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).
ROMANIA
FY 1998 Assistance to Central and Eastern Europe . . . . . . . . . . . . . . . . . $33,000,000 Introduction
With 23 million people, Romania is the second most populous of the formerly centrally planned economies in Central and Eastern Europe. Following 45 years of Communist Party rule, Romania began its economic and democratic transformation after the December 1989 revolution. The U.S. assistance program to Romania began in 1990 with the direct provision of humanitarian and social sector assistance. Assistance also sought to strengthen the tenuous democracy which emerged from Romania's revolution. Since 1993, an increasing share of Support for East European Democracy (SEED) resources has been devoted to fundamental economic restructuring programs, which now account for the largest share of USAID commitments. Support to the democratic transition process is focused on increasing citizen participation in political and economic decision-making, primarily at the local level through non-governmental organizations (NGOs) and local governments. Social sector restructuring programs are shifting the programmatic emphasis from direct service delivery to activities which address the systemic causes of social problems. In national elections held in November 1996, Romanian citizens voted out the former communists. The opposition party, Democratic Convention of Romania, won the Presidency and a plurality in Parliament. The political and economic interests of the United States continue to be served best by an active program assisting Romania to accelerate reforms, promote a sustainable economic transition, and strengthen democracy and local governance.The Development Challenge
In the November 1996 elections, the democratic opposition, which started the 1989 revolution but lost out in the 1990 elections to the former communists, gained power in free and fair elections. The Democratic Convention of Romania (CDR), a party composed of several reform-minded opposition parties, won a plurality in the Parliament. In the presidential runoff, the CDR presidential candidate Emil Constantinescu decisively defeated then President Ion Iliescu.The new Government of Romania (GOR) inherited a formidable challenge in rescuing an economy which is struggling as a result of seven years of indecisive policy and a general failure to implement meaningful reform. Romania faces a number of developmental challenges which dramatically worsened in the past year. The inflation rate increased from 25% to 45%. The fiscal deficit increased from ½% to approximately 4.0% of GDP. Factoring in losses of public enterprises would increase the fiscal deficit to over 8%. Privatization remains incomplete, but has been accelerated to accommodate the USAID-funded over-the-counter (OTC) and Bucharest Stock Exchange. Foreign investment proceeds only at a snails pace -- $2 billion since 1990. The banking system is weak, and the former government, for political reasons, directed major amounts of credit to the inefficient agricultural sector. In short, in the past year, Romania's transition to a market economy slowed, the economic well-being of its citizens deteriorated, and the government seemed to have lost its will and capacity to move forward with reform. Romania has fallen out of compliance with the IMF standby agreement and World Bank structural loans.
Romania's ability to sustain economic reforms and promote a stable democracy faces other key constraints, including: restrictions against foreign ownership of land; bureaucratic red-tape and corruption; limited availability of investment finance; slow pace of privatization; lack of respect for contractual obligations; and low confidence in the judiciary. In post-election statements, President Constantinescu declared that these issues would be high on the new GOR's reform agenda.
The country is endowed with natural resources, especially oil, gas, and coal, and agriculture. GDP growth is estimated as high as 6.0% for 1997. Unemployment is dropping, though still may be relatively high. Romania's high credit rating enabled it to return to international capital markets, borrowing US$ 1.5 billion. There are more than 600,000 registered small and medium-sized enterprises in Romania that are operated by a highly literate work force. Traditionally defined trade and investment barriers are not a significant problem in Romania. However, the cost of doing business in Romania is high: changing laws and regulations discourage efficiency and expediency; foreigners may lease, but not own land; business contracts are often not enforceable; and, income and social benefits tax rates are too high. In 1996, Romania made further progress toward privatizing its economy and establishing the legal framework for a market economy.
Other Donors
The use of SEED resources to leverage financial contributions from other donors has been an explicit element of the assistance program in Romania. USAID-funded technical assistance has paved the way for projects such as the two in energy--each for roughly $300 million--co-financed by the World Bank, the Japanese Government, and others, the $250 million World Bank privatization and financial reform project, the $100 million World Bank private agriculture effort, the $55 million World Bank employment services program, the World Bank's $100 million program to address industrial pollution and environmental legislation, the $150 million health rehabilitation activity, the $65 million European Bank for Reconstruction and Development (EBRD) municipal utilities project, and preparatory work for a proposed second tranche of loans for $140 million. In addition, as part of the Romania Enterprise Restructure Project, USAID is collaborating on privatization with the EU.FY 1998 Program
USAID's priority in Romania is to help the Government of Romania (GOR) formulate and implement a reform package which puts Romania firmly on the road to economic and democratic reform and responds to IMF and World Bank conditions.To accomplish this, USAID will offer a new package of technical assistance to advance a comprehensive and practical economic reform program. This effort, which started in 1997, includes a clear articulation of priorities, consensus building within the cabinet, and technical assistance and training for parliamentarians, to improve the coordination between the executive and legislative branches of government on key reform issues.
