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).
SLOVAK REPUBLIC
FY 1998 Assistance to Central Europe Request . . . . . . . . . . . . . . . . . $8,000,000 Introduction
. The goal of U.S. economic assistance is to help root Slovakia firmly in the Western economic and political community and to accelerate its transformation toward a pluralistic society and a market economy. While significant progress has been made toward democracy and competitive markets, the picture has been marred by the centralizing policies of the current national government. An assistance strategy aimed at increasing pluralism, decentralization of decision-making and establishing a market economy will help counter these trends.Significant strides have been made by Slovakia toward the development of the political and legal foundations on which a democratic system rests. Many of the political and legal institutions, including its own government and parliament, were present when independent Slovakia came into existence January 1, 1993. Other key political and legal institutions were created at independence including the Office of President of the Republic, a Constitution, a Supreme Court, a Constitutional Court and an Office of Financial Control. The Slovak Republic is a parliamentary republic whose Head of State is the President.
The Development Challenge
The Slovak economy enjoyed an impressive turnaround with five percent real GDP growth in 1994 after a cumulative GDP decline of 24% between 1990 and 1993. In 1995, this growth continued with a GDP increase of 7.4%. Predictions are for six percent growth in 1996. The country also experienced solid export growth, resulting in a trade surplus for 1995. However, there was a trade deficit in 1996. Industrial production, which fell by more than 10% in 1993, rose by an estimated seven percent in 1994 and 8.4% in 1995. Prudent monetary and fiscal policies have resulted in a 7.2% inflation rate and a Government of Slovakia (GOS) budget deficit of 1.9% of GDP. Average real wages are increasing. Nominal interest rates are falling. At $730 million, foreign investment is small relative to some other Central European countries, but has begun to grow from that small base. The share of the GDP produced in the private sector is approximately 70% according to official statistics. Most prices are free, with foreign trade relatively liberal and thriving.By 1998 Slovakia will be into a late phase of its economic transition whereby market forces and private investment should be expected to carry the reform forward. The second wave of privatization ended in 1996. Basic market institutions, legislation and policies are in place or pending legislative action. A "jump start" for a core of restructuring enterprises and banks has been advanced through USAID activities. These are expected to continue with a high level of European Union (EU) funding tied to the accession process. It is now time to turn these and other companies increasingly over to the market. More private foreign capital should become available during the "third wave" of privatization as new owners seek needed capital and new technology.
While the macroeconomic aggregates are improving, work needs to continue on democracy-building and environmental health. Forty years of communism left an apathetic, disenfranchised citizenry unaccustomed to believing individuals have a say in their government. Slovakia is struggling to find its place as a tolerant European country with a plurality of views, based on a strong civil society. While many individuals and most young people are convinced that the only way forward for Slovakia lies with early integration into Western institutions, the average citizen is somewhat ambivalent.
Current plans assume continued success for economic and democratic reforms and the phase out of Support for East European Democracy (SEED) Act assistance by September 1999. FY 1997 is the last year economic restructuring activities are being funded, with the thrust of the program thereafter focussing on democracy-building.
Other Donors
The United States has very actively coordinated with other donors helping Slovakia transform into a democratic society and market economy. The other donors include the International Monetary Fund, the European Bank for Reconstruction and Development (EBRD), the Assistance Program of the European Union (EU PHARE), the British Know-How Fund, and the German Technical Assistance Agency. Close coordination among the British Know-How Fund and the German Technical Assistance advisors has been critical in banking and financial sector assistance.
USAID's activities are supplemented by those of privately-funded non-governmental organizations (NGOs) also working to ground Slovakia firmly within the Western tradition of democracy and pluralism. These NGOs include the Ford Foundation, the Open Society Fund, the Rockefeller Brothers Fund and the German Marshall Fund.
FY 1998 Program
The FY 1998 program plans for phasing out three strategic objectives in economic restructuring and continues activities in three other strategic objectives where further work and expenditure of public funds can be justified in a late transition nation: citizens' participation; local government; and environmental health.The USAID strategy is to consolidate and strengthen democratic transformation and responsive local government and to continue efforts to reduce environmental risks to public health. These are to be supplemented with appropriately targeted participant training and technical assistance provided through volunteer organizations, consistent with USAID's theme of support for grass-roots, decentralized development.
