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).
BELARUS
FY 1997 FY 1998 FY 1999 Actuals Estimate Request FREEDOM Support Act............... $6,700,000 $6,700,000 11,300,000 Introduction
Continued assistance for Belarus is in the national interest of the United States due to three strategic concerns. The U.S. Government wishes to see Belarus join the community of democratic, market oriented nations that fully respect human rights. Belarus' strategic location as a bridge between Russia and Central Europe makes it especially important to encourage democratic institutions, rule of law, and a nascent middle class. Citizens who recognize that they, not a paternalistic government, need to take initiative and responsibility to solve problems are among the best agents of reform; the U.S. Government encourages such undertakings through support to a wide range of non-governmental institutions in Belarus. Finally, there is a continuing interest in seeing Belarus maintain its commitment to internationally supported arms agreements. Belarus, though, is among the slowest of economic and democratic reformers in the NIS and the U.S. assistance request is appropriately modest.
The Development Challenge
Reform in Belarus is virtually at a standstill. Since President Lukashenko took office in 1994, Belarus has increasingly moved toward Soviet style authoritarian rule. Lukashenko consolidated his power through a November 1996 referendum to amend the 1994 Constitution. Although the then-Constitutional Court ruled that the Constitution could not be amended by referendum, the President proceeded with his plan. Subsequently, the referendum was declared devoid of legitimacy by the Organization for Security and Cooperation in Europe (OSCE), European Union, Council of Europe, and the United States. Despite that, the President implemented his version of the Constitution, which eliminated a system of checks and balances over the executive branch, extended Lukashenko's term in office (without having to stand for re-election), established a new legislature which was not elected by the populace, and subordinated the judiciary to the President. In 1997, the human rights situation worsened dramatically, particularly with regard to freedom of speech and association.
With the exception of small-scale privatization, the Government of Belarus (GOB) has failed to introduce economic reforms. Since U.S. assistance began in 1993, the USAID-funded small-scale privatization program, implemented through the International Finance Corporation in 16 cities, has helped transfer 550 businesses to private ownership. But even this progress is behind program targets; privatization of medium and large-scale enterprises has not started. The lack of structural reforms is highlighted by the overall weak financial position of the enterprise sector and the fragility of the banking sector. The government continues to subsidize heavily the agriculture sector and maintains control over prices. Despite the government liberalizing the currency market for individual consumers in late 1997, the state maintains control over the exchange rate for business, resulting in a severe shortage of hard currency and an inability for foreign businesses to repatriate their profits.
Although official GDP statistics indicate that the economy grew by about 10 percent in 1997, the growth is based largely on command production, much of which remains unsold. Inflation also rose from a monthly average of 2.7 percent in the first half of 1996 to a monthly average of 6.3 percent for the same period of 1997. The recorded overall balance of payments deficit for 1996 increased to almost $300 million, up some $80 million from 1995.
As a result of the increasing authoritarian approach of the government, poor human rights record, and lack of economic reform, the U.S. Government introduced a policy of "selective engagement" towards
Belarus in January 1997. Consequently, U.S. officials limit contact with the Belarussian government to that necessary to conduct business of importance to the United States. At the same time, the U.S. Government has enhanced its contact with, and increased support for, democratic elements in Belarus, particularly the independent media and NGOs. The purpose of these interventions is to preserve U.S. interests in Belarus and lay a foundation for future market and democratic reform, should conditions become more favorable. Despite difficulties with progress by the government, there is an active and energized community of NGOs and individuals struggling to develop the idea of independent, non-governmental alternatives to the past centralized system of government control over all sectors of society.
Other Donors
The GOB has failed to comply with agreements signed with the IMF and World Bank, resulting in the Fund's suspension of a standby agreement in 1995 and a dramatic cutback in projects with the Bank and the EBRD. In addition, the European Union (EU) has cut assistance to the Belarussian Government. An EU voucher privatization program for larger organizations has been stalled. The Soros Foundation closed its office in Belarus after the government imposed an unwarranted $3 million fine against the organization.
FY 1998 Program.
In view of the dramatic move away from democratic and economic reform by the Lukashenko administration, particularly in the wake of the 1996 constitutional referendum, the development challenge in Belarus is greater than in many NIS countries. As in the past, priorities for U.S. technical assistance, outside the Nunn-Lugar program, remain small-scale privatization at the local level, strengthening democratic forces outside the government, and health care initiatives, primarily connected with the aftermath of Chernobyl. At the currently proposed level of funding, the U.S. will be able to maintain its existing programs, targeted on reform-minded elements, and take advantage of opportunities to encourage progress where possible.
