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US GOVERNMENT ASSISTANCE TO AND COOPERATIVE ACTIVITIES WITH ARMENIA

ASSESSMENTS OF MAJOR PROGRAMS

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID) –

BUREAU FOR EUROPE AND EURASIA

 

STRATEGIC ASSISTANCE AREA 1: ECONOMIC RESTRUCTURING

ü STRATEGIC OBJECTIVE 1.1: INCREASED TRANSFER OF STATE-OWNED ASSETS TO THE PRIVATE SECTOR

Armenia has made significant accomplishments in the area of privatization, although it still has a way to go, and the pace of privatization has slowed. Small-scale privatization is essentially complete, with 6,769 businesses having been privatized. Medium and Large Enterprises (MLE) privatization is estimated to be 75-percent complete, with 1,492 of 1,967 MLEs having been sold. Armenia’s telecommunications sector was privatized in 1997-98. Privatization slowed in early FY 1999, with the only significant sale being that of the Hotel Yerevan. Most remaining state-owned enterprises have failed to attract investor interest at auctions or tenders. However, the privatization law does not enable liquidation of these firms. The privatization of Armenia’s energy distribution company is due in FY 2000.

ü STRATEGIC OBJECTIVE 1.2: INCREASED SOUNDNESS OF FISCAL POLICIES AND FISCAL MANAGEMENT PRACTICES

The year 1999 was one of progress in economic reform, with elections leading to the formation of a reform minded government, an approach that was retained after the tragic October 1999 assassination of the Prime Minister and parliamentary leaders. Growth in real GDP was expected to be higher than the projected five percent, the projected budget deficit is less than the target of 5.9 percent, and inflation is less than one percent. USAID assistance led to substantial progress towards preparing credible annual revenue forecasts and developing realistic budgets, including plans to begin producing three-year revenue and expenditure forecasts. Also with USAID assistance, the Armenian Government has prepared improvements to the tax code. Under a USAID-funded pilot program, two tax inspectorates are in the process of computerization and are implementing an audit selection process. All companies are now required to use International Accounting Standards (IAS).

ü STRATEGIC OBJECTIVE 1.3: ACCELERATED DEVELOPMENT AND GROWTH OF PRIVATE ENTERPRISES

Policy, Legal and Regulatory Reform Programs: Armenia adopted a new civil code in January 1999, establishing a legal framework for property rights, contract enforcement and banking activities. Use of IAS was mandated for certain commercial sectors and will be required for all enterprises by 2002. A new customs code, which is expected to pass parliament in early 2000, will facilitate trade liberalization and boost Armenia’s drive to accede to the WTO.

Business Development Programs: In FY 1999, USAID business development programs in the Caucasus region also emphasized micro-enterprises and SMEs. In Armenia, the Eurasia Foundation loaned over $4.3 million to 149 SMEs and helped create almost 1,100 jobs. With USAID support, the Trans-Caucasus Enterprise Fund began implementing a $20 million grant to implement a five-year Trans-Caucasus SME finance program in Armenia, Azerbaijan and Georgia, the primary focus of which is to create and promote financial products and institutions that meet the needs of small businesses and entrepreneurs. In Armenia, more than 400 clients received loans totaling over $46,000 under this program, with an average loan size of $110. In addition, USAID complemented its financial sector initiatives with non-financial enterprise development efforts such as training and networking.

ü STRATEGIC OBJECTIVE 1.4: A MORE COMPETITIVE AND MARKET-RESPONSIVE PRIVATE FINANCIAL SECTOR

Armenia has embarked on significant reforms of its banking and capital markets. While it will be at least a year before it can be determined if significant progress is being made, initial indications are encouraging. The country has reduced the number of banks, increased the level of bank supervision and raised the required capital levels. No significant state owned banks were privatized as of September 2000. In the area of capital markets, Armenia has made significant progress in establishing securities regulators and exchanges. Armenia lags behind in the area of medium-sized enterprises privatization. There is an extreme distrust of financial intermediaries in the country—a legacy of numerous banking system failures and pyramid schemes—which is probably the single most significant obstacle to capital markets development.

ü STRATEGIC OBJECTIVE 1.5: A MORE ECONOMICALLY SOUND AND ENVIRONMENTALLY SUSTAINABLE ENERGY SYSTEM

With USAID assistance, Armenia has made significant advancements in energy reform over the past three years. The country has been able to create an effective energy regulatory commission that is developing transparent tariff methodologies. Armenia is preparing to privatize its four main distribution companies in early 2000 with USAID, World Bank and EBRD support.

ü STRATEGIC OBJECTIVE 1.6: INCREASED ENVIRONMENTAL MANAGEMENT CAPACITY TO SUPPORT SUSTAINABLE ECONOMIC GROWTH

In Armenia, USAID has carried out an environmental assessment of the entire energy sector to meet World Bank and Japanese Export-Import Bank requirements for the release of a $95 million loan aimed at improving the country’s transmission and distribution of energy. The Yerevan office of the American Bar Association’s USAID-funded Central and East European Law Initiative (ABA/CEELI) is working to enhance public participation in environmental decision-making by encouraging advocacy groups to identify and address environmental problems through the democratic process.

STRATEGIC ASSISTANCE AREA 2: DEMOCRATIC TRANSITION

ü STRATEGIC OBJECTIVE 2.1: INCREASED CITIZEN PARTICIPATION IN POLITICAL AND ECONOMIC DECISION-MAKING

Support for Independent Media: An Armenian student who participated in a USAID-funded Internews seminar in Yerevan was the first to obtain a video of the October assassination of the country’s prime minister, and private broadcasters were the first to interview the assassins.

ü STRATEGIC OBJECTIVE 2.2: LEGAL SYSTEMS THAT BETTER SUPPORT DEMOCRATIC PROCESSES AND MARKET REFORMS

Obstacles to the rule of law in Armenia include executive branch influence over the judiciary, judicial hesitancy about asserting independence from the executive branch, uneven enforcement of judicial decisions, corruption at many levels of government, and public cynicism about improvements to the legal system. Recent structural and legislative changes have helped set the stage for implementing a fair system of justice. With USAID assistance, a variety of new laws came into effect in January 1999, including a new civil code and a new court structure that abolished the old trial-level courts and created new courts of first instance and a court of appeals, in addition to a Court of Cassation (highest-level court) and a separate Constitutional Court. Judges for the new courts were selected through a competitive testing and certification process, with approximately 40 percent of appointees being new to the bench. While Armenia’s legal system made great progress in FY 1999, the level of expertise of legal professionals and public confidence in the system did not keep pace; consequently, USAID programs in this area include extensive support for training and re-training of legal professionals. USAID-funded consultants have worked closely with the Judges’ Association and the Council of Court Chairmen (the judicial body responsible for court administration, budgeting and financing) to provide essential training to all Armenian judges and to plan for future training needs. USAID has also supported U.S.-based training for attorneys through the Bar Association of Armenia and the Yerevan State Law School. USAID helped associations of legal professionals develop codes of conduct and use training sessions to stress the importance of ethical conduct. In coordination with the World Bank, USAID has also initiated programs with the Council of Court Chairmen to improve court administration and case management, the Ministry of Justice to improve the Court Executors’ Service, and supported efforts by the Government of Armenia to develop a law on administrative procedure. Such a law would give business much greater certainty when dealing with the government bureaucracy and substantially reduce the scope for corruption in public service. USAID’s FY 2000 assistance will include public out-reach to promote greater confidence in judicial and legal reform.