Strategic Goal: Democratic Transition
Since 1995, significant resources have been directed to assist decentralized decision-making, encourage the development of a diverse and independent media, strengthen the non-government sector, and deepen the general understanding and appreciation for democracy. Specifically, USAID focus has been on developing a dynamic civil society and viable independent media, two mechanisms which will ensure the gains already made will not be undone. With a vibrant civil society more firmly institutionalized to consistently represent citizen interests vis-a-vis government and act as a check on government actions, the major pieces are largely in place for the transformation to a healthy democracy. However, there are at least two reasons to continue support in this area. First, although the legal and political "infrastructure" are in place, the citizenry have not yet fully developed the knowledge, attitudes, skills, and mechanisms necessary to take full advantage of the new framework. Second, there has been some government backsliding on democratic reform. The past two years have been marked by U.S. and Western concern over the emergence of increasingly authoritarian style decision-making at the national government level. This suggests that assistance to consolidate and strengthen Slovakia's democratic gains is still needed. The FY 1998 program should achieve this goal.USAID's assistance will continue to emphasize work at the grassroots level to deepen the general understanding and appreciation of democratic civic values, to foster pluralism and respect for diversity, and to promote broad-based participation in community problem-solving and decision-making. USAID will continue to seek to increase the willingness and ability of citizens to participate in the formulation and implementation of public policy; work with local governments to create more opportunities for citizens to participate in the policy-making process; and to increase local government's understanding of the need and benefit of involving citizens in the decision-making process
USAID's assistance will also continue to support work aimed at enhancing local level decision-making in health care and management of newly-privatized condominium housing. The U.S. will work to improve the management and organization skills of hospital administrators and condominium associations. Under a hospital partnership project, USAID is continuing its efforts to develop quality health care at the community level by providing technical assistance and training for physicians.
Strategic Objective: Increased, better informed citizens' participating in community, political and economic decision-making
Strategic Objective: More effective, responsive and accountable local government
Strategic Goal: Social Stabilization
The assistance program has supported initiatives and policy work aimed at reducing environmental health risks. Legislation was introduced at the local level to reduce public exposure to health hazards. As the Slovak economy moves through the transition process, transformations are occurring in both the industrial base and in the health care sector. This situation provides the opportunity for strengthening of the environmental, occupational, and public health capability of Slovakia for the long term benefit of workers and community residents.In FY 1998, USAID will continue work on reducing negative health impacts of industrial manufacturing and processing facilities. Training will give Slovaks better ways to deal with environmental pollution. This complements the policy and investment activities of the Central Europe Environmental and Economics Policy Project, which were originally intended to reduce environmental risks to health and ensure that those goals are met by the addition of a third project component designed to ensure that Slovakia has the capacity to meet these challenges after USAID assistance ends. The environmental projects will help to ensure that Slovakia integrates with such organizations as the Office of Economic Cooperation and Development, EU and meets criteria of the International Standards for Environmental Friendly Production Process which will require demonstration of compliance with international standards in the areas of environmental protection, product safety and occupational health. By working with appropriate ministries, institutes and organizations, the assistance program will leave behind the capability of Slovakia to address systematically environmental, occupational and public health issues on an ongoing basis.
Strategic Objective: Reduced environmental risks to public health Cross Cutting and Special Initiatives
On a continuing basis, USAID's training activities include providing improved capacity for English language for teachers; reforming the legal profession and legal education; increasing participant knowledge in areas such as banking, capital market development, taxation and finance; strengthening management capabilities and advocacy; and increasing local government capacity.
SLOVAKIA
FY 1998 PROGRAM SUMMARY*
Strategic Objectives
Economic Restructuring Democratic Transition
Social Stabilization Cross-cutting / Special Initiatives Total Privatization -- -- -- -- -- Fiscal Reform -- -- -- -- -- Private Enterprise -- -- -- -- -- Financial Reform -- -- -- -- -- Energy -- -- -- -- -- Citizens' Participation -- 3,300,000 -- -- 3,300,000 Legal Systems -- -- -- -- -- Local Government -- 2,175,000 -- -- 2,175,000 Crises -- -- -- -- -- Social Benefits -- -- -- -- -- Environmental Health -- -- 1,100,000 -- 1,100,000 Cross-cutting / Special Initiatives -- -- -- 1,425,000 1,425,000 TOTAL -- 5,475,000 1,100,000 1,425,000 8,000,000 *Support for East European Democracy (SEED) Act funds
USAID Representative: Patricia J. Lerner
ACTIVITY DATA SHEET
PROGRAM: SLOVAKIA
TITLE: Citizens' Participation, 180-S002.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $3,300,000 SEED Act
INITIAL OBLIGATION: FY 1994; ESTIMATED COMPLETION DATE: FY 1999
Purpose: Increased, better informed citizens' participation in community, political and economic decision-making.
