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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

II. Country Assessment--Romania


U.S. Government Assistance to and Cooperative Activities with Central and Eastern Europe
Bureau of European and Eurasian Affairs
January 2007
Report
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Country Overview

Country Facts

  • Map of RomaniaArea: 91,699 sq mi (237,500 sq km), slightly smaller than Oregon 
  • Population: 22,303,552 (July 2006 est.) 
  • Population Growth Rate: -0.12% (2006 est.) 
  • Life Expectancy: Male 68.14 yrs., Female 75.34 yrs. (2006 est.) 
  • Infant Mortality: 25.5 deaths/1,000 live births 
  • Gross Domestic Product (GDP): $183.6 billion (purchasing power parity, 2005 est.)
  • GDP Per Capita Income: $8,200 (purchasing power parity, 2005 est.) 
  • Real GDP Growth: 4.5% (2005 est.)

Overview of U.S. Government Assistance

In FY 2006, the USG allocated an estimated $43.55 million in assistance to Romania:

  • $ 8.17 million in democratic reform programs; 
  • $ 9.80 million in economic reform programs; 
  • $ 0.97 million in humanitarian programs; 
  • $ 7.72 million in social reform programs; and 
  • $16.88 million in security, regional stability, and law enforcement programs.

FY 2006 Assistance Overview

U.S. STRATEGIC INTERESTS & FOREIGN POLICY PRIORITIES

Romania, the largest country in Southeast Europe, with its industrious and well-educated population and its substantial natural resources, is a key strategic ally for the U.S. in the Global War on Terror. Even before joining the North Atlantic Treaty Organization (NATO), Romania was an active partner in Balkan peacekeeping and had begun to develop "niche" military capabilities needed by the evolving Alliance. The bilateral strategic partnership is a model for the region, with U.S. and Romanian soldiers continuing to serve together in Kosovo, Afghanistan, and Iraq.

The continued healthy growth of the Romanian economy and the increasing democratization of its governance will enable Romania to assume a leadership role in the stability of the Black Sea Region. During FY 2006, the U.S. was Romania's sixth largest foreign investor, but there is still considerable room for growth in the economic and trade relationship. When Romania enters the European Union (EU) on January 1, 2007, it will be the seventh largest country in Europe, sending 35 representatives to the European Parliament.

FOREIGN ASSISTANCE PRIORITIES

In FY 2006, USG assistance addressed the basic issues needed to support Romania's continued democratic and economic transition. These programs facilitated Romania's entry into the EU. USG security assistance focused on modernizing Romania's armed forces and its law enforcement agencies in areas such as trafficking in persons and cyber crime. They contributed to the growth of regional institutions and security. During the year, emergency assistance to ameliorate the impact of more than 100 outbreaks of avian flu in domestic and commercial poultry farms and severe flooding when the Danube broke its banks became a high priority.

OPERATING ENVIRONMENT

Romania welcomed USG help in modernizing its economy and military and strengthening democracy and the rule of law - goals as important for the Romanian people as they are for the Romania's accession to the EU. Romania's economic growth has been impressive during the past six years, consistently above 4% per year. Some progress has been made in strengthening media freedom, civil society, and in combating corruption. Other opportunities for reform have not been seized aggressively and internal bickering within the ruling coalition dominates the news and has slowed reforms. Corruption remains endemic in Romania and serves as the primary barrier to increased foreign investment. Establishing the National Anticorruption Directorate to prosecute high-level corruption was crucial to EU accession, but parliamentarians have since rendered ineffective other legislation that aimed to curb corruption through audits of official's assets declarations.

COUNTRY PERFORMANCE MEASURES

Romanian Democratic Reform

The "radar" or "spider web" graphs below illustrate Romania's democratic performance during FY 2005. 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 2005 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. 10 (August 2006). Found online at: http://inside.usaid.gov/EE/po/mcp.html.

