Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
CROATIA
FY 1998 Assistance to Central Europe Request . . . . . . . . . . . . . . . . . $24,000,000 Introduction
From 1943 to 1991 Croatia was one of six constituent republics of the Socialist Federal Republic of Yugoslavia. In June 1991, Croatia declared independence from Yugoslavia, and shortly thereafter war erupted in portions of Croatia with large ethnic Serb populations. During the war, nearly a third of Croatian territory -- including the so-called Krajina and much of Slavonia -- was temporarily incorporated into the self-proclaimed Republic Serbska. In 1995, Croatian armed forces successfully regained control of Western Slavonia and the Krajina. A U.S.-brokered agreement, signed at Erdut in November 1995, brought an end to the war in Croatia by providing for the peaceful reintegration to Croatia of the last remaining piece of Serb-occupied territory in Eastern Slavonia. The Erdut Agreement was an essential precursor to successful negotiation of the Dayton Peace Accords. Under the agreement, a United Nations Transitional Administration for Eastern Slavonia (UNTAES) was established to administer Eastern Slavonia for an initial period of 12 months, beginning in January 1996. In November 1996 the United Nations (UN) Security Council extended the UNTAES mandate through July 17, 1997 with an option for a continuing UN presence through January 1998. Eastern Slavonia is a bellwether for the viability of multi-ethnic society in Croatia and the region and a potential flash point for renewed hostilities and destabilizing population movements. U.S. assistance to Croatia is needed to facilitate successful completion of the UN mandate in Eastern Slavonia and full implementation of the terms of the Erdut Agreement, including support for protection of civil and human rights of all affected populations. In the aftermath of the war, Croatia has entered a critical phase in the transition to an open democratic society. U.S. assistance to Croatia supports two U.S. foreign policy goals: promoting regional peace in the independent republics of former Yugoslavia, and fostering development of stable, market oriented democratic societies in Central and Eastern Europe.The Development Challenge
The development challenge in Croatia is twofold: (1) to resolve outstanding issues arising from the war among the former republics of Yugoslavia (i.e., resettlement of displaced persons and refugees, peaceful reintegration of formerly occupied territories, and reconstruction of damaged infrastructure and the economy), and (2) to complete the transition to an open democratic society with a sustainable market-based economy. The Government of Croatia was a signatory to the Dayton Accords and remains an essential partner for implementing the peace plan to ensure long term stability in the region. Successful economic and democratic transition is essential for Croatia to become a full partner to the process of European integration and maintain close relations with the United States.Reintegration of Eastern Slavonia, including official transfer of authority over the region to the Government of Croatia (GOC) and resettlement and reintegration of all affected populations, is the principal outstanding issue remaining from the war. Since the beginning of 1996, Eastern Slavonia has been under the control of UNTAES. In November 1996, the UN Security Council extended the UNTAES mandate through July 1997 with an option for a continued UN presence in the area through January 1998. Successful completion of the UNTAES mandate and full implementation of the terms of the Erdut Agreement will entail organizing and conducting free and fair local elections in the area prior to UNTAES departure, and resettlement and reintegration of up to 250,000 displaced persons and refugees affected by the terms of the Agreement. Beyond UNTAES, the challenge in the formerly occupied territories is to create social, political and economic conditions to restore and sustain the multi-ethnic composition of pre-war society.
While the process of economic transition is well-advanced in Croatia, substantial progress is needed in democratic reform, as well as some aspects of economic reform, between now and the year 2000 to enable Croatia to succeed in becoming a full partner to the process of European integration, including possible entry into the European Union, the Partnership for Peace, and eventually NATO. Croatia's uncertain commitment to a free and independent media and the need to establish a transparent legal and institutional framework to support representative multi-party democracy at the national and local levels are the two principal challenges to a successful democratic transition in Croatia. With local, regional and national elections scheduled in 1997, the next two years including FY 1998 will be critical for shaping the nature of democracy and civil society in Croatia for years to come. Despite apparent obstacles, this period presents important opportunities for sustained USAID engagement to pay major dividends in the future.
