Introduction

The fifth and jubilee publication of the National Human Development Report (NHDR) of 1999, Armenia, sponsored by the United Nations Development Program (UNDP) and prepared by independent national experts is entitled "Five Years of Human Development in Armenia". It attempts to evaluate the reforms carried out in the transition period and five years of human development in Armenia in light of sustainable human development.

NHDR 1999 is in fact a summary report, which refers to the transition of the Armenian economy and state institutions as a starting point for Independent Armenia's transformation and gives the evaluation of the whole process. The selection of such an approach for NHDR 1999 has resulted from a number of meetings and discussions, including the Human Development Experts' Club (Box I). The Report revisits the main themes of all the previous Reports prepared in Armenia - The Social Cost of Reforms _ 1995, Poverty _ 1996, Social Cohesion _ 1997, The Role of the State _ 1998, devoting separate chapters to them. The final chapter (which is at the same time the conclusion of the Report), puts forth scenarios for sustainable human development as well offers recommendations on Armenia's perspectives for a people _ centered future. Though the specificity of the Report dictates its logic, whereby each chapter is more a separate and large domain, the team of authors has completed a challenging job of putting together and presenting Armenia's integrated picture.

Box. I. Human Development Experts' Club Five years of NHDR preparation and United Nations' efforts in capacity building and cooperation in Armenia have resulted in the establishment of the Human Development Experts' Club, which incorporates all the independent national experts that have worked on the preparation of NHDRs of Armenia since its start in 1995. Among the objectives of the CLUB is not only to give opportunity to the representatives of Armenia's intellectual circles to preserve and disseminate the knowledge and experience acquired during mutually beneficial cooperation" but also to build a think tank with a multi-disciplinary setting which is able and willing to render expertise for the international community, the Government, research and development. The official opening of the CLUB was celebrated with the presentation of the Global Human Development Report 1998 on CONSUMPTION and a special overview of consumption trends in Armenia prepared for that occasion. The following meetings included discussions on Armenia's upcoming membership to the Council of Europe, the duration and type of transition in Armenia with the presentation of a report TRANSITION 1999, prepared by the UNDP Regional Bureau for Europe and CIS. The potential of the CLUB allows to create a forum for the search of new paradigms, and through the discussion of alternative views, outline the optimal model of development for Armenia_thus generating new ideas, and at the same time proposing concrete solutions to concrete problems.

The Report has also tried to include a wide spectrum of opinions by presenting alternative views and expressing different standpoints. Such "freedom" makes possible the existence of diverse and often opposing views in the Report, which, as we believe renders a fuller evaluation of developments in Armenia.

The priorities for progress and development have changed over the course of time and are now emphasizing Sustainable Human Development (Annex III). First introduced in the UNDP global Human Development Report in 1990, the concept of Human Development puts the people back into the center of attention and regards them as the means and ultimate goal of development at the same time. During these ten years, the concept has evolved, incorporating intergenerational equity (sustainable development), and has finally grown into Sustainable Human Development. It is a process of enlarging people's choices, having the principle of equal opportunities, universal well-being, intergenerational equity and empowerment as cornerstones.

At all levels of development there are three essential capabilities for human development (which make up the components of the Human Development Index - HDI) for people to lead long and healthy lives, to be knowledgeable and to have access to the resources needed for a decent standard of living. If these basic capabilities are not realized, then choices are simply not available and many opportunities remain inaccessible. But the realm of human development goes further: essential areas of choice, highly valued by people, range from political, economic and social opportunities for being creative and productive to enjoying self-respect, empowerment and a sense of belonging to a community.