Graph shows Romanian Democratic Reform:  Average of Romania and Bulgaria-2002, corruption, 2.8; electoral process, 3.8; civil society, 4.2; independent media, 3.0; governance/public admin, 3.5; rule of law, 3.0

The graph above shows Romania's democratic reform scores in 2005* (the gray shaded area) compared with the average of Romania's and Bulgaria's democratic reform scores in 2002 (the bold line) when they were invited to join NATO and receive favorable indications of future EU membership.

*Actual 2006 scores not yet available.

Graph shows Romanian Democratic Reform: 1999, corruption, 2.8; electoral process, 3.8; civil society, 4.2; independent media, 3.0; governance/public admin, 3.5; rule of law, 3.0
The graph above shows Romania's democratic reform scores in 2005* (the gray shaded area) compared with its democratic reform scores in 1999.

*Actual 2006 scores not yet available.

Romanian Economic Reform

The "radar" or "spider web" graphs below illustrate Albania's economic performance during 2005. 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 2005 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. 10 (August 2006). Found online at: http://inside.usaid.gov/EE/po/mcp.html.

Graph shows Romanian Economic Reform: Average of Romania and Bulgaria-2002, external debt percent GDP, 4.0; private sector share, 4.0; share of employment in SMEs, 1.5; export share of GDP, 1.5; FDI pc cumulative, 3.0; GDP as percent 1989 GDP, 3.5; 3yr avg inflation, 2.5

The graph above shows Romania's economic reform scores in 2005* (the gray shaded area) compared with the average of Romania's and Bulgaria's economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2006 scores not yet available.

Graph shows Romanian Economic Reform: 1999, external debt percent GDP, 4.0; private sector share, 4.0; export share of GDP, 1.5; FDI pc cumulative, 3.0; GDP as percent 1989 GDP, 3.5; 3yr avg inflation, 2.5

The graph above shows Romania's economic reform scores in 2005* (the gray shaded area) compared with its economic reform scores in 1999.

*Actual 2006 scores not yet available.

FY 2006 Country Program Performance

Governing Justly and Democratically

The final European Commission (EC) Monitoring Report on Romania, issued in September 2006, states that Romania's fight against high-level corruption and the reform of its justice system have yielded tangible results. Though room for improvement remains in some areas, the EC found that sufficient progress had been achieved for EU accession.

While civil society in Romania has grown stronger, it still is not self-sustaining. In particular, the future of civic watchdog groups is not assured because they have had difficulty raising money and have little access to public funding. Corporate philanthropy, while growing steadily, is still more the exception than the rule. Furthermore, there is not a full range of non-governmental organizations (NGOs) effectively representing the diversity of public interests.

Many observers believe that the "party list" system, through which the members of parliament and county and local councilors are elected, tends to diminish the communication between elected representatives and their constituents and contributes to the weak accountability of the public sector. The central government continues to transfer responsibility for basic services to local governments without providing adequate financial resources because it lacks the capacity to assess the financial impact of decentralization.

U.S. ASSISTANCE PRIORITIES

To address these issues, USG assistance priorities in FY 2006 were to build on successful projects in advocacy and citizen participation, political party strengthening, decentralization, judicial reform, parliamentary strengthening, media education, and assistance to the Office of the President. These activities were intended to increase citizen participation in local decisions and improve the responsiveness and transparency of local and national politicians. By helping civil society become more financially and organizationally independent by mobilizing local and national support, USG assistance contributed to increasing civil society sustainability, a fundamental component of any democracy. Promotion of a free and independent media in Romania remains a key USG goal. USG assistance programs were also designed to increase ways in which Romanian youth could be more actively involved in civic life and to improve the legal framework pertaining to domestic violence and victim assistance, addressing a serious, but reluctantly acknowledged, problem in Romania.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

In FY 2006, the USG provided assistance to public policy and watchdog organizations in Romania. Programs helped NGOs strengthen their sustainability, improve their advocacy and outreach capacity, and establish partnerships with private groups and the Government of Romania (GOR). They also helped intermediary support organizations expand and provide new programs and services to their member NGOs.

In response to the need for improved communication among elected officials, civil society and the public, USG assistance increased constituent outreach, improved citizen advocacy, and strengthened the representation of women in parliament.

