RUSSIA

	FY 1998 Actual	FY 1999 Estimate	FY 2000 Request
FREEDOM Support Act	$133,181,000	$172,360,000	$295,000,000

Introduction.

Russia's evolution toward free-market democracy remains crucial to U.S. national security and its political and commercial interests. In supporting and hastening that evolution, the U.S. seeks to build and consolidate new relationships with Russia, first as a full partner on a wide array of global issues --ranging from the maintenance of regional and international peace to the reduction of environmental threats-- and second, as an active partner in trade and investment. USAID assistance has contributed significantly to the broad U.S. reform agenda by working with Russians in many sectors. While the economic crisis of August, 1998 caused USAID to reexamine its strategy, the Agency is convinced that continued engagement is critical to U.S. national interests despite the many uncertainties.

The Development Challenge.

Russia is experiencing a severe macroeconomic and financial crisis reflecting in large part the Government's failure to implement the comprehensive economic reform measures needed to foster economic growth, generate revenues and maintain fiscal discipline. Russia’s inability to provide the environment for private sector-led growth and increasing levels of foreign direct investment has seriously delayed the modernization of Russian industry while keeping revenues woefully inadequate to cover minimal government spending and foreign debt obligations. Instead, the Government of Russia (GOR) resorted to heavy borrowing to fund current Government expenses. This unsustainable position combined with the spreading financial crisis in emerging markets came to a head in August, 1998. The ruble plummeted sharply from six to over fifteen to the dollar depleting Russia’s foreign exchange reserves in the process. The GOR failed to meet its domestic and foreign debt obligations. Russia’s vulnerable banking system collapsed, disrupting the payments system. GDP is now estimated to decline by 4 percent in 1998 and estimates for 1999 are unclear given the uncertain economic environment. Inflation projections for 1999 are currently over 80%, which is optimistic given the continued sharp decline of the ruble and the growing budget deficit. Direct foreign investment levels are down about 50% from a year ago, well below levels required to revitalize and expand Russia’s productive capacity.

The change of government brought about by the economic turmoil has exacerbated economic and political uncertainties. The most significant obstacle to Russia's transition to a market economy is the lack of political consensus to move ahead with comprehensive economic reforms. This suggests there is no near-term solution to resolving the fiscal and financial crisis, as evidenced by the inability of the government since August to adopt a realistic economic program which the IMF can support. Corruption and organized crime are a major impediment to fundamental change, reflecting a lack of effective and comprehensive systems to maintain the rule of law under transparent and democratic principles. Foreign and domestic investors continue to be cautious in the light of a still unclear tax and legal regime. Independent media outlets are struggling as a result of falling revenues from private sector advertisers. While the non-governmental sector is growing, it is still in its early stages of development and not firmly rooted. NGOs still need to strengthen their management practices and diversify their funding base. Production of greenhouse gases and other environmentally harmful industrial practices persist and an enforceable environmental legal structure has not yet been developed. Health risks from infectious diseases and environmental factors are undermining the human resources necessary to tackle future problems.

In an atmosphere as described above, the assistance challenge is to support those areas of the economy and society that can keep economic and democratic reform alive during these difficult times. These remain the private sector and civil society where USAID has already had a significant impact. For example, electoral commissions assisted by USAID are working to ensure that elections scheduled for 1999 and 2000 are free and fair, and partnerships between U.S. and Russian entities continue without direct USAID assistance. As a result of USAID small business programs, thousands of small businesses are changing their product mix and marketing approaches to respond to problems generated by the financial crisis. The development of infrastructure for the Russian capital markets system proceeds in Moscow and 15 regions. Tens of thousands of non-governmental organizations (NGOs) still operate, while independent local TV stations and newspapers seek ways to ensure their financial independence. Russian hospitals, in partnership with U.S. hospitals, continue to provide more cost effective health care and new techniques for combating infectious diseases, particularly tuberculosis (TB) and HIV/AIDS. New and environmentally friendly industrial processes are being implemented throughout the country; and, international accounting standards are being adopted by a growing number of businesses. All of these efforts provide the grassroots support and know how for implementation of reform in their respective areas. When the macro-level situation stabilizes, USAID stands ready to use its policy reform expertise to work on that level in concert with other donors.

Other Donors.

