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Bulgaria
FY 2001 Program Description and Activity Data Sheets
>> Regional Overview >> Bulgaria Overview FY 2001 Program
USAID will continue to work with the Government of Bulgaria, expanding involvement in strategically important areas. With the onset of Bulgaria’s negotiations for EU accession, demand for USAID technical assistance is likely to increase. USAID is likely to expand assistance for pension, banking and judicial reform; new credit arrangements for businesses; capital market development; and anti-corruption efforts. Two broad goals will continue as the basis for the program – fostering the emergence of a competitive, market-oriented economy; and supporting transition to transparent and accountable governance and an empowered citizenry through democratic political processes. USAID will intensify use of two major, complementary approaches in program implementation – a broad-based, bottom-up intervention at the municipal and regional levels; and strategic interventions for reform at the national level. While USAID priorities for the country are likely to be refined in the anticipated strategy update, USAID expects to continue its carefully targeted activities to accelerate economic and democratic transition through 2001 and beyond. The launching of cross-border, Balkans initiatives in support of the Stability Pact also will be a priority.
With the sharp increase in interest on behalf of Government of Bulgaria and donors in the social sector reform – including pension reform, employment generation, and health insurance – USAID envisions further involvement in these areas. Emphasis will be placed accelerating decentralization of fiscal authority to the municipal level, and strengthening support organizations that are essential to the development of a vital civil society sector. USAID will continue support for the Municipal Energy Efficiency Project in an effort to alleviate pressures on Bulgarian municipalities that face severe budget constraints by introducing new energy-saving technologies. Partnerships among private businesses, municipal governments, and NGOs will be promoted to catalyze economic development at the local and regional levels within Bulgaria. USAID will maximize linkages and synergy across all strategic areas – promoting private sector development and growth, and competitiveness of the private financial sector, effecting responsive and accountable local government, increasing active participation of citizens in decision making, and improving the legal system to support democratic processes and market reforms.
Special and Cross Cutting Initiatives:Given the dynamic environment in the country, USAID will continue to identify important niches where its cooperation is sought, and where there are opportunities for unusual impact. The Presidential Initiative on Internet will enhance USAID’s implementation of its long-term strategy to develop Bulgarian support organizations, improve national and local government responsiveness to its citizens, and facilitate Bulgaria’s integration into the global marketplace. In FY 2001, modest funding will support crosscutting activities including support to labor organizations and free-trade unions, and to valuable U.S.-based and regional training.
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ACTIVITY DATA SHEET
PROGRAM: Bulgaria
TITLE: Accelerated Development and Growth of Private Enterprises, 183-013
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $7,150,000 SEED
PROPOSED FY 2001 OBLIGATIONS AND FUNDING SOURCE: $8,000,000 SEED
STATUS: Continuing
INITIAL OBLIGATION: FY 1992 ESTIMATED COMPLETION DATE: FY 2005Summary: This strategic objective promotes the sustainable development of private firms in a competitive environment in preparation for EU accession and integration within global market structures. USAID’s strategy seeks to improve the legal and policy frameworks as the foundation for continued economic growth and private sector competitiveness. Activities are driven by EU accession focusing on sales and export growth, and job creation. The competitiveness of the Bulgarian economy will be a critical element in EU accession, and is therefore critical to the long-term prospects for economic growth.
A cornerstone of USAID’s strategy under this objective is to strengthen prominent business associations and organizations, consulting firms, think tanks and other business support institutions that will broaden the base of support for sustainable private enterprise growth. In response to the Government’s structural reforms, the Firm Level Assistance Group (FLAG), the principal instrument through which USAID enterprise-level assistance is delivered, has focused training and advisory services on sectors with relatively high competitiveness, such as tourism, agribusiness and light manufacturing.
The lack of financial services remains a particular constraint to enterprise growth at all levels of the economy, and USAID will continue to support efforts that increase private sector access to financing. Ongoing programs include: the Bulgarian American Enterprise Fund (BAEF) which continues to invest the $55 million obligated since 1992; the Small Enterprise Assistance Fund (SEAF) which has leveraged $6 million of EBRD funds to match the $6 million obligated from USAID to take minority shares in businesses of up to $250,000; and two guarantee programs which will mobilize $12 million in credit for the energy efficiency and small enterprise sectors. In addition, USAID is expanding on the success of the Warehouse Receipts program, which provides short-term credit to farmers based upon grain held as collateral.
The direct and primary beneficiaries are small and medium-sized private firms as well as numerous business associations and support organizations. All Bulgarians are, in effect, secondary beneficiaries, as a result of economic stability, growth, job creation, an improved quality, quantity and availability of consumer goods and services, and in the reasonably near future, the collateral benefits of EU accession. This objective supports the U. S. Embassy’s Performance Plan goals in the area of democracy and economic growth.
Key Results: The key results for this strategic objective include: (1) establishment of conducive legal, policy and regulatory frameworks for competition and private sector growth; (2) strengthened private sector business support associations and institutions; and (3) improved private business performance of target firms.