Background: Most of the political institutions needed by independent Slovakia, including its own government and parliament and a post-communist constitution, were already present when the nation came into existence on January 1, 1993. However, 40 years of communism has left behind an apathetic and disenfranchised citizenry uncertain of their rights and responsibilities in a democracy. The challenge now is to consolidate and maintain the democratic gains already made and to promote citizen participation and involvement in community, political and economic decision-making.
USAID Role and Achievements to Date: USAID support has helped increase the acceptance of democratic (civic) values in Slovakia through the University of Northern Iowa's (UNI) Orava Project which is introducing a "spirit of democracy" into the classroom. This activity, through the introduction of new teaching methods, is fostering the development of critical thinking and creative problem-solving skills, increased tolerance for diverse opinions, and the active participation of students, teachers, administrators, parents, university faculty and the community at large in the learning process. While the Orava Project will have its greatest impact on the students, and is therefore intended as an investment in the future, it is also producing substantial impact now by generating changes in the understanding, acceptance and utilization of democratic principles and values among the teachers, administrators, parents and other adults involved in the project.
USAID support is also contributing to the ability of citizens to participate in community, political and economic decision-making through its assistance to the NGO sector in Slovakia. Through the Democracy Network Program, grants in excess of $900,000 have been awarded to Slovak NGOs to carry out public policy activities. Additionally, USAID, through the International Center for Not-for-Profit Law, has contributed to the preparation of NGO legislation and to the national debate on this legislation in an effort to foster the development of a legislative environment supportive to the development of the NGO sector.
In 1996, USAID launched a major new initiative in support of the beleaguered independent media in Slovakia. The Professional Media Program is working with independent media in Slovakia to increase their financial viability - the key to their continued independence.
Description: USAID assistance in Slovakia will continue to focus at the grassroots level in an effort to deepen the general understanding and appreciation of democratic (civic) values; to foster pluralism and respect for diversity; to promote broad-based participation in community problem-solving and decision-making; and to strengthen the independent media so that the citizens of Slovakia will have access to the information they need to make objective, informed decisions.
Host Country and Other Donors: Major host country counterparts are Comenius University; the Slovak Judges' Association; the ORAVA Regional Administrative Office of the Ministry of Education; the Gremium for the Third Sector and the NGO community at large; the Ministry of Justice; various political parties; the Confederation of Trade Unions; and the independent media. Other donors include: the British Know-How Fund, the Open Society Fund, and EU PHARE.
Beneficiaries: This assistance seeks to benefit all Slovak citizens by increasing their understanding of the basic principles of democracy, their capability to participate in community and policy decision-making, and their ability to make objective, informed decisions.
Principal Contractors, Grantees, or Agencies: These organizations include the University of Northern Iowa, the International Republican Institute, the Foundation for Civil Society, the International Center for Not-for-Profit Law, the National Forum Foundation, the National Democratic Institute, the Free Trade Union Institute, the American Bar Association/Central and East European Law Initiative, the U.S. Information Agency, and the International Research and Exchanges Board.
Major Results Indicators: Baseline TargetVoter turnout: national/local elections 75%/52% (1994) 85%/65% (1998)
Increased citizen participation in 42% (1994) 50% (1998) community/political activities
Teachers trained in democratic 0 (1994) 4,000 (1999) instruction methods
ACTIVITY DATA SHEET
PROGRAM: SLOVAKIA
TITLE: Local Government, 180-S002.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $2,175,000 SEED Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 1999
Purpose: More effective, responsive and accountable local government.
Background: There are more than 2,800 Slovak towns and villages, each with its own democratically elected Mayor and Council members. The current structure of local self-government is only five years old and many municipalities are struggling to develop their capacity to govern and manage themselves. Slovakia's attempts in reforming the health care delivery system it inherited from the centrally-planned predecessor have had limited impact on improving services. The local governments inherited a centralized delivery system which does not address basic health concerns of the community, is poorly equipped to handle the new responsibilities, and remains in crisis.