ü STRATEGIC OBJECTIVE 2.3: MORE EFFECTIVE, RESPONSIBLE, AND ACCOUNTABLE LOCAL GOVERNMENT

New local government programs have been developed in Armenia, with implementation due in FY 2000. These programs will provide training and technical assistance to upgrade the skills of municipal officials and council members, develop the capacity of municipal associations to lobby the national government, increase citizen participation, and assist local governments in improving communal service delivery and providing a more supportive environment for local economic development. In addition, USAID will pursue policy dialogues with the Armenian government to encourage democratic local governance, fiscal decentralization and the empowerment of local government. Where appropriate, USAID will coordinate these programs with other USAID activities related to social transition and private sector development.

STRATEGIC ASSISTANCE AREA 3: SOCIAL TRANSITION

ü STRATEGIC OBJECTIVE 3.1: REDUCED HUMAN SUFFERING AND CRISIS IMPACT

The 1998-99 Winter Warmth Program distributed 7,300 metric tons of kerosene to schools and to vulnerable populations in temporary shelters in the earthquake zone of northern Armenia. This high profile program provided the only means of heat for the entire winter to a large segment of the population and was the only source of heat for the vast majority of schools throughout Armenia. The sixth consecutive and final year of this USAID program proved to be the most successful, thanks to the implementation of lessons learned, as well as the collaboration of local, U.S. Government and non-governmental organizations. As a result, kerosene was distributed to 99.7 percent of beneficiaries with coupons. The 7,300 metric tons of kerosene assisted 35,966 beneficiaries still living in temporary shelters after the December 1988 earthquake and 1,303 schools throughout Armenia. Also as a final action, USAID provided $571,000 to the UN World Food Program (WFP) in support of its food-for-work activities. In lieu of wages, workers under the program receive food packages of vegetable oil, flour and sugar. Since 1996, the program has been transitioning from humanitarian distributions to development assistance. Supported by funding from multiple donors, WFP activities have employed more than 75,000 vulnerable Armenians while creating an infrastructure necessary for income generation. In 1999, USAID was the single largest contributor to this activity, which employs more people than any other non-governmental source in Armenia. In fall 2000, WFP plans to expand its food-for-work activities to reach an additional 60,000 Armenians.

TRADE AND INVESTMENT PROGRAMS

OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC)

OPIC’s involvement in Armenia has led to up to $18 million in financing for Hotel Armenia project, which is sponsored by AK Development, LLC.

ENTERPRISE FUNDS

Trans-Caucasus Enterprise Fund: In FY 1996, the U.S. Congress earmarked $15 million for the creation of a Trans-Caucasus Enterprise Fund to promote regional cooperation and private sector development in Armenia, Azerbaijan and Georgia. An additional $10 million was earmarked for this purpose in FY 1997, along with the authority to invest through other institutions. Beginning in September 1997, USAID provided Shorebank Advisory Services (SAS) with a $20 million grant to implement a five-year Trans-Caucasus SME Finance Program. SAS has also mobilized $9.4 million in complementary funding from the International Finance Corporation (IFC) and expects to attract further funding from the IFC, local savers, financial intermediaries and other investors. The primary focus of the Trans-Caucasus SME Finance Program is to create and promote financial products and institutions that meet the needs of small businesses and entrepreneurs. Non-financial enterprise development efforts such as training and networking are used to complement financial-sector initiatives. As of September 1999, offices had been established and lending operations had begun in each of the three countries. SAS initiated operations in Georgia in March 1998 through local partner banks. To date, 48 loans totaling nearly $1.9 million have been made in amounts ranging from $10,000 to $40,000. SAS began operations in Azerbaijan in March 1998; to date, 25 loans totaling $1.1 million have been disbursed, with an average loan size of $48,000. In Armenia, SAS is currently working with one partner bank and is conducting a due diligence examination of two other banks.

Foundation for International Community Assistance (FINCA): The micro-lending program implemented by FINCA began operations in Armenia in June 1999, and has had more than 400 clients and has disbursed over $46,000 in loans, with an average loan size of $110.

Developing Enterprise Loan Program (DELP): DELP makes available loans ranging in size from $1,000 to $12,000. DELP’s Armenia Program was initiated in mid-June 1999; SAS has partnered with World Vision to implement this program. To date, most of SAS's efforts have focused on strengthening World Vision's lending operations before the disbursement of loans. To date, six loans have been approved, with $13,000 disbursed and another $17,000 awaiting disbursal.

U.S. DEPARTMENT OF COMMERCE – BUSINESS DEVELOPMENT INITIATIVES (BDCI)

The Ombudsman’s Dialogue with Central Asian and Caucasian Governments: The mission of the U.S. Ombudsman for Energy and Commercial Cooperation with the NIS is to facilitate regional dialogue on trade and investment development in the Newly Independent States. The Ombudsman’s activity urges specific measures for progress on energy development and transportation, as well as the development of business-friendly regimes that would facilitate the development of trade and investment. The Ombudsman also encourages cooperation with the International Financial Institutions, accession – where appropriate - to WTO, movement on privatization and transparency in the tendering process, and advocates on behalf of U.S. companies.

In Georgia, the Ombudsman urges progress in the legal and regulatory environment, commercial tax reform and privatization, and lobbied on behalf of U.S. company projects. In Azerbaijan, the Ombudsman seeks commitments addressing issues of corruption, customs reform, market access and fair treatment for U.S. companies, particularly in the telecommunications sector. The Ombudsman’s office has held several individual and joint meetings with the U.S.-Armenia Business and Investment Association, the American-Georgian Business Development Council and the U.S.-Azerbaijan Chamber of Commerce to develop ideas for regional cooperation (for more information, please click here).

U.S. DEPARTMENT OF THE TREASURY - TECHNICAL ASSISTANCE

Budget Policy and Management: A resident budget advisor assisted in the implementation of a new budget law. Instructions and forms for the preparation and submission of budget requests for the year 2000 were completed and were an improvement over the previous year’s procedures. A structured budget formulation system was created and plans were made to improve systems and practices for monitoring execution of the budget.

Government Debt Issuance and Management: A resident government debt advisor helped develop and implement standardized qualifications for primary dealers. He assisted the Central Bank in regulating, supervising and monitoring non-bank primary dealers, provided training to broker/dealers in establishing trading and sales operations, and helped create a "treasury direct" program, whereby the public is able to purchase treasury bills directly from the government.

Tax Policy and Administration: A resident tax administration advisor helped the State Tax Inspectorate (STI) reorganize its tax administration on a functional basis, develop and train inspectors in audit techniques, and establish three new departments for taxpayer education, audits and criminal investigations. He also drafted plans for helping the STI implement an annual audit plan and to develop audit selection criteria, as opposed to auditing the same businesses or taxpayers every year.