Performance and Prospects: USAID made significant gains in strengthening business associations and in providing ongoing assistance to enterprises in 1998-1999. Associations increased their advocacy for improved legal and policy frameworks, and USAID continued as the major actor in promoting public participation in small-scale enterprise (SME), policy reform, chairing the donor working group in this area. Associations in Bulgaria were able to increase revenues from dues and services by almost 17% in 1998 due to USAID assistance.
Through various Firm-level Assistance Group (FLAG) initiatives, USAID provides enhanced business services and technical assistance to Bulgarian entrepreneurs and private SMEs. As a result of FLAG interventions since 1996, 72 business linkages, including joint ventures, have been established worth about $30 million. Results indicators include increased exports, sales and employment. In 1999, exports in targeted firms had a 13% annual increase. In assisted firms, sales increased 10%, and sales per employee increased 3.5% quarterly. These gains were realized in a period of regional and worldwide economic slowdown, and in spite of the negative impacts of the Kosovo crisis.
A highlight of 1999 was the nationwide launch of a Warehouse Receipts Program, under which credit is mobilized against grain held as collateral in licensed bounded warehouses in Bulgaria. Under this USAID program, grain producers, bankers, warehousemen, insurance companies, government agencies and others were trained to originate loans; four warehouses with nearly 100,000 MT of grain were licensed; and banks booked more than a hundred thousand dollars of related loans. The number of licensed warehouses is expected to double by early 2000.
USAID continues to identify and develop supplementary means to improve the level of financial intermediation and increase the availability of credit in Bulgaria. USAID has recently launched three micro finance initiatives that will foster enterprise development and investment. These initiatives will not only serve to increase the availability of credit to small enterprises, but will also serve as a safety net for those most likely to be affected by the current process of economic restructuring. Financing of SME and energy efficiency projects will benefit from recently established guarantee facilities that will secure 50% of the risk of loans issued by commercial banks. A private Bulgarian bank will originate loans subject to commercial credit criteria. This will bolster USAID efforts to strengthen enterprises and the banking sector. Perhaps most important, these loans will be issued for terms of two to five years, a breakthrough considering that no bank in Bulgaria issues any significant loans for a term greater than one year.
USAID will continue strengthening business associations to increase their financial sustainability and capacity to deliver services to businesses. In light of recent successes, USAID will maintain efforts to increase credit availability – when such efforts can be achieved with market mechanisms, and in ways that increase the level of competition in the financial markets.
USAID will intensify its current policy reform efforts. The consensus of many different analyses in Bulgaria is that the sluggish response of the economy is due to a still mediocre policy and regulatory framework. Despite improvements over the past two years, the pace of foreign and local investment remains slow, and must accelerate to achieve an acceptable rate of economic growth. (Per Capita GDP remains at about 65% of the pre-transition period). The enhanced work on policy reform will fit well with a new initiative supporting regional trade in Southeast Europe. The success of this initiative will depend upon the successful identification of barriers to regional trade and implementation of appropriate measures to ameliorate those barriers. Policy reform is also a critical requirement for EU accession given that it will permit the development of a competitive Bulgarian economy.
Possible Adjustments to Plans: To be considered during the strategic update in FY 2000.
Other Donors' Programs: Multilateral donors and the EU assist associations and private firms in ways that complement USAID’s efforts. Among bilateral donors, USAID has the most significant private enterprise assistance program. EU (PHARE) assistance and support for the Bulgarian SME Agency is targeted at institutional strengthening. The British Know-How Fund, and the German and Austrian aid agencies have programs targeted at policy reform, as does the World Bank. The EBRD is working to establish new initiatives for SME financing, as are the British Know-How-Fund, and the Dutch and the Swiss aid agencies. USAID is leading donor coordination in the area of assistance to small and medium sized enterprises. In addition, USAID is seen as a leader in the sector, and as such has been able to play a critical role in assuring that donors approach this sector in a synergistic fashion. For example, in the area of policy reform, several donors, including USAID, are taking a coordinated approach to developing a reform agenda with the Government of Bulgaria.
Principal Contractors, Grantees or Agencies: USAID implements activities with numerous Government of Bulgaria ministries and agencies through: the International Executive Services Corps (IESC), University of Delaware, World Learning, Agriculture Cooperative Development International/Volunteers Oversees Cooperative Assistance (ACDI/VOCA), Catholic Relief Services, Opportunity International, the Bulgarian American Enterprise Fund, the Small Enterprise Assistance Fund (CARESBAC), the United Nations Development Program, Management Systems International (MSI), ABA/CEELI, WOCCU, and others.
Selected Performance Measures:
Baseline
(1997)Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Percentage of GDP provided by the private sector: 55% 62% 66% 75% 80% Increase in exports of targeted (assisted )firms* 10% 13% 13% 12.5% 15% Increase in revenue from dues and services of assisted business associations 10% 15% 16.5% 25% 25% Percentage increase in non-energy* Exports -0.6% -0.7% 2% 4% 4-6%
* These indicators are being used interchangeably to measure the ability of the country to compete internationally. We will continue to monitor performance on the indicator for non-energy exports, but will not report on it in next year’s Congressional Presentation given lag time involved in getting statistical data for the indicator. Statistical data for the indicator, "increase in exports of targeted (assisted) firms," is more reliable and accessible. Therefore, we will use this indicator next year as proxy measure of the international competitiveness of Bulgaria’s economy.