Other Donors
The key development partners in Eastern Slavonia are the UN, the European Union, Norway, and Belgium. The United Nations High Commissioner for Refugees (UNHCR) and the Federation of the Red Cross provide important support for reintegration and resettlement of war-affected populations. The principal development partners for economic restructuring are the IMF, the World Bank, and the European Bank for Reconstruction and Development. The British Know How Fund is also active in the area of financial sector development. Other donor support for democratic transition in Croatia has been very limited to date. The Open Society Institute (Soros Foundation) is an important supporter of independent media. Croatia became a member of the Council of Europe in November 1996, and it is anticipated that the EU, through the PHARE program, and other bilateral donors such as Germany, Sweden, and Norway will establish more active programs to support democratic and economic transition in Croatia.FY 1998 Program
USAID's strategic plan for Croatia for the four year period 1996 through 1999 comprises four strategic objectives in the three core assistance areas. In the core area of social stabilization, USAID in FY 1998 will focus efforts on completing the process of resettling and reintegrating populations affected by the Erdut Agreement. This strategic objective will remain the highest program priority through FY 1998. As the process of resettlement is completed, greater emphasis will be placed on establishing effective mechanisms for monitoring and safeguarding civil and human rights of resettled populations. To foster long-term stability in the whole of reintegrated Slavonia and other formerly occupied territories, USAID will continue to support regionally-based small credit, equity finance, and small/medium-scale private business development activities to promote economic revitalization and growth. In the core assistance area of democratic transition, USAID will focus resources on two strategic objectives: increased, better-informed citizens' participation in public decision making with emphasis on independent media, and improved local governance. In the core assistance area of economic restructuring, USAID will continue to support a tightly focused portfolio of activities to foster development of a competitive, private financial sector, the overall goal of which is to increase transparency in the financial markets and create conditions for broader public participation in the benefits of economic restructuring.The proposed FY 1998 budget level constitutes a substantial increase in funding for the Croatia program. More than two thirds of the proposed budget will be directed to the ongoing process of reintegration of Eastern Slavonia. USAID support of this process is a fraction of the cost of reconstruction, but will enable the US to continue to play an important leadership role in support of peaceful reintegration of populations, respect for human and civil rights, and restoration of mult-ethnic society in the formerly occupied areas of Croatia. The departure of UNTAES from Eastern Slavonia in 1997 and the elimination of internal borders mark the next 12 to 24 months as a critical juncture for the overall success of the operation. In the areas of economic and democratic transition, funds are needed to continue to promote systemic and sustainable change and lay the foundation for phase down of the program and inclusion of Croatia in the first group of Southern European SEED Program graduations.
Strategic Goal: Social Stabilization
Since early 1996, Eastern Slavonia, including the city of Vukovar, has been under the control of the UN Transitional Administration for Eastern Slavonia (UNTAES). As of the end of 1996, UNTAES has made substantial progress in demilitarizing the area and preparing for a peaceful transfer of authority to Croatia some time in 1997. Under the terms of the Erdut agreement, local elections must precede UNTAES' departure. All parties to the agreement are committed to ensuring the right of displaced and refugee populations with legal claim to Croatian citizenship to return to their homes of origin or resettle voluntarily in other parts of Croatia. Elections are scheduled for spring 1997 with transfer of authority expected later in the year. Despite progress to date, inter-ethnic tensions in the region remain high, and the area remains a potentially unstable flash point. A recent assessment by UNTAES estimated the cost of reconstruction in Eastern Slavonia at over $1.0 billion.