To support local government reform, USG assistance focused on improving the legislative framework that affects all local governments, disseminating good governance practices and strengthening the capacity of local government associations to promote reforms. Beneficiaries included the Ministry of Administration and Interior, the Ministry of Finance, four target municipalitie, and two national associations of local governments.

To address human rights issues, USG assistance facilitated cooperation between government agencies and NGOs dealing with domestic violence. USG assistance improved domestic violence legislation and its application. Beneficiaries included the National Agency for Family Protection, Ministry of Justice, Ministry of Labor, Social Solidarity and Family, National Institute of Magistrates, National School of Clerks, and National Coalition to Combat Domestic Violence, as well as judges and court staff assigned to domestic violence cases.

To promote media freedom and independence, USG assistance promoted media monitoring and professional ethics, investigative journalism, and the economic independence of the media. It also provided professional training in the U.S. to up-and-coming journalists.

OUTPUTS

The USG trained more than 220 civil society representatives in overall project design and problem-solving, strategic and business planning, exploring and understanding financial strategic choices, influencing public policies, implementing advocacy strategies and tactics, conducting monitoring and oversight of public institutions, and engaging effectively in public budget debates. Twenty-six NGOs received grants for 36 projects to increase their sustainability while addressing issues such as the accountability of local and national politicians, citizen participation in local decisions, fund raising, media responsibility, social and health reforms, combating domestic violence, the rights of people with mental disabilities, access of Roma to education, corporate social responsibility, and community resource mobilization.

USG programs also trained approximately 1,200 emerging leaders throughout Romania to assist political parties in achieving democratic reform and building local capacity to reach out to civil society on issues of systemic reform. The staffs of at least 160 local party offices were interviewed in order to better understand their constituents' interests. Follow-on assistance helped political leaders represent the interests of citizens through political engagement on an issue-by-issue basis. It also made party decisions more decentralized and transparent, and ensured that civic groups formed an integral part of the policy process.

USG assistance in constituent outreach took a major step by developing the guidebook Best Practice in Constituent Relations: A Guide for MPs and Parliamentary Staff, as well as constituent case tracking software. These served as "how-to" guides for members of parliament and their staff members and helped smaller offices keep track of and expedite constituent requests.

The USG continued to promote the teaching of civic education, as teachers trained by the USG in previous years extended training into the elementary schools and published additional training materials for teachers. U.S. support permitted civics education trainers to conduct regional conferences and promote student government projects in high schools. In addition, assistance supported the expansion of debate clubs in schools.

To improve media freedom and encourage media responsibility and independence, the USG funded a large media monitoring project designed to encourage accurate reporting. USG assistance also supported projects to improve the skills of journalists and media managers that trained 75 journalists from around the country.

PROGRAM PERFORMANCE/IMPACT

Through several years of democracy promotion assistance, the USG has built a substantial legacy in the sector. As a result of USG assistance, decentralization of basic service provision has advanced significantly; several municipalities have taken loans from commercial banks to finance services, local government associations have advocated successfully for enhanced financial and administrative autonomy for local communities. The local government legislation will soon include a separate chapter on municipal insolvency. Four cities have developed good governance practices in areas such as project management, solid waste management, municipal finance, performance measurement, and public procurement. Using the local government associations as dissemination vehicles, these models are available to additional municipalities throughout the country.

In collaboration with both the NGOs and government counterparts, USG assistance helped develop new legislation regarding domestic violence. The draft includes clear definitions of terms and concepts as well as an increased focus on victim protection, in line with international norms.

USG programs helped to ensure that civic watchdog groups will continue their work after USG transition assistance has phased out, which occurred at the end of FY 2006. Through partnership grants and training in advocacy, strategic plans, and sound management principles, NGO colleagues now have skills that will ensure their sustainability. In addition, the USG helped establish the Resource Center for Public Participation, which will continue to support civic watch-dog NGOs.