ACTIVITY DATA SHEET
PROGRAM: Bulgaria
TITLE: A More Competitive and Market-Responsive Private Financial Reform, 183-014
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $6,500,000 SEED
PROPOSED FY 2001 OBLIGATIONS AND FUNDING SOURCE: $7,300,000 SEED
STATUS: Continuing
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2005Summary: The purpose of this strategic objective is to develop a more competitive and market responsive private financial sector. Whereas the Bulgarian financial system will benefit directly from this assistance, the Bulgarian population at large will benefit from a stable financial system, in which they have confidence, and which provides financial intermediation services not yet available in Bulgaria. The deepening of financial markets in Bulgaria is necessary for achieving economic growth and a critical element for the Government of Bulgaria negotiations for EU accession. The support provided to the Bulgarian financial markets was initiated at the request of the Government of Bulgaria for urgent U. S. assistance following the severe financial crisis of early 1997. Senior staff of the U.S. Federal Deposit Insurance Corporation arrived in mid-1997; launched the privatization of six remaining state-owned banks; and helped strengthen the Central bank’s supervision capacity. Following the stabilization of the banking system, assistance efforts were initiated in other financial reform areas, notably capital markets and pension reform. This objective supports the U. S. Embassy’s Performance Plan goal in the area of democracy. This objective contributes to the U.S. Embassy’s Mission Performance Plan’s economic growth goal.
Key Results: The three primary results sought in support of this objective are: (1) establishment of a stable, regulated and efficient banking system; (2) development of a regulated, transparent and liquid securities market; and (3) the development of private pension funds industry. USAID's banking sector strategy has three elements: stabilization, including the privatization of state-owned banks; strengthening banking supervision, deposit insurance and the supporting legal/regulatory framework; and improving commercial banks’ operations through training. These elements address significant weaknesses in the sector, and develop the regulatory institutions and community of professional bankers necessary for future stability. All are key to restoring public confidence in the banking system and accelerating the development of a sound functioning banking sector.
Performance and Prospects: USAID assistance has been crucial to Bulgaria’s bank privatization process, which has resulted thus far in the sale of four banks to strategic investors in less than two years, and preparation of two remaining banks for sale in early 2000. As a result of U. S. assistance to the Bank Supervision Department of the Bulgarian National Bank (BNB/BSD), progress has been outstanding in improving the Central Bank's ability to oversee and regulate all licensed banks, using a risk-based analysis. With guidance from USAID-supported advisors, a risk-based Manual of On-site Examination Policies and Procedures has been prepared and distributed within the banking industry. Former U. S. examiners have worked side-by-side with Bulgarian counterparts, ensuring that the new procedures are fully implemented.
Effective bank supervision and deposit insurance are essential to building trust and confidence in the banking system. Since early 1999, USAID has worked with the newly established Deposit Insurance Fund (DIF) to develop its institutional capacity. In addition, USAID launched a commercial banker training activity focused on strengthening the institutional capacity of the Association of Commercial Banks and its training arm – the International Banking Institute. USAID has just initiated a new off-site supervision program for Bulgarian Banks at the request of the Government of Bulgaria.
USAID responded to a Government of Bulgaria request for assistance in 1998 by launching two new initiatives supporting capital market development. One provides assistance to the Bulgarian Securities and Stock Exchanges Commission (BSSEC), and seeks to increase local capacity to regulate capital markets. The second assists non-regulatory institutions including the Bulgarian Stock Exchange (BSE), the Central Depository and the Bulgarian Association of Licensed Investment Intermediaries (BALII); and seeks to increase liquidity and trading volumes on the BSE, and assure that transactions occur transparently and efficiently. U. S. assistance has also been crucial in the development of the new securities law, ratified in late 1999. Progress in the area of capital markets development has been slow due to the negative impacts of the Russian and Kosovo crises. Nonetheless, the number of companies listed officially on the Bulgarian Stock Exchange increased to 32 and the first Bulgarian corporate bond was issued in 1999. U. S. assistance also supported drafting the new securities law, and increasing public knowledge and understanding of capital markets mechanisms and shareholders rights.
During the 1990's, Bulgaria's public pension system grew increasingly unable to support a growing number of retirees. Continued funding of the system threatened to dwarf the Government’s capacity, and destabilize the Government budgetary process. USAID joined other donors in responding to the Government of Bulgaria’s request for help, launching its Pension Reform Program in mid-1998. U. S. assistance was crucial to finalizing the pension reform strategy and the ratification of related legislation. An important element of this activity is promoting the investment of the Bulgarian pension assets in a variety of international financial markets to ensure the security of pension fund assets. If successful, this program will improve the living standards of Bulgarian pensioners and contribute to economic growth through mobilizing retirement savings (similar to successes in such programs in Chile and elsewhere).