The process of peacefully reintegrating populations affected by the Erdut Agreement will take years to accomplish. Fulfillment of the UNTAES mandate to conduct local elections and transfer authority to the GOC by no later than mid-January 1998 is the crucial first step. The UNTAES mission constitutes a major diplomatic and financial investment by the USG and other donors, the ultimate success of which will be judged by what occurs after UNTAES departs. Restoring and sustaining the multi-ethnic composition of pre-war society in the region remains an important U.S. policy objective. Beyond UNTAES, successful reintegration and reconciliation of affected populations will depend on the capacity of the regional economy to create sustainable income and employment opportunities to accommodate resettled civilian populations, effective monitoring and protection of human and civil rights of all affected populations (particularly minority Serb populations), and reconstruction and rehabilitation of housing and infrastructure to enable displaced persons and refugees to return to their homes of origin or resettle permanently and voluntarily in other parts of Croatia. The window of opportunity for ensuring success after UNTAES' departure is limited. Timing will be crucial. Rapid and sustainable progress in each of these three areas is needed to develop and sustain the momentum of stability.
Needs associated with reintegrating populations affected by the Erdut agreement go well beyond Eastern Slavonia to encompass all of the former UN protected areas of Croatia including Western Slavonia and the so-called Krajina. Many of the current resident Serbs of Eastern Slavonia come from other parts of Croatia where war damage was severe and where little has been done to prepare for substantial population returns. Return of displaced Croats to their homes of origin in Eastern Slavonia will require that displaced Serbs vacate Croat homes of origin. This process will be disruptive and stressful in the extreme. If progress is slow in coming, impatience for quick remedies and the desire for revenge could result in violence and human rights violations against minority populations. While some degree of gridlock is inevitable, the likelihood of inter-ethnic tensions and hostilities can be mitigated by provisions to accommodate affected populations and establish effective human rights monitoring mechanisms.
Strategic Objective: The Peaceful Reintegration of populations affected by the Erdut Agreement Strategic Goal: Democratic Transition
Despite the existence of many aspects of democracy (e.g., constitutional guarantees of freedom of speech, freedom of press, and multi-party elections), the process of transition in Croatia to an open, participatory democratic society remains conspicuously incomplete. The principal threat to democratic transition is the concentration of power in the executive branch of the Croatian national government. The years between now and 2000 will constitute a watershed in Croatia's post-war democratic evolution.
Since independence in 1991, the Croatian Democratic Union (HDZ) has been the best organized and well financed political party in Croatia. With a strong majority in Parliament, the HDZ has used its advantage to consolidate its hold on power and stifle opposition efforts to share power. Efforts by the HDZ in the Croatian Parliament to amend elections laws in its favor and to pass new restrictive legislation affecting the press, non-governmental organizations, and the right of association have raised serious concerns about the future of open, democratic society in Croatia.
Notwithstanding HDZ's dominance, pluralism in Croatia has increased since 1991. Results of national and local elections in 1995 provided strong evidence that post-war Croatian society was prepared to support a more active multi-party democracy, including power sharing between the ruling and opposition parties. At the national level, the HDZ failed in its stated objective to gain a two-thirds majority in Parliament that would have given it wide latitude to wield power virtually unchecked. At the local level, voters in 27 cities, including Zagreb, elected opposition city council majorities and mayors. Voters from another dozen cities chose to support power sharing between an opposition majority on the city council and an HDZ mayor. Strong public protests in Zagreb in early 1996 over the ruling party's veto of a series of opposition mayoral candidates and more recently against moves to close down a popular independent radio station in the city are further evidence of a growing demand for more open democratic society in Croatia.
Support for independent media in Croatia is crucial to long-term prospects for representative democracy. The easy flow of information typical of mature democracies does not yet exist in Croatia. While opposing opinion is openly expressed, it has little platform from which to be heard. There are insufficient independent media outlets to counter television and other electronic media over which the government maintains monopolistic control. Press freedom is expected to remain precarious at least through 1998, when a new parliament will be seated. Until then, Croatian NGOs and newspapers, radio stations and other independent media outlets must assume a defensive posture, preserving the space available to them and pushing the envelope where possible. USAID will continue to provide technical assistance, training and other support to strengthen independent media and promote greater professionalization.