More than 60 judges attended USG-sponsored seminars to increase their awareness of domestic violence issues and their understanding of the responsibilities they have in implementing the laws. Judges dealing with domestic violence cases now more fully understand the legal framework and are able to adjudicate fairly. They are also more sensitive to the human aspects related to this issue.

Support for civic education culminated in a decision by the Ministry of Education to make civics education a curriculum requirement for the 11th grade, ensuring that students will be trained in the practice of basic democratic principles before they graduate.

The 2004 change in the GOR and USG assistance efforts to promote media freedom since led to a significant decline in government efforts to manage and control the media.

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 Governing Justly and Democratically. 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: NGO Sustainability Index 2005. Seven different dimensions of the NGO sector are analyzed each year in the NGO Sustainability Index: legal environment, organizational capacity, financial viability, advocacy, service provision, NGO infrastructure, and public image. The NGO Sustainability Index uses a seven-point scale, to facilitate comparisons to the Freedom House indices, with 7 indicating a low or poor level of development and 1 indicating a very advanced NGO sector. Source: USAID, the 2005 NGO Sustainability Index for Central and Eastern Europe and Eurasia. Found on line at http://www.usaid.gov/locations/europe_eurasia/dem_gov/ngoindex/2005/.

CY 2003 Baseline

CY 2004 Rank

CY 2005 Rank

CY 2006 Target

3.8

3.7

3.6

3.5



Impact of U.S. Assistance on the Above Indicator: USG assistance contributed to the gradual improvement of NGO sustainability through training, technical assistance, and sub-grants. The USG helped NGOs develop their business plans, strengthen their boards of directors, develop their constituent bases, recruit and maintain volunteers, and launch new public and corporate fundraising activities. The USG also helped local NGOs advocate reforms and monitor elected officials, stimulating dialogue between NGOs and local party branches on community issues.

Performance Indicator: Media Sustainability Index 2005. The MSI assesses five "objectives" in shaping a successful media system: free speech; professional journalism; plurality of news sources; business management; supporting institutions. The MSI uses a four-point scale, with a 0-1 range indicating unsustainable, anti-free press, a 1-2 range indicating an unsustainable mixed system, a 2-3 range indicating near sustainability, and a 3-4 range indicating a sustainable, free media environment. Source: USAID/IREX, Media Sustainability Index 2005. CY 2005 rank based on data collected in CY 2005. Found online: www.irex.org/msi/index.asp .

CY 2003 Baseline

CY 2004 Rank

CY 2005 Rank

CY 2006 Target

2.35

2.24

2.56

2.75



Impact of U.S. Assistance on the Above Indicator: Combined with the 2004 change in the GOR, USG support contributed to improvement in media freedom and independence in Romania. U.S. and Western programs in support of a free media have reinforced domestic efforts to discourage government interference in the media.

Economic Growth

Since 2000, Romania has made many key economic reforms. As a result, the economy has completed seven years of solid growth, with more than a 6% growth rate expected in 2006. The rate of inflation has decreased from 41% in 2000 to an expected less than 6.0%. Privatization of major portions of the energy industry continued in 2006.

Improvements in macroeconomic performance contributed to a decline in poverty. However, one in four Romanians still lives below the poverty line. Per capita Gross Domestic Product (GDP) reached $4,500, but remained only one third of the EU average. Romania's ability to withstand competitive pressures after EU accession remains a concern.

In 2005, Romania attracted $6.4 billion in foreign investment, thus receiving half of all foreign investment in the region. The positive trend continued into 2006, with statistics showing a 50% year-to-year growth of foreign investment. However, with approximately $1,100 of foreign investment per person, Romania still lags behind other countries in the region (compared with $1,350 in Bulgaria and $6,300 in Hungary). Corruption, bureaucratic inefficiency, and an uneven playing field continue to limit both domestic and international investment.

U.S. ASSISTANCE PRIORITIES

Privatization of the Romanian economy is in its final stages. Economic reforms must continue as Romania enters the EU in 2007, and the country will have to increase its competitiveness if it is to prosper in the EU market. The key will be the GOR's ability to administer its judicial and regulatory systems flexibly so that a free market develops naturally, free of undue government red tape and corruption. Also of concern is the GOR's limited capacity to ensure proper fiscal oversight of complex EU-funded programs.