Key legislation in the area of pension reform was developed and ratified in 1999 with USAID assistance -- the Law on Supplementary Voluntary Pension Insurance which regulates the activity of voluntary private pension funds, and establishes an independent regulator to oversee and license private pension and health funds in Bulgaria. Developed with U. S. assistance, the comprehensive Social Code revises existing public pension, disability and maternity benefits, and provides for creation of a mandatory private pension system in Bulgaria. The private pension industry will start accumulating significant financial resources in 2000, resources that can be invested inn Bulgaria’s economic growth.
USAID plays a special role in the development of Bulgaria’s financial markets. By supporting the development of self-regulating organizations like the Bulgarian Association of Licensed Investment Intermediaries, the Association of Commercial Banks, the Association of Private Pension Funds, we hope to make them effective advocates for further reform and improvement in the regulatory and policy framework. USAID is supporting regional integration among different financial market institutions, and promoting increased coordination and cooperation among regulatory organizations such as the Bulgarian Securities and Stock Exchange Commission, and private institutions such as the Bulgarian Stock Exchange.
USAID expects to intensify financial sector assistance, notably in the area of regulatory coordination and harmonization of Bulgarian legislation, both internally and with EU directives; in the areas of banking, capital markets, pension and health insurance; and in the area of unified tax and social benefits collections.
Possible Adjustments to Plans: To be considered during the strategic update in FY 2000.
Other Donors Programs: USAID has clearly played the leading role in providing technical assistance in the area of financial markets. This assistance contributed to addressing policy priorities of international financial institutions, including the IMF and the World Bank. A good example of the existing close cooperation is the World Bank's Financial and Enterprise Sector Adjustment Loan II (FESAL II) which reinforces, through conditionality, USAID's efforts to improve the banking/credit legal and regulatory framework, bank supervision, bank privatization, and pension and health sector reform regulatory roles.
Principal Contractors, Grantees or Agencies: Barents Group, CARANA Corporation, and the U. S. Securities and Exchange Commission.
Selected Performance Measures:
Baseline
(1997)Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Private bank assets as % of total bank assets 32.7 44 50 85 85 Market capitalization as % of GDP 0 7 7 10 15
ACTIVITY DATA SHEET
PROGRAM: Bulgaria
TITLE: Increased, Better-Informed Citizens' Participation in Political and Economic Decision-Making, 183-021
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $4,350,000 SEED
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $4,450,000 SEED
STATUS: Continuing
INITIAL OBLIGATION: FY 1992 ESTIMATED COMPLETION DATE: 2005Summary: The existence of a strong, flourishing and well-informed civil society is integral to USAID’s ultimate goal of helping Bulgaria to establish a free-market economy and democratic institutions. This strategic objective will be accomplished by building the capacity of non-governmental organizations (NGOs) to play a key role in facilitating broad public participation in policy and decision making. Strong NGOs can play an active role in the development of the country, and providing services to the population. The objective will be achieved when a critical mass of NGOs are fully developed to ensure citizens’ participation, and the broad public access to public affairs news from independent media. Indigenous grass roots organizations and the Bulgarian populace will benefit from these activities at the community level. This objective supports the U. S. Embassy’s Performance Plan goal in the area of democracy. This objective contributes to the U.S. Embassy’s Mission Performance Plan’s democracy goal.
Key Results: This objective will be achieved through two key results. First, USAID is strengthening the capacity of NGOs by working on the legal and regulatory enabling environment for civil society, and increasing advocacy coalitions for participation. USAID aims to strengthen these indigenous organizations by improving NGO operation and financial viability; and by establishing effective and sustainable Intermediary Support Organizations (ISOs) that provide support such as grant-making, training, and networking to the NGO community. USAID is also working to expand public awareness of the impact of corruption; enhance institutional capacity of the Parliament, including increased public dialogue on policy issues; and extend media training to members of Parliament. The second key result aims to strengthen independent broadcast media by increasing the effectiveness of media associations; and improving the electronic media regulatory framework, the professionalism of journalists, and business management of broadcast media.
Performance and Prospects: Through the Democracy Network and Democracy Commission small grants, more than 111 NGOs received assistance to strengthen their organizational skills and program activities from 1995 to 1998. All the organizations attended NGO training courses and had in-house training scheduled upon request. Additional outreach was made to more than 40 NGOs to participate in the training program, even though they did not qualify for financial assistance. A total of 94 group-training modules were delivered to 900 representatives from 133 organizations.
In 1999, the Democracy Network Program began its second phase – the development of ISOs as instruments to help institutionalize and sustain local capacity to provide civil society with political access, technical assistance, training, networking services, and financial resources. A core initiative is selection of national and regional organizations that will be providing grants and other services to grassroots organizations. In December 1999, a selection committee comprised of 15 Bulgarians chose 12 organizations from around the country to become ISOs that provide a range of services to a wider NGO community. The financial sustainability of these organizations is still fragile – due in part to the impact of economic conditions. USAID will work closely with these selected organizations to help them achieve financial sustainability over the next several years.
