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Regional Activities in
Central and Eastern Europe
>> Regional Overview >> Central and Eastern Europe Regional Overview Introduction
Since inception in 1989, the focus of Support for East European Democracy (SEED) programs has shifted from principally regional activities--which gave the United States the flexibility to respond quickly across countries' diverse needs in a rapidly changing environment--to much greater reliance on in-country programs. However, regional activities continue to play a vital role, both in promoting cross-border linkages and in post-presence assistance to countries such as those in the northern tier of Central and Eastern Europe once they have graduated from bilateral assistance. Regional assistance is seen increasingly as a means of developing north-south linkages, so that southern tier countries can benefit from lessons learned in the north. USAID is also developing regional initiatives to respond to the imperatives of the Stability Pact for Southeast Europe, which seeks to accelerate the integration of this region into Euro-Atlantic institutions and norms following the Kosovo crisis. Initiated by the European Union (EU) with strong U.S. support, the Stability Pact serves as a mechanism for promoting continued political and economic reforms, sustainable development, and enhanced security in the region.
FY 2000 Supplemental Request
A supplemental appropriation request for regional programs by the Administration of $17 million is pending before Congress. Of these funds, $12 million will support regional anti-organized crime units to stimulate pursuit of organized crime in Kosovo, Bosnia and Albania. Five million dollars in additional support, beyond the $10 million provided in the base FY 2000 appropriation, is for the European Bank for Reconstruction and Development Trust Fund, a multi-donor effort in support of the Southeast Europe Stability Pact. This Fund will ensure that the European Development Bank is fully engaged in Southeast Europe, and will significantly leverage other donor assistance to stimulate economic growth.
FY 2001 Program
Strategic Goal: Economic Restructuring
USAID seeks to foster the emergence of a competitive, market-oriented economy in which the majority of economic resources is privately owned and managed.
Privatization, Financial Sector Development, and Fiscal Reform: Funds are requested to support special economic restructuring needs across the region. Funds will be allocated to Washington-based technical advisors supporting field missions in activity design and implementation; service contracts that assist with a variety of non-technical support functions; inter-agency service agreements; and contracts to assist with performance monitoring, assessment, and rapid response to fiscal and capital markets-related needs across the region. SEED funds will be used for a regional conference for Stability Pact countries and technical assistance aimed at specific issues of competition and anti-trust law and policy for individual countries. USAID will facilitate the conference and provide technical assistance.
Funds will also be used to collaborate with other donors on anti-corruption initiatives in targeted countries, and for workshops to share lessons learned among countries in topics such as bank supervision, accounting reform, and privatization. USAID plans to provide targeted short-term assistance or training on a cost-sharing basis to government or market institutions in graduated (or soon to be) graduated countries to enable them to solidify their transition to market economies.
SEED money will be used to strengthen regional self-regulatory organizations in auditing and accounting in order to promote regional development, integration, and harmonization of auditing standards and practices. USAID will also support the training, education, and certification of professional accountants and auditors and the development of regional accounting and audit professional associations advocating accounting reform in the region. As part of the Stability Pact for Southeastern Europe, SEED funds will be used to foster structural reform in areas that constitute the building blocks of market economies--capital markets, rationally regulated banking sectors, and corporate governance. USAID will seek to ensure that such reforms are common throughout the region to facilitate greater economic integration within the region and with broader European and world markets.
Commercial Law and Trade Development: USAID will help establish better cross-border trade linkages in critical regions in order to reduce tensions and better integrate national economies into the World Trade Organization (WTO)/ and world trading system. SEED monies will be used to assist Stability Pact countries on trade policy issues with a focus on compliance with WTO requirements for countries that are already members and on remaining steps needed to accede to the WTO for those who are not.
Enterprise Development: SEED funds will support the Implementation Grants Program, the PRIME Fund, and a range of other programs aimed at promoting economic development and poverty alleviation in SEED countries through sustainable micro-enterprise development activities.
SEED funds will be provided also to the Small Enterprise Assistance Fund (SEAF) program to establish a Trans-Balkan Small and Medium Enterprise Equity Finance Program. The program will provide equity and quasi-equity financing in combination with active business assistance and trade linkages to small and medium enterprises in the former Yugoslavia and neighboring Balkan states. Investments will range between $100,000-500,000 per transaction.
USAID will use SEED funds to implement an internet-based system, linking business centers and small and medium enterprises electronically. The network furnishes data and information to businesses on supply-demand opportunities to stimulate local, regional, and international trade. The focus of the present system is Macedonia, Bulgaria, and Romania. SEED funding will be used to expand the network into Albania, Bosnia, Croatia, Montenegro, and Hungary. The result will be an increased area of business and trade opportunities for firms in the Stability Pact countries.