Enforcement Policy and Administration: A Treasury Department enforcement team has been providing assistance to the Interior Ministry’s Department Six (a bureau responsible for enforcing violations of bank, insurance and currency fraud), the Office of the Prosecutor General (OPG), and the Central Bank since 1998. In FY 1999, the team helped the Department improve its enforcement capabilities, familiarizing it with the "enterprise theory" of investigation, the use of informants, undercover operations and electronic surveillance. Gaming-industry assistance was provided to Armenia law enforcement officials, the regulatory and licensing authorities of the Ministry of Finance, tax collectors (now the Ministry of State Revenues), and the OPG. The team also provided assistance to the Armenia Association of Insurers’ Rights and conducted an assessment of the Armenia Government agencies responsible for creating an effective regulatory and enforcement system to combat insurance fraud.

USAID FARMER-TO-FARMER PROGRAM

The NIS component of USAID’s Farmer-To-Farmer Program (NIS-FTF) began as a special three-year initiative in 1991. NIS-FTF provides short-term agricultural technical assistance through U.S. volunteers to facilitate the NIS countries’ transition to a free-market economy. The Program has focused primarily on agribusiness development, agricultural credit, agricultural processing, marketing, development of associations and cooperatives, and agricultural/business training. Since its inception, NIS-FTF has organized more than 3,800 individual volunteer assignments in all 12 NIS countries. After almost eight years, the original NIS-FTF Program ended on September 30, 1999, and was being replaced by a new NIS-FTF Program as of October 1, 1999. The worldwide FTF Program is congressionally mandated and funded through the Farm Bill with P.L. 480 funds transferred to USAID for program implementation. In FY 1999, NIS-FTF operated under a one-year, $7.29 million extension of four cooperative agreements that have been operational since 1991.

In FY 1999, a total of 442 FTF volunteer assignments were completed in 11 NIS countries. A breakdown by country is provided below:

FY 1999 1991-99 TOTAL

Armenia 20 151

In recent years, NIS-FTF has increasingly focused on results achieved by the host organization as a result of the volunteers' assistance. FTF grantee organizations have been much more selective in identifying host participants, and have looked for ways to ensure that results are sustained and replicated. For example, in Armenia, the FTF grantee organization used USAID funding to help establish and register Volunteers in Service to Armenia Agriculture (VISTAA), a local NGO that is utilizing the services of underemployed agricultural professionals. Initially, the VISTAA volunteers supported the FTF volunteers in their assignments, but as the VISTAA volunteers gained experience, they began to carry out separate volunteer assignments. In 1999, VISTAA volunteers carried out 40 technical assistance projects to complement the 20 FTF volunteer assignments. VISTAA now operates at more than 50-percent cost recovery from assignments funded by international agencies, and is expected to be self-supporting in about two years.

FY 2000: The grant for the FTF Program in the Caucasus region was also awarded to ACDI/VOCA and its subgrantees Land O'Lakes and Winrock International. ACDI/VOCA plans to field 89 volunteers in FY 2000 (33 in Armenia, 28 in Azerbaijan, and 28 in Georgia), and a total of 339 volunteers over the course of the four-year project. In Armenia, the program will continue to focus on small to medium-sized enterprise (SME) development, post-harvest handling, value-added processing, packaging and labeling, and marketing. Working in close partnership with local NGOs in each country, ACDI/VOCA plans to have self-sustaining sup-port organizations in place by the time the project is completed.

TRAINING AND EXCHANGE PROGRAMS

USIA PROFESSIONAL TRAINING AND EXCHANGE PROGRAMS

Freedom Support Act (FSA) Grant Program (FSA-Funded): In FY 1999, USIA’s Office of International Visitors organized group and individual FSA Grant exchange programs for a total of 747 NIS participants, including 19 from Armenia, 44 from Azerbaijan, 47 from Belarus, 42 from Georgia, 49 from Kazakhstan, 35 from Kyrgyzstan, 26 from Moldova, 327 from Russia, 21 from Tajikistan, 13 from Turkmenistan, 112 from Ukraine, and 12 from Uzbekistan.

International Visitors (Iv) Program (Base-Funded): Like the FSA Grant Program, USIA’s IV Program gives NIS participants an opportunity to familiarize themselves with American society, government and culture; study U.S. approaches to their professional fields, and establish professional contacts with their U.S. counterparts. IV program participants, who are nominated by U.S. embassies, come to the United States for approximately three weeks to meet with experts in their fields in Washington, D.C. and various cities around the country. Program topics in FY 1999 included economic development, defense- and foreign-policy making, rule of law, trade, state and local government, taxation and budgeting, social welfare, media relations, NGO management and Y2K-related issues. In FY 1999, a total of 234 NIS citizens participated in individual and group IV programs: 11 from Armenia, three from Azerbaijan, 12 from Belarus, 16 from Georgia, 30 from Kazakhstan, seven from Kyrgyzstan, eight from Moldova, 112 from Russia, two from Turkmenistan, 25 from Ukraine, and 8 from Uzbekistan.

Citizen Exchanges (Jointly Funded)

Community Connections (FSA-Funded): USIA’s Community Connections Program offers community-based, three- to five-week practical training opportunities with home-stays in the United States for entrepreneurs, local government officials, legal professionals, NGO leaders and other professionals from Russia, Ukraine, Belarus, Georgia, Moldova, Armenia and Kazakhstan. (for more details see "U.S. Government Assistance to and Cooperative Activities with the New Independent States of the Former Soviet Union", FY 1999 Annual Report, hard copy, p.160). In FY 1999, the Community Connections Program arranged internships for an estimated 1,760 NIS participants: 60 from Armenia, 100 from Belarus, 100 from Georgia, 80 from Kazakhstan, 140 from Moldova, 880 from Russia, and 500 from Ukraine. In FY 2000, approximately 1,890 Community Connections participants will be recruited from Russia, Belarus, Georgia, Kazakhstan, Armenia and Moldova.

USIA ACADEMIC TRAINING AND EXCHANGE PROGRAMS

FUTURE LEADERS EXCHANGE (FLEX) PROGRAM (Jointly funded)

SECONDARY-SCHOOL PARTNERSHIPS (FSA-funded)

FREEDOM SUPPORT ACT (FSA) UNDERGRADUATE EXCHANGE PROGRAM (FSA-funded)

USIA’s FSA Undergraduate Program provides grants to NIS citizens for one year of non-degree undergraduate study in the United States in a number of areas, including agricultural and environmental management, American studies, business, computer science, economics, education methodology, journalism/mass communications, political science, and sociology. First-year students apply for scholarships to community colleges, while more advanced students compete for scholarships at four-year college and university programs. Academic studies are enhanced through community service activities, a practical internship, and an end-of-year workshop. Participants indicated that the community service activities were among the most eye-opening components of the program, giving them first-hand experience with the American approach to helping those in need. Recruitment for the 1999-2000 cycle of the FSA Undergraduate Program yielded over 6,400 applications from students all over the NIS—an increase of some 2,000 applications over FY 1998. In FY 1999, the program funded 261 participants: 25 from Armenia, 19 from Azerbaijan, 11 from Belarus, 21 from Georgia, 19 from Kazakhstan, 12 from Kyrgyzstan, nine from Moldova, 64 from Russia, four from Tajikistan, four from Turkmenistan, 63 from Ukraine and 10 from Uzbekistan.

