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Bosnia and Herzegovina
>> Regional Overview >> Bosnia and Herzegovina Overview ACTIVITY DATA SHEET
PROGRAM: Bosnia and Herzegovina
TITLE AND NUMBER: Recovery from Crisis, 168-031
STATUS: Continuing
PROPOSED FY 2001 OBLIGATIONS AND FUNDING SOURCE: $59,505,000 AEEB
PROPOSED FY 2002 OBLIGATIONS AND FUNDING SOURCE: $52,000,000 AEEB
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2002Summary: USAID is striving for a stable post-war Bosnia and Herzegovina (BiH) with a functioning and dynamic free-market economy and a democratic society. Because of USAID programs thousands of minority refugees have been assisted to return to their homes; over 17,000 jobs have been created; corrupt communist-era Payment Bureaus have been abolished; privatization has begun; factual, unbiased reporting has greatly increased; moderate political parties are commanding an increasingly greater share of the vote; and Brcko is well on its way to becoming a well-managed, multi-ethnic district. Based on these many "macro" level successes and the need for Bosnia to increasingly focus on internal economic and democratic reforms to improve the lives of her citizens, the program focus is shifting from a crisis recovery to transition mode. A new five-year strategy is currently under development and will be launched as the crisis recovery portion of the program is phased down, during FY 2002.
Program Categories: USAID's Recovery from Crisis program in BiH is comprised of three components. The economic reform component includes support for banking and economic policy reform, accounting reform in the public and private sectors; privatization, and corporate governance. USAID has also supported the development and expansion of the private sector through a business loan program and a pilot home mortgage program. The democratic reform component includes assistance for rule of law, elections, political party development, independent media, NGO development and strengthening, and participant training. The minority returns component supports refugee returns through community level infrastructure improvements that establish basic services and strengthen the institutions that provide these services.
Key Results: USAID economic reform activities focus on the following major results: establishing a policy and institutional framework conducive to the emergence of a market economy, by supporting sound fiscal policies, and a viable banking system and providing the framework needed for successful privatization; and restoring private sector productive capacity and generating employment. Democratic reform activities aim to: strengthen democratic institutions that promote a multi-ethnic society and political pluralism by fostering an independent media, free and fair elections, a responsive and transparent government, citizen advocacy, and a professional, independent judiciary. The minority returns component provides essential basic services to minority populations returning to their homes helping to re-establish the multi-ethnic mix that existed in many parts of the country before the war.
Performance And Prospects (Economic Reform Component): Since 1996, the US has implemented a comprehensive economic policy reform agenda to accelerate Bosnia's transition to a market economy in the context of post-war reconstruction. USAID supports a broad range of technical assistance directed to public sector accounting reform, privatization, commercial law, banking reform, capital markets and corporate governance. The objective is to provide sound guidance to decision-makers in the government and private sector to undertake defined responsibilities, smoothly transfer economic functions to the private sector, and regulate the new market economy fairly and transparently.
In FY 2001, USAID plans to obligate $13.425 million in FY 2001 funds and $499,455 in FY 2000 carryover funds to support banking and economic policy reform. Technical assistance provided by USAID has ensured the availability of well-trained and motivated banking supervision staff within the Federation Banking Agency and its counterpart in the RS, the RS Banking Agency. As a result, the banking sector has begun to stabilize and public confidence has been restored, as indicated by growth in new individual savings. USAID also took the lead in the international community's technical abolition of the Payment Bureaus, a critical step in the development of a market oriented banking system. The public sector accounting activity is establishing a treasury function in both entities. In FY 2001, USAID will provide on-site guidance to selected Bosnian banks in accounting, operations, information technology and strategic planning and will assist commercial banks to assume the range of financial services formerly provided by the Payment Bureaus. USAID will continue to support the Banking Agencies in banking sector consolidation. All remaining assets of the Payments Bureaus will be liquidated by June 2001 and the proceeds transferred to the entity budgets. USAID will begin two new economic reform activities. The Tax Administration and Modernization Program will improve tax administration and collection while the Regional Treasuries activity provides institutional strengthening consistent with recommendations from the International Monetary Fund (IMF) and the U.S. Treasury.
