Point of Contact:
Mark Phillips
International Cooperation Specialist
Tel: 202-712-0044
Email: mphillips@usaid.gov |
|
Overview
Hungary is an important partner of the U.S. in the Global War on Terror and contributes to stability in Central Europe. Hungary became a member of the North Atlantic Treaty Organization on March 12, 1999 and a full member of the European Union (EU) on May 1, 2004. Both events are milestones in the country’s foreign policy and security orientation. Hungary is also a member of the United Nations and World Trade Organization.
Between 1989 and 1999, USAID delivered $243 million to support Hungary in its transformation from a state-controlled economy under authoritarian rule to a market-oriented democracy. Aid from the American people was focused on assisting Hungary in achieving sustainable economic reform and completing its democratization process. USAID programming sought to increase the soundness of fiscal policies and management practices, improve performance of small and medium enterprises, cultivate a more competitive and responsive private financial sector, establish an economically sustainable, restructured energy sector, and increase citizen participation in the political process at the local level. Although the USAID program in Hungary ceased in 1999, the legacy of USAID development assistance has endured. |
Ten Years of
Collaboration:
A Retrospective Look at USAID's Role in
Hungary's Transition
Introduction
For the past ten years, USAID has been supporting the efforts of the Government and
people of Hungary to make the transition from an authoritarian political system and
centrally planned economy to a private sector-led market economy and pluralistic society. By
any measure, Hungary has been highly successful in accomplishing this goal and USAID has
been instrumental in facilitating its success. Since there are other countries still making the
transition with USAID and other donor support, it is worth taking the time to review
Hungary's experience and USAID's role to see if there are lessons to be learned. This paper
does not seek to isolate the causes of Hungary's success, but rather to focus on the means
by which USAID facilitated Hungary's efforts. It is addressed primarily to the development
professionals of USAID and to those of other assistance agencies.
As is to be expected in such a complex area as economic and political development, no
absolute rules or formulas emerge. Rather, the "Lessons Learned" identify specific programming
criteria or implementation methods that seem to have had significant impact on
ultimate success. A few lessons may be new, but many reinforce emerging "best practices"
in the region and all highlight the difference sound development practice can make. The
"Lessons Learned" repeat a number of broadly recognized lessons because, despite being
well known, they are so important and too often ignored that they bear repeating at every
opportunity. Overall, the "Lessons Learned" in Hungary tend to validate "Lessons Learned"
elsewhere in the CEE (e.g. those found in Chapter III of the FY 1997 SEED Act
Implementation Report). They also validate many of the changes made in programming and
implementation arrangements that emerged as USAID learned "on the job" and its efforts to
assist Hungary and other CEE and NIS countries to make the transition evolved and
matured. Finally, some of the lessons validate changes brought about by USAID's
reengineering.
To provide a background against which to view the "Lessons Learned," Part II of the paper
summarizes Hungary's political and economic transformation. Part III summarizes USAID's
efforts in Hungary. Neither is meant to be comprehensive but rather to provide highlights
and milestones, which will permit the reader to understand the context from which the
"Lessons Learned" emerged. Following the background sections,
Part IV presents the "Lessons Learned" in detail.
The "Lessons Learned" are derived from many sources:
- activity completion reports prepared by activity managers
- completion reports prepared by contractors and grantees
- five special studies commissioned by USAID/Hungary
- evaluation reports
- suggestions provided by the USAID/Hungary staff
- program documents such as R4's and country strategy statements
- reports prepared by other donors
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