Box. II. Global Human Development Report, 1999 GLOBALIZATION From the very start, Global HDRs, which have been published since 1990, became a frequently mentioned reference point for policy making in many countries for new approaches, world experience and rich statistical data presented in the Reports. They draw a global picture of the world, focusing on problems of common concern and allowing countries' comparisons in a global context. The Global HDR of 1999 is devoted to GLOBALIZATION, which is changing the world more rapidly than many people realize. Apart from a commonly accepted characterization of globalization as a flow of money and commodities, the Report emphasizes the growing interdependence of the world's people within the process of integrating not just the economy but culture, technology and governance. The era of globalization is opening many opportunities for millions of people and has distinctive features: new markets, new actors, new tools and new rules. Being driven by market expansion, today's globalization is opening national borders to trade, capital and information. However, when the market goes too far in dominating social and political outcomes, the opportunities and rewards of globalization spread unequally and inequitably- concentrating power and wealth in a select group of people, nations and corporations, marginalizing the others. By the late 1990s, one fifth of the world's people living in the highest income countries had 86% of world GDP- the bottom fifth just 1%. If global opportunities are not shared more equitably, the failed growth of the last decades will continue. The Report identifies the challenge of globalization in the new century as the need to find the rules and institutions for stronger governance. This is will preserve the advantages of global markets and competition, and will provide space for human, community and environmental resources to ensure that globalization works for people not just for profits. The agenda for action to secure human development (HD) in this era of globalization should focus on seven key challenges: 1.Strengthen policies and actions for HD, and adapt them to the new realities of the global economy. 2.Reduce the threats of financial volatility and all their human costs. 3.Take stronger global action to tackle global threats to human security. 4.Enhance public action to develop technologies for HD and the eradication of poverty. 5.Reverse the marginalization of poor, small countries 6.Remedy the imbalances in the structures of global governance with new efforts to create a more inclusive system. 7.Build a more coherent and more democratic architecture for global governance in the 21st century. As the Report contends, the surge of globalization over the past decade is only a beginning and the globally integrated world will require stronger governance to preserve the advantages of global market competition and turn the forces of globalization to support human advance. And the Millennium Assembly of the United Nations is a global forum that could provide powerful momentum for moving the agenda forward. The Global HDR fostered the preparation of the "Globalization" overview of the situation in Armenia, which depicted the trends and advises realistic options for Armenia's development with regard to globalization and globalization processes.

From the HDI standpoint, Armenia has made some progress (Figure I) and advanced to the 87^th place for 1997 among 174 countries instead of the 99^th place in 1996¹. The calculations of independent national experts for 1998 also indicate a trend toward further improvement. (see Annex II).

By the time Armenia declared independence and endeavored into the transition of both economic and political systems, there was no clarity in the process itself, its duration or ultimate outcomes with possible deviations. The impact was quick to appear in a drastic fall in the standard of living, mass unemployment, impoverishment of a vast portion of the population and deep polarization. The social cost appeared to too high against the achievements in the political arena.

Despite problems and hardships, both of objective and subjective nature, Armenia succeeded in stabilizing the situation and establishing the legitimate bases of a democratic society with market orientation, which allows us to assume that, from the qualitative aspect, the transition period in Armenia is close to its completion. As for returning to or approaching pre-reform standards of living, which could indicate the completion of the transition period in qualitative terms, Armenia has to be prepared to make another equally challenging and difficult leap. In case of the most optimistic scenarios (10-12% of annual economic growth) Armenia would be able to speak about the completion of the transition period only in around eight years, while with an average 5.7% growth, which has been observed over the past few years, Armenia has seventeen years ahead.

Policy makers worldwide and in Armenia likewise are more occupied with the quantity of growth, while the SHD approach argues that they need to be more concerned with its structure and quality. Armenia has experienced economic growth for at least 4 consecutive years, including 7.2% economic growth in 1998. However, this has not significantly improved the quality of life for the majority of people, particularly in regard to employment generation and improving security for people in all spheres of life. Hence, the Report tries to focus attention on the necessity of employment, civic participation and human rights, all reinforcing economic growth and calls upon re-conceptualizing developments in Armenia and its future in the context of sustainable human development.