Environmental Management: USAID's environmental focus has been broadened beyond reducing health risks to a greater emphasis on developing environmental management capacity to support sustainable economic growth. The shift reflects growing recognition that environmental policy initiatives and reforms need to be fully integrated into economic reform and restructuring at an early point. Doing so ensures that the governments consider environmental costs and benefits when evaluating proposed policies. USAID encourages the use of market mechanisms in promoting increased environmental quality although it recognizes that environmental costs and benefits are never fully internalized by the market. Therefore, governmental agencies at both national and local levels have important regulatory roles to play. USAID's Environmental Partnership Program ("ECOLINKS") is fostering partnerships between U.S. and regional entities to seek market solutions to environmental problems and promote the application of U.S.-based environmental expertise, best practices, and goods and services as part of the solutions. In Southeast Europe, ECOLINKS will continue to offer challenge grants to address priority environmental problems by linking businesses, local governments, and associations with U.S. organizations and partners in the region. In 1999, ECOLINKS delivered $2.2 million through 47 challenge grants to partners in Romania, Bulgaria, Macedonia, and Croatia. ECOLINKS will also provide assistance to businesses, local governments, and associations in identifying investment needs, and assessing the applicability of U.S. technology and expertise in meeting those needs.
Energy: SEED funds will be provided to support ongoing efforts to develop a Balkan regional electricity grid, and the institutional and regulatory framework for a Balkan regional energy market. Initial workshops and analysis of issues in developing a regional power pool in the Southern Tier are complete. Efforts are now underway through cooperative agreements with the U.S. National Association of Regulatory Utility Commissioners (NARUC) and the U.S. Energy Association to address these issues from both the regulatory and utility perspective. These programs involve cost sharing with the U.S. private sector and state regulatory commissions. USAID will work with the European Union (EU) on reforms that promote market development, a favorable climate for private investment, and greater integration of the regional systems for better electricity transmission. SEED funds will support the design of a Tele-information System among National Dispatch Centers that will facilitate greater trade and power exchanges. To promote energy efficiency, USAID and the European Bank for Reconstruction & Development (EBRD) will jointly complete the design and financing package for the Constantza Municipal Energy Efficiency Project and expand this model elsewhere in the region. USAID will also facilitate development of the new, World Bank, Romania Energy Efficiency Revolving Fund. Finally, USAID will work with private energy service companies and the new EBRD Energy Efficiency Equity Fund to identify and conclude private investment projects in the region.
Infrastructure
SEED funding will support access by countries in Southeast Europe to EU and international financial institute (IFI) financing for critical infrastructure; providing technical assistance to help facilitate project preparation, financing, procurement, and construction; and strengthening relevant institutions in the region. USAID would work in collaboration with staff of the EU and international financial institutions to process grants and conduct on lending.
Strategic Goal: Democratic Transition
Under this goal, USAID supports the transition to transparent and accountable governance and the empowerment of citizens through democratic political processes.
Rule of Law: Funds are provided for regional training, exchanges and technical assistance programs of the American Bar Association's Central and Eastern European Legal Institute for key legal reformers and members of the judiciary. USAID will provide support for broad reforms, training, and technical assistance to strengthen both public and private sector institutions and help build a judiciary independent enough to combat corruption and serve as a counter-balance to the executive branch. Funds are also provided for an enhanced anti-crime and corruption program being implemented by various, U.S. Government, law enforcement agencies, including the FBI, Treasury and the Criminal Justice Division of the Department of Justice. In partnership with the ABA, efforts will also focus on the creation of a regional network of reform-oriented officials and justice sector professionals.
Local Government & Decentralization: Regional funding supports the creation of a region-wide network that provides experience-based information to local government officials, municipal association members and relevant national officials. This information will enable these local actors to identify and solve municipal problems more effectively and thus respond to citizens' needs. USAID will provide assistance in a broad range of technical areas to support the effective, transparent functioning of local governments, and the continued enhancement of decentralization. Proposed activities include municipal credit, local environmental planning, citizen participation, urban service delivery and infrastructure, local economic development, municipal budget and finance, and several, local, housing and real property initiatives, including condominium formation and maintenance, property and asset management, and housing policy and finance. USAID collaborates with the World Bank and other bilateral and multilateral donors on the Fiscal Decentralization Initiative. Technical assistance will be provided to central governments, parliaments, sub-national governments, local authorities, research institutes and universities to analyze problems, develop solutions and implement improvements in local government policy and management. In addition, the program will provide a useful forum for donor coordination.