A key objective of U.S. assistance to Russia is to serve as a catalyst for other assistance providers, both bilateral donors and international financial institutions. Russia's ability to attract significant multilateral assistance is presently stymied by its failure to meet IMF conditions and the consequent suspension of the IMF program. In the past, USAID has leveraged World Bank funding for housing, community services, legal reform, urban development and local infrastructure development. In FY’s 1999 and 2000, USAID funding will complement the World Bank and other international donors if a comprehensive plan to restructure the Russian banking system can be developed. In sectors less directly affected by the macroeconomic crisis there remain areas for fruitful collaboration. USAID continues to coordinate with the EU-TACIS in business development and environmental policy reform. U.S. foundations, including Mott, MacArthur, Ford and the Open Society Institute, meet regularly with USAID and forge complementary strategies in areas such as health care and rule of law. Other donors with which USAID works include UNICEF, UNAIDS, the Red Cross and Medecins Sans Frontieres in health care, the Council of Europe and the Organization for Economic Cooperation and Development in legal and tax reform, and bilateral donors and other USG agencies in media, violence against women, crime and corruption, political party development, and electoral reform.

FY 2000 Program.

USAID-Implemented Programs: USAID’s program is part of the Partnership for Freedom (PFF) and the companion Regional Investment Initiative which target funds to the regions away from Moscow, and emphasizes the creation and strengthening of sustainable partnerships between U.S. and Russian organizations in all sectors. In FY 2000 USAID will continue to target funds away from the Government and from Moscow towards reform-minded regions, including the Russian Far East. Economic reform, democratic reform, and health and social sector reform will continue to provide the broad framework for all USAID activities. Under economic reform, activities will include small and medium enterprises development, establishment of alternative credit sources and loan guarantees for small and micro enterprise, assistance to local and regional governments interested in developing investor friendly regulations, and implementation of environmentally sound business practices. USAID will continue to work with other donors in banking and tax reform. In the democratic reform area, USAID will support the further strengthening of civil society and human rights, highlighted by funding for free and fair elections and political party development, particularly in preparation for the upcoming parliamentary elections in late 1999 and the Presidential elections in June, 2000. Increased strengthening of NGOs, support to the independent media, establishing U.S.-Russia partnerships and more work on the rule of law will also be key components. In the health and social sector area, assistance will work to stem the spread of infectious diseases, primarily HIV/AIDS and TB, increase access to and quality of health care, including maternal and child health, and support reform for Russian orphanages. Under cross-cutting and special initiatives, FY 2000 funding will support a number of programs. Training and exchanges will offer a variety of Russians an opportunity to travel to the United States to see systems functioning in a free market democracy. The broad program of the Eurasia Foundation and activities combating violence against women will continue.

Other U.S. Agency Programs: Included also with this request are programs implemented by other U.S. Government agencies. The request for cross-cutting and special initiatives, in particular, reflects expanded emphasis on the need to reduce the risks of proliferation of weapons of mass destruction through programs which enhance our mutual security, such as export controls, science centers and efforts designed to employ Russian scientists in non-military areas. In addition, other USG agencies participating in technical cooperation programs with Russia through inter-agency transfers from USAID include the Environmental Protection Agency, Health and Human Services, U.S. Forest Service, Departments of Justice, Treasury, Energy, Agriculture and Commerce, and U.S. Peace Corps. In addition, exchange programs run by the U.S. Information Agency are critical in fostering support in the next generation of Russians for democratic and free market reforms.

RUSSIA

FY 2000 PROGRAM SUMMARY*
(in Thousands of Dollars)

USAID Mission Director: Janet Ballantyne

Strategic Objectives	Economic Restructuring	Democratic Transition	Social Stabilization	Cross-cutting / Special Initiatives	Total
Privatization	--	--	--	--	--
Fiscal Reform	--	--	--	--	--
Private Enterprise	59,925	--	--	--	59,925
Financial Reform	8,675	--	--	--	8,675
Energy	--	--	--	--	--
Environmental Management	3,700	--	--	--	3,700
Citizens' Participation	--	13,000	--	--	13,000
Legal Systems	--	3,450	--	--	3,450
Local Government	--	--	--	--	--
Crises	--	--	--	--	--
Social Benefits	--	--	7,750	--	7,750
Environmental Health	--	--	--	--	--
Cross-cutting / Special Initiatives	--	--	--	198,500	198,500
TOTAL	72,300	16,450	7,750	198,500	295,000
*Freedom Support Act (FSA) funds

