Country Overview
Country Facts
Overview of U.S. Government Assistance
In FY 2005, the USG allocated an estimated $58.66 million in assistance to Bulgaria, including:
In FY 2005, a total of 266 Bulgarians traveled to the United States on USG-funded exchange programs.
FY 2005 Assistance Overview
U.S. STRATEGIC INTERESTSDuring the past fifteen years, Bulgaria has been a force for stability and a model for Euro-Atlantic integration in a region marked by recent violence, ethnic tensions, and political stagnation. The country has been a reliable ally demonstrating repeatedly that it is a staunch friend of the U.S., a strong supporter of the war on terrorism, and a dependable partner in a volatile region. After the withdrawal of its troops from Iraq, Bulgaria has committed to maintaining a humanitarian mission, demonstrating its firm commitment to the coalition. Bulgaria maintains peacekeepers in Bosnia, Kosovo, and Afghanistan. Bulgarian soldiers soon will be in charge of securing the Kabul airport, performing a vital mission for the Alliance and demonstrating again that Bulgaria is a capable and reliable NATO ally. The U.S. is close to finalizing the negotiations for the shared use of two military bases in the country. This is an important aspect of the USG overall strategic partnership that will promote security and stability between the two countries and help build a safer region.
The dynamic Bulgarian-American bilateral relationship is based on the country?s strong embrace of democracy, its adherence to free-market reforms, and its responsible behavior in international affairs. Bulgaria?s strategic position on the crossroads between Europe and Asia and the government?s commitment to fight terrorism makes it an important and dependable ally of the United States in the Global War against Terrorism. Further, Bulgaria and the U.S. are closely cooperating in the fight against drug trafficking, human trafficking, and organized crime, seen as threats to both countries and the Balkan region as a whole.
The USG?s highest priorities in Bulgaria are continuing support for the war on terrorism and enhanced regional stability, by strengthening democracy and economic development. The USG strongly supports Bulgaria?s membership in the EU, which will stimulate an increase in U.S. investments. A more prosperous Bulgaria will be a more lucrative market for American products and services, a better business partner, and a stronger ally in defending our common interests.
KEY ISSUES
Two major events shaped Bulgaria?s political scene in 2005: the signing of the treaty of Bulgaria?s accession to the European Union (EU) on April 25 and the parliamentary elections in June. The EU accession treaty was an impetus for the country to move forward with important legislative changes required for membership. The rush to meet EU requirements was counter-balanced by mid-year elections, which slowed reform efforts for several months. This was followed by another surge in legislative activity, several weeks before the European Commission (EC) published its October monitoring report. In the end, Bulgaria did make significant progress in achieving its ambitious goal of EU accession. The EC report confirmed that Bulgaria should be able to accede to the EU on January 1, 2007, provided that promised reforms are implemented. However, behind a mixed overall assessment lies the harsh reality of Bulgaria?s lack of progress in several key sectors over the last six months. The EC identified a number of areas where reforms lag including reform of the judicial system, development of institutional capacity, and fighting corruption and organized crime. These areas of concern are shared by the U.S. The Bulgarian government will need to make significant progress to head off an EC recommendation to delay accession by one year.
The EC report demonstrates the importance of USG programs, with its frequent mention of progress made in areas where the USG has active programs ? judicial reform, criminal justice, commercial law, anti-corruption, and fiscal decentralization. While U.S. involvement has been on target, the complexity of the reform efforts require additional time before qualitative changes will be visible. Bulgaria will likely need further assistance in this sector after graduation from SEED.
The parliamentary elections of June 2005 demonstrated citizens? distrust of political parties. With a historically low voter turnout (around 56 percent), the leftist coalition led by the Bulgarian Socialist Party won the elections. This produced a fragmented Parliament, followed by prolonged wrangling over the composition of the new government. Although the eventual formation of the new government removed most short-term political uncertainty, there remains a significant risk of renewed political instability in late 2006. The biggest surprise of the elections was the success of the Ataka coalition, a radical Bulgarian nationalist formation with an electoral platform hostile to the U.S. and the Turkish and Roma minorities.
Over the last several years, Bulgaria has made impressive progress towards long-term economic stability and sustained growth. As a result of sound macro-economic policies and deep structural reforms, average growth has reached levels comparable to that of the eight recent EU entrants at close to 5 percent per year in 2000-2004, with a projected 5.7 percent growth rate in 2005. A broad structural reform program contributed to solid economic performance. Growth is led by the private sector which now accounts for 75 percent of the economy, which is on par with the EU8 average. Integration with external markets has expanded, Foreign Direct Investment (FDI) flows increased, and investor confidence has improved both domestic and foreign. Per capita income increased by an average 6.4 percent per year since 1998 (at purchasing power parity in real terms). Unemployment has declined to 10 percent in 2005, from 18.1 in 2000, and continues to fall. Stability, growth, and Bulgaria?s developed social protection system contributed to a substantial reduction in poverty.
Despite an overall positive performance, Bulgaria still remains a relatively poor country compared to its neighbors in Eastern Europe. The gross national income per person in 2004 is still 92 percent of its 1989 level and is only 30 percent of the EU average. Pockets of poverty persist among certain groups, such as the ethnic minorities (Roma) and large households. The torrential rains and floods that hit the country between May and August 2005 caused severe damage that affected 3.2 million Bulgarians. While much of the costs of the damages (estimated at EUR 456 million or 2.1 percent of the GDP) will be paid by the government, the effects of the floods will continue to have a negative impact on those living in the devastated regions.
COUNTRY PERFORMANCE MEASURES
Bulgarian Democratic Reform
The "radar" or "spider web" graphs below illustrate Bulgaria?s democratic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark lines indicate how each country compares in its progress vis-?-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria ? the "threshold countries" ? were invited to join NATO and received favorable indications of future EU membership); and, (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country?s performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country_progress/.
The graph shows
*Actual 2005 not yet available.
The graph shows
*Actual 2005 scores not yet available.
Bulgarian Economic Reform
The "radar" or "spider web" graphs below illustrate Bulgaria?s economic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark line indicates how each country compares in its progress vis-?-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria ? the "threshold countries" ? were invited to join NATO and received favorable indications of future EU membership); and (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country?s performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country_progress/.