Anti-Corruption: Activities will continue to stimulate grassroots demand for more accountable, transparent governance throughout the region. USAID collaborates with the Organization for Economic Cooperation and Development (OECD) to support the Anti-Corruption Network for Transition Economies, a result of the OECD's Anti-Bribery Convention ratified in 1997. Funds will be used to continue annual meetings of regional NGOs, donors, and public officials from all three branches of government to share lessons, identify "best practice" models of reform, and promote dialogue between countries and regions on this topic. In addition, funds will be used to carry out diagnostics in countries in the region; to undertake integrity conferences, if feasible, as follow up to the diagnostic tool; and to promote the use of the diagnostic tool in additional countries. USAID is developing new initiatives in Romania, Albania, and Macedonia based on the successful, "Donetsk Model" in Ukraine that brings together NGOs and law enforcement officials to support an enabling business environment.
Independent Media: Under USAID's ProMedia program, regional funds will support journalist exchanges within the region, regional workshops for journalists in participating countries, and regional training for resident advisers in the region. Under the Pro-Media II program, USAID will initiate anti-corruption activities with small grants to independent journalists for investigative reports. Activities will foster the sustainability of media organizations in southeast Europe through the development of a Regional News Agency. This agency will provide news across borders as well as coordinate media exchange in the region. Funds will support the Annual Partners conference to bring IREX resident advisors and partners together to promote independent media. In addition, funds will be used to further develop a "Central Learning Facility," which will include a web site, country assessments, case studies, industry news, and other Internet links to other media assistance implementers. Finally, funds will be used to develop a media sustainability index to measure country progress.
Political Process: Funds will be set aside for unanticipated requests for election assistance, training of labor leaders, and possible assistance in conflict resolution.
Non-Government Organization (NGO) Development: Under the Democracy Network Program to strengthen NGOs in the CEE Region, USAID manages two regional programs, a legal reform program through the International Center for Not-for-Profit Law (ICNL) and a regional networking program run by Freedom House. The former seeks to improve the regulatory and legal environment vis-a-vis NGOs. The latter program fosters increased collaboration and coordination among local NGOs in CEE - through exchanges, regional workshops, U.S. and cross-border internships, and publication of a quarterly newsletter. Freedom House's efforts will strengthen the ability of NGOs throughout southern Europe to inform public opinion and influence public policy. Across southern Europe, ICNL is training lawyers and prosecutors responsible for NGO registration, working to regularize the NGO registration process, and advising on passage of new, liberalized laws on NGO regulation, including the promotion of NGO tax exemptions and the development of legal frameworks for NGO-government partnerships.
Strategic Goal: Social Stabilization
Under this goal, USAID assistance focuses on the human dimension of the transition to democracy.
Social Transition: Funds will be used to begin implementation of the new E&E Social Transition Strategy in Southeast Europe, where poverty, unemployment and lack of a social safety net are particular concerns. Attention to these issues is critical to political stability and support for reform. Activities will be closely coordinated with initiatives in health and labor market reform. Initial activities will include financing assessments, policy analyses, technical assistance, and training to key Southeast European government agencies in concert with World Bank loans for social sector restructuring. In addition, activities will convene roundtables of government officials, NGOs and policy analysts (universities, think tanks, etc.) to share information on needs and best practices in dealing with poverty, unemployment, and related issues. Finally, activities will foster the creation of partnerships, networks, and exchanges for professionals working in the social sectors.
Health: USAID provides support for technical assistance, training and special studies for cross-cutting initiatives in health such as financing, management, service delivery reform, partnerships, and infectious diseases. These funds also provide support for regional conferences that promote best practices, lessons learned, and dissemination of success stories in the CEE region.
Crosscutting and Special Initiatives
Transportation: With SEED funding, the Trade and Development Agency supports regional infrastructure integration in Southeast Europe through financing feasibility studies.
Training: SEED funds are set aside for regional participant training and the Georgetown University scholarship program. Evaluation and project development and support also are funded.
Performance Funds: In a changing political environment, U.S. interests are best served by having a modest level of Performance Funds available for new or accelerating reform such as may take place after the parliamentary and presidential elections in Croatia.
Explanation for Special Initiatives and Cross-Cutting Objectives
Other U.S. Government Agencies
The U.S. Department of Treasury participates in USAID's financial sector reform activities. The Department of Commerce's Commercial Law Development Program (CLDP) will assist Stability Pact countries on trade policy issues. The Federal Trade Commission/Department of Justice will focus on competition and anti-trust law and policy. The U.S. Department of Labor maintains regional training programs for all countries in the region, and supports social sector reform initiatives. The State Department supports the National Endowment for Democracy Title VIII, Democracy Commissions, and Ron Brown Scholarships in closeout countries.
U.S. Financing Table for Central and Eastern Europe Regional
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Last Updated on: February 05, 2001 |