In FY 2001, USAID plans to obligate $3.5 million to support privatization and corporate governance. In the Federation, the ongoing small-scale privatization program managed by USAID-trained personnel has been extremely successful, with 133 enterprises and 1042 enterprise-owned premises sold for approximately $245 million. Large-scale privatization of approximately 300 enterprises is presently underway. In the RS, 71 small-scale enterprises have been sold for $4.0 million, with 40 more to be offered for sale through auctions and direct sale. The RS government has identified 135 strategic enterprises to be sold through and an additional 870 enterprises will be privatized using a voucher system. In FY 2001, USAID will provide technical assistance in the implementation and oversight of the ongoing privatization effort, coordinating with other donors through the International Advisory Group on Privatization (IAGP). Efforts will focus on creating linkages between these newly privatized companies and USAID-financed banking, consulting, and business loan activities, and with International Financial Institutions and other donors, thus bringing together the full set of resources necessary for privatized companies to restructure and move to profitability.
Launched in FY 2000, the Corporate Governance Program has two components. The first, Private Sector Accounting Reform, improves access to business tools including international accounting standards (IAS) and international standards of auditing (ISA). The second, Corporate Governance for Business Investment, builds capacity to implement effective corporate governance. In FY 2001 the Private Sector Accounting Reform component will establish the framework for full implementation of IAS and ISA and begin conversion of accounting systems in select private sector enterprises. The Business Investment Component will support the implementation of corporate governance through legal and regulatory assistance and support to the Securities Commissions.
Another activity, the Business Development Program (BDP) provides loans to private Bosnian businesses, enabling them to restart and expand production quickly and create immediate employment. Approximately 490 loans totaling $140 million and generating approximately 17,000 jobs had been made as of December 2000. A pilot home mortgage program was launched as a separate component in late 2000. In FY 2001, BDP will expand activities in the Mostar region and may formally establish the home mortgage program depending on the results of the pilot program. USAID does not plan to obligate any additional funds for BDP. USAID is developing an exit strategy and implementation plan for the use of any funds remaining at the end of the program and privatization of the BDP loan portfolio.
In FY 2002, the program will continue to support the creation of transparent and accountable financial management tools and institutions that began with the dissolution of the payment bureaus. Harmonization of entity-based financial practices will be supported and assistance will be given to selected state level institutions and organizations. Macro economic advice will be provided at the entity and state levels to assist BiH officials in making rational and complementary financial management decisions. Business and mortgage loans will continues to be available, as will business management advisory services.
Beneficiaries: The ultimate beneficiaries are the citizens of BiH who gain from a stronger, better managed economy. In particular, beneficiaries include entity and state level financial ministries and offices, bank supervision agencies, selected banks, tax administration ministries and offices, privatization agencies, private business owners, securities and exchange commissions and potential home owners.
Other Donors: USAID's economic reform program works closely with the IMF, the EU, the European Bank for Reconstruction Development, and World Bank to ensure a common donor approach to promoting critical reforms. USAID's leadership of the IAGP has maintained the momentum to get important reforms underway in Bosnia. USAID's BDP complements other donor commercial lending programs.
Principal Contractors, Grantees Or Agencies: USAID implements economic reform activities under this strategic objective through U.S. consulting firms including Price Waterhouse Coopers, Deloitte Touche Tohmatsu, the Barents Group, and International Business and Technical Consultants Incorporated.
Performance And Prospects (Democratic Reform Component): USAID is working to build strong, enduring democratic institutions in a just and multi-ethnic society. The democratic reform agenda supports development of an independent media that provides objective and balanced information to all citizens; free and fair elections with a pluralistic party structure and high voter participation; democratic political leadership that governs transparently and accountably; and a professional and independent judiciary operating in an environment governed by the rule of law.
From February 1996 to May 2000, USAID's Office of Transition Initiatives (OTI) promoted reform efforts by supporting independent media and local NGOs. OTI-supported independent media outlets worked to counter nationalist propaganda and avert violence, thereby contributing to the peaceful resolution of ethnic and political differences. Cross border projects initiated by OTI in Serbia and Croatia encouraged the two countries to cooperate and helped counter the negative nationalist propaganda of Slobodan Milosevic's Serbia over the RS and of Franjo Tudjman's Croatia over Herzegovina. For the April 2000 municipal elections, OTI, together with local NGOs and media, organized an extensive get-out-the-vote (GOTV) campaign that crossed ethnic lines and underscored the importance of participating in elections, regardless of the voter's ethnicity.
