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).
REGIONAL ACTIVITIES IN CENTRAL AND EASTERN EUROPE
FY 1997 FY 1998 FY 1999 Actuals Estimate Request Support for East European Democracy $51,400,000 $70,000,000 $73,300,000 Introduction
Since its inception in 1989, USAID assistance to Central and Eastern Europe (CEE) has evolved from a regional program to a country-specific one. Initially the regional approach gave the United States the flexibility to respond quickly to varying needs across countries in a rapidly transforming environment. The program has matured. Country-specific programs within Central Europe are described earlier in this presentation. Described below are activities that still operate regionally, across countries.
In addition, USAID is developing innovative post-presence mechanisms to manage remaining activities and reinforce the sustainability of results in countries graduating from USAID assistance. These mechanisms include regional activities managed out of Washington, the Regional Service Center in Budapest, and the establishment of public-private partnerships to facilitate the financial sustainability of local civil society organizations. Initial funding for the Trust for Civil Society in Central and East Europe is proposed for FY 1999; it is described under the Democratic Transition goal below.
FY 1999 Program
Strategic Goal: Economic Restructuring
USAID seeks to foster the emergence of a competitive, market-oriented economy in which the majority of economic resources is privately owned and managed.
Privatization, Financial Sector, Fiscal Reform: Regional funds are requested to support special economic restructuring needs across the region. More recent initiatives include commercial law and anti-corruption concerns. Funds are allocated to: Washington-based technical advisors who support field missions in activity design and implementation; service contracts that assist USAID with a variety of non-technical support functions; inter-agency service agreements, such as those with the Securities and Exchange Commission and the Department of the Treasury, and contracts, such as that with the National Securities Clearing Corporation, which help in performance monitoring, assessment and rapid response to fiscal and capital markets related needs across the region; and collaboration with other donors on anti-corruption initiatives in targeted countries.
Environmental Management: USAID has broadened its environmental focus beyond reducing health risks, placing greater emphasis on developing environmental management capacity to support sustainable economic growth. This shift reflects growing evidence that environmental policy initiatives and reforms need to be fully integrated into the economic reform and restructuring process at an early point to ensure that the transition takes full account of long-term environmental costs and benefits in a market environment. USAID encourages reliance on market mechanisms to the maximum extent possible in promoting higher environmental quality, while also recognizing that environmental costs and benefits are never fully internalized in a market system, and governmental agencies at both national and local levels have important regulatory roles to play. To implement this approach, USAID has developed a new Environmental Partnership Program (EPP) that will be fully operational early in FY 1999. The EPP will foster partnerships between U.S. and regional entities aimed at finding market solutions to environmental problems and promoting application of U.S.-based environmental expertise, best practices, goods and services as part of those solutions.
Private Sector: Initiated in 1991, the Technical Assistance to Enterprises project will be evaluated to
assess program impact in facilitating small, medium, and micro- enterprise development and growth throughout the CEE region.
Enterprise Funds: The Baltic-American Enterprise Fund budget remains regional, since it funds investments in Latvia, Estonia and Lithuania. Regional funds also are reserved for the better performing Enterprise Funds throughout the region. Once performance is determined during the fiscal year, the funds will be transferred to the appropriate country Enterprise Fund. An evaluation of CEE enterprise funds is planned to assess impact of the program on private sector development in the region.
Energy: Given the international character of energy supply systems, USAID facilitates regional energy cooperation and trade/investment. Activities in FY 1999 will focus on: (1) developing regional power pools in the Baltic region; Centrel region, (e.g., Poland, Hungary, Czech Republic and Slovakia); and the southern tier; (2) promoting private sector development and investment in energy efficiency and supporting efforts aimed at reducing emissions and improving environmental performance as part of the Agency's environmental priorities; (3) facilitating competitive power systems and independent energy regulatory agencies through regional workshops and training programs and partnerships in utility management.
Strategic Goal: Democratic Transition
Under this goal, USAID supports the transition to transparent and accountable governance and the empowerment of citizens through democratic political processes.
Trust for Civil Society in Central and East Europe (Trust): This $100 million Trust, projected to begin operations at the end of this fiscal year, is a visionary idea in that long after the SEED program ends, the United States will have an opportunity to promote deeper and more sophisticated civil societies in former totalitarian countries. While there is ample evidence of the transition from command to market economies and while there are many symbols and indicators of democratic society in most Eastern and Central European countries, the remaining challenge is the institutionalization and deepening of democratic institutions and open, transparent economies. To accomplish this, traditional bilateral assistance at the governmental level may diminish, but direct assistance to a panoply of philanthropic organizations, advocacy groups, professional societies and other non-governmental organizations will ensure citizen activism and governmental accountability -- the hallmarks of a sound democracy.
