Armenia is a small, landlocked country with few natural resources in a historically
volatile part o f the world. The country experienced a major economic contraction at the end o f the
1980s when the effects o f a massive earthquake were amplified by the break up o f the Soviet Union
and the costs o f the conflict with Azerbaijan over Nagorno-Karabagh. Over the last ten years, the
Government has shown a strong track record on economic management and reform, and has made
good use o f the high levels o f official donor support it has received. Armenia had the highest IDA
performance record in the ECA region in 2003.