USAID has continued its strong emphasis on economic restructuring assistance, reflected in the significant commitment of funds and technical resources to support the country's development of private independent capital markets. The Capital Markets Program has created a fluid share trading market for a wide variety of firms and investors, linked to the final stage of the Romanian Mass Privatization Program (MPP), during which tradeable company shares are registered to individuals. The program also continues assistance in consolidating and strengthening financial markets and in other economic transition assistance, including support for direct business development programs. USAID's assistance in legal reform, specifically bankruptcy, is also enabling the country to better use its resources.
Supporting Romania's democratic transition remains a key objective. Priority areas include decentralization of governing authority and fiscal control to the local level, and fostering the development of non-governmental organizations (NGOs). USAID remains committed to pursuing key social service restructuring opportunities to address broader systemic problems resulting from the economic transition.
In July 1996, the GOR ratified the bilateral agreement between the U.S. and Romanian Governments, thus placing USAID assistance within a firm legal context. The agreement went into force on November 1, 1996. This allows USAID to assist the GOR's reform efforts without the bureaucratic drag experienced in previous years.
As part of Romania's efforts to promote the development of a competitive, market-oriented private financial sector, USAID supported a series of broad market reform initiatives, including legal initiatives and capital market reforms. These efforts provided market infrastructure for the new shares created in 5,200 companies participating in the Romanian Mass Privatization Program (MPP) and an estimated 16 million new Romanian shareholders. Specifically, USAID undertook the development of: an OTC market for the trading of newly issued MPP securities; a depository/clearance corporation; a central shareholder registry; telecommunications linkages; broker-dealer training; self regulatory organizations for both broker-dealers and investment companies; creation of new investment companies; a securities analysts training program; and assistance to the Romanian securities commission.
Strategic Goal: Economic Restructuring
In past years, USAID-funded technical assistance helped the Romanian Government consolidate its national accounts and thus keep track of its funds flow, enabling greater control over revenues and expenditures. Likewise, U.S. Government securities advisors focused on the legal framework and development of the primary market approaches to debt management.
USAID financing fostered several cooperative partnerships with U.S. electrical utilities to improve the energy efficiency of the power sector and its major clients. This has reduced government subsidies, thereby relieving pressure in public spending. USAID technical assistance prepared the original sector analysis and restructuring recommendations that paved the way for the $600 million World Bank Petroleum Rehabilitation Project which makes the industry more efficient and less destructive to the environment.
USAID's strategy in FY 1998 calls for continued technical assistance through the Capital Markets Program to solidify growth of the OTC market, promote market development and further regulatory implementation. As a complement to the Capital Markets Program, USAID will support economic reform efforts, in general, and will specifically support the GOR's plans to consolidate disjointed privatization efforts. Activities will support privatization and restructuring by alleviating the strain on the fiscal deficit caused by continued subsidization of inefficient state-owned enterprises. Major efforts in support of private business development will continue with the intent to leverage technical assistance to private enterprises with access to credit provided by the Romanian-American Enterprise Fund and other lending institutions. USAID assistance will also promote a safe and sound banking sector.
USAID efforts will continue to promote sustainable use of natural resources and to limit environmental risks to health, with continued emphasis placed on power sector restructuring, effective regulation of the oil and gas industry and energy efficiency. Activities in the power sector should secure the GOR's agreement to proceed with power and refinery sector reforms in order to reduce a major source of the budget deficit. In addition to relieving the deficit crisis, Romania's chances to obtain nearly $600 million of World Bank assistance will be increased.
Strategic Objective: Accelerated development and growth of private enterprises
Strategic Objective: A more competitive and market-responsive private financial sector
Strategic Objective: A more economically sustainable and environmentally sound energy sector Strategic Goal: Democratic Transition
To improve the legislature's ability to make decisions based on independent and sound policy research, USAID has worked with the Congressional Research Service (CRS) to assist Romanian parliamentariansthrough training programs and give them greater access to information. In FY 1998, USAID will continue to work with the Romanian Parliament in improving legislative procedures important to implementing economic, democratic and social reforms.Assistance has been provided to local governments to improve municipal finance and budgeting, management and operational efficiencies in urban services. Building on this assistance and the successful collaboration with EBRD for $65 million of infrastructure loans, USAID will support fiscal decentralization and a more market-oriented approach to municipal finance in a proposed second phase of EBRD loans for $140 million.
In FY 1998, a more targeted program in the area of democratic transition will be maintained in order to strengthen parliament, foster increased decentralization of government and fiscal control towards the municipal and county level, strengthen the development of Romanian non-governmental organizations (NGOs), and promote citizen participation in economic and political decision-making at the local level.
As part of a program directed at housing and urban improvements at the local level, USAID has implemented financial management, public budgeting, and water utility management programs. As a result of these initial successes, a Public Administration program initiated in 1995 in five initial cities has been expanded to include five more. The program focuses on public management, economic development, and public participation.
Strategic Objective: Increased, better-informed citizens' participation in political and economic decision-making Strategic Objective:More effective, responsible, and accountable local government Strategic Goal: Social Stabilization<
In the area of social stabilization, the USAID program has focused on the provision of humanitarian assistance to Romania's institutionalized children; the establishment of private family planning clinics; assistance to the national health reform; assistance in a number of high priority medical areas; and reduction of health risks from environmental pollution.Some of USAID's programs have a direct aim of reducing human suffering and improving long-term prospects for the disabled. Results include: 1224 institutionalized children reunited with their families, 65 handicapped or abandoned children moved from institutions to foster or group homes, and over 450 children adopted either domestically or abroad.
