Armenia. The year began with a cold winter and gas supply problems. A couple of explosions occurred on the Russian gas pipeline to Armenia and Georgia. No sabotage was excluded. While Ukraine was pressed very hard by Russian demands for gas tariff increases, Gazprom’s Russian state government demanded a doubling of Armenia’s fees. The country receives all its gas from Russia, which also controls most of Armenia’s electricity grid, a control that was strengthened during the year. Armenia is Russia’s foremost ally in the Caucasus, with a so-called strategic partnership, and had expected to be exempt from the demands for higher gas prices in the region. But the price was raised from US $ 56 to US $ 110 for 1,000 m 3gas. This led to increased energy prices for Armenian consumers, who conducted protest demonstrations. Political analysts felt that the Russian demands were related to Armenia’s plans to become independent of Russian gas through a new leadership from neighboring Iran. However, Russian pressure to gain influence over the gas pipeline did not appear to produce results. On the other hand, the Armenian government agreed to hand over control of a large heat plant to Gazprom in exchange for certain gas deliveries without payment and promised a fixed gas price for three years. The opposition accused the government of increasing Armenia’s dependence on Russia. However, President Robert Kotjarjan, who visited Moscow several times during the year, seemed to respond to some of that criticism by strengthening relations with Iran.
When the Christian dominated Armenian President Kotjarjan visited his disputed Muslim colleague Mahmoud Ahmadinejad in Tehran in July, far-reaching energy cooperation was agreed. In exchange for the new gas pipeline, which is expected to be commissioned in 2007, Armenia will supply Iran with electricity through newly built pipelines. The countries will also jointly build a new hydroelectric plant in the Aras border and Armenia will build a new highway to the Iranian border in anticipation of increased trade. Iran’s interest in Armenia was seen as a challenge to Russia’s and Turkey’s influence in the southern Caucasus.
According to CountryAAH, major public holidays in Armenia include Independence Day (September 21) and New Year (January 1). Armenia gained international political success when the French National Assembly in October decided to criminalize the denial of Turkish genocide against Armenians in 1915. The decision provoked strong negative reactions in Armenia’s powerful neighbor Turkey.
Armenia’s economy seemed to grow by over 10% for the sixth consecutive year. According to government statistics, the proportion of residents below the official poverty line of six years had fallen from 56 to just over 36%.