“Rio+20 - New Development Paradigm” - will Armenia take the new path


Poverty and unemployment are still an issue in Armenia

Background

Since the 1992 Rio Sustainable Development (SD) Summit, the world has significantly benefitted from progress in economic growth and institutional development. In the meantime, the economies of many countries have also grown at the expense of sustainability: high level of human development is associated with high level of environmental and social losses, with increasing inequality and widening gaps between the rich and the poor.  As a result of such growth path, the world is facing concurrent crises and challenges cutting across the environmental, economic and social spheres.

Nowadays global challenges, such as high unemployment, pervasive poverty, social exclusion, depletion or degradation of natural capital, and persistent high levels of pollution are also typical for Armenia. In the threshold of new development challenges, it is an imperative for Armenia to adapt national policies and actions in line with sustainable development principles.

Holding sustainability concept as a major thrust of its operation, UNDP attaches the highest importance to the upcoming UN Conference on Sustainable Development to be held in Rio de Janeiro in June 2012. The objective of the Conference is to secure renewed political commitment for sustainable development, assess the progress and the remaining gaps in the implementation of the outcomes of the major summits on sustainable development, as well as  address new and emerging challenges with focusing on two major themes: (i) a green economy in the context of sustainable development and poverty eradication; (ii)  the institutional framework for sustainable development.

Some Highlights

  • In 2010, more than third of Armenian population (35.8 percent in 2010 vs. 27.6 in 2008) was poor, 21.3 percent was very poor and 3.0 percent was extremely poor. Just in two years, some 270,000 people became poor, thus raising the number of the poor in 2010 to around 1.2 million. Estimated poverty gap in 2010 was 8.1 percent as compared to 5.1 percent in 2008, whereby the severity of poverty was estimated 2.5 percent as compared to 1.4 percent in 2008.

UNDP will strive to get a commitment on new development that will focus on the challenges of securing growth that is inclusive and equitable, changing global consumption patterns and aspects of integrated decision making across social and environmental domains to make sustainable development a habit rather than something occasional or sporadic.

Within this context, UNDP Armenia, in close cooperation with the Government, NGOs, the private sector  and  the academia  , is supporting the Rio+20 national preparatory process aiming at enhancing  national capacities to meet the challenges of 21st century and beyond and ensuring sustainable development.

In 2002 UNDP supported the establishment of the National Council for Sustainable Development, chaired by the Prime Minister. This  is a unique platform to promote cross sectoral cooperation and address formidable development challenges in the eve of Rio+20 World Summit and beyond.

Armenia’s development challenges and priorities

Despite the progress and the improvements in the sectoral economies and environmental conditions that followed the Rio process, there are still major challenges that need to be tackled. Even though the government and the IMF project a 4.2 percent economic growth in 2012, there are still risks given the wide range of potential shocks to which Armenia is exposed.

With one of the worst economic downturns in the world as a result of the global financial crisis, Armenia strives to keep its public expenditures high to prevent an extensive decrease in living standards. The government has increased social spending budget ratio for 1.9 percent for 2012. The annual budget envisages a 5 percent rise in expenditures, whereas nearly half of its spending (47.9 percent) is earmarked for social expenditures to be channeled into education, health, environment protection and culture. However, high inflation remains as a serious challenge also for this year (projected ceiling is 5.5 percent) and increased social spending will definitely not suffice and constitute a serious risk in prolonging the negative effects of the crisis, in particular on the background of increased poverty rates.

The 2012 state budget commits the government to spending USD 2.74 billion, which is a 5 percent increase from the previous year’s level. The government projects collection of extra revenues, however, the possible recession in Europe could slow that growth and thus complicate the planned increase in tax receipts. The Armenian economy’s vulnerability to external economic tremors is coupled by growing external debt and lack of economic diversification. Moreover, the dependence on foreign remittances is still very high, and the elevated post-crisis public debt burden will start limiting policy space in the years to come.

Regional disparities and socio-economic inequalities continue to be significant. Based on the inequality indicators evaluated by the Gini coefficient, Armenia’s population is socially polarized.

As of now, 82 percent of lands are under degradation and different level of desertification, with significant level of contamination by chemicals and heavy metals. There are still problems with water quality and water supply issues - for instance 60 percent of wastewater is being discharged into open basins without any treatment. There are 475 urban and rural waste dump sites which do not correspond to sanitary and hygienic requirements, and there are almost no specialized sites and facilities for waste utilization, recycling and disposal. Extremely rich Armenian biodiversity is under a threat: around 150 species of animals and 357 of plants are registered in Red Data Book of Armenia. 40,000 hectares of forest were cut, of which 7,000 hectares was completely eliminated. Around 125 settlements and 9,000 km of roads are under permanent landslides. The experience of the drought that happened in 2000 indicates that it can affect up to 500,000 rural dwellers and subsistence farmers who rely almost exclusively on agriculture for survival.

Along with these challenges, other vital issues, such as the improvement of business and competition environment, provision of housing in the 1988 earthquake zone, and creation of agricultural cooperatives, were brought in the forefront of sustainable development agenda by the Government of Armenia in 2012.  

 

“What is not sustainable is not development” - How does UNDP make a difference on the ground?  

UNDP Armenia has fully aligned its assistance with national priorities and development plans and has provided rapid and targeted response to the evolving challenges.  Capitalizing on the well established credibility with government interlocutors, donors and other partners, UNDP has influenced advancement of reforms and policy development in a number of sectors:

-Regional development and decentralization (through the preparation of Regional Development Strategy and institutional strengthening of more than 140 local administrations);

-Sustainable agriculture (through promoting the concepts of cooperatives, aid for trade, etc.);

-Labor market and vocational education and training (through promoting active labor market and modernizing VET sector);

-Green economy and energy efficiency (through development of a National Strategy for energy efficiency and low-carbon economy, and adoption of the Second National Environmental Action Plan);

-Disaster risk reduction (through development of National DRR Strategy and Action Plan and establishment of DRR National Platform, Crisis Prevention Center and DRR Observatory).

The overarching capacity development program of UNDP Armenia, which is targeting a number of Ministries, other public institutions and structures (e.g. National Council on Sustainable Development; Civil Service Council, etc.) is a powerful example of our support to national efforts toward improving development effectiveness. This program has substantially enriched the impact of the activities of other UN agencies and development partners in the country.

The regional South Caucasus Integrated Border Management program implemented by UNDP addressed challenges within the domains of democratic and economic governance, including capacity deficiencies, poor infrastructure and weak institutions, and violations of human rights. UNDP supported the elaboration of the National IBM Strategy and Action Plan, which were adopted in April, 2011. 

The capacity of public institutions for advancing the national reform agenda was strengthened and European standards through the implementation of the ENP Action Plan were introduced, as well as social cohesion and tolerance were promoted.  

The way forward –national context

It is evident that current model of economic development in Armenia based on over-exploitation and degradation of natural capital is no longer suitable for ensuring stable economic development and social equity. Lessons should be learned from the recent economic crisis and the long term sustainable development agenda should prevail over short- term economic and social gains. Thus, a “new development paradigm” to change the way how investments and public policies are made is extremely necessary for Armenia. Development of common vision and plan of actions as well as atmosphere of trust between the decision-makers and the civil society is crucial for promotion of the new development agenda.