This report describes the changes that have taken place in many aspects of human development in the Czech Republic. For example, business activities that experienced dynamic growth in the early nineties after the totalitarian regime had been overthrown and were an important impulse for human development have diminished recently. From 1997 to 1999 the economy has been through a deep recession and optimism has been replaced by scepticism. Other changes discussed by the report include, privatization, social cohesion, unemployment, income inequality, housing, the transformation of the pension system, health care reforms, demographic changes and the status of women. The authors identify the areas where further progress must be made if the quality of life of people in the Czech Republic is to continue to improve. For example, they argue it is crucial to sustain the weakening public support for the transformation processes, particularly among the middle classes, through real promise of more equal opportunities.