In 1998, significant effort was made to improve the NGO legal and regulatory environment, particularly the arcane law regulating the activities of NGOs. Three draft NGO laws were introduced into parliament. Two of these drafts originated from a draft prepared through USAID assistance via the International Center for Non-for-Profit Law. In 1999, USAID assisted the legislative process by sending the working group on NGO law, including members of Parliament and experts, to the United States. This study tour helped the working group to expand their knowledge on NGO and relevant legislation, and to work on a unified NGO law draft. The unified draft is being finalized now, and USAID hopes that the legislation will pass on the first reading. After NGO law is adopted, USAID assistance will be needed on implementation procedures, and on other relevant laws; e.g., tax legislation. Such a comprehensive approach will require work well beyond 2002.
The ProMedia program seeks to train NGOs and professional and trade associations, helping them to protect free speech; advocate on behalf of journalists and the media; and serve as future providers of in-service training to journalists and managers. ProMedia has worked with the Association of Bulgarian Broadcasters since early 1997, helping it to provide training and other member-services. As a result, the Association has more than tripled its membership from 21 to 94. As a result of the improvements in the media regulatory framework, particularly in broadcast licensing, rapid growth of private television is expected. This will require a sustained training and support effort. USAID has addressed this need by establishing the ProMedia Television Training Center in 1999. The Center is the only facility in the country equipped to provide professional hands-on training to practicing journalists, broadcast media managers and students.
The USAID-funded Coalition 2000 continued its ambitious program of raising public awareness of corruption. After developing a National Action Plan in 1998, phase two of the Coalition 2000 focused on a comprehensive, anti-corruption, public awareness campaign and introduction a state of the art Corruption Monitoring System. A major new element in 1999 was the small grants program, providing 20 indigenous NGOs from around the country with funding for local anti-corruption efforts. Coalition 2000 has formed a task force of leading legal and human rights experts to draft a law on the Ombudsman institution in Bulgaria. As a result, the Draft Law on the People’s Defender is now under review. In June 1999, Coalition 2000 organized an International Conference on anti-corruption, attended by approximately 100 representatives of 19 countries, as well as representatives of bilateral aid agencies and international organizations. At the conference, emerging civil society anti-corruption coalitions were provided with a ‘how-to' guide for establishing public-private partnerships to reduce public sector corruption.
USAID launched a parliamentary support program, in response to the needs expressed by the Bulgarian Parliament for legislative technical support, and facilitating greater involvement of civil society in the legislative process. This Program is aimed at recruiting, training and assigning substantive legislative research projects to Bulgarian University students. These students will serve Parliament as volunteer legislative assistants to provide first-quality legislative research services to the National Assembly. In addition, USAID has financed a program for improving the skills of MPs to work with the media.
Possible Adjustments to Plans: Experience indicates that much more work remains to develop the nascent Civil Society organizations in Bulgaria, and to ensure their long-term financial sustainability. Concrete adjustments will be considered during the strategic update in FY2000.
Other Donors Programs: Many donors work in the NGO sector. A few work through networks of intermediaries (e.g., Soros Open Society Fund and Open Society Clubs). Others provide funding and assistance to individual NGOs; e.g., the EU channels substantial support to local NGOs through the Civil Society Development Foundation. In light of the variety of players in the country and diversified nature of the NGO sector, donors have agreed that they need to coordinate more closely and increase information sharing. In 1999, USAID conducted a thorough assessment of civil society in Bulgaria to ensure the continued responsiveness of DemNet and other donors’ programs to the unique Bulgarian environment; and used this study as a means to engage donors in discussing coordination of assistance to meet requirements. In the area of anti-corruption activities, other donors are complementing USAID’s small grants program; e.g., the Dutch Embassy in Bulgaria has committed to financing five additional projects under the auspices of Coalition 2000 network. USAID plans to continue to play a leading role in improvement of in-country donor coordination in the not-for-profit sector.
Principal Contractors, Grantees, or Agencies: USAID implements activities through U.S NGOs including the Institute for Sustainable Communities, Freedom House, the International Center for Not-For-Profit Law, International Research and Exchanges Board, International Development Law Institute, the Bulgarian Parliament, and the Bulgarian local government.
Selected Performance Measures:
Baseline
(1997)Actual
(1998)Target
(1999)Target
(2000)Target
(2001)NGO Sustainability Index1) 4 3.8 4.2 4.0 3.8 NGO legal framework No No introduced Yes Yes Percent of public who receive significant portion of public affairs news from independent media 2): TV:
n/a 14% 35% 45% 50% Radio: n/a 45% 55% 60% 65% Code of ethics adopted by all Broadcast media (% of media adopting code) Code drafted 30% 35% * *
*This measure will not be reported in subsequent Congressional Presentations.
Notes:
- The NGO index is calculated on a scale from 7 to 1, 1 indicating the highest civil society development. The index is multi-dimensional, looking at legal framework, financial sustainability, service provision, etc. Due to a change in index categories with the aim of better measure the real situation, as well as some economic effects of the Kosovo crisis, the index dropped from 3.8 to 4.2. We are expected the upward trend to get back on track, indicating that more time will be required to achieve the target levels of high civil society development).
- Data for TV and Radio is separated, as they are at different stages of development.
