Armenia's leading position as a depository and trade centre for silk continued undisturbed until the production of silk also started in Syria, and the expansion of production in the Middle East led to the decrease in the silk trade between Asia and Europe.
This transit trade, for instance as regarded customs, was handled specifically by the Jews during the 3rd and the 4th centuries who, after the dispersion of the Jewish people, had come to Armenia. The Jews constituted the main part of the middle class in the major cities that they had settled down in, while the upper class and the villagers were almost entirely made up of Armenians.
The great war of Armenia against the Sasanid King Shapour in the second half of the 4th century affected a resounding change in the country. The battles, which were extremely brutal and bloody, caused the depopulation and the destruction of cities, which in time lost their status, not only as important international trade-cities, but also for the local merchants. After this a primitive and unique economical situation emerged in M-Armenia, 5th century#Armenia, whereby each province and each village was compelled to supply itself and to maintain its own needs. When the Sasanid king occupied Armenia, he relocated the Jews, who had left their destroyed homes, to Persia as he wished to concentrate trade to Persia and to develop its industry. 61
After the emigration of the Jews from Armenia the country was still able to maintain its transit-role between Europe and Asia. In contrast to the international trade, however, the local trade decreased because of the development of a self-sufficient system, whereby each province had to provide for its own needs. This local self-sufficiency, the prevailing lack of security in the country, the wars, and the recurring rebellions resulted the creation of fewer cities and declining status for those existed.
During the Arab rule, their unquenchable thirst for money led them to introduce heavy taxations and fees in all the countries which they had invaded, taxes which were not supposed to be paid with products, but exclusively in currency. The most important taxes which the Arabs collected included the annual taxes which the population paid (except for the nobility and the clergy) and land-taxes which were paid annually and were separate from personal taxes. Besides these fees the nobility and the church were supposed to pay special taxes. In total, Armenia (including Albania or the present Azerbaijan, which was a part of Armenia) at the end of the 8th century paid an annual sum of 10,000,000 dirhams (approximately $30 millions in current value). 62
The many and constant requirements of the Arabs, including these annual taxes, to paid exclusively in hard currency, meant that the Armenian nobility and villagers were forced to abandon their self-providing economical system and to begin to produce a surplus to sell in the centres of trade, in order to obtain the sums needed for these taxes. 63
In this way, a new era began, an era in which the trade centres, the cities, flourished once again. New cities also started to emerge during this period, among them the cities of Kars, Bitlis, Akhlat, which co-existed alongside the cities of Van, Artaxata and Theodosiopolis (Erzurum). Another result of the high demands by the Arabs was the development and extension of Armenian products within agriculture, mining, handicraft and other industries This development would reach its peak during the Bagratouni dynasty, creating material possibilities which became the foundation for the civilization of the beautiful Armenia of Ani.
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