IV. POLITICAL ENVIRONMENT


Nature Of  Bilateral Relationship With
The United States

The United States Embassy has been operating in Yerevan since
February 1992.  The Armenian Embassy opened in Washington in the
same year.

In a move to assist the present Armenian leadership to strengthen
the newly-born democracy in the country, the U.S. Government has
been for several years extending significant humanitarian and
technical aid to Armenia aimed to support the crisis-stricken
economy and population of the country, and provide institution
building. The U.S. actively participates, as a member of CSCE, in
the attempts to negotiate an end to the Karabakh conflict.
Armenian and American government officials maintain satisfactory
working relations.  During the winter of 1993-1994 the USG
undertook unprecedented large-scale assistance to Armenia, provided
kerosene and kerosene heaters, insulating Armenians from the worst
effects of the winter.

In 1992, USAID established its office in Armenia. It grew rapidly,
and in 1994 was granted a Regional Mission status. Mission
activities cover all the three Transcaucasian states - Armenia,
Georgia, and Azerbaijan.

The U.S. Peace Corps has been operating in Armenia from 1992.  More
than 50 U.S. volunteers work in Armenian cities and the countryside
providing business consulting and English language training.

Armenia signed three agreements with the United States affecting
trade between the two countries:

1. Agreement on Trade Relations Between the Republic of Armenia and
the United States of America.
2. Investment Incentive Agreement between the Government of the
Republic of Armenia and the Government of the United States of
America.
3. Treaty Between the Republic of Armenia and the United States of
America Concerning the Reciprocal Encouragement and Protection of
Investment (BIT).  This Treaty has not yet been ratified by the
Armenian Parliament.

Major Political Issues Affecting
Business Climate

Involvement in the conflict around Nagorno-Karabakh, an Armenian-
populated autonomous enclave in neighboring Azerbaijan, has caused
Azerbaijan and Turkey to embargo Armenia.

Brief Synopsis Of Political System,
Schedule For Elections,  and Orientation
Of Major Political Parties

The Parliament known as the Supreme Council has 247 members who
form the highest legislative body.  The Supreme Council has 16
standing committees which, along with ministries and state
administrations, are actively involved in the development of draft
laws.  Deputies to the Supreme Council are elected by general
election every five years.

The President of Armenia is elected every five years by  universal
vote.  The President nominates, subject to Parliamentary approval,
the Prime Minister who in turn appoints, with Presidential and
Parliamentary approval, the Cabinet of Ministers which leads 22
national ministries, and the Chairmen of 10 State Administrations.

The regional (district) governmental structure of Armenia closely
mirrors the national structure.  Within the 37 administrative
regions, there are both executive and legislative bodies which
wield considerable control over the residents and businesses in the
region.  The regional governments, however, do not have the
authority to pass laws independent of the national legislation.

The following political parties play a prominent role in the
political life of the country:

Armenian National Movement (ANM) - 61 seats
Communist Party - 25 seats
Armenian Democratic Liberal Party (Ramkavars) - 17 seats
Armenian Revolutionary Federation (Dashnaks) - 14 seats

Other minor parties and movements include:

Armenian Agricultural Party
National Democratic Union
Republican Party
National Self-Determination Union
Constitutional Rights Union
Heritage Party
Armenian Christian Democratic Union
Mission Party
Armenian Revolutionary Party of Armenia (local Dashnaks)