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ACTIVITY DATA SHEET

PROGRAM: RUSSIA
TITLE: Accelerated Development and Growth of Private Enterprise, 110-S001.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $59,925,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2002

Summary: Russian GDP and productivity continue to decline and official unemployment continues to grow. More successful businesses will provide new jobs and new incomes, leading to further growth and stability of the Russian economy. Under this strategic objective, U.S. assistance providers work with a wide variety of Russian organizations throughout the country to accelerate the development and growth of private enterprise based on individual initiative and the operation of market forces. Activities under this objective respond to the tremendous unmet needs of small and medium enterprises in Russia to stimulate economic development and to guarantee income and employment. Activities include business training for individual entrepreneurs in marketing and western management practices; on-site client focused business consulting services; the formation of sustainable business associations, trade organizations and business support centers; improving access to credit for micro and small businesses from non-commercial bank sources; and work on land and real estate privatization to increase availability of real collateral. Beneficiaries include Russians from all regions of the country.

Key Results: Four intermediate results are necessary for achievement of this objective: (1) policies, legislation and regulations conducive to broad-based competition and private sector growth are adopted; (2) land and real estate market mechanisms are operating, accessible and used by businesses; (3) successful models of private business ownership and modern management are widely replicated; and (4) a sustainable network of business support institutions are rendering services to entrepreneurs and enterprises.

Performance and Prospects: Since inception, over 200,000 Russian entrepreneurs (of which 104,000 are women) have received business training and consulting assistance, over 50,000 jobs have been created directly as a result of USAID funding, and over 5,000 continuing new businesses have been created. 71% of USAID business clients report increases in production, 81% report increases in sales, 89% increased customer base, and 82% increased net profit. Five of ten institutions established with USAID support to provide financing for small and micro entrepreneurs continue to operate without USAID assistance; over 3,200 loans have been provided to micro and small entrepreneurs; membership in the Russian Guild of Realtors has increased from five to over 800; and local boards have been established in 25 regions. These efforts help build grassroots support for implementation of land reform and private property laws. Over the next few years USAID will continue to fund small and medium business training and consulting and increase coverage of indigenous business support institutions, supplying them with the tools to weather the economic crisis and grow. With matching funds from the Global Bureau, USAID plans to expand micro credit programs, strengthen the real estate profession and land privatization efforts. USAID will also launch a Development Credit Authority Project to provide large infrastructure credit guarantees to encourage banks to make loans in support of telecommunications and port and energy infrastructure projects.

Demand for business services continues throughout the country. Last year thousands of entrepreneurs were trained, business support centers were able to provide services without USAID funding, micro entrepreneurs paid back loans at a 99% rate, Regional Investment Initiative business support including work on legal and regulatory systems in regions continued, and environmentally friendly methods of doing business were adopted. Normal project implementation problems were encountered, but, even in the face of the economic crisis, demand for USAID business services continued.

Possible Adjustment to Plans: USAID continues to focus its programs. This will result in fewer separate activities under this strategic objective. Also, given the inevitable turmoil in Russia’s road to reform, USAID will continue to be flexible and make appropriate adjustments to ensure that funds are utilized to achieve the highest impact.

Host Country and Other Donors: USAID works with private Russian institutions, the managers and owners of private enterprises and associations of private businesses, and with various Ministries and agencies of the government at both national and local levels. USAID collaborates with other donors seeking to support private sector growth, especially the British Know-How Fund, the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation, and the World Bank. EU-TACIS funds complementary support projects as do both private and public representatives of European governments.

Principal Contractors, Grantees, or Agencies: USAID works with dozens of U.S. nongovernmental organizations as well as for-profit contractors in implementing a broad program of support to private sector growth.

