major sectors of the economy : jewelry and diamond processing : manufacturing : information technology : natural resources : chemicals and pharmaceuticals : agriculture : food processing : tourism : construction and construction materials : energy : transport : telecommunications : water

Transport

As a landlocked country, Armenia is vitally dependent on transport links through its neighboring countries for imports and exports. Until the Nagorno-Karabakh dispute is resolved, only links through Georgia and Iran are open. The country therefore relies mainly on aviation and a few low-capacity land connections via Georgia and Iran. The Georgian city of Poti is the nearest seaport, and is a primary gateway for Armenia, for both imports and exports. Both road and railway routes are gradually undergoing much-needed upgrading.

Roads and Road Services

Armenia has a relatively well-developed road network, serving all areas of Armenia's economy with a road density of 257.6 kilometers per 1,000 square kilometers. The road network consists of 7,700 kilometers of interstate roads, inter-republican roads (regional) and local roads. Of these, 1,400 kilometers are interstate roads, 2,520 kilometers are inter-republican roads, and 3,780 kilometers are local roads. The Armenian government has undertaken to renovate roughly one-third of the 1,500 kilometers of main roads in Armenia. Reconstruction of a bridge over the Araks River, completed in December 1995, has improved road access to Iran and facilitated the supply of consumer goods.
The World Bank helped to prepare a project to rehabilitate strategic road links to Georgia and to improve road sector cost recovery, which was funded by IDA. The World Bank is now working on a second transport project worth US$ 50 million, covering road, rail, the Yerevan metro, and runway repair. Armenia has also been the recipient of many TRACECA studies whose main theme has been improving transport links northwards to the trans-Caucasian corridor in Georgia.
Plans are underway to raise US$ 25 million from the Armenian Diaspora, through the All-Armenian Fund Hayastan, to build a 170-kilometre road across the disputed region of Nagorno-Karabakh. A highway has already been built from Goris to Stepanakert via Lachin.

Railways and Railway Services

There are 883 kilometers of railways (excluding industrial lines). Of four international rail connections (via Georgia, Azerbaijan, Iran and Turkey) only the one to Georgia, giving access to the Black Sea ports of Poti and Batumi, is presently in operation, due to the trade embargoes imposed by Azerbaijan and Turkey. In 1996 the UN funded the reconstruction of a railway bridge on the main line between Tbilisi and Yerevan.
The World Bank is contributing a loan of US$ 13 million to restoration of the railway system, including the purchase of new locomotives and the repair of railway bridges as part of the World Bank transport program.

Air Transport Infrastructure and Civil Aviation

Aviation is one of the government's priority areas for development. Modernization, including replacement of practically all airport equipment, and purchase or lease of passenger aircraft is needed.
Civil aviation infrastructure consists of three international airports, at Zvartnots, Erebuni, and Gyumri, and nine local (non-military) airports, although most of the domestic airports are not functioning.
In 1994 the EBRD signed a loan agreement worth US$ 22.8 million for the construction of a cargo terminal at Zvartnots airport. The terminal, total project cost of which was US$ 27.8 million, was opened in early 1998. Apart from building a new warehouse, the project included the construction of new taxiways to accommodate cargo aircraft and the procurement of necessary cargo handling equipment. (See EBRD activities in Armenia below.) The government plans to privatize services at the airport in the near future.
Scheduled Armenian Airlines flights operate between Yerevan and Amsterdam, Athens, Beirut, Delhi, Dubai, Frankfurt, Istanbul, Kiev, London, Moscow, Paris, Sofia and Teheran, among other destinations. British Mediterranean Airways, the British Airways franchisee, is now offering direct flights from London twice a week. Swiss Air operates a twice-weekly flight between Zurich and Yerevan.