The graph shows
*Actual 2005 scores not yet available.
The graph shows
*Actual 2005 scores not yet available.
FY 2005 Country Program Performance
Democratic Reform
In 2005, Bulgaria continued its positive trend of consolidating democratic reforms including progress in achieving a more mature and active civil society, dealing with corruption, and improving governance. However, progress in the areas of media, judicial reform, and electoral process were somewhat flat. With regard to local government, despite the decentralization strategy approved by the Government of Bulgaria (GOB) in May 2005, reform has not progressed as expected. The government lacks a clear reform vision for the overall fiscal decentralization process and progress in national reform has been mixed. The general and parliamentary elections in June 2005 and the lengthy negotiations to form a new coalition government delayed considerably the implementation of reforms across the board, and especially the GOB's Fiscal Decentralization Program. The GOB needs to undertake constitutional changes that would give the authority to municipalities to set local taxes.
The effective and sustainable integration of Roma remains a major concern. Efforts to implement the Framework Program for Equal Integration of Roma into Bulgarian Society lack sufficient strategic approach, coordination, and finance. Key reforms in combating discrimination in education, healthcare, and housing are still outstanding. Unemployment among Roma (8 percent to 10 percent of the population) is as high as 90 percent, living conditions in their neighborhoods are poor, and health and educational problems persist. The increased levels of inflammatory racist rhetoric and physical confrontations with Roma have become more commonplace over the past several months and have received wide media coverage. During the recent national elections, anti-minority rhetoric entered mainstream media and the political arena. This trend culminated within the entry into Parliament of an extremist anti-minority, anti-NATO, anti-U.S. party that opposes Bulgaria?s joining the EU unless Bulgarian national interest is guaranteed. Although there is concern about the rise of extremism in the country, the USG does not believe that Bulgaria is currently vulnerable to conflict or crisis.
U.S. ASSISTANCE PRIORITIES
In FY 2005, the USG democracy portfolio in Bulgaria focused on strengthening local governance, supporting civil society by building the capacity of independent media and non-governmental organizations (NGOs), and encouraging public-private partnerships as an approach to address community issues. In the local governance arena, USG assistance focused on fiscal decentralization, municipal capacity-building to cope with increased responsibilities, and support for NGOs that advocate for local government services. Community-level activities provided increased opportunities for ethnic minorities and encouraged greater ethnic and religious tolerance. Building stronger civil society organizations, strengthening parliamentary practices, and improving the professionalism and advocacy of the independent media further supported Bulgaria?s transition to a strong democratic society. USG-funded travel of political leaders, government officials, academics, and journalists supported the familiarization of Bulgaria?s leaders with the day-to-day functioning of a democratic, market-based system, thereby helping to build a cadre of young leaders who can spearhead the reform efforts in the country. The USG democratic reform program is closely linked to the highest priority of strengthening the Rule of Law.
PROGRAM PERFORMANCE
Local Governance: The capabilities of the local government system grew stronger over the past year, largely due to USG assistance efforts. USG-supported policy changes and the improved financial management of local governments led to the most stable fiscal environment at the local level in the last ten years. The adoption of the Municipal Debt Act provided a consolidated and clear framework for municipal borrowing, including a reasonable debt ceiling for long-term debt and transparent borrowing procedures. The USG provided considerable assistance at all stages of the legislative drafting process, and the Act received strong support from the investor community. Another important development was a $15 million loan portfolio guarantee agreement for municipal infrastructure projects signed between the USG and HVB Bank Biochim. This is the first USG Development Credit Authority (DCA) agreement dedicated to Bulgarian municipalities. The program has created new jobs and improved infrastructure in the assisted municipalities by attracting both foreign and domestic investment. Local economic development (LED) specialists, previously unknown in Bulgaria, have been appointed in 16 municipalities and a dedicated LED department has been established in 13 additional municipalities, which has lead to several investments in communities.
The USG continues to be the only donor in Bulgaria that has been providing systematic assistance to local governance reform efforts since the mid-1990s. The institutions established with USG support and the best practices introduced through these programs will form the foundation for sustained legacies of USG assistance. The EU PHARE program has allocated EUR 10-15 million of FY 2005 funds for municipal staff training. However, these funds will not be available until 2007.
Civil Society: U.S.-assisted communities moved closer to sustainability by demonstrating capacity to raise local funds. The growing financial and in-kind contributions from individual and corporate donors ($250,573 in FY 2005 vs. $177,873 in FY 2004) demonstrate an increased interest in local philanthropy. FY 2005 witnessed the devolution of responsibility for social service delivery from national to local governments through the decentralization process and involvement of private providers. The USG assisted two municipalities to develop model procedures for contracting of social services (day care centers for street children, soup kitchens, and shelters) that will be widely replicated. The USG also continued to train social service NGOs that support marginalized groups such as the disabled, street children, and other vulnerable populations to operate successful businesses. By developing an income-generating venture and an entrepreneurial culture, NGOs have started to overcome financial sustainability challenges and create opportunities for disadvantaged groups. Further, the Democracy Commission Small Grants program supported 18 NGO programs on tolerance, judicial reform, leadership training, civil society, and prevention of corruption. The result was a stronger network of individuals and NGOs working on democratic reforms in communities throughout Bulgaria. The translation and dissemination of four American books on political leadership and the Constitution increased Bulgarians? knowledge of American institutions and was particularly useful for students of political science. Small Project Activities of Peace Corps volunteers contributed to strengthening Bulgarian civil society through funding of community environmental centers, information centers and NGOs that promote education and openness.
Ethnic Tolerance: The USG worked in 13 Bulgarian communities with Roma and Turkish populations to demonstrate models for ethnic integration, which will be replicated nation-wide. One model was designed to demonstrate how local communities can resolve their own conflicts through reconciliation. As a result, new mediation centers were established in four towns. These new centers, along with three existing ones, mediated 181 cases during 2005, with 47 percent of the cases resulting in full resolution and 23 percent partial resolution. Also during FY 2005, 162 ethnic minority representatives (Roma and Muslim) completed leadership training and 42 participants were certified as trainers. This training improved the capacity of Roma and Muslim leaders to address community issues and participate in the political process.