Selected Performance Measures:

	Baseline	Target
Private sector production as % of GDP	20% (1995)	45% (2000)
New businesses created	5,000 (1998)	25,000 (2000)
New jobs created	50,000 (1998)	150,000 (2000)

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ACTIVITY DATA SHEET

PROGRAM: RUSSIA
TITLE: Improved Economic Infrastructure to Support Economic Growth, 110-S001.4
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $8,675,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2002

Summary: The development of a middle class in Russia requires sustainable economic growth, which in turn requires an improved economic infrastructure. However, USAID is limited in its ability to fund activities which directly fund the Government of Russia. It is in this strategic objective where the bulk of government-related funds are disbursed. Representative activities include assistance to the Government, the Duma, the State Tax Service, and selected regional and local governments to analyze the potential impacts of different tax regimes on the government budget, draft legislation, and implement new taxes. In the banking sector, USAID has trained examiners in bank supervision, providing advisory services, and has developed loan guarantee protocols. Under the Regional Investment Initiative, USAID has helped improve open markets by assisting regional governments to design investment policies that promote more liberal trade and investment regimes. USAID funds also help strengthen the capability of key think tanks to conduct quality economic analysis to support sound policy formulation, and promoting the adoption and use of international accounting standards. Beneficiaries include Russian businesses, foreign and domestic investors, the Russian public, government agencies, and think tank institutions.

Key Results: To help develop an improved economic infrastructure, USAID supports activities in tax reform, banking reform, adoption of international accounting standards, and institutional strengthening of policy think tanks. Previously, funds were used to establish the Russian Securities and Exchange commission in Moscow and the regions.

Performance and Prospects: The transition from a centrally planned economy with a strong central government to a market economy continues to face difficult obstacles, although progress has been made in many areas. Economic and legal guidance has been provided to the Russian Government and Duma to evaluate strengths and weaknesses of the proposed tax code, including amendments. Economic analysis has been provided to the Ministry of Finance, showing impacts of changes in taxes, particularly personal income tax, on the hypothetical taxpayer. The State Tax Service’s unit for collecting from large enterprises has been strengthened. A property tax system is being implemented in the cities of Tver and Novgorod. The Securities Commission, National Association of Broker Dealers, Depository Clearing Company and other regulatory bodies have been established and institutionalized to strengthen investor protection. USAID has helped establish commercial bank training institutes outside of Moscow in order to increase Russian financial services to small and medium sized businesses. Over 30 banks have begun housing and commercial mortgage lending, and, International Accounting Standards have been published in Russian, accepted by the Russian Ministry of Finance, and are being adopted by business. The establishment of the Russian Securities and Exchange Commission provides a solid infrastructure for securities trading in the country. Once the economic situation stabilizes and investor confidence returns, this exchange will play a major part in mobilizing finance. While the Government has consistently indicated a strong demand for USAID assistance in the tax reform area, these efforts have met with significant obstacles in the implementation stage, including differing views by groups in the Duma of how the tax system should be reformed. USAID will work with the World Bank to develop a bank restructuring plan and also to strengthen think tanks which can offer high quality economic analysis to decision-makers.

Possible Adjustments to Plans: For FY 1999, USAID decreased the numbers of components it was working on in tax reform. Depending on the progress in tax reform and changes from the 1999 Duma elections, further refinement may be necessary. As in other strategic objectives, USAID will need to be flexible and ensure that its activities support reform in ways that can be replicated and continued after bilateral assistance ceases.

Other Donor Programs: USAID plays a critical role in the financial sector. Activities are used as practical laboratories for future funding by the World Bank, the EU, and other donors. Of particular import will be the collaboration between USAID and the World Bank in banking restructuring. USAID works closely with bilateral donors and the International Committee for Accounting reform in its international accounting standards project. USAID hopes to strengthen Russian think tanks abilities to provide high quality economic analyses.

Principal Contractors, Grantees, or Agencies: USAID implementers include: Georgia State University, Financial Services Volunteer Corps (FSVC), the Gaidar Institute, the International Committee for Accounting Reform, and executive ministries of the Russian Government working on tax reform.