To offset the dominance of the ruling party at the national level, support is needed to foster the development of sustainable political parties and non-governmental organizations (NGOs) to respond to citizens' growing social, economic and political demands. Strengthened capacity of opposition parties to organize enduring coalitions and offer more meaningful platforms will enhance their viability as alternatives for national leadership and exert a moderating influence on legislation.
Below the national level, city governments in Croatia are generally receptive to innovation and willing to make changes in favor of participatory democracy. In contrast to cities in other CEE countries, Croatian cities are already endowed with a legal framework granting them considerable autonomy. These factors and the existence of multi-party democracy at the local level provide an opportunity to foster democratic transition through support for improved, more responsive, local governance. Of particular importance is to establish mechanisms to open government processes to input from citizens and citizens groups to push city governments to be more responsive and accountable to their constituents' needs.
Strategic Objective: Increased, better informed citizens' participation
Strategic Objective: More Accountable and Responsive Local Governance
Strategic Goal: Economic Restructuring
Accelerated economic growth is critical to improve post-war living standards and enhance Croatia's ability to serve as a stabilizing influence in the region. To achieve sustainable growth, Croatia needs to attract private investment from both domestic and foreign sources, complete the transition to amarket economy including privatization of socially-owned enterprises, establish a sustainable system of public finance to sustain long-term macroeconomic stability, and create a conducive environment for the growth and development of private enterprises.
Of equal importance to economic expansion is that economic growth take place under conditions that encourage and facilitate broad participation of the population in the benefits of restructuring. Since independence in 1991, there have been growing concerns among many Croatians that a well-financed and politically well-connected elite have garnered a disproportionate share of the benefits of economic restructuring. An under-developed financial sector and particularly the lack of transparency and effective regulation in the financial markets has contributed to the concentration of wealth. Potential investors (including Croatians with capital outside of Croatia) not privy to the arcane and confusing workings of the domestic financial system, have been reluctant to invest due to lack of confidence in the system. At the same time, competition over the limited funds available for financing private sector development has excluded the less well-connected and further led to increased concentration of wealth.
The Croatian financial sector suffers from lack of investor confidence in the formal banking system, severe domestic illiquidity, and under-developed capital markets. Lack of confidence in the banking system is the result of inherent weaknesses in the state-controlled system inherited from the former Yugoslavia, absence of a transparent legal and regulatory framework to govern operations, and lack of basic institutional infrastructure to regulate and supervise financial institutions to ensure sound management practices and protect investors. Domestic illiquidity is the result of unresolved public finance issues left over from the break-up of the former Yugoslavia. For example, the total nominal value of government paper issued to Croatian banks against liabilities resulting from the seizure of private foreign exchange assets by Belgrade and excessive losses accumulated by "socially-owned" enterprises is currently estimated at $2.1 billion. This constitutes more than 40% of total assets in the banking system. The inability of commercial banks to convert these non-marketable government securities to cash constitutes a huge drag on the economy and severely constrains banks' ability to make funds available to finance private sector-led growth. Domestic illiquidity has also been exacerbated by the general economic decline resulting from the war and the imposition of restrictive monetary policy.
USAID has selected the financial sector as the priority economic restructuring assistance area based on potential for influencing government and private sector investment to achieve a wide range of sustainable outcomes and affect a broad class of beneficiaries. USAID support will make the financial system more transparent and more accessible to a broader range of the Croatian population and increase availability of financing through expanding capital markets. A well developed financial sector and capital market will also enhance Croatia's long term prospects for European integration.
Strategic Objective: A More Competitive and Market-responsive Private Financial Sector
Cross-cutting and Special Initiatives.