Media and Elections: Bulgarian media plays a major role in advocating for reform. USG assistance focused on encouraging high professional standards through training. In FY 2005, 120 journalists received specialized training in technical skills and reform issues, 11 traveled to the U.S. to study investigative reporting and reporting on ethnic issues, and two were trained on court administration and NGO management reporting. The result was increased journalist professionalism and the introduction of new practices. In addition, three U.S. speakers addressed election reporting and the role of political cartooning. The USG-supported weekly anti-corruption investigative television program, "Na Chisto," won a series of awards for exposing corruption, improving access to information at the Ministry of Energy, and expediting passage of the Private Enforcement Act. USG assistance programs helped the main political parties in Bulgaria to develop campaign plans and messages that reflect voter concerns. USG funds also sponsored a national, nonpartisan, voter education and get-out-the-vote campaign to increase youth participation in elections. Despite these efforts, voter turnout was relatively low and youth participation in the 2005 general elections remained consistent with that of previous elections. In compliance with the strategy for graduating Bulgaria from USG SEED assistance, democracy programs will phase out by the end of 2007.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Democratic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 ? September 30 of the following year. "CY" stands for "calendar year," or January 1 ? December 31.
Performance Indicator: Governance Index. This index measures: the stability of the governmental system; authority of the legislative bodies; decentralization of power; responsibilities, election and management of local governmental bodies; and legislative, and executive transparency. (7-point scale: 1 indicates good governance, 7 indicates poor governance) Source: Freedom House, Nations in Transit 2005. This volume covers events from January through December 2004. Found online: www.freedomhouse.org/research/nattransit.htm.
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
3.75 |
3.75 |
3.50 |
3.50 |
The above indicator demonstrates an improvement in Bulgaria?s governance. USG assistance helped advance decentralization policy reform efforts and local government capacity building programs, which brought about modifications to the legal framework for decentralization, including policy dialogue and analysis and comparison of policy options in several specific areas. Bulgarian institutions are designing training and information dissemination tools for local governments to increase their capacity to deliver services and manage effectively. Key national partners such as the National Association of Municipalities, the Ministry of Finance, and the Local Government Commission in Parliament have begun to collaborate effectively. The GOB?s institutional capacity to prevent corruption and enhance transparency and accountability, especially in government audit, internal controls, and public procurement areas, has been strengthened.
Performance Indicator: Civil Society Index. Assesses the growth of NGOs, their organizational capacity and financial sustainability, and the legal and political environment in which they function; the development of free trade unions; and interest group participation in the policy process. (7-point scale: 1 indicates a very advanced NGO sector, 7 indicates a weak NGO sector) Source: Freedom House, Nations in Transit 2005. This volume covers events from January through December 2004. Found online: www.freedomhouse.org/research/nattransit.htm.
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
3.25 |
3.0 |
3.0 |
2.75 |
The above indicator demonstrates an improvement in the Civil Society Index for Bulgaria. In particular, the financial sustainability of Bulgarian NGOs has encouraged businesses, citizens, and local governments to establish community funds. These funds help solve community priorities. NGOs have also learned how to develop viable enterprises to ensure a stable income for the organization. Small grant projects continue to address youth and educational issues, environmental concerns, and local economic development. Implemented at the grassroots level with the involvement of NGOs and citizens, programs directly contribute to strengthening Bulgaria civil society. NGOs have also increased their capacity to deal with priority transitional issues in the country.
Economic Reform
Bulgaria has maintained macro-economic stability with strong growth (estimated at 5.7 percent in 2005), relatively low inflation (4.5 percent estimate in 2005), and falling unemployment. The private-sector share of GDP continued to grow ? the gross value added generated by the private sector reached 75 percent, and the private sector provided 75 percent of total employment in the country. Credit activity grew and domestic credit reached a respectable 45 percent of GDP, but it was still below the Western European average. Continuation of economic reforms will enable the country to cope with the competitive pressure and market forces in the EU. During 2005, Bulgaria?s progress in the economic sector was challenged by internal and external events: the Parliamentary elections in June 2005 and rising international fuel prices. The inflow of Foreign Direct Investment (FDI) continued to grow, reaching EUR 1.3 billion for the period January-September 2005, an 11.5 percent increase over the same period in 2004.
U.S. ASSISTANCE PRIORITIES
Despite sustained macroeconomic stability and continued economic growth in FY 2005, several issues continue to impede improvement of the business environment and are the focus of our assistance efforts. The ineffectiveness of Bulgaria?s judicial system in solving commercial disputes, registering businesses, and enforcing court judgments hamper the development of a more supportive business climate. Government interference in the private sector was still a constraint in 2005. Energy sector reforms to bring about the effective functioning of a competitive, private energy market and its successful integration into the newly established regional common energy market are critical. Bulgarian agriculture still struggles to meet EU accession requirements. Small and medium enterprises (SME) continue to be burdened with excessive licensing requirements. Consultation mechanisms for public-private dialogue with business associations on policy matters remain weak. Labor market performance is constrained by education and vocational training systems that have not adapted to current employer needs. The introduction of new and risky products in the financial sector and the increasing number of financial conglomerates poses coordination issues between banking and non-banking regulatory institutions that could threaten the integrity of the financial system. In addition, money laundering is increasingly more sophisticated and detection is becoming much more difficult.
As a result of these priorities, a USG-funded program focused on streamlining the enabling environment for business development by reducing barriers to market entry and attracting investments. Other activities to improve the business climate included efforts to revise commercial laws to relieve the court system of administrative activities and development of the energy sector regulatory framework and secondary legislation, which is critical for the continued privatization in the sector and the opening of the electricity market. By providing technical assistance to Bulgarian SMEs and business consulting firms, the USG strengthened the capacity of local business consultants to provide services to SMEs in growth-oriented industry clusters with the greatest potential for job creation and increased exports. To bridge the gap between demand and supply of labor, the labor market program implemented initiatives to improve the employability of young people. USG-funded micro-lending programs and loan guarantee mechanisms empowered the private sector to grow and undertake investments in order to maintain and expand local, regional, and global market shares. At the same time, the USG continued to invest in building strong financial sector institutions and regulators. USG-funded agricultural programs targeted SMEs, increasing farm credit, trade, and investment, and Bulgaria?s integration into the world economy.