Selected Performance Measures:

	Baseline	Target
Legislative authority for bank restructuring agency (ARCO) passed	No (1998)	Yes (2000)
Fixed capital formation (% increase from previous year)	87 (1995)	100 (2000)

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ACTIVITY DATA SHEET

PROGRAM: RUSSIA
TITLE: Increased Environmental Capacity to Support Sustainable Economic Growth, 110-S001.6
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $3,700,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2002

Summary: The acuteness of environmental problems in Russia, deepened by the difficult socio-economic conditions, have led to significant losses in economic productivity. To help address this situation, USAID activities in the environmental sector respond to Russia’s need to achieve sustainable economic growth. This growth is dependent on improved capacity in environmental and natural resources management. USAID activities also respond to the needs of local environmental non-governmental organizations who require technical assistance to achieve financial and technical sustainability. Current activities include strengthening partnerships among institutions throughout Russia to promote exchange of practical lessons gathered from ground-breaking work in pollution prevention, risk assessment, and land-use planning, reforestation and other successful activities. Activities also include reducing the negative impact of global climate change through programs targeted at fire prevention, pest control, reforestation, forest policy, and the phase-out of ozone depleting substances production. The entire population of Russia will benefit if USAID-supported and other donor programs in this area have their intended impact. The Russian Far East in particular will benefit from improved forestry practices and new ecology-based businesses.

Key Results: Three intermediate results are necessary for achievement of this objective: (1) increased capacity to deal with environmental pollution as a threat to public health; (2) improved management of natural resources and biodiversity protection; and (3) improved economic mechanisms for natural resources management, environmental protection and emissions trading.

Performance and Prospects: Significant progress has been achieved, with results of pilot projects in six regions now replicated and disseminated in more than 50 regions in the Russian Federation. In pollution prevention, private industry and municipal utilities in four industrial regions have reduced air and water pollution and demonstrated significant cost savings. A new health risk assessment methodology has been tested in seven cities and a Federal Working Group was established to utilize this methodology nationally. Non-governmental organizations have reduced local pollution by conducting city clean-up days, developing solid waste collection programs, and constructing new drinking water wells for small villages. In natural resource management and biodiversity protection, the first ever comprehensive reforestation program was introduced in the Russian Far East, resulting in a 60 fold increase in the production of seedlings. The Regional Forestry Service and governments in the Russian Far East drafted the first Regional Forestry Code to ensure regional management of forest resources, and the endangered Siberian Tiger population stabilized at approximately 400 animals.

USAID assistance has also helped generate funding for the environment. Private enterprises and municipalities have financed environmental projects through domestic and international financial institutions, and regional eco-funds in three municipalities leveraged environmental loans for drinking water improvements. The municipal government in Nizhnii Tagil, an industrial city in the Urals, secured World Bank funding to improve its drinking water system. Gagarin and Smolensk are candidates for similar financing for municipal water improvements. Zapovedniks (nature reserves) in the Russian Far East are generating new revenue to fund protective programs through eco-tourism.

The Replication of Lessons Learned Project is USAID’s flagship environmental project and applications for small grants in the environment continue to overwhelm the selection committees. Regional forestry departments are appreciative of USAID assistance in forestry matters and USAID is looking forward to seeing the results of new projects in non-forest timber product development and marketing. The key to the success of activities in this strategic objective is the focus on grassroots level work.

Possible Adjustments: As with all of its strategic objectives, USAID will continue to monitor work in this area to ensure that appropriate activities are designed and implemented. Demand continues to be very high for the services offered, especially at the local level.

Host Country and Other Donors: USAID closely coordinates with host country government, non-government, and private sector counterparts at the national, regional, and local levels. USAID programs work with other donors and international financial institutions, particularly the World Bank and EBRD, to coordinate activities and to leverage additional resources. To date, environmental assistance projects in Russia have leveraged at least $370 million in environmental investments, with the potential for a total of $400-500 million before the assistance program comes to an end.

Principal Contractors, Grantees, or Agencies: USAID is working with the following partners: U.S. Environmental Protection Agency, U.S. Forest Service, U.S. Department of Interior, ISAR, Institute for Sustainable Communities, Ecologically Sustainable Development, World Wildlife Fund/U.S., Center for International Environmental Law, and the Department of Energy.

Selected Performance Measures:

	Baseline	Target
Environment-related business plans developed and implemented	0 (1993)	8 (2000)
Number of self-sustaining environmental NGOs	5 (1993)	25 (2000)
Environmental grants provided to local entities throughout Russia	0 (1993)	50(2000)

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ACTIVITY DATA SHEET

PROGRAM: RUSSIA
TITLE: Increased Better Informed Citizens’ Participation in Political and Economic Decision-Making, 110-S002.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $13,000,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2002

Summary: This strategic objective will ensure that citizens have the opportunity to express their opinions and influence decision-makers. USAID targets citizens, communities, NGOs, public officials, independent media, and various political party officials in order to expand public outreach efforts and to increase participation.