USAID intends to obligate $4.0 million in FY 2001 funds for independent media. In FY 2000, USAID assistance improved the business operations, management, revenue generation and market research capacity of select broadcast and print media outlets. Prompted by the USAID media program, virtually all BiH newspapers and newsmagazines publicly committed to observing a countrywide code of press ethics and the structure of a voluntary, countrywide press council to implement the press code. Legal experts provided through the USAID media program aided the OSCE to draft a widely acclaimed freedom of information law that the BiH parliament has now adopted. The OSCE will take the lead in developing an implementation plan for the law and USAID will provide training. Following the car bombing of the editor of a local newspaper in October 1999, the media program carried out a comprehensive study of partisan political pressures on media, the reasons for media vulnerability to such pressures, and potential remedies. The USAID media program has provided personal security training for high-risk journalists. In FY 2001, USAID will provide technical assistance aimed at further improvements in the quality and content of the news and more effective management of media enterprises. The program will also focus on improvement in the legal and regulatory framework supporting media and free speech.
In FY 2001, USAID intends to obligate $4.5 million in FY 2001 funds and $1.99 million in FY 2000 carryover to support elections and political and social processes. USAID has previously provided a broad range of technical assistance directed to political party development, improved accountability of elected officials, election management and monitoring, voter registration and education, and institution building support to the Association of Elected Officials of BiH. Although BiH voters did not uniformly elect progressive, reformist political leaders in the November 2000 elections, these elections consolidated trends toward moderation. The next round of elections is scheduled for the fall of 2002 and USAID assistance is more important than ever. This interim election year provides the opportunity to build professional and institutional capacity and ensure the public has the tools it needs to proactively engage in the political process. In FY 2001, USAID will focus on training and technical assistance to newly elected Parliamentarians; strengthening political parties at the grassroots party structure and leadership levels; providing specialized technical assistance to moderate political parties; building the capacity of the Association of Election Officials in BiH to administer elections; and supporting passage of the permanent election law. USAID will also closely link its elections and political and social processes activities to NGO strengthening and local governance activities.
In FY 2001, USAID plans to obligate $2.52 million in FY 2000 carryover for Non Governmental Organizations (NGO) strengthening. USAID programs directed to NGO strengthening include Democracy Network (DemNet), the International Center for Not for Profit Law and a community organization activity. These programs are having a significant public policy impact in BiH. Member NGOs have successfully organized public campaigns to lobby local government, mobilized funding from international organizations, developed coalitions and mounted advocacy campaigns, and launched programs to address identified problems. In FY 2001, USAID will strengthen the ties among elections and political and social process activities, NGO strengthening activities and local governance activities. USAID will work with communities to identify and prioritize needs, and lobby local officials and elected representatives. USAID will also support development of a national organization focused on community-based organizing, civic education and domestic election monitoring. In FY 2001, USAID will also begin DemNet II that will expand the number of highly trained and professionally managed indigenous NGOs in BiH. This core group will have the capacity to provide valuable services to their constituents.
In FY 2001, USAID intends to obligate $3.855 million in FY 2001 funds to support local governance. USAID plans to start a new program focused on improving economic and social/political conditions in communities by working with small businesses and families to improve the local government, local living conditions and local economies. The program will mobilize sufficient resources to create a critical mass of activity in a concentrated area in order create significant impact. While it is true that many local governments in Bosnia are inefficient, corrupt, and uneducated in their jobs, there are elected and appointed officials who seek to improve the level of services provided by government and who want training and technical assistance. The program will help to make these authorities more responsive to the social, political and economic needs of their constituents. It will also help to make local government more responsive to the needs of a multi-ethnic society. The program will facilitate improvements in government services for small business and citizens. The project will work with local credit and business associations, homeowners' associations, local NGOs, and local government. It will provide training to local governments and will work with business associations and citizens to create credit associations. The program will work in 14 municipalities in Central Bosnia along the Ilidza-Travnik corridor and the parallel Ilidza-Maglai corridor. The two parallel corridors include all three ethnic groups.
In FY 2001, USAID plans to obligate $800,000 in FY 2001 funds and $185,000 in FY 2000 carryover funds to support Rule of Law. To date, USAID's focus on judge training, bar reform and legislative reform has resulted in: creation of a cadre of 40 judicial trainers who will form the core of two judicial training institutes; progress in establishing uniform regulation of the legal profession; consensus in the legal community on the need for a unified bar association; and draft legislation on court budgets and improvements in the civil procedure code.
In FY 2001, USAID will continue to provide technical assistance, training and advocacy grants to develop active independent judges', bar and /or lawyers' associations. The program will also focus on creation of an indigenous, sustainable judicial training and education mechanism that reflects the needs and desires of Bosnian judges. Legislative and court administration reform in the Federation and the RS will focus on improvement of framework of civil procedure and execution of civil judgement laws that reduces litigation inefficiencies, as well as case-flow management. Legislative drafting will be important segment of the program in FY 2001.
