baijani capital Baku to flee to Armenia. On 17 March 1991, Armenia, along with the Baltic states, Georgia and Moldova, boycotted a nationwide referendum in which 78% of all voters voted for the retention of the Soviet Union in a reformed form.
Restoration of independence
On 23 August 1990, Armenia declared independence, becoming the first non-Baltic republic to secede from the Soviet Union. When, in 1991, the Soviet Union was dissolved, Armenia's independence was officially recognized. However, the initial post-Soviet years were marred by economic difficulties as well as the break-out of a full-scale armed confrontation between the Karabakh Armenians and Azerbaijan (Nagorno-Karabakh War). The economic problems had their roots early in the Karabakh conflict when the Azerbaijani Popular Front managed to pressure the Azerbaijan SSR to instigate a railway and air blockade against Armenia. This move effectively crippled Armenia's economy as 85% of its cargo and goods arrived through rail traffic. In 1993, Turkey joined the blockade against Armenia in support of Azerbaijan.
The Karabakh war ended after a Russian-brokered cease-fire was put in place in 1994. The war was a success for the Karabakh Armenian forces who managed to capture 16% of Azerbaijan's internationally recognised territory including Nagorno-Karabakh itself. Since then, Armenia and Azerbaijan have held peace talks, mediated by the Organisation for Security and Co-operation in Europe (OSCE). The status of Karabakh has yet to be determined. The economies of both countries have been hurt in the absence of a complete resolution and Armenia's borders with Turkey and Azerbaijan remain closed. By the time both Azerbaijan and Armenia had finally agreed to a ceasefire in 1994, an estimated 30,000 people had been killed and over a million had been displaced.
As it enters the 21st century, Armenia faces many hardships. It has made a full switch to a market economy and as of 2012,