In FY 1998 the only remaining cross-cutting program receiving funding is the Audit, Evaluation and Project Support (AEPS) Project. Support under this project will be used to maintain regular program and project monitoring and evaluation systems including close-out audits and evaluations. USAID financial support for the American International Health Alliance is scheduled to end in FY 1997. Participant training has been incorporated into each of the strategic objectives.
CROATIA
FY 1998 PROGRAM SUMMARY*
Strategic Objectives
Economic Restructuring Democratic Transition
Social Stabilization Cross-cutting / Special Initiatives Total Privatization -- -- -- -- -- Fiscal Reform -- -- -- -- -- Private Enterprise -- -- -- -- -- Financial Reform 3,000,000 -- -- -- 3,000,000 Energy -- -- -- -- -- Citizens' Participation -- 6,000,000 -- -- 6,000,000 Legal Systems -- -- -- -- -- Local Government -- 4,000,000 -- -- 4,000,000 Crises -- -- 10,000,000 -- 10,000,000 Social Benefits -- -- -- -- -- Environmental Health -- -- -- -- -- Cross-cutting / Special Initiatives -- -- -- 1,000,000 1,000,000 TOTAL 3,000,000 10,000,000 10,000,000 1,000,000 24,000,000 *Support for East European Democracy (SEED) Act funds
USAID Representative: Charles R. Aanenson
ACTIVITY DATA SHEET
PROGRAM: CROATIA
TITLE: More Competitive, Market-responsive Private Financial Sector, 180-S001.4
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $3,000,000 SEED Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 1999
Purpose: More competitive and market-responsive private financial sector.
Background: Croatia needs to attract private domestic and foreign investment in order to achieve sustainable growth. Development and modernization of the financial sector is essential to establishing a solid foundation for a modern market economy which welcomes and facilitates the broad participation of the population.
USAID Role and Achievements to Date: USAID assistance has resulted in a number of financial sector developments. Six Treasury-bill auctions have been successfully conducted and the Ministry of Finance has established a public debt control system. Banking supervision/examination capacity has been established and Croatian examiners have improved their skills in on- and off-site procedures. Two banks have been placed into the bank rehabilitation program. The Zagreb Stock Exchange has established membership rules, and the Croatian Securities Commission (CROSEC) has been formed.
Description: USAID is providing training and technical assistance to the National Bank of Croatia to establish a Bank Supervision Unit and to the Bank Rehabilitation Agency to restructure large regional banks. A resident Treasury Advisor is working with the Ministry of Finance to assist in development of a government securities market and establish a public debt control system. Technical assistance and training has been provided to assist development of the Croatian Securities Commission, the Central Registry and other financial sector institutions. ABA/CEELI is providing technical assistance to improve legal/regulatory framework affecting financial transactions.
Host Country and Other Donors: USAID is coordinating with the World Bank, Ministry of Finance, Central Bank. and the British Know How Fund.
Beneficiaries: Beneficiaries of this strategic objective include CROSEC, the Ministry of Finance, National Bank of Croatia, Zagreb Stock Exchange, Varazdin OTC Market; and the Croatian financial community.
Principal Contractors, Grantees, or Agencies: U.S. Treasury Dept; KPMG/Barents Group, Financial Services Volunteer Corps; ABA/CEELI. Carana/Recovery Group; World Learning
Major Results Indicators: Baseline TargetInterest rate spread between 19% (1996) 10% (1999) deposits and loans declines
Share of assets in private banks increase 48% 60%
Gov. Debt Securities issued domestically 0 (1995) 2.5 billion kuna
Ratio of Household deposits to GDP 18% 21%
Bankruptcy law implemented No (1995) Yes (1997)
% of non-performing bank assets identified 8% known (1995) 15% (1999) and reduced
% of banks examined annually 10% (1995) 100% (1999)
Companies with securities officially 1 (1995) 14 (1999) registered with the Stock Exchange
Capital markets laws and CROSEC regulations in place No (1995) Yes (1998)
ACTIVITY DATA SHEET
PROGRAM: CROATIA
TITLE: Increased, better informed Citizens' Participation, 180-SO02.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $6,000,000 SEED Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 1999
Purpose: Foster transition to sustainable democracy.