PROGRAM PERFORMANCE
Business environment: In 2005, USG-funded programs fostered the reform of Bulgaria?s grossly ineffective judgment enforcement system that was not compatible with European norms. With the passage of the Law on Private Enforcement Agents, Bulgarian businesses and foreign investors gained confidence that their interests will be better protected and their commercial cases will be finalized in a timely manner. The businesses further benefited from the opening of two mediation centers in the country, offering an inexpensive and swift alternative to the cumbersome judicial process. Regarding the business registration process, USG-led efforts brought about a breakthrough decision by the GOB to draft legislation to transfer the business registration process from the overburdened courts to executive authorities. Collaboration with the World Bank was crucial and resulted in incorporating a conditionality addressing business registration reform in the Bank's new loan to Bulgaria. Additional benefits on the streamlined business registration process will be a decrease in opportunities for corruption.
Economy Restructuring: In 2005, the USG supported the restructuring of two key sectors in Bulgaria ? energy and transport. The USG provided technical assistance for the sale of concession rights for two Black Sea airports, ensuring that the transaction was completed in compliance with the highest international standards for transparency. The transaction is of importance for the further development of the competitive Black Sea tourism industry, however, legal challenges to the transaction have delayed implementation. In the energy sector, USG assistance continued to help Bulgaria develop a competitive energy market and integrate it into the regional market. After the successful privatization of the electricity distribution companies in 2004, USG-funded activities supported the development of a regulatory framework for the privatization of four electricity generation companies. The agreement for the privatization of one of the thermal power plants was signed in October 2005. The USG continued to provide assistance to the State Energy and Regulatory Commission (SEWRC) in order to build its capacity to act as an independent regulator for the liberalization of the energy market. The USG worked closely with SEWRC on the energy sector tariff reform and finalized the tariff methodologies and the regulatory Chart of Accounts for the natural gas and the heat supply sectors.
Private Sector: To improve the competitiveness of SMEs and prepare them for the European market, the USG funded a second-generation enterprise development program that helps private business consulting firms provide a broad range of services to export-oriented SMEs in industry sectors with high growth potential (biotechnology, information technology, agriculture, tourism, and commercial wine production). As a result of expanded service provision, USG-supported business consulting firms? revenues increased by an average of 23 percent, and the revenues of SMEs receiving USG-funded consulting services increased by 8 percent. Other USG-funded programs to stimulate private sector growth included a Democracy Commission grant to promote female-owned start-up businesses and an International Visitor program to increase the expertise at the Bulgarian Investment and Business Association in e-commerce. Peace Corps volunteers supported tourism development by assisting information centers and developing community strategies.
Labor market: USG-funded programs supported efforts to improve the market orientation of universities and their ability to deliver up-to-date skills by launching an extensive network of Career Development Centers (CDCs). The aggressive promotional campaign among students and employers resulted in more than 50,000 students registering for the services of the CDCs and more than $100,000 committed by businesses to support the centers. With the objective of preparing young people for the new realities of the labor market, the USG also continued to encourage the entrepreneurial spirit of young people by supporting entrepreneurial and business training at schools, and the establishment of student operated companies. In FY 2005, 32,000 students from 220 schools throughout Bulgaria were given the opportunity to demonstrate their outstanding business and entrepreneurial skills at national and international events.
Financial Sector: USG programs continued to support financial sector reform by capacity building in the Financial Supervision Commission (FSC) and the Bulgarian National Bank (BNB). The focus was on reducing money laundering by developing anti-money laundering manuals and providing formal, on-the-job training. The USG was instrumental in assisting with the development of landmark draft legislation protecting the rights of an increasing number of borrowers. The legislation is modeled on the "Truth-In-Lending" Regulation Z of the United States and is in compliance with EU directives. To provide adequate insurance protection for bank depositors, and thereby build a stronger commercial banking sector, USG assistance helped the Bulgarian Deposit Insurance Fund introduce risk-based deposit insurance premiums. USG advisors were instrumental in helping the BNB establish a plan for a modern Cash Center facility responsible for producing Euro currency and incorporating anti-counterfeiting measures.
Access to Credit: The USG-funded Development Credit Authority portfolio guarantee program continued to provide increased credit access in key competitive sectors of the economy, such as energy, agriculture, tourism, advanced technology, and light manufacturing. In FY 2005, the USG-partner banks extended over $14.8 million in loans, of which over $11.7 million was used to improve Bulgarian private companies? competitiveness in the targeted sectors. Another $3 million was allocated for credits to agricultural and energy projects. The USG micro-credit program continued its alternative lending mechanism for start-up businesses and women entrepreneurs, helping to create more than 56,000 jobs. The micro-credit program?s active portfolio amounts to $3.7million and the implementer, Nachala, is already financially and operationally self-sustaining. The second microfinance program funded by the USG and graduated in FY 2004 (USTOI cooperative) continues to operate and is sustainable both operationally and financially.
Agriculture: Devastating floods in the summer and early fall of 2005 was partially responsible for the fall of agricultural production by 6.6 percent in the third quarter relative to the same period in 2004. The avian influenza threat also posed a challenge for the country. USG assistance programs continued to support the agriculture sector by bringing 16 U.S. companies to Bulgaria on a trade and investment mission. Sales resulting from prior years? trade missions total nearly $10 million. The Iowa State Center for International Agriculture Finance facilitated agribusiness loans valued at $1.6 million. USG-funded programs continued activities to increase productivity by providing assistance to the food processing and animal genetics industries. The USG supported four Bulgarian professors in an exchange program with U.S. universities in an effort to improve consumer health and the quality of local animal products. In compliance with the strategy for graduating Bulgaria from USG SEED assistance, the economic reform programs will phase out by the end of 2007.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Economic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 ? September 30 of the following year. "CY" stands for "calendar year," or January 1 ? December 31.
Performance Indicator: Purchasing Power Parity (PPP) as Percent of EU Average. The higher the PPP as percent of EU average the better. Purchasing-power-parity (PPP) is a method of measuring the relative purchasing power of different countries? currencies over the same types of goods and services. Because goods and services may cost more in one country than in another, PPP affords more accurate comparisons of standards of living across countries. Source: EUROSTAT.