The National Democratic Institute (NDI) and the International Republican Institute (IRI) work in political party building at the national, regional, and local levels and in strengthening political institutions essential to democracy. NGO support networks covering two-thirds of the Russian Federation support thousands of active local NGOs. Major grant programs, administered through umbrella grants to U.S. and Russian NGOs, such as the Sustaining Partnerships into the Next Century (SPAN) program, provide funding to sustain dozens of partnership activities between Russian and American organizations in the areas of civil society, rule of law, tax reform, financial sector, business development, environment, and health. The Eurasia Foundation is a major grass-roots grant making institution assisting economic and social reform. Sixteen media partnerships and most newspaper partnerships have achieved progress toward self-sustainability. Media partnerships promote business development of selected media, upgrade professional standards and expand access to independent sources of information. Under the Regional Investment Initiative (RII), NGO, local government, and private sector elements are brought together in selected communities to simultaneously address two principal elements of the Partnership for Freedom: reducing impediments to trade and investment and increasing citizens' participation in civil society.

The entire citizenry stands to gain as a direct result of USAID programs under this strategic objective. The political process activities are of greatest importance to voters and public officials at the national and regional level. Both independent media and NGOs reach a large portion of the Russian population. Independent media provides more objective news coverage essential for informed debate while NGOs offer an avenue for citizen participation in economic, social and political decision making.

Key Results: Three intermediate results are pursued in support of this objective: (1) free and fair elections are administered nationally and locally; (2) increased public access to information informs political and economic choices; and (3) NGO sector provides opportunities for citizen participation in economic and political speres of society.

Performance and Prospects: Given that democratic development can take decades, even generations, USAID must be realistic about program expectations. However, there have been impressive results to date. Some 65,000 local NGOs now contribute to the building of civil society in Russia. USAID training programs have reached over 13,500 activists from non-governmental organizations. Over 300 new independent television stations exist. A Russian non-governmental organization provides long-term services for Russian regional newspapers. Most recent elections were considered free and fair. Approximately 6,500 political party activists have been trained in party development. Twenty-four partnerships are receiving assistance to sustain and increase Russian - U.S. cooperation.

The increasing involvement of Russians in all activities has helped strengthen work in this strategic objective. Most impressive is the continuing work to strengthen NGOs around the country with the establishment of regional NGO Support Centers. Observers consider the SPAN Partnership Project an excellent model for the creation and strengthening of enduring partnerships between U.S. and Russian entities. All media assistance goes through Russian organizations. Civil society strengthening will continue to be a crucial element of U.S. assistance to Russia.

Possible Adjustments to Plans: USAID will continue to monitor this strategic objective to ensure that activities continue to have results and that they respond appropriately to NGO, media, partnerships, and political party needs.

Other Donor Programs: Russia has dozens of political parties. USAID has emphasized responding to requests for technical advice and training services from those parties viewed as "reform-oriented." Work with citizens' groups has generally been carried out through NGOs and in concert with local institutions, including municipal governments. Other donors have been active in electoral process issues; USAID has coordinated regularly with them in all election run-up periods and will continue to do so. USAID also works cooperatively with other bilateral donors providing assistance to the media and, increasingly, to Russian civil society.

Principal Contractors, Grantees, or Agencies: USAID is working with the following: International Republican Institute (IRI), National Democratic Institute (NDI), International Foundation for Electoral Systems (IFES), ISAR, World Learning, Inc., American Center for International Labor Solidarity (ACILS), Internews, National Press Institute (formerly RAPIC), the Helsinki Group, IREX, the Eurasia Foundation, and the Moscow School of Political Studies.