EDMUND S. MUSKIE / FREEDOM SUPPORT ACT (FSA) GRADUATE FELLOWSHIP PROGRAM (Jointly funded)

The Muskie/FSA Graduate Fellowship Program provides highly qualified NIS graduate students and professionals with opportunities for one to two years of study in U.S. master’s-degree programs in the fields of business administration, economics, education administration, environmental management, law and legal education, library and information science, mass communications/journalism, public administration, public health and public policy. Candidates are recruited through an open, merit-based competition administered by the American Councils for International Education (ACIE, formerly ACTR/ACCELS) and the Open Society Institute. U.S. host campuses are also selected through a competition and generally provide tuition waivers of fifty to sixty percent. There are typically at least three times more applicants than available Muskie/FSA fellowships in most NIS countries. The accomplishments of Muskie/FSA program alumni are often front-page news in their home countries, and they actively participate in USIA-supported alumni activities. In FY 1999, a total of 299 participants traveled to the United States on Muskie/FSA Graduate Fellowships.

CONTEMPORARY ISSUES FELLOWSHIP PROGRAM (FSA-funded)

USIA’s Contemporary Issues Fellowship Program, which is administered by the International Research and Exchanges Board (IREX), targets NIS government officials, NGO leaders and private-sector professionals who are engaged in the political, economic, social or educational transformation of their countries. Through an open, merit-based competition, the program provides participants with an opportunity to conduct research and participate in professional conferences and public forums on a range of topics, including sustainable growth and economic development; democratization, human rights and the rule of law; political, military, security and public-policy issues; strengthening civil society; Internet; the communications revolution; and intellectual property rights. Fellows are placed in four-month-long programs at U.S. universities, think tanks, NGOs, and U.S. Government offices and are matched with a U.S. host advisor, who guides their research and professional development, with an emphasis on writing and advocacy skills. Some 870 qualified applications were received for the 93 fellowships awarded in FY 1999. Of the 93 finalists, five were from Armenia, three from Azerbaijan, six from Belarus, six from Georgia, nine from Kazakhstan, three from Kyrgyzstan, eight from Moldova, 21 from Russia, one from Tajikistan, two from Turkmenistan, 21 from Ukraine and eight from Uzbekistan. FY 1999 program highlights included a participant from Armenia who conducted research at the University of Maryland on NGOs and the health-care sector and was subsequently appointed Armenia’s Minister of Health. During his fellowship, he established a telemedicine (Internet-based health-care) partnership between the University of Maryland and the Armenia Diagnostics Medical Center, of which he had been the director.

J. WILLIAM FULBRIGHT PROGRAM (Base-funded)

The NIS component of USIA’s Fulbright Program, which is administered through offices in Moscow and Kiev, provides opportunities for American faculty to teach in the NIS countries and research awards for NIS scholars to study in the United States. Although the program emphasizes the humanities and social sciences, scholarships are also awarded in biology, chemistry, mathematics, medicine, and related fields. In addition to funding 67 U.S. and 98 NIS scholars in FY 1999, the program also provided textbooks for use by American grantees at their NIS host institutions. The Fulbright Program familiarizes NIS scholars with the diversity and perspectives of the American liberal arts curriculum and provides them with a global network of personal and professional contacts.

The Fulbright Program brings U.S. lecturers in a wide range of academic disciplines to the NIS countries. In FY 1999, in addition to the more traditional fields of American studies, economics, and business management, U.S. Fulbright lecturers taught courses in environmental sciences in Armenia and Kyrgyzstan.

REGIONAL SCHOLAR EXCHANGE PROGRAM (Base-funded)

The Regional Scholar Exchange Program (RSEP) is an open, merit-based competition that selects NIS and U.S. junior and mid-level university faculty, researchers, and scholars in the social sciences and humanities for four- to six-month fellow-ships at U.S. and NIS institutions, respectively. NIS Regional Scholars are placed at U.S. universities, while U.S. Regional Scholars are placed at universities and research institutes in the NIS. Regional Scholars are matched with host advisors who guide their research and professional development. RSEP fellows conduct research on specific topics in the social sciences and humanities, write academic papers, articles and books, and deliver lectures, with the goal of contributing to the further development of higher education and scholarship in their home countries. RSEP awarded 87 fellowships to NIS scholars and eight fellowships to U.S. scholars in FY 1999. The breakdown of the NIS scholars by country is as follows: 28 from Russia, 17 from Ukraine, six from Kazakhstan, and four each from Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan.

NIS COLLEGE AND UNIVERSITY PARTNERSHIP PROGRAM (FSA-funded)

USIA’s NIS College and University Partnership Program (NISCUPP) is designed to support mutually beneficial linkages between U.S. and NIS colleges and universities in the following areas: law, business, economics, trade, education, continuing education, educational reform, civic education, public administration, public policy, government, urban and regional economic development, journalism and communications. Further information about ongoing NISCUPP projects is available through the program’s website at the following address: http://e.usia.gov/education/niscupp

ENGLISH LANGUAGE PROGRAMS (Jointly funded)

USIA’s English Language Programs complement the full range of U.S. Government-funded FSA exchange programs by improving English-teaching capabilities in the NIS. The Regional English Language Officer (RELO) also engaged returned FLEX Program alumni to teach English to potential future FLEX participants and conducted similar workshops in Armenia.

USIA DEMOCRACY-BUILDING PROGRAMS

DEMOCRACY FUNDS SMALL-GRANTS PROGRAM (FSA-funded)

FY 1999 marks the fifth year of this high-impact small-grants program, under which embassy-based Democracy Commissions in each NIS country award grants of up to $24,000 to indigenous non governmental organizations (NGOs) or individuals in support of democracy-building activities, independent media and the free flow of information. In FY 1999, the Democracy Funds Small-Grants Program awarded over 210 grants with a total value of over $2.1 million.

Since FY 1995, over 570 grants have been awarded among the participating countries, including 63 in Armenia.

CIVIC EDUCATION CURRICULUM DEVELOPMENT PROGRAMS (FSA-funded)

The University of Iowa will administer a one-year project to disseminate civic education curriculum materials in Armenia. The University of Iowa is publishing 19,000 copies of civic education materials, organizing two teacher training workshops in Armenia, and providing support for a conference to be held in Yerevan in June 2000. The published materials were developed under an existing USIA grant, under which the University of Iowa is cooperating with six Armenia educators to draft, revise and field-test seven civic education units for Armenia seventh-grade students. All project activities involve substantial cooperation with the Armenia Education Ministry’s Center for Educational Reform. In addition, an elementary-level teacher education program initiated in FY 1998 began the pilot testing and revision of civic education materials. In September, the U.S. project director conducted a field-test and team seminar in Yerevan involving 18 pilot-school representatives, six members of the U.S.-trained curriculum development team, and representatives from the Ministry of Education and the U.S. Embassy. The seminar was conducted in preparation for continued pilot- testing and the final editing of a civic education handbook for elementary-school teachers.

