f their holdings, and paid off
its IMF obligations from reserves in full in early 2006, both of
which have reduced Argentina's external debt burden. Real GDP has
continued growing strongly, averaging 9 percent during the period
2003-2006, bolstering government revenues and keeping the fiscal
accounts-a key vulnerability in the past-in surplus.

Armenia
Under the old Soviet central planning system, Armenia had
developed a modern industrial sector, supplying machine tools,
textiles, and other manufactured goods to sister republics in
exchange for raw materials and energy. Since the implosion of the
USSR in December 1991, Armenia has switched to small-scale
agriculture away from the large agroindustrial complexes of the
Soviet era. The agricultural sector has long-term needs for more
investment and updated technology. The privatization of industry has
been at a slower pace, but has been given renewed emphasis by the
current administration. Armenia is a food importer, and its mineral
deposits (copper, gold, bauxite) are small. The ongoing conflict
with Azerbaijan over the ethnic Armenian-dominated region of
Nagorno-Karabakh and the breakup of the centrally directed economic
system of the former Soviet Union contributed to a severe economic
decline in the early 1990s. By 1994, however, the Armenian
Government had launched an ambitious IMF-sponsored economic
liberalization program that resulted in positive growth rates in
1995-2006. Armenia joined the WTO in January 2003. Armenia also has
managed to slash inflation, stabilize its currency, and privatize
most small- and medium-sized enterprises. Armenia's unemployment
rate, however, remains high, despite strong economic growth. The
chronic energy shortages Armenia suffered in the early and mid-1990s
have been offset by the energy supplied by one of its nuclear power
plants at Metsamor. Armenia is now a net energy exporter, although
it does not have sufficient generating capacity to replace Metsamor,
which is under international pressure to close. The electricity
distribution system was privatized in 2002 and bought by Russia's
RAO-UES in 2005. Armenia's severe trade imbalance has been offset
somewhat by international aid, remittances from Armenians working
abroad, and foreign direct investment. Economic ties with Russia
remain close, especially in the energy sector. The government made
some improvement