In order to encourage broader popular support for democratic and market reforms and an independent sector, greater assistance to non-governmental entities is needed. Among the areas that require additional support are: NGOs engaged in providing social services (particularly health care to at-risk children and mothers-to-be), restoring the post-Chernobyl environment, and promoting Belarussian culture and language; entrepreneurs (particularly business school students and women), who need a source of low interest credit to implement their plans; and domestic independent broadcast media.
Because of the tentative nature of the USAID program in Belarus, all activities fall under the rubric of cross-cutting and special initiatives.
Small-scale privatization. Despite the general lack of progress on economic reform, there is a political consensus that small-scale privatization must proceed. The U.S. Government views small-scale privatization project as a top priority and as one of the key tools available to promote economic reform. It is also one area where the GOB and U.S. Government cooperate. However, a comprehensive re-registration campaign added to the uncertainties already created by a relatively nontransparent business environment, a lack of clarity regarding the sanctity of contracts and property rights, and generally interventionist policies on the part of the government and the presidential administration has discouraged many private activities. Because of past successes in privatization, USAID will continue to explore opportunities to support small-scale enterprise development in Belarus.
Democracy. Although Belarus has taken a decided step back from democratic reform, USAID's democracy program continues to support the respect for rule of law in a democratic context and independent media. To strengthen local bar associations and support reform of legal education, USAID conducts workshops on rule of law, democratic procedures and institutions through the American Bar
Association/Central European Law Initiative (ABA/CEELI) program. Building on ABA/CEELI's efforts to help democratic legal institutions, USAID assistance to media associations focuses on improving media laws and promoting freedom of speech. USAID's grant to IREX/PROMEDIA is offering moral, technical, and legal support to the independent print media which has come under increasingly tightened executive branch controls since the November 1996 referendum. Additionally, the IREX/PROMEDIA program provides access to foreign news service via the Internet which broadens the scope of news available in Belarus.
Eurasia Foundation. As an independent, grant-giving organization, Eurasia makes seed grants at the grassroots level to foster the process of economic and political reform. Target areas are economics education, democracy building initiatives, civic education, and initiatives raising public awareness about democratic principles and citizens' rights in Belarus and in free societies. Active in Belarus since 1995, the Eurasia Foundation complements other aspects of the USAID program.
Non-governmental organizations. In support of USAID's NGO development program, Counterpart has trained over 125 NGO leaders. A new grant with Counterpart strengthens the NGO sector's capacity to provide needed social services to vulnerable groups, to express and protect citizens' interests in dialogue with the government, and to promote continued democratic and economic reform. Local NGOs which promote grassroots reforms have been assisted through Eurasia Foundation grants and its resource center.
Hospital partnerships. USAID has also supported a hospital partnership program which focuses on pediatrics, poison control, and hospital administration and management. Coordinated through the American International Health Alliance (AIHA), the partners are Magee Women's Hospital in Pittsburgh and the University of Pittsburgh Medical School. The Belarussian partners are the Children's Hospital No. 4, the Radiation Medicine Institute, Minsk Maternity Hospital No. 2 and the Minsk Medical Institute. At the Minsk Medical Institute incoming students will start a program of modernized, problem-oriented medical education developed through the partnership. The partners are publishing new manuals, guidelines and a syllabus, which will be disseminated throughout Belarus. The partnership will open a comprehensive women's wellness center in FY 1998, providing primary care services for women of all ages. More generally, USAID will help will combat infectious diseases, such as tuberculosis, as needed.
BELARUS
FY 1999 PROGRAM SUMMARY*
(in Thousands of Dollars)
Strategic ObjectivesEconomic Restructuring Democratic
TransitionSocial Stabilization Cross-cutting and Special Initiatives Total Special Initiatives -- -- -- 11,300 11,300 TOTAL -- -- -- 11,300 11,300
*FREEDOM Support Act (FSA) funds
USAID Mission Director: Gregory Huger
![[USAID Home]](https://webarchive.library.unt.edu/eot2008/20081109235747im_/http://www.usaid.gov/images/usaid.gif)
[USAID Home]
[CP 99 Home]