In FY 2001 USAID intends to obligate $125,000 in FY 2001 funds and $550,000 in FY 2000 carryover funds to support the Brcko arbitral decision. Since the Brcko District was established in March 2000, USAID has played a leading role in recruiting and training a qualified multi-ethnic workforce for the fledgling District government. The District's first Annual Budget has been completed and approved. USAID's District Management Team is actively engaged in addressing municipal services' issues. Working closely with District employees, USAID spearheaded a series of difficult negotiations with Entity officials regarding consolidation of the District's three electricity distribution firms into a single multi-ethnic electric utility. Objectives of this effort include establishing uniform rates for all district electricity customers, a well-trained, rationally sized workforce and more efficient collections. To this end, an aggressive "shut-off" collection program has been implemented and revenues significantly increased. In FY2001, the USAID will continue to provide support to the Brcko District in oversight of day-to-day operations of the newly created District; implementation of reforms under a professional civil service model of local government; and provision of on-the-job training for the managers of the Brcko District government.
In FY 2002, the program will continue to focus on improvements at the local level by supporting the linkage among local government, civil society and political/party/legislative strengthening. Support to independent media, judicial reform and elections managed by the Association of Election Officials in BiH will also continue.
Beneficiaries: Beneficiaries are the citizens of BiH who gain from a stronger democracy. In particular, beneficiaries include selected local governments, civil society organizations, political parties, members of BiH legislatures, selected print and electronic media outlets, journalist and other media-related associations, the Association of Election Officials in BiH and law-related associations.
Other Donors: In democratic reform, USAID works closely with other donors, primarily the OHR, the EU, the Council of Europe, and other bilateral and private organizations, in efforts to support independent media, political party development, judicial reform, and civil society building.
Principal Contractors, Grantees Or Agencies: USAID implements democratic reform activities U.S.-based and local NGOs, including the International Foundation for Election Systems, the National Democratic Institute, the American Bar Association, International Research and Exchange Board, American ORT and Development Alternatives Incorporated.
Performance And Prospects (Minority Returns Component): The Municipal Infrastructure and Services Program (MIS), designed to meet urgent infrastructure reconstruction needs in support of economic recovery and refugee returns, ended on December 31, 2000. Under MIS, over 270 projects community-based projects in the energy, water, transportation, health, and education sectors totaling $187 million were completed, and 11,000 short-term jobs created. More than 510 joint USAID/U.S. Stabilization Force (SFOR) projects (Community Infrastructure Rehabilitation Projects or CIRPS) worth over $32 million have been completed. Over 9,000 short-term jobs were created through the CIRP projects, and 16,000 children are attending schools repaired under MIS and CIRPs. In Brcko, USAID has invested approximately $17.9 million in infrastructure rehabilitation and technical assistance providing assistance 55,000 minority returnees.
In FY 2001, USAID plans to obligate $26.0 million in FY 2001 funds to support minority returns and water and power sector institutional strengthening. USAID launched the Community Reintegration and Stabilization Program (CRSP) in late FY 00. CRSP focuses exclusively on community-based support for minority returnees, including the institutional strengthening of municipal utilities. USAID will continue its collaboration with US army-led SFOR troops (CIRPs), as well as its support for the Brcko Arbitral Decision. In FY 2001, CRSP will assist 48,000 returnees. CRSP will also provide targeted technical assistance to improve operations and sustainability of local water companies and reform and privatize electric companies. In Brcko, CRSP will continue to complement other USAID funded activities to establish a functioning Brcko district government.
In FY 2002, the program will continue to provide access to basic services, such as water and power, for minority returnees. Income generation activities will also become part of the program. Institutional strengthening in the power and water sector will continue ensuring and efficient and cost effective delivery of those services.
Beneficiaries: Beneficiaries are the citizens of BiH who gain from a return to a multi-ethnic society in which all citizens have the right and ability to return to their homes and improved power and water delivery. In particular, beneficiaries include selected minority return communities and water and power regulatory bodies.
Other Donors: In minority returns, the CRSP program is closely coordinated with the infrastructure rehabilitation efforts of the World Bank, the EU, and other multilateral or bilateral organizations and the State Department's Bureau for Population, Refugees and Migration. USAID is prohibited from constructing or reconstructing housing. The CRSP program also works very closely with the EU, OHR and World Bank in promoting institutional sector reform in the water and energy sectors. In both sectors, donor unity plays a major role in encouraging reforms to make the sectors eligible for much-needed loans and eventual utility privatization.