ACTIVITY DATA SHEET
PROGRAM: Bulgaria
TITLE: Legal Systems that Better Support Democratic Processes and Market Reforms, 183-022
STATUS: Continuing
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,300,000 SEED
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $2,300,000 SEED
INITIAL OBLIGATION: FY 1999 ESTIMATED COMPLETION DATE: FY 2005Summary: This objective is critical to the entire USAID program for Bulgaria. An improved judicial system is crucial to advancing the government’s declared strategy for economic reform and democratic governance. Effective and impartial application of the rule of law, a key element of EU accession criteria, can only be achieved with a professional judiciary. A professional and independent judiciary is vital to advancing the government’s campaign against corruption, and ensuring a legal environment in which the private sector can develop. Since 1992, many newly appointed, younger judges have entered the system. Yet, there is no organized training for young judges before they join the bench; and many of these young people do not look upon judiciary as a career, but rather a necessary step to a lucrative private practice. In addition, the courts lack qualified support staff and do not have adequate office equipment. The USAID program aims to train young judges in these new laws to build up their professional esteem as part of a strong independent judiciary and to strengthen court administration. The direct beneficiaries of these activities are a significant percentage of the Bulgarian judiciary, including primarily judges, and also prosecutors, investigators and law students, and indirectly every member of the public who comes in contact with the legal system. This objective contributes to two of the goals in the U.S. Embassy’s Mission Performance Plan, broad-based economic development, and democracy.
Key Results: Together with the Association of Judges in Bulgaria and the Ministry of Justice, USAID works to establish the curriculum and training activities of a Judicial Training Institute to provide continuing education for judges. Major results being sought include (1) improved professionalism of the judiciary; (2) judicial training institute established; and (3) improved court administration. Continuing education will serve both to elevate professional standards and provide an incentive for judges to work for extended periods in the system and pursue their own self-improvement.
Performance and Prospects: Since the current, reform-minded government came into office in 1997, Bulgaria has placed judicial reform on a very fast track -- driven by the desire to harmonize Bulgaria’s legal system with European Union criteria for accession. Seventeen hundred Bulgarian laws are being reviewed for compatibility with European principles. In March 1999, three entities – the Ministry of Justice and European Legal Integration, the Association of Judges in Bulgaria, and the Alliance for Legal Interaction – came together to form the Magistrate Training Center (MTC). The Training Center will address Bulgarian judiciary’s training needs to increase ability to adjudicate on new and complex issues arising in a market economy. USAID was the first donor to support this institution with a direct grant; fully equipped the Center; and provided technical assistance in establishing its financial, personnel, and administrative systems.
Since September 1999, USAID has been working with the Ministry of Justice and the Association of Judges to successfully launch an extensive program to support reform of the judiciary. The program will be implemented for an initial period of three years with a budget of approximately $7 million. A comprehensive, sustainable program will be put into place with two primary components: judicial training and court administration. The ultimate goal of judicial training is a change in attitudes, knowledge, skills and behavior of judges and court personnel. This will be achieved by combination of both initial judicial training for novice judges and continuing judicial training for sitting judges at the MTC. USAID will also work with the MTC and the Ministry of Justice and European Integration to implement a pilot program to improve court administration. The court administration program will establish several Model Pilot Courts and provide technical assistance in identifying and promoting legislative and administrative reforms necessary to improve administrative procedures, case and docket handling, and case information management.
The U.S. Department of Justice complements USAID’s work in the area of judicial reform. Joint efforts have contributed to the drafting of anti-crime legislation, and are providing technical assistance, training, and equipment for law enforcement activities conducted by the Interior Ministry, the Customs Administration, and the Prosecutor’s Office and National Investigative Service. The American Bar Association’s Central and East European Law Institute is also a valuable partner in judicial reform initiatives.
Possible Adjustments to Plans: USAID's Judicial Reform Program was just launched in 1999. This objective is significant in terms of preparing Bulgaria to meet key EU accession requirements for judicial reform, and is crucial to achieving USAID Mission goals. The program will require USAID's involvement over an extended period of four to five years.
Other Donors Programs: Donors’ interests in the judiciary is high. The EU has listed judicial reform as a high priority within its public administration reform agenda and has developed a program of assistance that includes support to the Ministry of Justice and training of magistrates. The World Bank has also announced its intention to expand its efforts in judicial reform. With its new technical assistance team USAID expects to play a leadership role among donors in this sector. The Government of Bulgaria is actively pursuing accession to the EU, which requires demonstrated commitment to reducing and eliminating public sector corruption. Bulgaria is also a participant in the Council of Europe’s regional Octopus program, which is developing strategies to combat crime and corruption. Council of Europe experts have helped Bulgaria develop guidelines for legislative initiatives which have led to amendments in the penal code.
Principal Contractors, Grantees, or Agencies: USAID implements the activities under this objective through a Cooperative Agreement with the East-West Management Institute, and a grant to the Bulgarian Magistrate Training Center.
Selected Performance Measures*:
Baseline
(1997)Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Percentage of cases brought to trial and completed 10 10 TBD TBD TBD Average experience of judges 3 years in court 3 years in court TBD TBD TBD
* This strategic objective was presented as new in last years Presentation, and targets are still being formulated.