Selected Performance Measures:

	Baseline	Target
Percentage of viewers with access to independent TV	12% (1995)	21% (2000)
Increased and strengthened party identification among voters	22% (1994)	25% (2000)
Number of media partnerships that are fully self-sustaining	0 (1995)	3 (2000)
Share of assisted NGOs showing increased domestic funding	15% (1995)	40% (2000)

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ACTIVITY DATA SHEET

PROGRAM: RUSSIA
TITLE: Strengthened Rule of Law and Respect for Human Rights, 110-S002.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $3,450,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2001

Summary: This strategic objective will strengthen the legal systems that better support democratic processes and market reforms. USAID’s Rule of Law program now focuses on two principal aspects of legal reform in Russia: judicial reform (including enforcement of judgments and alternative dispute resolution), and legal education and training. Partnerships between U.S. and Russian legal entities are encouraged. USAID has worked with the Rule of Law Consortium to ensure that all Russian Commercial Court judges are familiar with new legislation, including the Civil Code. In 1996, Russia moved to strengthen the independence of its judiciary, creating a Judicial Department to put administration of the courts of general jurisdiction into the hands of judges. USAID funds the National Judicial College in Reno, Nevada to work in partnership to ensure that this department fulfills its role. USAID has started to work on improving enforcement of judgments, and is providing assistance as Russia sets up a Russian equivalent of the U.S. Marshall's Service, which in addition to handling court security will enforce civil judgments. The American Bar Association (ABA/CEELI) supports commercial law training for lawyers, legal advocacy for women involved with domestic violence, continuing legal education, and law clinics. USAID also addresses corruption with activities promoting judicial ethics and discipline and improved government auditing. Another important USAID-supported effort is the work with many local NGOs to improve advocacy and outreach, helping Russians become more aware of their rights in such areas as housing, property, civil rights, and environmental protection. The American Center for International Labor Solidarity (ACILS) works with local legal groups to provide citizens with the resources to seek enforcement of their labor rights and to organize into effective, independent labor unions. USAID continues to support the Sakharov Center and the Moscow Helsinki Group to increase human rights awareness. Beneficiaries include investors, both foreign and Russian, Russian citizens desiring an open, transparent civil and commercial legal system, and the judicial and legal professions. They all stand to benefit from activities that increase transparency and the soundness of new laws, and that ensure their even-handed application and enforcement.

Key Results: Two intermediate results are pursued in support of this objective: (1) better administration, application and enforcement of law; and (2) higher standards and competence in the legal profession.

Performance and Prospects: Recent USAID support has assured that all 1600 commercial court judges in the country received Part 1 and 2 of the new civil code and other laws recently enacted; over 40% of these judges received training on substantive, Russian commercial law topics. USAID training and technical assistance produced several reforms. The legal framework for property rights was improved to promote more private property transactions. Over 2000 Russian judges and lawyers received training on Russian laws to ensure that court process and judgments are transparent and consistent with written law. Twenty exchanges of top Russian judges led to the formation of the new Judicial Department, which is modeled on the Administrative Office of the U.S. Courts. Continuing legal education is available in eight more cities. Numerous law schools instituted trial advocacy and other practice-based curricula. Partnerships have been established between U.S. institutions and Russian judicial training institutions at all levels, and 18 training programs were conducted to improve judges’ decision-making skills. Thirty human rights groups in the regions now monitor abuses throughout the Russian Federation. Over 3,300 legal consultations were provided to trade unions in FY 1998 alone.

USAID will continue its dual focus on creating the requisite legal and regulatory environment to promote trade and investment and the rule of law while combating crime and corruption and supporting human rights. Activities will include continuing support for judicial partnerships, the new judicial department, enforcement of judgments, legal education, and legal rights advocacy by NGOs, especially related to domestic violence.

Possible Adjustments to Plans: Projects will be monitored to ensure results and modified if necessary.

Other Donor Programs: The World Bank, the EU, and several bilateral donors are involved in Rule of Law activities for Russia. An active donor coordination group meets quarterly. USAID also works closely with the Russian government, local governments, legal associations, and NGOs such as the Sakharov Center and the Moscow Helsinki Group.

Principle Contractors, Grantees, or Agencies: In addition to DOJ technical assistance and training, USAID works with ABA/CEELI, Chemonics and the National Judicial College, the Sakharov Center and Museum, Moscow Helsinki Group, and the Organization for Economic Cooperation and Development.