Improving the business climate to attract more U.S. and foreign investors is a key priority. Necessary reforms include elimination of burdensome license and permit requirements, ensuring contract sanctity, reform of the labor code, lower labor taxes, and stability of commercial laws. Improved protection of intellectual property, increased transparency in economic and legislative decisions, and serious measures to counter corruption are also needed. Furthermore, with nearly half of Romania's population living in rural areas and more than a third of the labor force employed in agriculture, improving productivity and developing alternative employment in rural areas remain high priorities.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

In FY 2006, USG programs supported financial markets, small- and medium-sized enterprises (SMEs), agriculture productivity, energy efficiency, and environmental safeguards. Assistance worked to reform the chronically under-funded state pension system, and supported the drafting of legislation and development of the regulatory commission for a private pension system. USG programs supported SMEs by improving their legal and regulatory environment, increasing competitiveness in information technology and tourism, and expanding access to credit.

U.S. agricultural advisors trained agribusiness owners and employees in the wine, honey, tourism, and processed meat industries to improve the quality of their products, strengthen their organizations, and increase their ability to access EU development funds. USG assistance promoted biotechnology, a powerful tool for the sustainable development of agriculture and the food industry. It also provided advisors and training for the GOR institutions monitoring avian influenza to improve their ability to control outbreaks and minimize economic losses to poultry farmers.

The USG supported further reforms in the energy industry and implementation of a social safety net to ameliorate the impact of rapidly rising energy prices on the poor. Assistance also increased Romania's energy competitiveness and capacity to play an important role in the regional energy market.

USG initiatives continued to foster improved management of the water sector through implementation of pollution prevention and environmental management systems in small industrial plants and local water utilities. Also, the USG provided support to the Ministry of Environment and Water Management to test and demonstrate a national water management system that will be used as a water allocation and emergency management tool.

The USG also provided emergency assistance and supplies to local authorities and displaced people following the serious flooding of the Danube River.

OUTPUTS

USG assistance helped design secondary legislation for private pensions, provided on-the-job training for 25 staff of the new private pension commission, and organized a study tour for commission staff to Sweden and Lithuania so they could learn from the experiences of more advanced EU private pension systems.

USG assistance resulted in the improvement of seven laws and regulations that assist small businesses: the Fiscal Code, Labor Code, Company Law, Enterprise Registration Law, Non-Banking Financial Institutions Law, Silent Approval Act, and the Employer's Law. It supported 17 round tables focusing on small business issues. A credit program leveraged an additional $3.7 million from new sources and disbursed nearly 2,600 micro-loans. The USG helped establish Express Finance, an independent development finance institution that will be an important legacy in Romania. To improve competitiveness, USG programs completed 79 tourism projects, involving 98 partner firms, directly benefiting 2,620 individuals, 283 artisans, 824 businesses, and 28 NGOs. In information technology, the program assisted 147 companies, trained 310 individuals, and helped two American firms to invest in Romania.

USG programs sponsored 15 wineries on five marketing trips to Western Europe and Russia. The USG also trained 164 beekeepers, of which 120 are certified organic producers. The USG helped five international agribusinesses analyze Romanian investment opportunities that led to new or increased investments, and trained 580 agribusiness staff to improve production quality and comply with EU standards and regulations. In tourism, US assistance helped 445 Romanian tourism professionals improve their rural tourism services. These programs hosted 37 foreign journalists and tour operators, leading to the development of 21 new tourism packages sold on the international and domestic markets.

The USG contributed to the development of food safety regulations and practices that meet EU requirements. USG programs worked with GOR staff to mitigate the effects of avian influenza. Advisors worked with the Romanian National Authority for Sanitary, Veterinary, and Food Safety to reform its management structure and improve the monitoring of the sanitary and veterinary practices of various industries. The USG also supported the creation of a new biotechnology association.