ACTIVITY DATA SHEET
PROGRAM: Bulgaria
TITLE: More Effective, Responsive, and Accountable Local Government, 183-023
STATUS: Continuing
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $4,600,000 SEED
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $4,600,000 SEED
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2005Summary: This objective envisions Bulgarian local governments that make choices responding to citizen expectations; act on those choices effectively, and are accountable for their choices and actions. Local governments that exercise well-informed choice in partnership with citizens and community-based organizations can solve problems, identify and maximize opportunities, narrow the gap between resources and responsibilities, and successfully engage the central government on policies and laws to encourage local initiative. This local government initiative (LGI) will directly benefit the people and local officials of the majority of municipalities. Replication of successful models developed in target municipalities and the public policy work and dissemination efforts of national and local associations will strengthen democracy at the local level. This objective contributes to two of the goals in the U.S. Embassy’s Mission Performance Plan, broad-based economic development, and democracy.
Key Results: Bulgaria is still highly centralized and local governments lack both the authority and experience to adequately serve their constituents. Since 1995 USAID has sought to: (1) increase capacity of local governments to govern effectively and promote necessary democratic reforms; (2) promote decentralization and improve intergovernmental relations; and (3) assist in reinforcing the principles of local self governing.
Performance and Prospects: In 1999, USAID continued to strengthen local government associations and local government staff. USAID's strategy combines technical capacity building within local governments, public policy reform, and creation of non-governmental organizations supporting decentralization and democratization. The program is on track, with concrete results such as implementation at the municipal level of new approaches in budgeting and computerized systems for decentralized functions. The municipal elections in October 1999 added an impetus and a new challenge to USAID’s current activities in the country. The elections resulted in a large turnover of mayors, but the newcomers seem dedicated to move forward with reforms at the municipal level.
A priority for USAID in implementing the second phase of its Local Government Initiative is building local support capabilities and progressively shifting the lead role of upgrading local government to indigenous institutions. The results achieved are very encouraging. The national and regional municipal associations have been institutionally strengthened to better respond to the training, technical assistance and information needs of their member municipalities. The number of municipalities joining the associations is constantly growing. For example, the National Association of Municipalities now has 243 members, out of 262 Bulgarian municipalities. While development to date of these associations is encouraging, USAID plans to focus on lobbying and advocacy skills, with changes anticipated in staff and program activities. Cross border initiatives have also received USAID support: municipal associations along the Greek border and the Romanian border have begun economic development projects. In 1999, USAID launched a new competitive grants program for providing direct support to non-governmental organizations (NGOs) working on local government issues. The program will broaden the pool of beneficiaries beyond the municipal associations supported in the past, to include some very creative projects in the areas of economic development, cross-border cooperation, and the environment.
The Local Government Initiative (LGI), the centerpiece of our work at municipal level, has established excellent relationships with Mayors throughout Bulgaria and has provided high quality training and technical assistance. LGI training programs in municipal property management, citizen participation, and other key areas have attracted nearly 1,000 local government staff. Representatives from ten municipalities have been trained in service based budgeting; LGI continues to provide technical support to the implementing municipalities, as budgeting techniques appropriate to decentralized government are essential for the transition. The LGI program includes public policy reform, capacity building at the municipal level, organizational development for NGOs and training for Bulgarian technicians. LGI works closely with 30 partner organizations in joint sponsorship of special programs; for example, a parliamentary conference on local government held in 1999.
Decentralization of fiscal matters and policy decisions is a very challenging but important priority in the public policy area. The Foundation for Local Government Reform (FLGR) seminar on fiscal decentralization (1998) organized a working group in 1999 of 38, high-level government and NGO leaders to advance a strategy for reform. The Fiscal Decentralization Policy Reform Working Group has provided input to the government on implementing the new Health Insurance Act and reviewed a finance policy evaluation model developed by LGI consultants. The model will be useful for the Ministry of Finance calculations of intergovernmental transfers and will provide fiscal information to FLGR, other NGOs and the public, in support of transparent government. In the area of policy reform, LGI is developing a new strategy for NGOs and local governments to lobby on behalf of decentralized functions. USAID will be shifting the focus from Parliament to the Ministries, capitalizing on key contacts within the ruling party, and bringing to bear greater expertise in lobbying and advocacy, both through NGOs and U. S. consultants. USAID anticipates becoming more directly engaged, initiating collaboration with our multilateral partners.
In addition, USAID is implementing programs that further support municipalities and greatly contribute to the sustainability of the achievements and building partnerships at local level. Through the Technical Twinning Program, seven Bulgarian cities have initiated new activities to transfer the experience, know-how and successful practices from U.S. cities in different areas of self-government. Highlights include the adoption from Portage, Michigan, of a model for public-private partnership in Gabrovo, which resulted in an improved tender procedure for sale of municipal lots, yielding revenue of $44,000 and the creation of 46 new jobs. With advice from Durham, North Carloina, Stara Zagora traded municipal land for construction and renovation of public buildings in a new concession agreement with the private sector. This program will be expanded to include up to ten new cities.