Selected Performance Measures:

	Baseline	Target
Judges have electronic access to laws and judicial decisions	No (1997)	Yes (2000)
Judicial decisions are viewed as uniform and predictable by commercial lawyers (annual survey of commercial lawyers taking CLE seminar)	10 (1998)	20 (2000)
Increased number of regions with human rights monitors	0 (1998)	32 (2000)

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ACTIVITY DATA SHEET

PROGRAM: RUSSIA
TITLE: Improved Effectiveness of Selected Social Services and Benefits, 110-S003.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $7,750,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2002

Summary: This strategic objective will improve the delivery of selected social services and benefits, primarily health care services at the community level. Funds have been disbursed to assure the sustainability of basic social services and benefits target users of the health care system, low-income populations, and members of recently privatized state farms. Projects have included technical assistance, training, and advice in several areas, successfully demonstrating the benefits of a restructured, more market-oriented health system. Sustainable models for cost efficient health care have been implemented in several oblasts and cities in Siberia. Increased health care efficiency also means rational pharmaceutical use. As the health care model evolves, USAID will put the majority of its funds into medical partnerships, women and infant care, and into the fight against HIV/AIDS and tuberculosis. Achievement of this objective will result in more efficient and sustainable delivery of quality basic health, and of communal services, such as heating, to those who cannot afford it.

Key Results: Three intermediate results have been pursued in support of this objective: (1) new approached to service delivery adopted; (2) new approaches to resource allocation and alternative financing of service delivery adopted; and (3) relevant policies, laws and regulations are drafted and submitted to the Duma.

Performance and Prospects: In view of the enormity and complexity of the social services delivery system, the precipitous decline in local resources available for social services over the past decade, and the current economic crisis, USAID’s ability to significantly improve the overall health and well being of Russia’s citizens is limited. Nonetheless, there have been some significant results to date.

Fourteen model family planning centers have been established in six regions and serve over three million women of reproductive age; overall abortion rates in these areas decreased by 11 percent between 1996 and 1997, almost twice the national average. Twelve partnerships between U.S. medical institutions and Russian hospitals have been established.

The Russian Medical Association is now responsible for accrediting physicians and distributed a Code of Ethics for Nurses. In three pilot regions, hospitals have developed clinical guidelines for five major illnesses, generating significant financial savings. In another pilot district the number of hospital beds has been reduced by almost half and, together with other cost saving measures, the district has saved $700,000 per year, one fourth of the entire budget for health care services.

Other discrete activities in support of the Gore-Chernomyrdin Commission Health Committee included: blood-lead screening for over 1200 children; national conferences on micronutrient malnutrition; and seminars on the early detection, prevention and control of major infectious and non-communicable diseases.

"Means tested" housing allowance programs coupled with gradual increases in rents and utilities charges have been adopted by over 90 percent of Russian communities. Housing was constructed for 4,569 returned Russian officers; this program served as the prototype for the Russian Government’s efforts to house Russian officers as the military was downsized.

USAID is scaling back it's efforts for comprehensive health reform with the central government due to limited progress at that level. Russian counterparts have expressed consistent high demand for work in infectious diseases and hospital partnerships are producing good results. With high infant mortality rates, the mother and infant health care project is timely.

Possible Adjustments to Plans: USAID’s priorities will be in fighting infectious diseases (AIDS and TB), women and infant health care, and medical partnerships in support of these priorities. Health finance, pharmaceutical policy, and work on discrete topics such as cardiovascular and mental health are of lower priority. USAID will continue to play an important role in supporting the U.S. - Russia bi-lateral commission in health care.

Other Donor Programs: Activities are closely coordinated with the World Bank, UNAIDS, the Soros Foundation, the British Know-How Fund and other donors. USAID normally pilot tests activities which are later embraced and expanded by other donors. The World Bank has made a $64 million loan for the health sector and is considering an additional $500 million over three years. The Soros Foundation is considering a $100 million contribution over three years. The Ministry of Health considers USAID activities to be most important and are working closely with USAID in formulating policy.

Principal Contractors, Grantees, or Agencies: American International Health Alliance, Boston University, Lutheran Hospital, LaCrosse, American Medical Association, U.S. Department of Health and Human Services, AVSC, and others.

Selected Performance Measures:

	Baseline	Target
Abortion rates in USAID-supported areas decrease more than the national average	7% (nationally)	10% (assisted areas)
Number of facilities using modern cost accounting and financial systems in pilot oblasts	0 (1994)	40 (2000)
Infectious disease protocols initiated	0 (1999)	4 (2000)

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