Background: The next two years will be critical for determining the long term nature of democracy and civil society in Croatia. Independent media, durable political parties to respond to a broad range of citizens' concerns, and more active involvement of NGOs and other citizens groups is needed to enable Croatia to complete transition to an open democratic society.
USAID Role and Achievements to Date: USAID has helped strengthen the University of Zagreb Journalist Faculty, trained over 100 journalists and helped establish a Press Club. USAID has also assisted in the development of a coalition of labor unions. USAID assistance to political parties is helping make them more responsive to constituents' concerns as well as helping strengthen coalitions among parties. Finally, several Croatian NGOs are becoming financially self-sustaining as a result of USAID support.
Description: The National Democratic Institute (NDI) is providing training and technical assistance to political parties to enhance multi-party democracy in Croatia and support voter education in Eastern Slavonia. The Free Trade Union Institute is working with Croatian trade unions to improve advocacy skills. The International Research and Exchange Board (IREX) is providing training, technical assistance to support independent media and the institutional development of independent journalists' associations. ABA/CEELI is supporting the Croatia Judges Association. The Urban Institute is working to develop links between local governments and NGOs.
Host Country and Other Donors: In supporting political pluralism, USAID is coordinating with Holland, Norway, the Open Society Foundation, and the European Union.
Beneficiaries: Beneficiaries of this strategic objective include: the Croatia Journalists Association, University of Zagreb Journalism Department, independent media practitioners; political parties, trade unions, and NGOs.
Principal Contractors, Grantees, or Agencies: IREX, NDI, the Free Trade Union Institute, the Croatia Journalists Association, ABA/CEELI, the Urban Institute, America's Development Foundation, International Rescue Committee, and Delphi/Star International..
Major Results Indicators:* Baseline TargetMore active citizen participation in civil society 0 (1997) +1.0 (1999) (rated on scale -2 through +2)
More Effective NGO advocacy on five key issues (independent 0 (1997) +1.0 (1999) media, reintegration, privatization, democracy and women's rights)(rated on scale -2 through +2)
Increased responsiveness of political parties to constituents Low Average/high
Increased balance in media reporting Low Average/high
Increased media professionalism Low High
Freedom house rating on democracy and media Partly Free Partly Free/Free * Baseline and targets are drawn from independent survey data collected during program period
ACTIVITY DATA SHEET
PROGRAM: CROATIA
TITLE AND NUMBER: Local Government, 180-S002.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $4,000,000 SEED Act.
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2000
Purpose: More Accountable and Responsive Local Governance.
Background: Croatian cities are electorally more pluralistic and open than the national government. Cities are often seen by the national government as outside its control, where opposition politicians can gain a foothold. USAID will assist city governments to achieve a greater degree of political and economic independence from the national government. Our program will be anchored to the five cities of Zagreb, Rijeka, Osijek, Split, and Varazdin. Cities are relatively more likely than the central government to embrace innovative procedures such as open public hearings on local government priorities.
USAID Role and Achievements to Date: USAID assistance is helping improve the competency of local government, as well as its transparency and accountability to citizens. The program is relatively new, but is already achieving progress. Five cities are introducing democratic practices for budget formulation and service delivery. Three cities are jointly approaching economic development and solid waste management. Two cities preparing to finish their incomplete housing privatization of 1992.
Description: This activity contributes directly to two high-profile initiatives undertaken by American diplomacy in Croatia: the peaceful reintegration of former UN Sector East into Croatia proper, and the increased prevalence of pluralistic democracy at all levels of governance. As city governments are the primary training ground for the next generation of political leaders, USAID is working with cities to establish routine use of democratic practices, modern municipal finance, private sector approaches to housing, and the peaceful reintegration of eastern Slavonia.