An estimated 30 U.S. and NIS citizens will participate in exchange activities under these civic education grants, with an additional 280 NIS citizens taking part in the training components.

USIA INFORMATION PROGRAMS

INTERNET ACCESS AND TRAINING PROGRAM (FSA-funded)

USIA’s Internet Access and Training Program (IATP) has established public access Internet sites at selected NIS libraries, universities and information resources centers in Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Ukraine and Uzbekistan. The program seeks to provide sustainable Internet access and training in the effective use of Internet resources to alumni of U.S. Government-funded exchange and training programs, their colleagues and other key audiences.

SPEAKERS PROGRAMS (Base-funded)

Through USIA Speakers Programs, U.S. embassies fund American experts to participate in conferences, conduct lectures, lead workshops and seminars, or participate in other programs, either in person or through tele-conferencing. In FY 1999, USIA funded a total of 69 speakers for the NIS countries: two for Armenia, five for Azerbaijan, 11 for Belarus, two for Georgia, six for Kazakhstan, two for Kyrgyzstan, three for Moldova, 29 for Russia, three for Turkmenistan, three for Ukraine and three for Uzbekistan. For example, a Washington D.C.-based newspaper correspondent lectured in Armenia on journalism ethics and helped improve the editorial writing of local newspapers.

USIA SPECIAL PROGRAMS

ARMENIA CONNECTIVITY PROGRAM (FSA-funded)

In FY 1998, USIA provided a grant to the American Councils for International Education (ACIE, formerly

ACTR/ACCELS) to establish Internet connectivity in six Armenia schools and their six U.S. partner schools. The Internet will be used to develop new social science curriculum modules for Armenia schools. In fall 1999, two teachers from each of five Armenia schools visited their U.S. partner schools; and 10 U.S. teachers traveled to Armenia. The final exchange under this program is scheduled for January 2000.

USAID TRAINING PROGRAMS

Economic Restructuring

In the Caucasus countries, over 20 in-country programs were conducted on small and medium-sized enterprise development, including topics such as needs assessment, credit, and leadership skills for entrepreneurs.

Democratic Reform

· Several USAID-funded women's leadership workshops brought together women from Armenia, Azerbaijan and Georgia to strengthen ties among the region’s NGOs and establish a Caucasus-wide women's coalition.

· A U.S.-based training program was arranged for six members of the law faculty of Yerevan State University in Armenia.

· In Armenia, USAID training facilitated the development of a new civics curriculum and textbook that are being used in approximately 270 high schools.

· In the Caucasus, USAID training facilitated the establishment of the International Union, an NGO for women leaders, with branches in Tbilisi, Baku and Yerevan. Training participants also established a telephone hotline and shelter for victims of domestic violence.

FY 1999 USAID Global Training for Development (GTD)

Total Number of Participants by Strategic Assistance Area (SAA)

U.S. DEPARTMENT OF COMMERCE - SPECIAL AMERICAN BUSINESS INTERNSHIP TRAINING (SABIT)PROGRAM

Since 1992, the Commerce Department’s SABIT Program has been providing NIS managers and scientists with practical training in U.S. innovation and management techniques by placing them with U.S. companies for hands-on training for periods of six weeks to six months. SABIT’s training activities have helped forge hundreds of partnerships between U.S. and NIS businesses. In FY 1999, SABIT provided internships for 315 managers and scientists—two from Armenia, four from Azerbaijan, eight from Georgia, 15 from Kazakhstan, four from Kyrgyzstan, four from Moldova, 204 from Russia, two from Tajikistan, seven from Turkmenistan, 56 from Ukraine, and nine from Uzbekistan—bringing the cumulative number of SABIT participants to 1,749. Over 500 U.S. companies and organizations hosted SABIT participants in FY 1999.

U.S. DEPARTMENT OF AGRICULTURE (USDA) - COCHRAN FELLOWSHIP PROGRAM

USDA's Cochran Fellowship Program provides short-term agricultural training programs for NIS agriculturists and policy-makers. Training is conducted in the United States for selected mid- and senior-level practitioners, specialists and administrators, with the goal of enabling them to help develop their home countries’ agricultural food systems and strengthening agricultural trade linkages with U.S. agribusinesses. Training is implemented in conjunction with USDA agencies, agricultural trade and market development associations, universities and private agribusinesses. In FY 1999, the Cochran Program used Freedom Support Act (FSA) funds to provide training for 159 participants from 11 NIS countries (excluding Belarus), bringing the cumulative total of FSA-funded participants to 933. Of the 159 participants, six were from Armenia, nine from Azerbaijan, nine from Georgia, 17 from Kazakhstan, 13 from Kyrgyzstan, 15 from Moldova, 39 from Russia, three from Tajikistan, 13 from Turkmenistan, 15 from Ukraine, 20 from Uzbekistan. An additional 30 Cochran participants from Armenia, Russia and Ukraine received training funded by USDA's Emerging Markets Program (EMP). Since FY 1993, the EMP has funded 616 Cochran Fellowships for NIS participants. EMP funding is targeted towards trade-related activities focusing mostly on food wholesale and retail training.

CRIMINAL JUSTICE PROGRAMS

U.S. DEPARTMENT OF STATE - ANTI-CRIME TRAINING AND TECHNICAL ASSISTANCE (ACTTA) PROGRAM

Armenia: In FY 1999, INL continued to coordinate and fund police training in subjects such as counter-narcotics and money laundering, as well as more specialized FBI training in homicide investigation and legal procedures for polygraph use. For a second year, INL funded a major U.S. Treasury Department advisory effort on financial enforcement. Armenia has also participated in INL-funded mid-level police training at ILEA in Budapest and in local and regional procuracy training provided by DOJ/OPDAT.

U.S. DEPARTMENT OF JUSTICE (DOJ) - OFFICE OF OVERSEAS PROSECUTORIAL DEVELOPMENT, ASSISTANCE AND TRAINING (OPDAT)

Armenia: In FY 1999, a DOJ-funded ABA/CEELI ("DOJ/CEELI") criminal law liaison continued to provide commentary on relevant Armenia legislation and to coordinate DOJ/CEELI activities. OPDAT conducted training on prosecuting public corruption in cooperation with DOJ/CEELI. DOJ/CEELI organized a training program for Armenia prosecutors in September 1999.