Several major American foundations have joined with USAID in a partnership to create this Trust. The immediate goal is to raise $100 million. The private foundations are far along in meeting their 50% commitment. The U.S. Government intends to make a pledge in four annual tranches, with the FY 1999 request covering the first $12.5 million. The Trust will operate for 15 to 20 years. Presently under consideration are plans for ensuring ample funding, for implementing the trust on a sound basis and for establishing criteria for in-country activities. Because this program is predicated on civil society maturation, the trust will, at the outset, be most active in northern-tier countries and later gravitate to the southern tier. All 15 CEE countries will be eligible over the life of the trust.
The goals will be threefold. First, the concept is to directly sustain in country non-governmental groups so that they may be viable and enduring. Second, the idea is to ensure the proliferation of such groups by simultaneously guaranteeing that a hospitable legal and regulatory environment keeps pace. Third, this trust gives the United States an opportunity, with limited public expenditures, to leverage the additional resources and expertise of American foundations, thereby permitting more innovative and longer-lasting expressions of our bilateral interests in these transition countries.
Rule of Law: Funds are provided for regional training, exchanges and technical assistance programs of the American Bar Association - Central and Eastern European Legal Initiative for key legal reformers and members of the judiciary. Funds are also provided for an enhanced anti-crime and corruption program being implemented by various U.S. government law enforcement agencies, including the FBI,
Treasury and the Criminal Justice Division of the Department of Justice.
Local Government: Regional funding supports the creation of a region-wide network which will provide experience-based information to local government officials, municipal association members and relevant national officials for solving municipal problems and will improve their responsiveness to citizens' needs. USAID will support the full array of technical areas integral to the effective, transparent functioning of local governments and the continued enhancement of decentralization. These include municipal credit, local environmental planning, citizen participation, urban service delivery and infrastructure, local economic development, municipal budget and finance, condominium formation and maintenance, property and asset management, housing policy and finance.
Independent Media: Under USAID's ProMedia program, regional funds will support journalist exchanges within the region, regional workshops for journalists in participating countries, and regional training for resident advisers in the region.
Political Process: Funds will be set aside for unanticipated requests for election assistance, training of labor leaders, and possible assistance in conflict resolution.
Non-Government Organization (NGO) Development: Under the Democracy Network Program to strengthen NGOs in the CEE Region, USAID manages two regional programs: a legal reform program through the International Center for Not-for-Profit Law (ICNL), to improve the regulatory and legal environment vis-a-vis NGOs, and a regional networking program run by Freedom House, to increase collaboration and coordination among local NGOs in CEE - - through exchanges, regional workshops, U.S. and cross-border internships, and publication of a quarterly newsletter.
Strategic Goal: Social Stabilization
USAID assistance responds to humanitarian crises and strengthens the capacity to manage the human dimension of the transition to democracy.
Labor Market Transition: The Department of Labor maintains regional training programs for all countries in the region and supports World Bank social sector reform initiatives.
Cross-cutting and Special Initiatives.
South Balkan Development Initiative: This program helps Albania, Former Yugoslav Republic of Macedonia and Bulgaria, front-line countries most severely affected by the conflict in the former Yugoslavia. With normal trade routes to Serbia cut off, the resultant economic setback has threatened the survival of these nascent democracies. In coordination with and with funds leveraged from other donors, the initiative will improve links among the South Balkan nations, encourage regional integration and promote cooperation.
Health: The health partnership program holds regional conferences and workshops for management development and nursing reform.
Training: Funds are set aside for regional participant training and the Georgetown University program. Evaluation and project development and support also are funded here.
Performance Funds: In a changing political environment, U.S. interests are best served by having a modest level of Performance Funds available for new or accelerating reform or superior performance in key sectors, such as occurred in the Romania capital markets sector during FY 1997.
CEE REGIONAL
FY 1999 PROGRAM SUMMARY*
(in thousands of dollars)
Strategic ObjectivesEconomic Restructuring Democratic
TransitionSocial Stabilization Cross-cutting / Special Initiatives Total Privatization 455 -- -- -- 455 Fiscal Reform 1,630 -- -- -- 1,630 Private Enterprise 11,463 -- -- -- 11,463 Financial Reform 1,990 -- -- -- 1,990 Energy 685 -- -- -- 685 Environmental Management 3,370 -- -- -- 3,370 Citizens' Participation -- 14,950 -- -- 14,950 Legal Systems -- 6,633 -- -- 6,633 Local Government -- 932 -- -- 932 Crises -- -- 222 -- 222 Social Benefits -- -- 1,460 -- 1,460 Environmental Health -- -- -- -- -- Cross-cutting/ Special Initiatives -- -- -- 29,510 29,510 TOTAL 19,593 22,515 1,682 29,510 73,300
* Support for East European Democracy (SEED) Act funds
Deputy Assistant Administrator for the CEE: Barbara Turner
![[USAID Home]](/images/usaid.gif)
[USAID Home]
[CP 99 Home]