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
28.3 percent |
29.8 percent |
31.4 percent |
32 percent Forecast |
The above indicator demonstrates that Bulgaria exceeded the PPP 2005 target, a sign of the progress the country has made. Bulgaria?s long-term objective is to reach a PPP level closer to EU standards. The CY 2005 rank number is only the EUROSTAT forecast as annual numbers are not yet available.
Performance Indicator: Private Sector Share of GDP. The underlying concept of private sector value added includes income generated by the activity of private registered companies, as well as by private entities engaged in informal activity in those cases where reliable information on informal activity is available. This indicator is analyzed in the "Monitoring Country Progress in Eastern Europe and Eurasia" USG/E&E/PO, #9 April 2005, drawing from EBRD, Transition Report. Ratings are based on a 1 to 5 scale, with 5 being most advanced. The 2005 rank is based on data collected in 2004. Found on line: inside.USG.gov/EE/po/mcp.html.
|
FY 2003 Baseline |
FY 2004 Rank |
FY 2005 Target |
FY 2005 Rank |
|
4.5 (75 percent) |
4.5 (75 percent) |
5.0 (80 percent) |
4.5 (75 percent) |
The indicator above demonstrates that the private sector share of GDP has remained at a constant 75 percent. USG assistance in the form of micro-lending programs has provided entrepreneurs with access to non-bank financial services with a focus on less economically developed regions. Credit access to SMEs also increased, resulting in significant job creation. As mentioned, gross value added generated by the private sector reached 75 percent and the private sector provided 75 percent of all employment opportunities in the country. Private sector growth was also enhanced by streamlining the enabling environment for businesses to reduce barriers to market entry and attract investments to the country. Improvements came in company registration procedures, enforcement of judgments, increased efficiency of collateral, expanded use of alternative dispute resolution in commercial matters, and corporate governance. USG assistance programs for the financial sector are helping to achieve a sound, stable, modern, vibrant, transparent and well regulated banking/financial sector that meets the needs of a market economy, including financial intermediation, risk management and provision of financial services, and anti-money laundering initiatives.
Social Reform and Humanitarian Assistance
Although the government is pursuing an active employment-creation policy, unemployment levels in 2005 at 10 percent are double the EU average. With a minimum wage of EUR 77, average salary of EUR 190, and average pension of EUR 67 monthly, Bulgaria maintains the lowest compensation levels in the region. An aging population, inadequate delivery systems, and excessive infrastructure of health and education services continue to pose challenges for the country. Health care reform continues at an uneven pace and is a cause for public discontent. The population?s health status is well below the EU average. Although HIV/AIDS infection rates remained low, a World Bank report warns about the possibility of a pandemic increase in the region. The educational system is also failing to meet the needs of the country?s job market. Substantial reforms followed by appropriate investment in health and education will be required to reverse the deterioration of social indicators and improve Bulgaria?s competitiveness. The new government has identified health and education reforms as priority concerns, but has not taken concrete actions. Recent teacher strikes and the dismissal of prominent medical doctors from the boards of several leading hospitals highlight the challenges in reforming these sectors.
U.S. ASSISTANCE PRIORITIES
Due to the phase out of SEED assistance to Bulgaria in 2006, social challenges have had to be a lower priority for USG funds. Nevertheless, a program to consolidate pension reform and health care reform, with an emphasis on hospital restructuring and decentralization, was successful. Other activities already described under the democracy or economic sections above have also had an impact on the social sector. The ethnic integration program created jobs for minorities and addressed key health and educational issues faced by the Roma and Muslim minorities. The USG-funded labor market programs are responding to the needs of employers, directly contributing to a decrease in the unemployment rate in the country. In addition, participant training programs and support to the American University in Bulgaria directly promote development of a qualified workforce in Bulgaria.
PROGRAM PERFORMANCE
In FY 2005, two USG programs that contributed to the social reform in Bulgaria ? the pension reform and health finance reform programs ? were completed and others continued.
Pension Reform: The USG-funded pension reform program left a sustainable legacy of a three-pillar pension (mandatory public, mandatory private, and voluntary private) system to provide better retirement income for future generations. At present, close to three million Bulgarian workers participate in private pension schemes and the net assets managed by Bulgaria's eight private pension companies amount to more than BGN 1 billion (approximately $600 million), which is 2.5 percent of the GDP. The success of pension reform extends not only to improving the social protection landscape in Bulgaria but it also has a long-term positive impact on the financial markets and economic growth and development as the private pension funds are strengthened and become mature institutional investors.
Health Reform: In the health sector, USG assistance focused primarily on in-patient financing and hospital care restructuring. Given the GOB?s lack of experience in managing the health sector in a market-based environment, the USG identified this niche as crucial for restructuring the system and improving its efficiency and transparency. One program achievement in 2005 was the establishment in the Ministry of Health of the National Health Accounts (NHA) division to compile, analyze, and report on national health expenditures. Bulgaria is the first Central and Eastern European country to institute health accounts. NHA?s financial analyses give a broad profile of the flow of financial resources through the system, providing new and useful information to decision-makers on efficiency, equity, and impact. Another health reform activity focused on measuring financial inputs for services delivered. A new in-patient financing system based on Diagnostic Related Groups was developed and applied in 38 pilot hospitals. With USG assistance, over 1,800 coders from all Bulgarian hospitals were trained in preparation for national implementation. A hospital restructuring survey resulted in a recommendation to consolidate services in underused communities; the World Bank plans to continue the assessments in hospitals throughout the country. There are indications that the Ministry of Health will pilot restructuring of the hospitals in two regions in 2006.
Human Capacity Development: In 2005, the USG continued to build the capacity of individuals to implement reforms effectively by providing short-term, tailored trainings in the U.S., Bulgaria, or other countries. EU accession demands helped define USG training priorities, allowing 295 participants from indigenous institutions and organizations to attend 24 training events, thus bringing the total number of Bulgarian trainees to 2,700. Participants included ministers and other high-level governmental officials, members of Parliament, mayors, Supreme Court judges, and key business association leaders. The Small Grants component of the participant training program funded computer and information centers in underprivileged Roma neighborhoods, drafting of a regional economic development plan, increased professionalism and ethnic tolerance through multi-ethnic training of journalists, and seminars to involve citizens in local government.