USG assistance to the Ministry of Environment continued to increase its capacity to manage the impact of floods. As a result, the Ministry finalized its flood management strategy and has submitted for public debate the river basin templates for flood intervention plans. USG environmental assistance resulted in six feasibility studies that attracted $72 million to rehabilitate water infrastructure in small towns in Bihor County.
USG programs organized six workshops where 180 stakeholders from the energy sector discussed measures to increase energy efficiency in municipalities and reduce the impact of the energy prices on low-income inhabitants. The energy program also supported the organization of an important conference on energy cooperation in the Black Sea Region.

The USG provided clothing, shoes, mattresses, cooking stoves, and gas tanks to hundreds of families, totaling 3,940 people, who were driven from their homes by the Danube floods.

PROGRAM PERFORMANCE/IMPACT

USG assistance resulted in a properly trained and professional regulator to supervise the Romanian private pension system that will support about 4.5 million citizens. Since the state pension system is chronically under-funded and inadequate, the private pension system is critical for the long-term social welfare of Romania's workers. In addition, private pension contributions will largely be invested through the domestic capital markets, which will provide critically needed capital for investment and will help the GOR improve social services and programs.

USG programs helped improve the business environment in the areas of fiscal reform, corporate governance, labor reform, licensing, access to finance, starting a business, and micro-lending activity. The reforms will save small businesses an estimated $150 million in taxes in 2007. They will also continue to encourage firm creation, thus increasing the tax base and creating jobs. Since its inception, a USG-funded micro-lending program has disbursed $42 million to Romanian small businesses, which have created or sustained over 38,600 jobs. A tourism activity introduced a certification program for handicraft authenticity, created regional destination branding initiatives in Maramures, Brasov, and Sibiu counties, completed a wide variety of cultural tourism products, and developed local capacity of partners and stakeholders. USG information technology (IT) assistance introduced IT certification programs, which will contribute to Romanian companies' international recognition, and supported growth of Romanian IT companies with total employment of 42,800.

As a result of direct USG agribusiness assistance, partners increased sales by $18.3 million and invested an additional $11.03 million in upgrading and expanding their operations. USG programs also helped with the development of financial packages for $12.5 million of new farm equipment, beekeeping operations, rural tourism businesses, food processing equipment, and many others. Five Romanian companies received Food Safety Inspection Service clearances to export to the U.S. as a result of USG assistance.

A USG energy program continued to support legal assistance by contributing to the amendment of important laws on thermal rehabilitation and electricity. The first law was approved by the parliament, while the second was adopted before the end of 2006. As a result of USG support for environmental activities, the GOR approved the five-year implementation of a $180 million national water management project.

The flood program helped communities in 11 counties recover from extensive flooding and revitalize their economic and social life. The USG agribusiness program, using corn seed partially donated by two American companies, assisted 2,000 farmers whose lands were flooded by the Danube to plant 3,000 hectares. They harvested more than 20 metric tons of corn, which helped to restore their farms and livelihoods.

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 Growth. 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: GDP Real Growth Rate. GDP growth on an annual basis adjusted for inflation and expressed as a percentage. Source: Romanian National Institute of Statistics (
www.insse.ro).

CY 2003 Baseline

CY 2004 Percentage

CY 2005 Percentage

CY 2006 Target

5.2%

8.4%

4.5%

6.5%


Impact of U.S. Assistance on the Above Indicator: Romania has continued to experience solid economic growth and increased foreign direct investment. As part of this, USG assistance helped strengthen Romania's business environment by supporting fiscal reform, corporate governance, labor reform, licensing, access to finance, small business development, and micro-lending.

Performance Indicator: Private Sector Share of GDP. Private sector share in GDP represents rough European Bank for Reconstruction and Development (EBRD) estimates, based on available statistics from both official and unofficial sources. The underlying concept of private sector value added includes income generated by the activity of private registered companies, as well as by the private entities engaged in informal activity in those cases where reliable information on informal activity is available. Source: EBRD Transition Report 2006. The data that make up this indicator are as of September 2006. Found online:
http://ppc.usaid.gov/esds/sources.cfm.