The USAID program also helped reduce environmental health risks. For example, regulatory authorities and community representatives have worked together to improve worker safety in Zlatna, site of an outdated copper smelter responsible for heavy metal contamination and sulfur dioxide emissions.
U.S. technical assistance has supported three key components of the World Bank Health Rehabilitation Project. First, a USAID grant to UNICEF for Hepatitis B vaccinations directly leveraged the inclusion of a $15 million vaccination program in the World Bank project. Second, the U.S. Centers for Disease Control (CDC) provided training and advice in family planning logistics management, helping the GOR Ministry of Health (MOH) and the National Pharmacy to better implement a large World Bank-financed contraceptive commodity distribution program. Third, ongoing assistance to regional hospitals, chosen as test sites for health finance and management reform, is laying the groundwork for an entirely new system of payment for health services. In addition, USAID enlisted a team from the Centers for Disease Control to help the Ministry of Health and the City of Bucharest deal with an epidemic of West Nile Virus.
USAID strategy will continue to pursue key social service restructuring opportunities, moving beyond earlier service delivery programs in family planning and help for institutionalized children to address broader constraints in the health and social service delivery systems. An effort will be made to increase the role of private pharmacies in the delivery of contraceptives and to expand the general awareness of modern contraceptives. Health management training will build the human resources necessary to better manage the shift to primary health care and a diagnostic related cost (DRG) system will be introduced to allocate scarce health resources more rationally. The health program will support Romania's health reform law in key areas. Grant funds will be used to upgrade sanitary conditions in Bucharest primary schools through a local currency account.
Strategic Objective: Individuals receive more effective and sustainable health and social services and benefits
Strategic Objective: Reduced environmental risks to public health
Cross-cutting and Special Initiatives
USAID funds a cross-cutting training program which offers training opportunities in the United States for Romanians in a number of key sectors and areas which support the strategic objectives of the USAID program.
ROMANIA
FY 1998 PROGRAM SUMMARY*
Strategic Objectives
Economic Restructuring Democratic Transition
Social Stabilization Cross-cutting / Special Initiatives Total Privatization -- -- -- -- -- Fiscal Reform -- -- -- -- -- Private Enterprise 8,700,000 -- -- -- 8,700,000 Financial Reform 7,600,000 -- -- -- 7,600,000 Energy 3,000,000 -- -- -- 3,000,000 Citizens' Participation -- 2,233,000 -- -- 2,233,000 Legal Systems -- -- -- -- -- Local Government -- 2,500,000 -- -- 2,500,000 Crises -- -- -- -- -- Social Benefits -- -- 2,250,000 -- 2,250,000 Environmental Health -- -- 2,900,000 -- 2,900,000 Cross-cutting / Special Initiatives -- -- -- 3,817,000 3,817,000 TOTAL 19,300,000 4,733,000 5,150,000 3,817,000 33,000,000 *Support for East European Democracy (SEED) Act funds
USAID Representative: Peter Lapera
ACTIVITY DATA SHEET PROGRAM: ROMANIA
TITLE: Private Enterprise, 180-S001.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $8,700,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 2002
Purpose: Accelerated development and growth of private enterprises.
Background: Since 1990, Romania has embarked on the transition from a centrally planned to a free market economy. Progress will pick up pace under the new GOR. Currently, there are over 600,000 private enterprises in Romania and over 45% of GDP comes from non-government sources.
USAID Role and Achievements to Date: USAID's role is to assist businesses develop business management capability and capacity to find new markets, import modern technology, manage resources more cost-effectively and generate new jobs. Several hundred small businesses and several thousand entrepreneurs, including women and rural citizens, have found new markets, products, financing and technology through USAID assisted programs.
Description: In 1998 USAID programs will accelerate the leverage of its assistance to small business by improving the ability of small businesses to qualify for loans and repay them. USAID programs will assist state-owned enterprises in promising sectors rapidly achieve privatization and profitability which will also stimulate foreign investment. The Romanian-American Enterprise Fund has also evaluated prospective investment projects and began its lending program during 1995, with a total of $6 million through 1996 and $17 million projected in 1997.
Host Country and Other Donors: Ongoing efforts in this sector are coordinated with those of other donors including the United Nations Development Program (UNDP) program, IMF, World Bank and EU-PHARE.
Beneficiaries: The direct beneficiaries of this assistance are the private entrepreneurs of small and medium sized businesses.
Principal Contractors, Grantees or Agencies: Washington State University, Citizens Democracy Corps, Volunteers in Overseas Cooperative Assistance (VOCA), Agricultural Cooperative Development International, Land O' Lakes, Aid to Artisans, Entrepreneurial Management and Executive Development (EMED), and Peace Corps. Romanian-American Enterprise Fund
Major Results Indicators:
1995 Baseline Target
Increase in sales for USAID- Current level 5% annual growth
assisted firms. of firm sales
% of annual GDP from the private sector 45% 75% in 2000
ACTIVITY DATA SHEET PROGRAM: ROMANIA
TITLE: Financial Reform, 180-S001.4
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $7,600,000 SEED Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2000
Purpose: A competitive, market-oriented private financial sector.
