On September 27, 2020, Azerbaijan started its war on Nagorno-Karabakh, a long-disputed region called Artsakh in Armenia. It ended after 44 days, when Russia facilitated a cease-fire, with the defeat of the forces of Armenia and those of Artsakh, causing severe political instability and posing significant risks to Armenia’s democratic transition.

The Armenian economy has been hit hard both by the COVID-19 pandemic and the war in Nagorno-Karabakh. By mid-2020, the economy had contracted by 5.7%, exacerbating structural weaknesses. Enduring economic challenges include low agricultural yields, dependence on Russia for exports and remittances, rising inflation, and high oil prices.

The Nagorno-Karabakh war and the pandemic brought Armenia’s reform movement to a halt. Although changes occurred in many sectors after the 2018 revolution, these reforms have been patchy and have had no serious impact. The government launched corruption investigations, but large-scale institutional changes have not been realized.

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