ENERGY AND ENVIRONMENTAL PROGRAMS

U.S. DEPARTMENT OF ENERGY (DOE) - NUCLEAR REACTOR SAFETY PROGRAMS

In FY 1999, DOE worked to improve safety at Soviet-designed reactors through bilateral and multi-lateral cooperative activities in Russia, Ukraine, Armenia and Kazakhstan. Activities included strengthening the physical condition of the nuclear plants and enhancing safety-related practices. DOE activities also supported the development of an indigenous nuclear-safety infrastructure in these countries. DOE helped establish International Nuclear Safety Centers in Russia, Ukraine and Kazakhstan to promote the open exchange of nuclear-safety information and to facilitate cooperation on safety analysis and nuclear power engineering. DOE activities were conducted in collaboration with personnel at nuclear power plants (NPPs), scientific and technical institutes, and government agencies. In FY 1999, DOE’s efforts significantly improved the safety of Soviet-designed reactors and the nuclear infrastructure. Key accomplishments in FY 1999 and previous years are outlined below:

Armenia

Fire-resistant floor covering and 140 new fire doors were installed at the Metsamor NPP to improve its
fire safety.

Training courses were developed for control room operation, radiation protection and mechanical
maintenance. The courses were developed using internationally accepted nuclear training standards.

Work continued on the construction of a seismic-resistant, spray-pond cooling system for cooling safety
-related loads of the Metsamor NPP.

A safety parameter display system was installed at Armenia’s Metsamor NPP to ensure improved control
of the plant in case of an accident situation by providing key parameters to plant operators.

Ultrasonic-testing, valve-repair, vibration-monitoring, and pump-shaft alignment equipment was provided
to the Metsamor NPP, along with training to improve the maintenance of safety-related equipment.

U.S. NUCLEAR REGULATORY COMMISSION (NRC) - NUCLEAR SAFETY REGULATION PROGRAM

In FY 1999, the NRC’s continued its efforts to strengthen the nuclear safety and regulatory authorities in the four NIS countries in which Soviet-designed reactors are in operation: Russia, Ukraine, Kazakhstan and Armenia. Safety assistance activities focused on increasing the regulatory authorities’ institutional capacity and stature, so as to help ensure the operational safety of their country’s nuclear power reactors. NRC has been implementing regulatory assistance activities with the State Nuclear Regulatory Administration (SNRA) of Ukraine and Russia’s federal nuclear and radiation safety authority (GosAtomNadzor or GAN) since 1992. NRC has provided assistance to SNRA and GAN in such areas as licensing of nuclear power plants, development of a legislative basis for nuclear regulation and legal enforcement, development of an emergency response capability, development of an analytical simulator, and development of a regulatory training program and training center. NRC regulatory assistance activities with the Armenia Nuclear Regulatory Authority (ANRA) and the Kazakhstan Atomic Energy Agency (KAEA) began in 1994. Since then, NRC has provided training for ANRA personnel in such areas as fire protection; radiation embrittlement of metals; radioactive waste and spent fuel management; seismic issues and decommissioning of nuclear power plants. NRC has also helped ANRA developing a safety analysis review capability. NRC has provided KAEA personnel with training in such areas as inspection techniques for operating nuclear power and research reactors and licensing of nuclear power plants. The NRC has also supported the KAEA in developing regulatory decommissioning-related requirements for application at the recently shut-down, Soviet-designed, sodium-cooled, fast breeder reactor at Aktau. In FY 1999, the NRC provided training to 50 Russian, Ukrainian, Kazakhstani and Armenia nuclear regulators, bringing the total number of regulatory officials trained by NRC since 1992 to approximately 650.

U.S. ENVIRONMENTAL PROTECTION AGENCY (EPA)

In FY 1999, as in FY 1998, EPA’s activities in the NIS were concentrated in Russia and Ukraine, with about a dozen joint projects being implemented in each country. During the second half of FY 1999, EPA initiated projects in Central Asia and the Caucasus, in addition to its previous work on the establishment of Regional Environment Centers (RECs) in Moldova and the Caucasus region. In all, EPA had about 30 projects under way in the NIS in FY 1999.

Armenia: EPA provided environmental impact training at the request of Armenia officials.

SECURITY PROGRAMS

U.S. DEPARTMENT OF DEFENSE (DoD) - COOPERATIVE THREAT REDUCTION (CTR) PROGRAM

DoD’s Cooperative Threat Reduction (CTR or "Nunn-Lugar") program was initiated in FY 1992 to reduce the threat posed to the United States by the weapons of mass destruction (WMD) remaining on the territory of the former Soviet Union, by promoting denuclearization, demilitarization, and the prevention of weapons proliferation. Under the CTR program, DoD provides assistance to states certified as eligible to receive such assistance. In FY 1999, the President of the United States certified Russia, Ukraine, Kazakhstan, Armenia, Azerbaijan, Georgia, Kyrgyzstan, Moldova, Turkmenistan and Uzbekistan to receive CTR assistance.

DOD/U.S. Customs Service Counter-proliferation Program: The DoD/U.S. Customs Service (USCS)

Counter-proliferation Program was authorized in Section 1424 of the National Defense Authorization Act for FY 1997. Unlike the DoD/FBI Counter-proliferation Program, the DoD/USCS Program focuses heavily on equipment in its initial implementation. A government-to-government counter-proliferation agreement must be in place between the United States and a participating nation prior to the delivery of U.S. Government-funded equipment. These agreements serve as umbrella agreements for this program and future U.S. bilateral initiatives, establish proper government commitments to stop WMD proliferation and trafficking, and provide the necessary liability protections, privileges and immunities, and tax/customs exemptions for U.S. Government-funded equipment and personnel. Through 1999, agreements have been put in place with Azerbaijan (this pro-gram is exempt from Section 907 restrictions on assistance to the Government of Azerbaijan), Georgia, Moldova, Kazakhstan and Uzbekistan. Also, the U.S. Government is in various stages of negotiations on similar agreements with Armenia, Kyrgyzstan and Turkmenistan.

During FY 1999, approximately $1.205 million was expended under the DoD/USCS Program. Of this amount, an estimated $120,000 was for Armenia, $160,000 for Azerbaijan, $350,000 for Georgia, $345,000 for Moldova, $10,000 for Turkmenistan, and $220,000 for Uzbekistan. Program highlights are provided below:

Two WMD detection/interdiction training courses were held at the Hanford Nuclear Site in Washington State: one for 12 Armenia officials in June 1999, and one for 12 Azerbaijani and 11 Georgian officials in March 1999. This brings the total of NIS officials who have attended these courses to 65 since the program’s inception.

U.S. DEPARTMENT OF DEFENSE AND U.S. DEPARTMENT OF STATE - WARSAW INITIATIVE /PARTNERSHIP FOR PEACE

U.S. Department of Defense (DoD) - Warsaw Initiative (WI)

These programs seek to address near-term problems which limit the ability of partners to engage in PFP (Partnership for Peace) activities; promote interoperability with NATO; increase the level of participation in PFP exercises; and support efforts to deepen defense and military cooperation between the U.S. and NATO and their PFP partners. The funds used for the WI are DoD-budgeted operations and maintenance (O&M) funds. The Under Secretary of Defense for Policy and the Office of the Assistant Secretary of Defense (Strategy and Threat Reduction) are responsible for policy oversight of the Warsaw Initiative program for the NIS. The Defense Security Cooperation Agency administers Warsaw Initiative funds.

All PFP member-states are eligible to receive Warsaw Initiative assistance. Eligible NIS states include Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Turkmenistan, Ukraine and Uzbekistan. Section 907 of the FREEDOM Support Act prohibits certain types of U.S. Government assistance to the Government of Azerbaijan, which cannot qualify for WI assistance until it lifts its blockades against Armenia. However, WI assistance to Armenia is also quite limited.