USAID Role and Achievements to Date: Beginning in 1994, the Health Markets Project focused on improving the quality of hospital operations by working with the Ministry of Health, a regional hospital and Slovakia's largest hospital. A successful collaboration to improve health care quality in pediatric cardiosurgery between the Children's Hospital of Boston and a facility in Bratislava was completed in 1995. Seven municipalities received technical assistance on privatization of municipal functions, expansion of waste water treatment plants, and asset management. Four regional centers have been established to provide consultation with municipal officials regarding establishment of a privatization program for municipally-owned housing, to provide information to tenants in buying their units and to assist groups of new owners form homeowners' associations.
Description: USAID's assistance will focus on building the commitment and capacity of local governments to provide the means through which citizens can actively participate in making decisions that affect their daily lives, and by facilitating the interest and ability of citizens to participate in community processes that shape those decisions. USAID will specifically focus on promoting enhanced technical, managerial and governance skills to officials, both elected and appointed; improved administrative, operational and policy systems for management and governance; enhanced capability to finance local needs; and increased decentralization of authority and resources.
Host Country and Other Donors: Major host country counterparts include the Kosice Faculty Hospital, Trnava University; Economics Faculty at the University of Banska Bystrica; the Health Management School; the Association of Towns and Villages; the City Managers' Association; and the Finance Officers' Association. The British Know-How Fund and EU PHARE have also been involved in these efforts.
Beneficiaries: This effort seeks to benefit Slovak citizens by contributing to the building of strong democratic institutions and traditions in Slovakia and by achieving effective, independent governance, directly and through municipal staffs.
Principal Contractors, Grantees, or Agencies: These organizations include the Children's Hospital of Boston; Women and Infants' Hospital, Providence, RI; the University of Scranton, PA; the International City/County Managers Association; Research Triangle Institute; and the Urban Institute.
Major Results Indicators: Baseline TargetCitizens believing local government 0% (1996) 25% (1999) is more effective and responsive
Municipalities with officials using 0 (1996) 500 (1999) enhanced skills
Towns adopting improved 0% (1996) 50% (1999)
management systems
ACTIVITY DATA SHEET PROGRAM: SLOVAKIA
TITLE: Environmental Health, 180-S003.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $1,100,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 1999
Purpose: Reduced environmental risks to public health.
Background: Slovakia has many of the critical environmental problems facing countries in transition which adversely affect human health. It is also one of the few countries in the world where every citizen has the constitutional right to a healthy environment. Therefore, there is a serious commitment on the part of the GoS to address environmental concerns.
USAID Role and Achievements to Date: Seven pilot projects in a Waste Minimization Program have been completed. As a result, industrial chemical pollution for employees, as well as for the general population living near chemical plants, has been reduced. This has created a substantial savings in production costs to companies. Major Slovak enterprises are adopting technology which results in substantial reductions in pollution in concert with production technology improvements, both of which are necessary to meet the requirements of international markets. Since 1993, USAID has been working to improve the effectiveness of environmental public policy by replacing outdated command and control regulation with market-based economic instruments. The revised legislation, regulations and policy will have a positive impact on mitigating the environmental risks to public health.
Description: USAID's activities focus on improving environmental quality, citizens' quality of life, and reduced related health risks by supporting economically viable pollution prevention and abatement activities. Remaining efforts will focus on planning, implementing and evaluating public health campaigns, policy development, and behavioral changes based on specific techniques for environmental health promotion.
Host Country and Other Donors: Over 24 municipalities, the Slovak Environmental Agency, the State Environmental fund and the Ministry of the Environment collaborate with USAID programs. In addition there is collaboration from the Ministry of Health, the Center for Epidemiology, and the Center for Occupational Hazards. USAID also seeks to incorporate EU PHARE and EBRD funding and technical expertise in collaboration of activities including planning for various workshops and other project components.
Beneficiaries: This effort seeks to benefit Slovak citizens by reducing serious environmental hazards which many citizens encounter in their daily life.
Principal Contractors, Grantees, or Agencies: Major organizations are the Harvard Institute for International Development, Chemonics, the University of Minnesota consortium, the Environmental Health Program, and the World Environment Center. Cooperating U.S. Agencies are the Environmental Protection Agency, Department of Energy, the Nuclear Regulatory Commission.
Major Results Indicators: Baseline TargetLife expectancy increased (M) 66.5 yrs (1993) 70.9 yrs (1998)
(F) 75.3 yrs (1993) 78.2 yrs (1998)
New laws/programs dealing with 0 (1993) 10 (2000) environmental health risks in selected companies
Targeted companies initiating 10 (1993) 100 (2000) environmental health risk programs
![[USAID Home]](/images/usaid.gif)
[USAID Home]
[CP 98 Home]