Background: Development of the private financial sector has continued to accelerate. Legislation has been introduced in Parliament allowing for the privatization of state-owned banks. The first of these banks (the Romanian Development Bank) has already been identified.
The Bucharest Stock Exchange began trading operations in November 1995 and the USAID-funded over-the-counter trading system has been operational since October 25, 1996. The OTC system is used to trade shares of the 5,200 companies that are under the mass privatization program and Government securities.
USAID Role and Achievements to Date: USAID undertook the development of: an OTC market for the trading of newly issued MPP securities; a depository/clearance corporation; a central shareholder registry; telecommunications linkages; broker-dealer training; self regulatory organizations for both broker-dealers and investment companies; creation of new investment companies; a securities analysts training program; and assistance to the Romanian securities commission. USAID assists the Government to improve its implementation of public finance laws. USAID-funded US Treasury assistance resulted in a draft privatization law for state banks. A USAID-funded program has assisted Romanian bankruptcy courts organize bankruptcy proceedings; US Federal Bankruptcy judges, bankruptcy attorneys and trustees volunteers assist.
Description: In the capital markets area, assistance is being provided to solidify growth of the OTC market and supporting institutions, promote regulatory implementation, and support the GOR's plans to consolidate disjointed privatization efforts. Our activities will support privatization by alleviating the strain on the fiscal deficit caused by continued subsidization of inefficient state-owned enterprises. USAID will also provide assistance to the GOR to help implement economic reform in general.
A long term bank privatization Treasury advisor has worked extensively with the National Bank of Romania and the Council for Coordination, Planning and Economic Reform to develop a draft bank privatization law. The draft that has been submitted to parliament has had extensive input from this advisor and is acceptable to the World Bank.
USAID will work with the National Bank of Romania to strengthen capacity to supervise and promote a safe and sound banking sector, through training bank examiners in on-site inspection policies and procedures, strengthening the legal and regulatory framework, and working with problem bank issues and enforcement mechanisms. USAID will continue to assist the Romanian bankruptcy judges improve the administration of their courts as bankruptcy cases proceed under the new market-oriented law.
Host Country and Other Donors: Ongoing efforts in this sector are being coordinated with the World Bank, EU-Phare, the British Know How fund and Canadian technical assistance teams.
Beneficiaries: The Romanian population at large will have access to a much improved financial system.
Principal Contractors, Grantees or Agencies: Coopers & Lybrand, INTRADOS, Financial Markets International, and Booz Allen & Hamilton; U.S. Treasury; and the World Council of Credit Unions,
Major Results Indicators: 1995 Baseline Target % of state-owned banks privatized 0% 100% in year 2000
Numbers of licensed viable 25 100 in year 2000 private commercial banks
% increase in volume of equity $50,000 1996: 50%; 1997: 30%; trading per week (Buch. 1998-2000: 20% ave. Number of well-functioning 3 70 in year 2000 Mutual Funds
Number of registered Broker/ 40 250 in year 2000 Dealers operating on Stock and OTC market
PROGRAM: ROMANIA
ACTIVITY DATA SHEET
TITLE AND NUMBER: Energy, 180-S001.5
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $3,000,000 SEED Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2000
Purpose: A more economically sustainable and environmentally sound energy sector
Background: USAID provides assistance to the Government of Romania (GOR) in three critical areas of the energy sector: Power, Petroleum Refining and Petroleum Exploration and Licensing.
A main objective of the Power Sector Policy of the GOR is to provide reliable electricity supply to all Romania's people at least cost to the economy. The achievement of this objective is hampered by lack of a coherent legal and regulatory framework, inefficiencies of the sector institutions and lack of capital. To address these systemic problems, the GOR has decided to undertake a fundamental reform of the power sector that will bring about demonopolization of activities, and create conditions for the participation of publicly and privately owned companies in a competitive environment.
The refining sector has been beset by poor operational performance, extended downtime, losses and disregard for environment and energy conservation. As a first step towards developing such a strategy, the GOR intends to undertake a Study on Refining and Associated Petrochemical Sector Restructuring and Privatization.
As a condition to receiving World Bank assistance in the petroleum sector, and following technical assistance granted through USAID consultants, the Government of Romania agreed in 1993 to establish an independent National Agency for Mineral Resources (NAMR) to negotiate mineral rights and grant licenses for concessions and to oversee geological research. NAMR is responsible for administering a petroleum law that incorporates internationally recognized standards. The new law was approved by the Parliament in December of 1995. Previous USAID assistance identified the need for further assistance to NAMR, to become a fully operational, independent regulatory body.
USAID Role and Achievements to Date: USAID has been the key provider of technical assistance and program development support for over $600 million in lending from international financial institutions for energy sector programs.
- Power Sector Loan made effective.
- Upstream Petroleum Sector Loan made effective.
- Energy Efficiency Savings at 10 industrial plants.
- Analysis of power sector restructuring options presented to the government, and is under review with World Bank and EBRD.
- Plans for rationalizing and improving refinery sector presented to government, and under review (with World Bank.