U.S. DEPARTMENT OF STATE - SCIENCE CENTERS

The Science Centers Program is implemented by two intergovernmental organizations that were established under international agreements signed in the early 1990s: the International Science and Technology Center (ISTC) in Moscow, established by agreement in November 1992, and the Science and Technology Center in Ukraine (STCU) in Kiev, established by agreement in October 1993. The primary objective of the Science Centers Program is to prevent the spread of weapons-of-mass- destruction and delivery-system technologies by providing opportunities to former Soviet weapons scientists and engineers to redirect their weapons expertise to peaceful activities. Since 1994, the ISTC and STCU have funded over 830 projects involving more than 26,000 scientists. The United States cooperates with Canada, the European Union, Japan, the Republic of Korea, and Norway in providing financial support for the ISTC and STCU, which operate in most of the NIS countries. The Science Centers and their activities also receive substantial in kind contributions from Russia, Ukraine and the other participating NIS states (Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan and Uzbekistan) in the form of local office and personnel support, tax and customs exemptions, and infrastructure support for projects at participating research organizations.

The Moscow-based ISTC supports project work and other activity at scientific institutes in Russia, Armenia, Belarus, Georgia, Kazakhstan and Kyrgyzstan.

In addition to funding about $1 million in research projects in Armenia in FY 1999 (mostly in the technology areas of electronics and materials), the U.S. Government funded a special training effort directed by the American University of Armenia (AUA) to train computer specialists from the former Soviet weapons industry in programming and other areas that will make them employable in Armenia’s burgeoning software development industry. The initial pilot course will provide training for 25 individuals, and can potentially be expanded within Armenia as well as regionally.

U.S. CIVILIAN RESEARCH AND DEVELOPMENT FOUNDATION (CRDF)

Armenia: In FY 1999, the CRDF continued to provide assistance to develop an indigenous capacity in Armenia for funding science through merit-based competitions with support from USAID. CRDF continued to provide training in accounting and auditing procedures and material support to the Armenia National Foundation for Science and Technology (NFSAT). NFSAT refined its organizational skills by handling logistics for three seminars held in Armenia: two proposal development seminars for the American Association for the Advancement of Science (AAAS) and a CRDF training program in technology development and marketing sponsored by the U.S. Department of Commerce. In an effort to assist NFSAT in broadening its funding base, CRDF sponsored a visit to the United States by NFSAT’s chairman with the goal of showcasing NFSAT's activities and capabilities among the Armenia-American diaspora and representatives of interested foundations and government agencies.

U.S. DEPARTMENT OF STATE – EXPORT CONTROL / BORDER SECURITY ASSISTANCE

Nonproliferation and Disarmament Fund (NDF)

The State Department’s Nonproliferation and Disarmament Fund (NDF) provides resources to support bilateral and multilateral efforts to prevent, deter or detect potential proliferation of WMD, WMD components and delivery systems pursuant to Section 504 of the FREEDOM Support Act of 1992. In FY 1999, the NDF funded six projects totaling $9.5 million for Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Russia, Turkmenistan, Ukraine and Uzbekistan. The following programs were approved for NDF funding in FY 1999:

· Expansion of the Tracker automated licensing system in Armenia and Azerbaijan. The Tracker system permits countries to track exports of proliferation concern and to consult electronically with other government ministries and with foreign governments. It provides a basis for the eventual establishment of a global network for sharing information about items of proliferation concern. ($1.92 million)

Nonproliferation, Anti-Terrorism, Demining and Related Activities (NADR)

Armenia: U.S. Government export control assistance helped Armenia establish a high-level interagency export-control coordinating commission, reflecting Armenia’s increasing interest and commitment to export controls. In FY 1999, Armenia officials participated in the Central Asia and Caucasus Regional Forum on Export Controls. Through this and other regional programs, Armenia officials have established working relations with officials from Georgia and Azerbaijan, a promising example of increased cooperation among the Caucasus countries.

SOCIAL-SECTOR AND HUMANITARIAN PROGRAMS

U.S. DEPARTMENT OF AGRICULTURE (USDA) - FOOD ASSISTANCE PROGRAMS

Armenia: In FY 1999, USDA allocated $9.15 million for the provision of approximately 6,200 metric tons (MT) of food commodities to Armenia, drawing from USDA resources under the Food for Progress and Section 416(b) Programs. Under its Food for Progress Program, USDA donated approximately 5,700 metric tons (MT) of commodities through two U.S. private voluntary organizations (PVOs) working in Armenia: the Fund For Armenia Relief (FAR) and the United Methodist Committee on Relief (UMCOR). UMCOR monetized 2,500 MT of these commodities and used the proceeds to carry out several programs to assist health care providers and to improve agricultural facilities. FAR used 1,900 MT of donated commodities for the direct feeding of 60,000 beneficiaries. In addition, FAR used the proceeds from the monetization of 1,300 MT of commodities to help revitalize the country’s dairy industry. In addition to the Food for Progress commodity donation, USDA also donated 500 MT of dry milk to support United Nations World Food Program (WFP) initiatives in Armenia. In FY 1999, the Government of Armenia decided not to accept a $10 million concessional loan for the procurement and delivery of U.S. wheat to Armenia under USDA’s P.L. 480, Title I Program, basing its decision on the premise that accepting the loan would have exacerbated the country’s 1999 budget deficit and would therefore have seriously jeopardized the planned release of segments of Armenia’s International Monetary Fund (IMF) and World Bank loans. The Armenia Government subsequently requested a USDA Section 416(b) grant wheat program for FY 2000, the provision of which will be dependent on commodity availability and funding authority.

COORDINATOR’S OFFICE HUMANITARIAN ASSISTANCE PROGRAMS

· The continuation of grants to the United Methodist Committee on Relief (UMCOR) to conduct critical humanitarian clinical work in Armenia, Azerbaijan and Georgia. UMCOR’s efforts were especially critical in responding to the needs of refugees and internally displaced persons (IDPs) in Azerbaijan and Georgia, and in supporting the operation of over 65 clinics in Armenia.

· The awarding of multiple grants to the U.S. PVO CitiHope to deliver high-value medical commodities to Armenia, Azerbaijan, Belarus, Kyrgyzstan and Moldova. (CitiHope is one of the few U.S. PVOs working in Belarus.) CitiHope has been particularly effective in furnishing critically needed hepatitis vaccines and oncological medicines for children.

· The provision of initial grants to the PVO World Council of Hellenes Abroad (SAE), with Counterpart International as a sub-grantee, to provide humanitarian medical assistance to mainly Greek populations in Armenia, Georgia and Ukraine.

· The delivery to Armenia of a $300,000 U.S. Defense Department excess hospital supply and equipment package furnished through the U.S. European Command (EUCOM). This package was provided as a follow-on to a package of hospital supplies and equipment that had been delivered in 1996.