American University in Bulgaria: Established in a region that has a long history of conflict driven by ethnic tensions and nationalist tendencies, the mission of the American University in Bulgaria (AUBG) is to educate future leaders committed to serving the needs of the region by promoting the values of an open, democratic society. Fiscal year 2005 was a difficult one for the University. AUBG?s financial performance was less than stellar as the operating deficit climbed from $1 million to $1.6 million due to lower-than-expected enrollment numbers. Nonetheless, AUBG made positive strides towards financial sustainability by successfully recruiting the largest freshman class ever for school year 2005-2006. In spite of the financial setbacks, AUBG only withdrew $1.1 million from the principle of the USG?s nearly $10 million endowment, which is 30 percent less than last year?s drawdown. This marks the second year in a row that AUBG has not exceeded its projected drawdown.
Democracy Commission grants supported 14 NGO projects on social integration of the Roma communities, ethnic tolerance, and prevention of human trafficking. The result was greater awareness of the problems of social integration and creation of networks working against trafficking and for greater tolerance.
Humanitarian Assistance: From May through September 2005, Bulgaria experienced waves of torrential rains that caused heavy flooding throughout the country. The damage affected over 3.2 million people, or one-third of the Bulgaria population. The USG Office for Foreign Disaster Assistance (OFDA) ($1.45 million) and the U.S. State Department ($250,000) provided funds for equipment for immediate recovery efforts such as pumps, generators, protective clothing, inflatable boats with outboard motors, chemical toilets, and direct assistance (food, water, and heating materials) to the affected population.
In FY 2005, the Department of Defense (DOD) Humanitarian Assistance Programs (HAP) continued cooperative efforts with the GOB to improve the quality of life and health care services for the Bulgarian population. The Office of Defense Cooperation (ODC) coordinated the delivery of $790,000 in DOD HAP donations and/or grants. Almost half of that amount ($360,000) was used for the extensive renovation of the Hospital for Active Care in Sliven, including the reconstruction and modernization of the Intensive Care Unit, the operating rooms of the Surgery Wards, and the overall renovation of the building. Under the Humanitarian and Civic Assistance (HCA), U.S. troops conducted physical exams, dental and optometry assessments for 1,251 Bulgarians in remote locations, and donated medical consumables, supplies, and equipment worth in excess of $130,000. A total of $170,000 in DOD excess property was made available in FY 2005, which facilitated the distribution of medical supplies and equipment, furnishings, generators, and other property to needy governmental organizations. In response to the summer 2005 flood disasters in Bulgaria, ODC coordinated the receipt and distribution of additional DOD excess property valued at $130,000 to organizations and municipalities in the affected regions. In compliance with the Strategy for graduating Bulgaria from the USG SEED assistance, the social programs will phase out by the end of 2007. Humanitarian assistance will be provided on an as needed basis.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Social Reform and Humanitarian Assistance. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 ? September 30 of the following year. "CY" stands for "calendar year," or January 1 ? December 31.
Performance Indicator: Human Capital Index. Six primary indicators are used to track human capital: per capita income; secondary school enrollment; under five mortality rates; life expectancy; public expenditure in health; and public expenditure in education. These six indicators are used to create an overall human capital index (analyzed in the "Monitoring Country Progress in Eastern Europe and Eurasia" USG/E&E/PO, #9 April 2005, 1 is lowest, 5 is highest). Source: World Bank, World Bank Development Indicators 2004 and UNICEF, Social Monitor 2004. Found online: www.inside.USG.gov/EE/po/mcp.
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FY 2002 Baseline |
FY 2003 Rank |
FY 2004 Target |
FY 2004 Rank |
|
3.2 |
3.2 |
3.5 |
3.2 |
The indicator above demonstrates no improvement in the human capital index since 2003. Still, USG assistance is helping to build the capacity of the National Health Insurance Fund and the Ministry of Health to enable them to better define, design, and cost services and benefits covered by the national health insurance scheme. Laws that have an impact on the financing and provision of health care services have also been enhanced. Reform of the Bulgarian pension system, including the creation of a mandatory private pension system, the establishment of a supplementary voluntary system, and reform of the public pay-as-you-go system resulted in well-designed labor-market, pension, unemployment and related social policies.
Performance Indicator: Unemployment Rate, Annual Average. This indicator contains the percent of the labor force that is without jobs. The FY 2005 rank is based on data collected in FY 2005. Source: Employment Agency of the Ministry of Labor and Social Policy in Bulgaria.
|
FY 2003 Baseline |
FY 2004 Rank |
FY 2005 Target |
FY 2005 Rank |
|
14.3 percent |
12.7 percent |
11.5 percent |
11.7 percent |
The indicator above demonstrates a decline in the unemployment rate. Private sector growth and the development of SMEs continue to result in creation of new jobs and increased opportunities for more people to be actively engaged in the economy. In particular, USG assistance to business and trade development programs promote entrepreneurship, sound business practices, innovation and modernization. USG assistance to micro-lending programs has also encouraged start-up and small businesses. Programs targeting the labor market address the gap between demand and supply of labor by implementing initiatives to improve the employability of young people, and have resulted in decreased youth unemployment.
Security, Regional Stability and Law Enforcement
In FY 2005, Bulgaria made strides in improving the rule of law and modernizing its criminal justice institutions. USG assistance helped Bulgaria adopt significant legislative and regulatory reform measures, strengthen existing institutions, achieve successes in the investigation and prosecution of crime, and realize other improvements to its law enforcement and judicial systems. Driven by EU accession priorities, the legal framework for the functioning of the justice system has undergone important changes, including adoption of a new Penal Procedure code in October 2005. All legal professions now have ethical codes, although there is little evidence of enforcement of these codes. The National Institute of Justice continued to implement a training program for magistrates in close cooperation with foreign donors. For the first time, training courses for court clerks were organized. The justice system, however, continues to suffer from a lack of accountability and inefficiency. Systematic delays in implementing an automated case management system have further exacerbated the issues. The first national ombudsman was elected in April 2005, but the office has yet to become operational. While efforts to combat corruption have had some impact, notably in relation to administrative/petty corruption, the country continues to suffer from substantial organized crime and high-level corruption, which law enforcement and judicial institutions have been unable to effectively counter. Brazen acts of violence related to organized crime occur with frightening regularity. The 2005 Monitoring report of the European Commission found that the high level of organized crime in Bulgaria "so far has not been a priority on the political agenda." The pervasiveness of organized crime and corruption undercuts political and economic reform, lessens public confidence in democratic government, and threatens both national and international security and stability.