Through an agreement between USAID and the Department of Labor, 10 municipalities have formed multi-sector working groups to develop local economic plans through a year-long community-based planning process taught and coordinated by PLEDGE, Partners in Local Economic Development and Government Effectiveness. Small grants are enabling each community to try out their plan, with continuing assistance from 14 local PLEDGE trainers, as well as oversight from US experts in labor and economic transition strategies. The training program aims at local and regional economic growth, job creation, and worker retraining; and will begin a new round in 17 municipalities in the depressed Danube River region where a high percentage of Roma have been among the thousands laid off from closed or privatized state enterprises.
The impact of the Kosovo conflict on the Danube River municipalities has been critical. Direct and indirect trade losses for Bulgaria total over $162 million, according to the Ministry of Industry. The Danube communities are particularly hard hit because 70% of their exports go to Western Europe via the river. Many, USAID-partner municipalities have suffered economic downturn as well as increased pressure on social services. In recognition of this hardship, USAID has organized a separate, complementary program, the "Danube River Initiative." USAID has also directed some of the regular LGI programs to this region; for instance, a training model for municipal governments on how to price concession agreements is being carried out in five pilot municipalities there.
Working at the municipal level will continue to be a cornerstone of USAID’s program, with greater emphasis on linkages with other sectors and partnerships to achieve sustainable results.
Possible Adjustments to Plans: USAID will need additional time to adequately prepare the newly elected officials for democratic, effective governance – including sound economic development plans. The Stability Pact affects our program given that Bulgaria is one of the target countries for assistance. Now that Bulgaria has been designated for EU accession, local governments will need assistance in project development and presentation in order to apply for pre-accession funds. USAID will provide such assistance through training programs and through small-grants programs. USAID anticipates the need for substantial training and technical assistance beyond the end of the current LGI program in March 2001. Specific adjustments in this and other program areas will be required as the strategy is updated.
Other Donors Programs: Currently USAID is the only donor organization carrying out a comprehensive program of local government improvement. However, several bilateral donors and the EU provide assistance to associations and municipalities in ways that complement USAID’s efforts. The Dutch government will provide capacity building to the National Association of Municipalities in the area of EU accession, and the Danish government will promote partnership between Central Government and local authorities on the legislative agenda. The French government supported a National Association project on land restitution. The Swiss government helped establish a regional municipal association in central Bulgaria. The British Know How Fund provides technical assistance to three Bulgarian municipalities, and plans to help regional governments in strategic planning. The EU’s Local Democracy Program supports citizens’ participation in community partnerships and sustainable regional development. The Mott Foundation has made a grant to the Foundation for Local Government Reform to support the sub grants program initiated with USAID funds. USAID will coordinate closely with these development partners.
Principal Contractors, Grantees or Agencies: USAID implements activities through U.S. and local organizations, including the International City Managers’ Association, Management Systems International, U.S. Department of Labor and other private firms and NGOs.
Selected Performance Measures:
Baseline Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Of all the policy proposals presented by local government groups, the percentage accepted by the central government: * * 55% 60% 65% Number of policy positions local government groups advocate before central government ** ** ** ** ** Achievement of business plan targets identified by municipal organizations *** *** *** *** *** Growth of own-source revenues generated 30%
(1997)15% ** ** ** The percentage of increased local government authority over annual Municipal budget: NA 8% 2% 1% 1%
*These are new indicators for which the program has not yet established baseline years and/or values.
**These indicators from last year’s Congressional Presentation will not be reported in next year’s Congressional Presentation. Moreover, there has been a change in the unit of measure for policiy positions advocated, making comparison with baseline values difficult. For instance, policy positions are not being measured in terms of numbers before government as indicated in last year’s Congressional Presentation; but in terms of percent of positions advocated effectively. In this instance, the percent effectively advocated in 1998 is 51%. For growth in municipal revenues, percent growth
***Indicator deemed invalid and therefore dropped.
EXPLANATION FOR SPECIAL INITIATIVES and CROSS-CUTTING OBJECTIVES
Title: Special Initiatives, 183-041
Planned FY 2000 Obligation and Funding Source: $4,200,000 SEED
Proposed FY 2001 Obligation and Funding Source: $2,550,000 SEEDSummary: This objective includes some 632 (a) transfers to other USG entities. Recipients include the Departments of State and Treasury.
USAID activities under this objective meet criteria outlined in Agency guidance for special objectives or interests. That is, they are of limited scope and/or duration and respond to particular windows of opportunity. For USAID/Bulgaria, these activities include environmental activities, labor force restructuring, the Bulgaria Enterprise Fund and the Kosovo related rehabilitation program.
Title: Special Initiatives, 183-042
Planned FY 2000 Obligation and Funding Source: $2,900,000 SEED
Proposed FY 2001 Obligation and Funding Source: $2,800,000 SEEDSummary: This objective is designed to accommodate activities that make significant contributions to more than one objective. The activities included in this objective for Bulgaria are the participant training program, the labor union program, and program development and support activities.
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Last Updated on: February 01, 2001 |