COORDINATOR’S OFFICE HUMANITARIAN ASSISTANCE TO ARMENIA

The following is a listing of humanitarian assistance funded by the Office of the Coordinator of U.S. Assistance to the NIS (S/NIS/C), including air and surface transportation of U.S. Government excess property and privately donated commodities (food, clothing and medical supplies/equipment), grants and special projects. (Values are in millions of dollars.)

OTHER PROGRAMS

THE EURASIA FOUNDATION

The Eurasia Foundation, which was established in 1993 with a major grant from USAID, promotes democratic and market economic reform at the grassroots level in the twelve NIS countries. The Foundation is privately managed and field-driven, and it has built its reputation on its ability to offer a quick and flexible response to needs identified by NIS organizations and to reach areas often untouched by other Western donors. While its primary tool for providing assistance is an open-door grants program, the Foundation also employs grants competitions to target certain priority areas on a regional basis. Over the past six years, the Foundation has used funding from USAID and other sources to award over 4,400 grants totaling more than $94.8 million, including 970 grants totaling $18.2 million in FY 1999. To date, the Foundation has raised more than $22.8 million in non-U.S.-Government funds, including $8.3 million in FY 1999 alone. The Found tion has expanded its donor base to include foreign governments, foundations, corporations and private citizens. Major donations in FY 1999 included private gifts from individuals totaling more than $3.1 million for work in Armenia; approximately $500,000 from private corporations, including Citigroup, Boeing, Exxon and Texaco; a $500,000 contribution from the Carnegie Corporation of New York for the Economics Education and Research Consortium (EERC); and a $528,000 award from the Dutch Government for the Media Viability Fund (MVF).

More Effective, Responsive, and Accountable Local Government: The following is an example of Foundation grants made in this program area in FY 1999:

$34,530 to the Tashkent State Economics University to support the introduction of a new bachelor’s degree program in municipal management and economics. The project aims to analyze established municipal management programs through partnerships with the Urban Institute’s field office for the Caucasus and Central Asia, the American University of Armenia, and several Russian universities. A suitable program of study, including new curricula, training programs and a textbook, will then be developed. A retraining program for municipal workers is also planned.

Targeted Initiatives

Small Business Lending Program (SBLP): The SBLP provides loans to small and medium-sized businesses in Armenia and Ukraine. The program provides capital to the fledgling private sector and intensive, hands-on training to participant bank lenders in credit analysis and collection methodology. In FY 1999, SBLP-Armenia made 20 new loans totaling $679,794 that created 153 jobs. In FY 1999, SBLP-Ukraine made five new loans totaling $246,728 that created 73 jobs.

Special Projects

South Caucasus Synergy Program: To help overcome the political and economic obstacles to regional integration, the Eurasia Foundation’s South Caucasus office has created a program to ease cross-border tensions that have impeded the democratic development and economic integration of the region. The Synergy Program is designed to facilitate greater contact and cooperation among leading organizations in Armenia, Azerbaijan, and Georgia through support for cross-border projects in areas such as business development, legal reform, civil society building, and public administration. Through its grant-making and communication-enhancement activities, the Synergy Program is catalyzing greater cooperation and accelerating the region’s transition to democracy and a market economy. The impetus for the program came from Eurasia Foundation grantee organizations with established track records for progressive, reform-oriented work in their own countries. These organizations had expressed a common desire to increase collaboration to solve mutual problems and promote regional development. At the inaugural Synergy Program conference held in Likani, Georgia, in October 1998, 152 non-governmental organizations (NGOs) from Armenia, Azerbaijan and Georgia exchanged ideas about priority areas for regional action and developed working partnerships to address common concerns. (This was the largest such gathering of representatives of the three South Caucasus countries since the break-up of the Soviet Union.) The Synergy Program aims to build on the accomplishments and experience of these organizations by transferring knowledge and developing their efforts across the region. In December 1998, the Foundation awarded 27 "contact grants" of up to $2,000 through a grant competition, to provide resources to cross-border initiative groups to develop joint proposals for larger "linkage grant" projects aimed at specific areas of regional reform. To maintain the contacts established at the Likani conference and promote new partnerships, the Synergy Program has also created a permanent forum for communication among the program’s participants. Through an electronic listserv, organizations submit information of regional interest which the Foundation compiles and distributes monthly to all program participants in the form of an e-mail digest. The listserv provides a means to initiate dialogue, seek specific types of cooperation and announce events. With priority given to projects involving all three countries, eight grants totaling $300,000 were awarded in September 1999 in support of projects in the areas of civil rights advocacy, harmonization of accounting standards, legal information, real estate legislation, and radio programming. This program will be expanded in FY 2000.

PEACE CORPS

Following the collapse of the Soviet Union, the Peace Corps was invited to send volunteers into eight of the NIS countries (Armenia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Turkmenistan, Ukraine and Uzbekistan) to help facilitate their transition to market-oriented democracies. In responding to these requests, Peace Corps volunteers (PCVs) have helped overcome the historically limited contact between U.S. and NIS communities, and have established and strengthened new bonds of friendship and cross cultural understanding by addressing issues of mutual concern. PCVs have helped change the perceptions of their NIS host communities and counterparts regarding the United States and the American people, and after returning home from their Peace Corps experience, they have also helped educate Americans about the people of the NIS countries.

Peace Corps NIS Programs in Armenia

1. Business Education

2. Health Education

3. NGO Development

4. TEFL (Teaching English as Foreign Language)

5. Small Business Development

 

Small Project Assistance (SPA) Program

 

COUNTRY	FY 1999 SPA Grant Expenditure	FY 1999 TOTAL SPA Expenditures*	Cumulative Expenditures FY 1996-99
Armenia	$36,128	$36,128	$112,954

* Total includes SPA grant funds, as well as funding support for technical assistance.

Armenia: 11 grants were awarded in the areas of education (10 grants) and NGO development (1 grant).

U.S. SUPPORT FOR INTERNATIONAL FINANCIAL INSTITUTIONS

European Bank for Reconstruction and Development (EBRD)

CUMULATIVE EBRD BOARD COMMITMENTS TO NIS THROUGH 12/31/98

(millions of ECU*)

VALUE NUMBER

Armenia 69 3

* As of December 31, 1998, one ECU equaled approximately $1.17

International Bank for Reconstruction and Development (IBRD)

International Development Association (IDA)

The IBRD and IDA, which are part of the World Bank Group, provide project and adjustment lending (balance-of-payments support based on policy reform) to developing countries. Poverty reduction and sustainable development are the central objectives of the IBRD’s activities. The IBRD lends at near-commercial rates, while IDA provides credits to the poorest countries at highly concessional rates. Based on relative poverty and creditworthiness criteria, Tajikistan is eligible to borrow only on IDA terms; while Armenia, Azerbaijan, Georgia, Kyrgyzstan and Moldova are eligible for both IDA and IBRD terms.

IBRD AND IDA COMMITMENTS

(millions of dollars)

 

COUNTRY	CUMULATIVE TOTAL (through June 1999)	FY 1999 IDA (6/1/98-6/30/99)	FY 1999 IBRD (6/1/98-6/30/99)
Armenia	535.3	120.6