Bulgarian organized crime groups also are believed to operate in the United States, especially in drug-related crimes, human smuggling, and prostitution. Branches of Bulgarian businesses associated with organized crime and involved in money laundering are also active in the United States. High-ranking representatives of businesses believed to be extensions of Bulgarian organized crime and individuals reported to have leading positions in the Bulgarian organized crime world consistently seek legal entry into the United States. The impact on the United States from Bulgarian organized crime is not likely to diminish with Bulgaria's accession into the European Union. Assistance in the criminal justice sector will likely remain in our national interest even after graduation from SEED assistance.
U.S. ASSISTANCE PRIORITIES
Rule of law has been, and will continue to be, the USG?s highest priority in Bulgaria. USG efforts have tackled the many justice sector reform issues by applying a comprehensive approach, working at the national and local levels with regional, district, and appellate courts, lawyers, governmental entities, non-governmental organizations, and professional organizations. The USG provided a mix of technical assistance, training, grants, and equipment to improve court administration/case management, the capacity of magistrates and court staff, and to assist with drafting and implementing key laws and regulations to support more effective rule of law. These efforts were complemented by initiatives to strengthen the professional development of attorneys by introducing and implementing new standards and procedures for admissions and discipline, providing sustainable continuing legal education, promoting methods for alternative dispute resolution, and, remedying the lack of practical training that is recognized as a weakness in Bulgarian legal education. USG-funded anti-corruption activities strengthened the GOB?s institutional capacity to prevent corruption and enhance transparency and accountability, especially in the government audit, internal controls, and public procurement areas. In addition, civil-society components promoted anti-corruption public awareness, monitored public administration work, and investigated corruption allegations. The anti-trafficking activity focused on building the capacity of Bulgarian institutions at the national and local levels to identify the associated risks and cope with this problem.
U.S. criminal justice assistance was focused on strengthening Bulgarian criminal justice institutions and improving the capacity of Bulgarian justice sector personnel to investigate and prosecute complex and transnational crime cases, particularly those involving organized crime, public corruption, trafficking in persons, narcotics and other contraband, and intellectual property and cyber crime. In addition, USG assistance improved the technical capacity of Bulgarian institutions to address key financial crimes, and thereby protect against risks to U.S. interests. Efforts focused particularly on money laundering, terrorist financing, financial fraud (including tax fraud and identity theft), counterfeiting, asset tracing, seizure and forfeiture, criminal procedure code reform, and financial institution regulatory controls. A substantial portion of USG assistance to date has focused on drafting legislation to modernize the criminal justice sector. While new measures have been adopted, implementation of key legislation has lagged. USG assistance continues to target implementation issues, such as assistance to central authorities in administration of new legislation and training of justice sector personnel on its application. Bulgaria still needs to develop legislation governing specialized investigative techniques, modernize its penal code and strengthen the recently-passed criminal procedure code. The USG is prepared to assist with such legislative development until SEED funding ends.
USG security-related assistance promotes reform, modernization, and enhanced interoperability of Bulgarian armed forces to take on the challenges of its deepening NATO member status as a security contributor and participant in the Global War on Terror. Nuclear safety assistance targeted upgrading the simulator at Units five and six of Kozloduy Nuclear Power Plant.
PROGRAM PERFORMANCE
Judicial Reform: The USG's major achievement in the justice sector is the creation in 2004 of the National Institute of Justice (NIJ), which is already recognized by magistrates as their training institution and receives state funding. USG assistance improved the NIJ?s administrative capacity, infrastructure, and competence in developing new training modules and programs. The Institute delivered almost 8,500 training days this year and trained all new magistrates, introduced mentor judges, and began delivery of a continuing magistrate training program, thereby contributing to the improved professionalism of the judges. The USG is now covering 20 percent of the cost for training of magistrates, compared to 90 percent in the past. Improvements in both the quality and availability of judicial training help magistrates better manage the dispensation of justice at all levels. The USG continued to build partnerships with 21 Bulgarian courts to address issues of effectiveness, transparency, and independence. Over the past year, the USG provided technical and drafting assistance for important legislative changes, such as amendments to the Judicial System Act and the Attorneys Act. Passage of the Mediation Act in late 2004 and its implementing regulations in early 2005 helped establish the legal basis for court-referred mediation, a national register of mediators, a Code of Ethics, and qualification standards for mediators. Several mediation centers are operational, and many individuals and businesses are starting to opt for mediation, obviating the need to file court proceedings. A reduction in court case backlog is already noticeable as older cases are being referred and successfully mediated.
Performance of other USG-supported justice sector reform programs has been mixed. Strong political will in the country to implement reforms is lacking. Difficult and controversial coordination, particularly with the EU, has been a major stumbling block. The focus of USG-funded justice sector reform programs in the final years will focus on sustainability and attracting future donors. Already, a productive relationship has been developed with the Spanish EU technical twinning partner to provide assistance to the NIJ and the Supreme Judicial Council (SJC). The USG is nonetheless the only donor with a comprehensive ROL program that serves as bridge funding for the large EU projects planned for Bulgaria.
Anti-Corruption: As a way to improve the transparency of Bulgarian public entities, the USG funded the GOB?s state-of-the-art Public Procurement Register and made significant advances in involving business associations in monitoring pubic procurement. Fraud detection and procurement training for auditors continued in FY 2005 with 120 professionals benefiting. A leading business association received a grant to monitor public procurement. In an effort to bring Bulgaria?s internal audit function in-line with EU requirements and international best practices, the USG continued to support targeted ministries in streamlining the work of their internal administrative controls to assure adherence to effective management policies, and fraud prevention and detection. In FY 2005, 245 professionals from government and auditing bodies were trained in Freedom of Information legislation. The USG supported Coalition 2000 in its efforts to monitor corruption trends and promote the appointment of a National Ombudsman and local ombudsmen. During the past two years, our efforts in building transparent and accountable state entities have been greatly supported by the EU, which has energized policy reform efforts of the government.