FY 2003 Baseline

FY 2004 Percentage

FY 2005 Percentage

FY 2006 Target

65%

70%

70%

71%



Impact of U.S. Assistance on the Above Indicator: Private sector share of GDP continued to increase in Romania. USG economic growth programs contributed to this by strengthening competitiveness in key industries, laws and regulations that enable small business development, and access to credit.

Investing in People

Romania's women's health care and child welfare systems have improved during the last decade. However, much remains to be done to consolidate gains and ensure their long-term success.

Romania's infant mortality, under-five mortality, and maternal mortality rates have all decreased since the early 1990s. Romania also made significant strides in improving reproductive health and family planning services. During the last five years, the GOR's budget for family planning has increased 20 fold from $100,000 in 2001 to nearly $2 million in 2006.

Child welfare remains a highly visible and controversial issue. While a few outspoken European parliamentarians portrayed Romania's child welfare system as a great success, independent international observers continued to report of children and adolescents living in poor institutional conditions. Despite these extremes, the number of children in Romanian institutions continued to fall, and more children were placed in foster care.

More than 100 avian influenza outbreaks in domestic and commercial poultry farms occurred in the Danube Delta and central Romania in FY 2006. The GOR responded quickly and effectively by procuring additional influenza seasonal vaccines, and developing education campaigns for the general public, especially in rural areas.

U.S. ASSISTANCE PRIORITIES

A USG assistance priority in this sector is to continue to help improve the health and welfare of Romania's women and children. Health programs increased the use of modern family planning methods, enhanced prenatal and postnatal care, combated discrimination towards people living with HIV/AIDS, and helped family planning NGOs to become self-sustaining. Together with the Romanian Orthodox Church and the Ministry of Education, the USG created a Global Development Alliance to raise awareness and change attitudes about HIV/AIDS and family violence. It also supported the GOR's emergency avian influenza programs.

USG assistance in child welfare focused on the continued reform of the child welfare system, as well as increasing the sustainability of child welfare NGOs. Programs identified alternative funding streams to continue child welfare services, and aid to children and adults with disabilities. The USG played a leading role in developing services for these groups and championed the Special Olympics movement in Romania.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

The USG helped to provide efficient and comprehensive reproductive health services in primary health clinics, and continued to support the use of modern family planning methods while improving safe motherhood practices. USG assistance prevented sexually transmitted infections (including HIV/AIDS), supported the early detection of breast and cervical cancer, and helped prevent family violence.

Romania's unique HIV/AIDS profile, with an unusually high number of children infected in the early 1990s, required creative interventions. To address this environment, the USG funded major awareness campaigns and education programs to reduce HIV/AIDS transmission and ensure that people living with HIV/AIDS were valued and integrated into society. The USG provided technical assistance to the Ministry of Health to define legislation to improve the quality of primary health care, and supported a streamlining of medical procedures to provide better services for the general public.

The USG partnered with the GOR to create a legislatively-rooted system for out-sourcing child welfare and social services to local NGOs. To ensure the long-term sustainability of these NGOs, the USG increased support to the United Way in Romania. In addition, Special Olympics Romania (SOR) expanded, becoming renowned world-wide for its rapid development. SOR is changing public attitudes regarding the disabled. USG-sponsored NGOs from different regions continued to provide essential services to disadvantaged children. Programs strengthened NGO capacity to identify opportunities, adapt services to meet client needs, manage costs, improve quality, form strategic partnerships, and attract community and financial support.

OUTPUTS

In FY 2006, USG-funded partners trained 1,150 family doctors in family planning. Participant doctors have trained more than 5,120 family planning providers since USG assistance began in 2001. In addition, they trained 2,500 general practitioners in prenatal care and 120 Roma health mediators in reproductive health. A six-part TV mini-series, "Real Women," broadcast messages on reproductive health and family planning, receiving two coveted international awards for its effectiveness and production quality. In 2006, 465 priests and 408 teachers of religion were trained in HIV/AIDS and family violence issues, 48 youth leaders were trained as peer-counselors, and 270 young people participated in social community services. In addition, 18 youth clubs were established with the support of USG assistance to promote positive values and behavior among youth and encourage their participation in community life.