Description: The Power Sector Study is to be carried out in two phases. The first phase, a diagnosis, defined the current constraints to the reaching of the GOR's policy objectives and identified possible solutions for overcoming them. During this phase the USAID consultants reviewed current options for restructuring, identified key issues associated with these options and analyzed advantages and disadvantages of alternative options for consideration by the GOR. The second phase will build on the diagnosis and the GOR's decision with regard to the sector structure and ownership. In the secondphase the consultants should provide the main elements for implementing the reform, including recommendations on detailed steps and schedules.
The Refining Study developed by the USAID Consultant will produce: 1) a restructuring strategy the refining and associated petrochemical sector based on a full review and detailed evaluation of the performance of each operating company in the sector; 2) a critical investment report needed to identify investments that hypothetically private partners/owners would need to undertake to optimize the performance of the plan; 3) privatization proposals of the refinery products retail marketing and service subsector and few large refinery-petrochemical operating companies.
Host Country and Other Donors: The Power Study is undertaken in partial fulfillment of a condition with the GOR and with respect to the World Bank, EBRD and EIB loan to the Electricity Utility RENEL. The loan for the power sector rehabilitation and modernization has an estimated value of $363,900,000 over a four year period.
The Refinery Study is undertaken in cooperation with the World Bank and EIB which are considering a loan for the rehabilitation of the refining sector and promotion of private investment in the sector.
The assistance to NAMR is being provided in close cooperation with World Bank which granted a loan for the rehabilitation of the petroleum sector.
Beneficiaries: The primary beneficiaries of this assistance are the owners and suppliers of the respective organizations. All Romania will eventually benefit from a more efficient energy sector.
Principal Contractors, Grantees or Agencies: The project is implemented by a team headed by the Bechtel Corporation, and comprised mainly of: Bechtel, Arthur Anderson, National Economic Research Associates, and Gaffney Cline.
Major Results Indicators: 1995 Baseline Target% of independent filling stations to total 50% 75% in 2000
External private investment $150M increase 100 M annually increase in energy in 1996-97
Market share of independent 2% 8% in 2000
power producers
Electricity and heat law enacted No (1995) Yes (1997)
ACTIVITY DATA SHEET
PROGRAM: ROMANIA
TITLE: Citizens' Participation, 180-S002.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $2,233,000 SEED Act
INITIAL OBLIGATION: FY 1994; ESTIMATED COMPLETION DATE: FY 2000
Purpose: Increased, better informed citizens' participation in political and economic decision-making.
Background: USAID engages this issue in two significant areas: support for local NGO development and improved local public administration.
Six years ago, Romania was confronted by an influx of private groups all bringing emergency assistance. For the first time, Romanians heard of non-governmental organizations and tried to understand the concept. Initially, many officials were wary, refusing any involvement with NGOs, other than to form their own so they could access international funds. Then the pendulum shifted to attempting to control the NGO sector. Since 1994, however, there has been broad recognition and support of the NGO sector in Romania, which has expanded beyond expectations.
USAID Role and Achievements to Date: USAID's Democracy Network (DemNet) program supports the emerging NGO sector in Romania, through: establishing linkages within the NGO community and program sectors; enhancing institutional effectiveness; fostering state, market and civil society collaboration; and increasing the access of Central and East European regional resources to Romanian NGOs. During the period July 1995 to February 1996, assessments were conducted throughout the country to identify NGOs with the potential to influence public policy in Romania and to make a preliminary assessment of their training and technical assistance needs. Of the 345 NGOs and 34 governmental organizations interviewed, 111 qualified for participation in the "Democracy Network" program and 60 further qualified to attend the NGO Management Workshop series. Seven Romanian NGOs received subgrants through the DemNet program.
Description: USAID focuses on the development and strengthening of a broad range of Romanian public policy oriented NGOs in four priority sectors: (1) democracy; (2) environment; (3) economic growth, and (4) social sector reform. Through subgrants and technical assistance, local NGOs are helped to become self-sustaining and capable of: influencing the formulation and implementation of public policy; serving as a forum for public policy debate and advocacy; mobilizing private resources; forming partnerships and alliances with appropriate public and/or private organizations; raising funds to further the purpose of the NGO and secure its financial and organizational sustainability; operating democratically, effectively, efficiently and responsibly; providing services to and advocacy for their constituents.
Host Country and Other Donors: EU-PHARE, EBRD, International Monetary Fund (IMF), the Soros Foundation, National Democratic Institute (NDI), International Republican Institute (IRI), and some individual European countries have programs which address this objective. Romanian communities receiving USAID assistance are not the beneficiaries of programs of other donors offering similar assistance. The Government of Romania does not provide matching funds or in-kind support for NGO development programs. Public Administration activities are largely supported by Romanian local government personnel and institutions. Individual NGO recipients also provide facilities and support with their own personnel.
Beneficiaries: The main beneficiaries of the "Democracy Network" program are local communities in Romania. Citizen groups and local NGOs will improve their public advocacy methods and skills, as well as their institution-building capabilities. Ultimately, NGO staff members will gain credibility and government officials will become aware of the value of dialogue, team work, and participatory training as examples of democracy at work in the effort to address needs at the community level.