Principal Contractors, Grantees Or Agencies: USAID implements minority return activities through private U.S. and local companies including the Ralph M. Parsons Company and local construction firms and U.S.-based NGOs, including the American Refugee Committee, International Refugee Committee, Mercy Corps International, World Vision Incorporated and International Orthodox Christian Charities.
Performance And Prospects (Cross-Cutting Activities): Since 1995, USAID's participant training program has sent well over 700 mid- and-senior level officials, business leaders, and citizen activists from both entities to the United States and third countries for intensive short-term training. Women represent approximately 42 percent of participants. Training programs are selected to directly complement USAID activities in economic growth and reform, infrastructure rehabilitation, and democracy building. Participants are recruited and selected competitively from the professional and functional levels identified as critical to effecting change in institutions with which USAID is working. Funds devoted to cross-cutting activities also support U.S. Personal Service Contractors and a local Foreign Service National staff in the design and implementation of the portfolio and financial and program management activities. The funds are also used to support monitoring, evaluation and strategy design,
In FY 2001, USAID plans to obligate $3.3 million in FY 2001 funds for cross-cutting activities. Training programs will continue to directly complement USAID activities in economic growth and reform, infrastructure rehabilitation, and democracy building. Funds will also be used to continue critical management, planning and evaluation functions.
In FY 2002, the program will continue to support human capacity development by providing BiH citizens with in-country, third country and U.S. based training opportunities and to ensure prudent management and oversight.
Beneficiaries: Beneficiaries are the citizens of BiH who gain from the increased management and performance capacity of public officials and private citizens. Individual beneficiaries will vary depending on the training programs selected.
Principal Contractors, Grantees Or Agencies: USAID implements cross-cutting activities through World Learning, a private U.S. company and U.S. citizen and local citizen employees.
Possible Adjustments To Plan: USAID is in the process of developing a new five-year program strategy for the BiH. The strategy will reflect U.S. Government priorities and lessons learned during implementation to date. Program components and activities throughout the portfolio may be modified accordingly.
FY 2002 Performance Table
Selected Performance Measures*: Recovery From Crisis, 168-031
Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY01 (Plan) FY02 (Plan) Indicator 1: Minority Beneficiaries** NA 70,000 57,000 55,000 48,000 N/A Indicator 2: Short term jobs created through minority return support*** 4,565 3,707 3,770 4,170 N/A N/A Indicator 3: Effectiveness of local NGOs promoting citizen concerns (NGO Sustainability Index rating)**** 5.6 5.3 4.9 N/A N/A Indicator Information:
Indicator Level (S) or (IR) Unit of Measure Source Indicator Description Indicator 1: * # of beneficiaries Refugee assistance organizations and USAID/BiH Minority Returns Office staff Number of minority refugees benefiting from the provision of community based basic services. Indicator 2: * # of employees Activity conractor and subcontractor Number of people employed on a short-term basis in the provision of community based basic services. Indicator 3: * Overall NGO ranking USAID NGO Sustainability Index Average of ranking for all aspects of NGO effectiveness as determined by the NGO Sustainability Index. * Appropriate activity performance measures for all activities are under development and will be included in the Mission's strategic plan presentation.
** Targets are set on a yearly basis and depend on available funding and projects selected. The minimal goal for the minority return activity which began in FY 01 is 100,000 minority beneficiaries assisted.
*** The figures reported here are calendar year figures. For the purpose of this report, a short-term job is assumed to be three months of employment.
**** USAID uses the NGO Sustainability Index as a proxy for improved NGO effectiveness. On a scale of one to seven, one is the best rating and seven is the worst.
U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999 299 DA 299 DA 0 DA 0 CSD 0 CSD 0 CSD 5,250 ESF 4,979 ESF 271 ESF 728,658 SEED 684,202 SEED 44,456 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 12,000 ESF 6,380 ESF 55,875 SEED 55,602 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 299 DA 299 DA 0 DA 0 CSD 0 CSD 0 CSD 17,250 ESF 11,359 ESF 5,891 ESF 784,533 SEED 739,804 SEED 44,729 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 39,289 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 0 ESF 59,505 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 98,794 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 299 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 17,250 ESF 52,000 SEED 0 SEED 935,327 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA
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Last Updated on: May 29, 2002 |