Host Country and Other Donors: The activity works with the city governments, rather than with the national Croatian government. The EBRD is considering financing major investments in public infrastructure in two of the cooperating cities.
Beneficiaries: Approximately two million persons will directly benefit from improved city services and housing management.
Principal Contractors, Grantees, or Agencies: Urban Institute Consortium
Major Results Indicators: Baseline TargetCitizens view city government as responsive 2 (1996) 12 (1999) and accountable to their needs
Number of cities where city councils and 0 (1996) 10 (1999) executives conduct joint review of operating and investment budgets and involve citizens in the process
Number of cities using public hearings or other 0 (1996) 10 (1999) reviews of adequacy of city services
Number of Slavonian cities implementing a joint 0 (1996) 5 (1999) approach to economic development
ACTIVITY DATA SHEET
PROGRAM: CROATIA
TITLE: Reintegration of Populations Affected by the Erdut Agreement 180-S003.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $10,000,000 SEED Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 1998
Purpose: Peaceful resettlement and reintegration of populations affected by the Erdut Agreement
Background: Eastern Slavonia was the scene of fierce fighting between Croatia and rebel Serbs at the outset of the war in 1991 and was occupied by rebel Serbs for nearly five years. Under the terms of the Erdut Agreement, the territory will be peacefully reintegrated into Croatia by no later than January 1998 after a 12-24 month period of UN Administration. The reintegration process will affect up to 250,000 displaced persons and refugees. Successful completion of the UNTAES mandate and full implementation of the terms of the Erdut Agreement are essential to long-term viability of multi-ethnic society in Croatia and the region.
USAID Role and Achievements to Date: USAID is playing a major role in catalyzing other donor efforts in economic revitalization. USAID seeks to foster investment in the multiethnic future of local governments in Sector East by both Croatian Croats and Serbs through technical assistance to ensure the provision of essential services and direct the emergence of the new management structures. USAID programs are helping resolve obstacles to a timely, peaceful transfer of population and authority through operation of a legal clinic to advise and assist the remaining and returning populations on such matters as identity papers, voter registration, and property rights. USAID grantees are actively monitoring human rights issues and assisting Croatians returning home to Western Slavonia and the Krajina. Finally, USAID is assisting returning populations with micro-loans to re-start their businesses.
Description: USG resources for reintegration of affected populations will continue to be concentrated in three areas: economic revitalization, human and civil rights protection, and humanitarian assistance for economic security. USAID support for economic revitalization includes equity finance and micro-loan programs and a small/medium-scale private business development project. USAID economic revitalization projects operate in the Slavonia region (i.e., East and West) and may be extended in 1997 and 1998 as appropriate into the Krajina. Legal assistance to populations includes a civil rights project and a human rights nongovernmental organization (NGO) umbrella project.
Host Country and Other Donors: USAID is coordinating with UNTAES, Norway, Belgium, and the European Union in the implementation of this strategic objective.
Beneficiaries: Because of the broad nature of this SO, beneficiaries include the 250,000 current and former residents of East Slavonia.
Principal Contractors, Grantees, or Agencies: America's Development Foundation. American Bar Association/Central and East European Law Initiative, Opportunity International, Small Enterprise Assistance Fund, World Learning, International Rescue Committee and Catholic Relief Services.
Major Results Indicators: Baseline TargetNumber of displaced persons in Croatia 240,000 (1995) 24,000 (1999)
Economic output in affected areas as % 100% (1991) 75% (1999) of pre-war output
Level of employment in Slavonia region 63% (1995) 70% (1999)
Number of new businesses created in Slavon 0 (1995) 200 (1999)
Human and civil rights monitored and safeguarded Significant qualitative improvement* safeguarded
Number of NGOs addressing problems of 0 (1995) 30 (1999)
civil society in Eastern Slavonia
*As documented in annual State Department Human Rights Report
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