Principal Contractors, Grantees, or Agencies: USAID implements activities through a cooperative agreement with World Learning Inc., in collaboration with the National Democratic Institute for International Affairs (NDI), and Support Center International (SCI). National Forum Foundation (NFF) and International Center for Not-for-profit Law (ICNL) are also involved in the program, as regional contractors. This objective is also supported by work performed under SO 2.3, local government.
Major Results Indicators: 1996 Baseline TargetNumber of new federations, 66 210 in 2000 organizations, coalitions, etc. formed to promote or oppose specific policies or legislation.
Average capacity rating for 1.3 2.8 in 2000
USAID-assisted local NGOs/PVOs (4 point scale)
ACTIVITY DATA SHEET PROGRAM: ROMANIA
TITLE: Local Government, 180-S002.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $2,500,000 SEED Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2002
Purpose: More Effective, Responsive, and Accountable Local Governments.
Background: Romania is a unitary state and it has little experience with decentralized governmental authority. Decisions are made and control is exercised by the central government in Bucharest. Local authorities have restricted legal authority and even that authority is limited by central government control over the financial resources necessary to exercise even the limited authority the law provides. The recent change of government represents an important opportunity for decentralization of legal and fiscal control to local governments.
In the area of public administration, decisions traditionally have been made and control exercised by the central government in Bucharest. Local authorities have restricted legal authority and even that authority is limited by central government control over the financial resources necessary to exercise even the limited authority the law provides. There are hopeful signs, however, as local officials are actively lobbying for increased levels of responsibility. A recently revised law on local government gives increased authority to municipalities. The new GOR's commitment to democratic reform will serve a key role in advancing the decentralization process.
USAID Role and Achievements to Date: USAID has provided assistance to several Romanian cities in housing and management through creation of condominium associations which no longer look to government for solutions, and in systems management for those same cities with emphasis on budget and financial management with the computerization necessary to support those systems. So far six cities have received technical assistance in budget and finance, the creation of modern program budgets, or computerization. As a result, two of these cities have been assisted in qualification for European Bank for Reconstruction and Development loans to improve their water and waste water systems. As a result of the condominium project, the new housing law passed in October 1996 will not only provide for the existence of condominium associations but will require their creation as replacements for tenant associations for privately owned apartments.
The Romania Public Administration Program began operation in October 1995. Its first public participation specialists began work in Romania at that time. As a result of their efforts, a citizen information center constructed, staffed and began operation in Slobozia, sponsored by the Ialomita County Council. In late 1996, a second information center was opened in Bucharest to service residents of the capital. The assistance was provided in cooperation with then Mayor of Bucharest Victor Ciorbea, who is now Prime Minister.
Description: By expanding the condominium activity, a local NGO capability to create and train condominium associations is being produced to cope with the national demand generated by the passage of the new condominium law. The result will be sustainable organizations nationwide capable of property management and maintenance and interface with local government agencies such as utility providers. The Romania Public Administration Program encourages decentralization of power to local authorities by increasing the capacity of local governments to perform their legal responsibilities. Among those responsibilities is economic development. The program focuses on economic assessments of each pilot city and the production of development plans for each. To combat the tendency to look to the central government for solutions, the public participation focus of the program encourages NGOs and individual citizens to participate in local authority decision-making and encourages local authorities to make effective use of citizens' input. The program initially targeted fivepilot cities, and has been expanded to five more. The initial five were charged with transferring lessons learned to the second five and the ten will be the basis for spreading the benefits of the program throughout Romania.
The Public Administration Program focuses on economic development, public management, and public participation. It provides for short term advisors in each of these areas to concentrate activities on each of five pilot cities. The successful projects from each of these cities is being transferred to five additional Romanian cities. The public participation focus of the program encourages NGOs and individual citizens to participate in local government decision-making and to encourage local authorities to make effective use of citizen input. Among the few permitted activities of local government is local economic development. As citizens become more involved in government, they will become equally involved in economic decision-making as well.
Host Country and Other Donors: EU-PHARE, European Bank for Reconstruction and Development (EBRD), International Monetary Fund (IMF), the Soros Foundation, National Democratic Institute (NDI), and some individual European countries, notably the United Kingdom and Denmark sponsor programs that directly or indirectly impact this objective. Public Administration Program pilot cities do not receive similar assistance from other donors. Individual recipient cities provide facilities and support with their own personnel.
Beneficiaries: Public Administration beneficiaries are the citizens of the targeted communities who will enjoy improved services and a have greater role in running their communities. Local authorities will also benefit from training and skill development. Ultimately the central government will benefit through being able to turn over authority for essentially local activities to local authorities.
Principal Contractors, Grantees or Agencies: This objective is supported by contracts with Chemonics Inc. for the Public Administration Program and with NDI and IRI for programs which indirectly affect it.
