4.3. State Activities.

Socio-economic Sphere. Parallel to the liberalization process, which started in the 1990s, the legal and practical framework for private property was established. The deficiencies of privatization legislation (which is the main prerequisite for the establishment of a market economy), implementation mechanisms and the existing authoritarian and clan system, were all factors which prevented the privatization process from being conducted in a socially just and economically efficient manner. Neither did the free allocation of 20% of an enterprise's shares to its employees have a significant impact on the improvement of employees' social conditions.

The State has entirely alienated itself from the process of regulation and programming, from the protection of domestic producers, from investments in industry and long-term loans. The so-called operations of privatized enterprises are considered to be solely the owner's headache.

As a result of land privatization, the role of the State in agriculture was confined to the adoption of some normative legislation and insufficient rehabilitation of infrastructures, and sporadic provision of fertilizers and seeds. State activities in this sphere have been extremely unsatisfactory and spontaneous.

Thus, the State's economic role has been reduced to minimum, in concordance with the programs of those who support extreme liberalization, which has failed entirely. Society has grown more supportive of the need for active State intervention in the economic sphere. The victory of centrist (Unity, Right and Unity) and leftist forces (Communists and Dashnaks) in the 1999 NA elections exemplifies this tendency. They have announced the rehabilitation of industry with an emphasis on a more efficient State intervention as a high priority strategic goal. Thus, the strategic goals of the State in the economic sphere have been gradually changing over the course of time _ initially the focus was on the creation and establishment of a market economy by mass privatization and foreign loans from 1990-1997, while the strategic goals shifted toward the creation of jobs by means of foreign investment in 1998-99.

State activities failed to prevent the outburst of social disaster in 1992. The performance of the State was unsatisfactory even in relation to the distribution of humanitarian aid (whose amounts are dwindling). In the course of time, the State abolished the benefits to different groups of the population and replaced them with financial compensation. The system of family allowances introduced in 1999 has limited capability for essentially improving the general social conditions. Thus, only about 38% of about 600,000 needy families have been covered by the family allowance system.

No essential changes are observed in the health care system in 1998-1999. The current system features an overwhelming list of for-fee services. The description of free medical treatment and state-guaranteed services is rather complicated, and for that reason, most people have no idea by what criteria they will be treated.

Though possessing a rather organized structure, health care is becoming inaccessible: the fees are unaffordable for most people. In almost all medical institutions official payments are required to be complemented by shadow payments, creating profound discontent and distrust amongst the people towards the health care system.

In 1998-1999 structural changes in the sphere of education also have not been carried out either, although a Law on Education, adopted in 1999 introduces certain regulations in this area. The fact that about 60,000 children, according to observations, do not attend school on a regular basis for social reasons is especially alarming. As a positive shift in 1999, it should be mentioned that some schools in the earthquake zone have seen improvements. The existing system of State-organized (free) education in the higher educational system is limited, while the established fees for fee education are unaffordable for most people. Low salaries of lecturers in the higher education result in an outflow of qualified specialist; on the other hand, bribery has become rampant.

Strategic provisions have been drawn up in the sphere of pension security and insurance. The draft law on mandatory social insurance has been drafted and approved by the RA government. The law envisages the following types of insurance: medical, pension, against temporary inability to work, against unemployment, against injury at work, against accident and professional disease. This system guarantees compensation of income (salary) in the mentioned cases. Given the current socio-economic situation, the solution to the problems of social protection for the disabled and the elderly, expounded in the "Program for the Improvement of Social Services for the Solitary Elderly and the Disabled at Home" approved in 1997 by the RA government, acquires special importance.

Human Rights. In 1998-1999 certain progress has been noticed in the sphere of human rights protection. Political parties and mass media banned in 1995 have been re-established, political prisoners have been released, and political persecution has been terminated. Human rights violations have decreased noticeably, with the exception of the 1999 parliamentary elections: because voter registries were inaccurately compiled, and as a result of the requirements of the 1999 Elections Law about 200,000 people were unable or failed to exercise their constitutional right to vote.

As for social and economic rights, no tangible progress has been noticed in this sphere. Since the realization of these very rights has particular significance for everyday life, society regards itself as deprived of them.

As far back as 1990, taking into consideration the importance of human rights protection in a democratic society, the Supreme Council established a Human Rights Commission. As late as the era of the 1995 Parliament, this Commission was no longer functioning. Although the Constitution at that time expounded in detail on a system for the protection of human rights, in reality there was no legislative body to supervise their observance. The Human Rights Commission established by the RA President in 1998, which was supposed to supervise the situation also failed to gain proper authority in society.

Foreign Policy. RA foreign policy is based on the principle of mutual reciprocity and maximal involvement, aimed at deepening and comprehensively enhancing the established bilateral and multilateral relations.

Armenia is a member of the Commonwealth of Independent States (CIS) and an equal participant of all political and economic processes within the CIS. Close bilateral relations have been established with a number of CIS countries. Special importance is attached to direct relations with the Russian Federation (RF), a CIS member; these relations also cover the military sphere, stipulated in the "Agreement on friendship, cooperation and mutual assistance"(1997). According to the RA Foreign Ministry's clarification, Armenia being concerned with security, regards Armenian-Russian military cooperation as an adequate response to the situation in the region. To illustrate its balanced policy, Armenia has established stable relations also with the North Atlantic Treaty Organization (NATO), particularly within the "Partnership for Peace" program.

Relations with the United States of America (USA) are of special interest in the RA foreign affairs; they cover a broad area of initiatives and they show a stable tendency toward enhancement. The constructive activities of the Armenian communities in the USA have their unique impact on the development of these relations.

The European domain, being a basic component of the RA foreign relations, comprises both cooperation with all-European structures such as the Organization for Security and Cooperation in Europe (OSCE), the Council of Europe, the European Union (EU), European Bank for Reconstruction and Development (EBRD), etc. and direct relations with a number of countries of this continent.

Cooperation with the People's Republic of China has been consistently developing since the re-establishment of Armenia's independence. The relations with India, Japan and some South East Asian countries have also been developing positively.

In the domain of the Middle East, close relations have been established with the Islamic Republic of Iran. Traditionally warm relations have been consistently developing with Arab countries. There is still potential for further enhancement of relations with these countries, along with achievements attained to date. Relations with Israel, though not yet substantial, also indicate promising tendencies.

There is some disproportion in the relations of Armenia with her immediate neighbors. While the economic and political relations with Iran and Georgia have a tendency for proportionate growth, there are no relations with Turkey and Azerbaijan. Moreover, in contravention to the basic provisions of international law, for about 10 years these countries have been imposing a blockade on Armenia, including the transportation of humanitarian cargoes and the lifting of the blockade is conditioned upon the unilateral resolution of the Karabagh problem.

The peaceful settlement of the Karabagh problem is a special area of the RA's foreign policy. In this field Armenia has adopted the principle stance of national self-determination. To demonstrate its readiness for mutual concessions, Armenia agreed to negotiations based, as the starting point, on the concept of a "common state" proposed by the OSCE Minsk Group. However, this proposal too was rejected by Azerbaijan, intending to bring the negotiations into a deadlock. Armenia also believes that direct Karabaghi-Azerbaijani talks parallel to the Minsk Group initiative would promote the speedy establishment of stability in the region.

The problem of the international recognition of the Armenian Genocide still remains the focus of the RA foreign affairs. Armenia has expressed satisfaction about some noticeable progress in this sphere.

Table 4.5. Number of Schoolteachers in Armenia by Educational Level Source: RA Ministry of Education and Science, 1998.