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 THE NEW INDEPENDENT STATES
FY 1997 FY 1998 FY 1999 Actuals Estimate Request FREEDOM Support Act............... 42,900,000 $34,000,000 $87,300,000 Introduction
Since its inception in 1992, USAID assistance to the NIS has progressed from a regional program to a country-specific one. While 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. USAID now has more field representation which has provided improved knowledge of a country's transition environment and enabled development of country-specific strategies. Nevertheless, some activities are appropriately funded regionally because several countries are benefitted.
Described below are activities that still operate regionally, across countries, including: regional enterprise funds; performance funds; contract personnel who provide technical services to more than one country; and regional conferences, working groups and courses that benefit participants from a number of countries. Activities of other U.S. agencies which receive funds through transfers from FSA accounts are in some cases applied regionally.
FY 1999 Program
USAID is pursuing the following strategic goals with regionally designated funds in the NIS:
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 emphasize 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 needs across the region; and collaboration with other donors on anti-corruption initiatives in targeted countries.
Private Sector: An assessment of the impact of private enterprise development programs aimed at strengthening the ability of entrepreneurs to manage their businesses, and improving the broader environment (of laws, policies, regulations) and the relationship between government and business in the NIS will be undertaken. A pilot anti-corruption activity will also be carried out to assess ways to improve and make more transparent, legislative and business start up procedures to reduce corrupt practices that constrain business development and expansion.
Enterprise Funds: The Central Asian Republics and West NIS Enterprise funds continue to foster private sector development by providing investment capital to small and medium-scale businesses in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and in Ukraine, Belarus and Moldova, respectively. Under the FY 1996 and 1997 Trans-Caucasus Enterprise Fund earmarks, the private
investment fund partially guaranteed by the Overseas Private Investment Corporation and the small enterprise lending program, which reports directly to USAID, are fully funded and operational. An evaluation of NIS enterprise funds is planned to assess impact of the overall program in promoting private sector development in the region.
Energy: Given the international character of energy supply systems, USAID's program in this area facilitates regional energy cooperation and trade/investment. Activities in FY 1999 will focus on three major areas: (1) development of cooperation among the newly-formed energy regulatory agencies in areas of licensing, tariff development, market and grid code regulations and organizational development and public participation; (2) regional activities to support cooperation among Caspian states in legal, economic/financial and environmental aspects of oil and gas development and pipelines; (3) training, analysis and technical assistance related energy efficiency and environmental issues and mutually-beneficial options for reducing emissions in key countries in the NIS region.
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. To maximize the impact of USAID's investment throughout the region, support will be provided to identify and apply cross-border lessons in the environment sector and to encourage regional networks.
Strategic Goal: Democratic Transition
Under this goal, USAID funds support the transition to transparent and accountable governance and the empowerment of citizens through democratic political processes.
Rule of Law: Funds are provided for technical assistance programs and seminars addressing topics such as Civil Code drafting which are common to multiple countries, and expanding activities of the Sakharov Center Human Rights Institute. Funds are also provided for regional anti-crime and corruption programs 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 regional 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.
Strategic Goal: Social Stabilization
Humanitarian: USAID assistance responds to humanitarian crises and strengthens the capacity to manage the human dimension of the transition to democracy. Technical assistance places a strong
focus on vulnerable groups feeding, strengthening local social service NGOs, and leveraging multilateral assistance. In addition to Freedom Support Act funds, some food aid is allocated on a contingency basis for potential emergencies.
Health: USAID uses regional health funds to provide technical assistance for infectious diseases, vaccine and pharmaceutical delivery, hospital partnerships, and women's health programs not clearly attributable to individual country programs.
Cross-cutting and Special Initiatives.
Funds for programs which cut across a number of strategic objectives or which are not directly related to the achievement of USAID objectives.
Performance Funds: In a changing political environment, U.S. interests are best served by having a modest level of Performance Funds available for support of new or accelerating macroeconomic reform or superior performance in key economic sectors, such as with the Central Asian Republics Energy Initiative.
Southern Caucasus Regional: USAID funds humanitarian assistance, reconstruction and remedial activities for refugees, displaced persons, and needy civilians affected by the conflicts throughout the Southern Caucasus region, including those in the vicinity of Abkhazia and Nagorno-Karabakh.
Regional Training: USAID supports the New Independent States Training and Exchanges Project. Training programs funded under this project are directly linked to the USAID strategic objectives for each country. In order to maintain the project, there are functions which are carried out regionally because of the economies of scale inherent in combining process functions. For example, regional training funds support maintenance of health coverage, tax assistance for trainees, and data collection. In addition, regional funds are used for impact analysis, project monitoring and report preparation. Since there is a substantial amount of training that is done in the U.S., there is more U.S. based monitoring in this project than in most USAID financed activities.
Other Agencies: Similarly funds are provided to the Departments of Treasury, Commerce, Justice, U.S. Information Agency, the Trade and Development Agency, and the State Department for Science Centers and transport of humanitarian assistance commodities.
NIS REGIONAL
FY 1999 PROGRAM SUMMARY*
(in Thousands of Dollars)
Strategic ObjectivesEconomic Restructuring Democratic
TransitionSocial Stabilization Cross-cutting / Special Initiatives Total Privatization 472 -- -- -- 472 Fiscal Reform 160 -- -- -- 160 Private Enterprise 1,185 -- -- -- 1,185 Financial Reform 1,265 -- -- -- 1,265 Energy 405 -- -- -- 405 Environmental Management 3,000 -- -- -- 3,000 Citizens' Participation -- 317 -- -- 317 Legal Systems -- 80 -- -- 80 Local Government -- 703 -- -- 703 Crises -- -- 374 -- 374 Social Benefits -- -- 1,725 -- 1,725 Environmental Health -- -- 581 -- 581 Cross-cutting / Special Initiatives -- -- -- 77,033 77,033 TOTAL 6,487 1,100 2,680 77,033 87,300
* FREEDOM Support Act (FSA) funds
Acting Deputy Assistant Administrator for the NIS: Brian Kline
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