Major Results Indicators: 1995 Baseline TargetRevenue available from national TBD 15% increase by 1999 and local sources
Number of formal mechanisms for 1 20 in 1998 local governments to exchange ideas & involve citizens
% of budgets of USAID-assisted 0% 50% in 2000 local government units that are self-directed
ACTIVITY DATA SHEET PROGRAM: ROMANIA
TITLE AND NUMBER: Social Benefits, 180-S003.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $2,250,000 SEED Act
INITIAL OBLIGATION: FY 1990; ESTIMATED COMPLETION DATE: FY 2002
Purpose: Individuals Receive More Effective and Sustainable Health Services and Benefits
Background: Romania has one of the highest maternal mortality and infant mortality rates in Europe as well as a high number of institutionalized children. A major contributing factor is the lack of access to and use of modern contraceptives, resulting in unplanned pregnancies and subsequent high rates of abortion and child abandonment.
In addition, Romanian health care institutions have limited quality assurance systems and prevention programs in place, which has resulted in high rates of infectious diseases, such as HIV/AIDs and Hepatitis B and high rates of cardiovascular disease. There is an over-reliance on more costly hospital and specialist care in comparison to primary health care. Managers of the health care institutions are physicians who do not have skills in basic management, which has resulted in less effective and efficient use of the limited health resources.
Health reform is being piloted and evaluated in eight counties, a health insurance law has been introduced, and there is a draft health sector reform strategy. Major barriers to reform efforts identified by the World Bank and the government include lack of management training and lack of experience in implementing a new health delivery system.
USAID Role and Achievements to Date: Modeling prevention, community-based services, primary health care, and sound management practices has been a major focus for the last five years.
Community-based approaches to care of Romania's institutionalized children have been successfully demonstrated in ten counties. Social workers and educators have been trained and are working in collaboration with staff in government institutions to demonstrate services to prevent abandonment; facilitate family reintegration, domestic adoption and foster care; or improve the social and living skills for children and young adults. Government officials are starting to implement similar programs in other counties. Romanian social workers and managers trained though these projects are now taking a leadership role in addressing child welfare issues. National and local groups have been created to advocate for children's rights and to promote improvements in child welfare legislation and administrative policies.
Family planning services have been developed and seven clinics have provided high quality services and education, which have served over 27,000 women to date. The Ministry of Health is now utilizing staff trained by the program to train government family planning providers. Family planning managers are being trained in contraceptive logistics management.
A primary health care curriculum has been developed and approved by the Ministry of Education. More than 3,700 students, residents and general practitioners will be trained each year in primary health care at the Medical school in Cluj. Concepts of primary health care will be introduced to schools of dentistry and pharmacy.
Six new-born protocols are in place in 12 maternities and will be introduced in another 40 hospitals impacting 80% of all mothers and newborns. Safe and effective hepatitis B vaccines are now being given to all newborns whom are born in maternities. Over 17,000 workers have been screened for cardiovascular risk; those at risk will receive prevention education and follow-up screening.
An early childhood development program has resulted in the development of a national curriculum that has been implemented at 20 government sites.
Health management technical assistance and training has focused on introducing to health managers and providers in the health reform districts concepts of quality assurance, practice management, and methods for determining costs and performance. The program facilitated the creation of work groups of general practitioners and specialists in two reform districts that are now developing practice protocols and standards to improve quality of care and have implemented procedures to increase client access to care.
Description: Through the United Nations Children's Fund (UNICEF), the program will continue to promote the sustainability of community based care for children by educating policy makers about the achievements of the projects.
Seven USAID funded family planning clinics will implement sustainability plans. To increase access to modern contraceptives, private pharmacists will be trained in contraceptive marketing and operations management. The program will continue activities to help create a policy environment supportive of women's and children's health.
A health management training partnership will build upon program activities initiated to date and on a World Bank management training program. The partnership will strengthen the knowledge and skills of the health management training staff and health managers in the field by assessing and improving the health management curriculum The program will facilitate linkages between health management training and practical application in the context of health reform implementation, through the development of case studies. The program will also facilitate information sharing and problem solving across reform districts and with other Central and East European countries implementing health reform.
Host Country and Other Donors: On going efforts related to women's and children's health are coordinated with those of other donors, including UNICEF, United Nations Fund for Population Activities (UNFPA), EU PHARE (Child Protection Program), and the World Bank. USAID is represented on the National Committee for the Protection of Children, which has developed a National Action Plan for child protection. The Ministry of Health is beginning to provide family planning services around the country and to provide training to about 400 general practitioners and obstetrical nurses.
Efforts related to health system reform are coordinated with the World Bank and EU Phare. The World Bank has been the major donor in the health sector, providing loans for primary health care, family planning clinics, and a health management training institute. The Ministry of Health has initiated several laws related to health reform, has taken the initiative on developing a cost model, is implementing health reform in eight counties, and supports (through the World Bank loan) the Institute of Hygiene, Public Health and Health Services and Management (IIPSSC). The IIPSSC staff is responsible for health management training and technical assistance to the reform districts.
Beneficiaries: All Romanians will eventually be impacted by health reform efforts. Women of reproductive age and children account for 40% of the population in Romania, or about nine million people. The USAID-supported program reach about one-half of these beneficiaries.
Principal Contractors, Grantees, or Agencies: USAID implements activities through U.S. PVOs, local NGOs, U.S. firms and U.S. universities including: Feed the Children, Holt International Children's Services, Project Concern International and World Vision.