Law Enforcement: USG assistance helped Bulgaria construct a strong legislative regime to combat human trafficking. Amendments to its criminal code criminalized human trafficking explicitly, and passage of the Anti-Trafficking statute established a National Anti-Trafficking Committee and mandated extensive protection and assistance for trafficking victims. Criminal tax reform efforts fell short, due largely to a lack of political will which prevented the establishment of a criminal enforcement unit. In other areas ? particularly the development of sound investigations and prosecutions of actual financial crimes cases ? results exceeded expectations. USG assistance was instrumental in passage of a comprehensive law for the protection of witnesses, passage of new Asset Forfeiture legislation, and amendments to Bulgaria's Money Laundering Act. Further, with USG assistance, Bulgaria revitalized its Financial Supervision Commission, which has oversight responsibility for insurance and its Gaming Commission, including collaborative anti-money laundering training and inspection activities with the Financial Intelligence Unit. While Bulgaria still needs to increase the number of major cases going to trial and ending in convictions, several human trafficking cases were successfully prosecuted, resulting in prison sentences for defendants. Further, the Prosecution service has now brought several indictments based on money laundering charges. USG assistance also helped improve the management and internal processes of the Research Institute of Forensics Science and Criminology.
Two individual and two group International Visitor Programs targeted the fight against organized crime, cyber-crime, and human trafficking. The result was greater awareness of American practices and closer contacts between American and Bulgarian law enforcement agencies in these areas. Ten Democracy Commission grants supported NGO projects on fighting corruption and human trafficking, building greater awareness and increased action against the problems.
Coordination between the USG and foreign donors on law enforcement is good. A U.S.-led anti-trafficking donors? coordinating group, consisting of Embassies, NGOs, and other international organizations, met quarterly, resulting in numerous joint anti-trafficking undertakings. The USG also worked closely with other EU donors on strengthening the new criminal procedure code and this coordination appears likely to bring the donors in closer collaboration on other aspects of criminal justice reform.
Security: The USG provided the GOB $6.9 million in Foreign Military Financing (FMF) and $1.54 million in International Military Education and Training (IMET). While not all inclusive, FMF facilitated Bulgaria?s acquisition of up-to-date NATO-compatible Communication Information System equipment, defense reform initiatives, and an integrated logistics system. The U.S. Enhanced International Peacekeeping Capabilities (EIPC) program delivered equipment and services worth $1.1 million (1999-2001 U.S. EIPC grant). Upon completion of the equipment installation in January 2006, three Bulgarian Armed Forces? (BUAF) EIPC centers will open to provide peace keeping operations training for the Bulgarian armed forces and train-the-trainer links with the Center for Civil-Military Relations (CCMR) in Monterey, CA. The IMET program ensured continued exposure for the Bulgarian Ministry of Defense (MOD) to Western models of force structure, tactical doctrine, resource management, and the professional military education (PME) of those military and civilian personnel projected to occupy key positions in a defense-reformed environment. A total of 121 Bulgarian officials participated in different training courses under our broad security programs?IMET (53), JTCP (28), Marshall Center (17), and EUCOM Regional Defense Counter-Terrorism Fellowship program (23). Enhanced IMET (E-IMET) facilitated through a Mobile Education Training (MET) the International Defense Acquisition Resource Management Program?s (IDARM) course on Principles of Defense Acquisition and Program Management for 50 Bulgarian MOD acquisition officials/state experts.
In compliance with the strategy for graduating Bulgaria from USG assistance, SEED-funded programs will phase out by the end of 2007. However, law enforcement and security-related assistance through other funding sources may continue after 2007.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Security, Regional Stability and Law Enforcement. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 ? September 30 of the following year. "CY" stands for "calendar year," or January 1 ? December 31.
Performance Indicator: Judicial Framework and Independence Rating. This indicator highlights constitutional reform, human rights protections, criminal code reform, judicial independence, the status of ethnic minority rights, guarantees of equality before the law, treatment of suspects and prisoners, and compliance with judicial decisions. (7-point scale: 1 is the highest, 7 is the lowest). Source: Freedom House, Nations in Transit 2005. This volume covers January through December 2004. Found online: www.freedomhouse.org/research/nattransit.htm.
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
3.50 |
3.25 |
3.0 |
3.25 |
Bulgaria?s rating on judicial framework and independence remains unchanged. Although the framework for an independent judiciary and basic political, human, and civil rights are in place, the manner in which judicial power is constituted and functions creates problems with the enforcement of the legislation. Courts are slow and the prosecution is ineffective, while the Supreme Judicial Council, the body of power in the judiciary, lacks sufficient mechanisms to oversee the performance of judges and prosecutors. While some procedures have improved, the most important changes, including amendments to the Constitution, are still pending. Nevertheless, the USG's major achievement in the justice sector is the creation in 2004 of the National Institute of Justice (NIJ), which is already recognized by magistrates as their training institution and receives state funding. The USG is now covering 20 percent of the cost for training of magistrates, compared to 90 percent in the past.
Performance Indicator: Corruption Perceptions Index (CPI) 2005. This indicator addresses the status of public sector corruption. The CPI ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians. It is a composite index, drawing on corruption related data in expert surveys carried out by a variety of reputable institutions. It reflects the views of business people and analysts from around the world, including experts who are locals in the countries evaluated. The CPI ranges between 10 (highly clean) and 0 (highly corrupt). Source: Transparency International Corruption Perceptions Index 2005. The 2005 rank is based on data collected in 2004. Found online: www.transparency.org.
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CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
3.90 |
4.10 |
4.25 |
4.00 |
Bulgaria experienced backsliding on this indicator, based on data collected in 2004, in part because of its failure to investigate and prosecute high-level officials on public corruption, and implement legislation related to judicial reforms. Bulgaria?s efforts to establish an anti-corruption sub-commission of the National Human Trafficking Commission stalled. On the positive side, Bulgaria did make some progress on eliminating petty corruption, and the National Institute of Justice began training magistrates, improving the professionalism of the judiciary. Improvement of administrative controls continued even in the absence of comprehensive legislation regulating financial management and internal audit. As a way to improve the transparency of Bulgarian public entities, the USG funded the GOB?s state-of-the-art Public Procurement Register and made significant advances in involving business associations in monitoring pubic procurement. The USG also supported Coalition 2000 in its efforts to monitor corruption trends and promote the appointment of a National Ombudsman and local ombudsmen.
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