Major Results Indicators: Baseline TargetIncreased use of modern 14% in 1993 35% in 2000 contraceptives % of private sector in 5% in 1996 30% in 2000 contraceptive procurement
PROGRAM: ROMANIA
ACTIVITY DATA SHEET
TITLE: Environmental Health, 180-S003.3
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 98: $2,900,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE FY 2002
Purpose: Reduced environmental risk to public health
Background:USAID environmental health activities address three areas: 1) the reduction of exposure to toxic pollution at selected industrial sites; 2) improving environmental policies and institutions and; 3) using economic incentives to obtain better environmental outcomes.
The town of Zlatna is one of 14 environmental "hot spots" in Romania. The major health problems in the area are caused by exposure to lead and sulfur dioxide. Lead in the environment comes from traditional mining and copper smelting activities that existed in the area for the last 250 years. Sulfur dioxide is emitted by AMPELLUM Copper Smelter during its operation.
Environmental Action Plans (EAPS) in Romania are being implemented pursuant to the U.S. Government commitments under the Environmental Action Program which was adopted in Lucerne in 1993. Following GOR requests, and in support of the Environmental Health Project, EAPS focus on technical assistance and equipment provision to the AMPELLUM Copper Smelter.
At the request of the Council for Coordination, Strategy and Economic Reform, USAID, through Harvard Institute of International Development, has been providing long and short term technical assistance to the GOR focusing on market-oriented environmental policy assistance and training. The primary targets are the Ministry of Waters, Forests and Environmental Protection, Ministry of Industries, Parliament, National Commission for Statistics, and municipalities.
USAID Role and Achievements to Date: Romanian Working Groups for all three major activities have greatly assisted EHP team members in identifying equipment and TA needs. Locally designed, family and community health education/ counselling materials and programs to reduce exposure of children to lead were drafted and distributed. More than 300 children were tested for their blood lead levels; as a consequence, more than 150 families received counselling from the local medical staff. Data reveal that no child under 11 had a level of 10mcg/dl, the CDC's "level of concern". A workshop on data analysis, Interpretation and communication increased the capability to approach in a holistic way the different kinds of data made available during the project, in order to find concrete ways to reduce health hazards for population. The Medical Research Center in Cluj Napoca is better able to perform blood lead level tests.
The EAPS initiated activities in Romania in 1995, working with AMPELLUM on smelter technological information, operation, management, and financial support for equipment purchases and design assistance. The EAPS project also supported a Study Tour in December 1995 of US Copper Smelter.
USAID provides assistance in drafting the Water Law, in recommending the "beneficiary-pays" principle, the establishment of the local level River Basin Commissions, and explicit and mandatory public participation in the water management. At the suggestion of the USAID program, an interministerial task force to ensure the expeditious implementation of the Environmental Law was established. In the forestry sector, the Project has designed procedures for the Forestry Department to improve timber auction and to help obtain a fair market value for the timber. To date, the program has also completed a contingent valuation survey/willingness-to-pay analysis which will form the basis of upcoming policy recommendations. A methodology has been provided to the National Statistics Commission to compute a NNP series incorporating resource depletion. This will allow the GOR to set targets and indicators regarding the true sustainability of investment and consumption allocationdecisions.
Description: At the request of the GOR, USAID selected Zlatna as a demonstration site for reducing the environmental risk to population. USAID requested the Environmental Health Project (EHP) to provide AMPELLUM and various community groups in Zlatna with both technical and equipment assistance to reduce the environmental and human health problems associated with the smelter. At the request of USAID, EHP addressed the following three areas of concern in Zlatna and the surrounding county of Alba: reducing the exposure of young children to lead; air quality monitoring and control; and occupational health and safety. There is a clear need to consolidate these gains, as well as to attempt to replicate this model with other communities in Romania facing similar environmental and occupational problems.
The EAPS program will provide to selected project sites a combination of three types of support (1) technical assistance aimed at improving process efficiency, (2) grant procurement of equipment and instrumentation that significantly reduces environmental emissions, and (3) training focussing on building the technical capacity and environmental awareness in the non-ferrous metals industry.
HIID's Environmental Policy Project is designed to: analyze existing policies, laws and regulations, to determine their impact on environment and major environmental hazards and their causes; identify least-cost policies and their concrete solutions to deliver affordable environmental protection during transition to a market economy; develop strategies, legislation, regulations and methodologies in support of sustainable economic development; transfer skills in environmental economics and policy analysis.
Host Country and Other Donors: The Government of Romania disbursed the equivalent of $1,000,000 up to the end of 1995 for retrofitting the AMPELLUM Copper Smelter. Proposals have been made to allocate the equivalent of $1,500,000 from the FY 1996 State Budget for the same purpose.
Beneficiaries: Local communities and industries in selected sites, central GOR agencies.
Principal Contractors, Grantees and Agencies: Camp Dresser and McKee (EHP), Chemonics (EAPS), World Environment Center.
Major Results Indicators: 1995 Baseline TargetAverage blood lead levels in 30-45 mg/d l23-38 in 1998 targeted areas
Percentage of severely-polluted areas 0% 100% by 1998 with EAPS (Environmental Action Plans) in place
% of AID-assisted sites with 0% 100% by 1998 environment data quality assurance procedures in place
Number of Environmental Impact 150 500 in 1998
Assessments carried out
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