Following the first outbreak of avian influenza in early FY 2006, the USG supported the Ministry of Health in developing and implementing a public education campaign. Messages included basic information on avian influenza, and how to prevent its spread to people. The campaign produced hundreds of thousands of flyers, posters, and stickers and distributed them to all counties, with a special emphasis on rural residents most at risk of becoming infected. USG assistance bought laboratory equipment to detect avian influenza in humans for four regional infectious disease centers in order to increase the GOR's capacity to respond and control any human influenza pandemic. It supported the preparation of a National Preparedness Plan and provided training for epidemiologists and microbiologists responsible for surveillance.

USG assistance worked to develop strategies to sustain NGOs working with child welfare. Twenty-five NGOs were trained in ways to ensure their sustainability. The USG continued to support 22 NGOs working in partnership with public authorities to create child welfare services that help integrate institutionalized children into communities. A corporate social responsibility program resulted in nearly a doubling of the number of supporting local companies, increasing from 15 in 2005 to 27 in 2006. Special Olympics Romania spread its activities throughout the country by training 690 coaches and 1,200 volunteers to help organize sports events. Moreover, SOR helped several schools for disabled children establish partnerships with regular schools to run joint programs and support each other. SOR also implemented training which is designed to reduce discrimination against people with disabilities.

PROGRAM PERFORMANCE/IMPACT

The positive impact of USG-funded family planning activities continued. In FY 2006, more than 40% of women used modern contraceptives that were illegal only 15 years ago, and women had fewer abortions as a means to limit their family size. The number of contraceptives supplied free of charge by project trained doctors continued to increase from 272,000 in 2004, to 294,000 in 2006.

In 2006, the GOR recognized the USG-sponsored National Coalition of 30 NGOs fighting domestic violence, enabling it to advocate and lobby more effectively for reforms.

The number of children living in institutions continued to decrease, from 21,000 in October 2005 to 20,200 one year later. More than half of these children live in family-style residential units, but the remainder still live in dismal dormitory institutions. The number of children in foster care increased from 16,800 in June 2005 to 19,300 the following year. Twenty-two USG-funded grants created or improved more than 50 child welfare services, assisting 19,000 children by reintegrating them into communities, thus contributing to the decrease in the number of children in institutions. Over 90% of USG-funded services are sustainable and most of them already receive funding from local or county authorities. The system of contracting social services, developed with USG assistance, enabled NGOs to provide their services on behalf of local and county councils. Five out of 41 counties have signed agreements and started pilot contracts by the end of 2006.

In 2006, Special Olympics Romania became a partner of county authorities that fund sporting events for people with mental disabilities. This was an important step forward towards the sustainability of the Special Olympics movement in Romania. During 2006, more than 6,700 SOR athletes were involved in programs, and more than 18,000 athletes with mental disabilities have participated in SOR events since August 2004. Moreover, Romania, along with Germany, now represents Europe in the SO International Global Messengers.

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 Investing in People. 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: Number of children living in dormitory-type, state-run institutions. The National Authority for the Protection of the Children's Rights collects this data using a national database which is updated on a daily basis. Data are recorded by social workers at the county level, and are made available to the general public on a quarterly basis on http://www.copii.ro/im/20060601_statistica.xls .

FY 2001 Baseline

FY 2005 Actual

FY 2006 Actual

FY 2007 Target

48,000

21,000

20,200

19,000


Impact of U.S. Assistance on the Above Indicator: The data indicate that from FY 2005 to FY 2006, 800 fewer children lived in dormitory-type, state-run institutions. The USG funded alternative services helped prevent the institutionalization of children and helped other children be reintegrated into their communities through family reunification, placement with extended families, adoption, and life skills programs.

Performance Indicator: Couple Years of Contraceptive Protection. This indicator measures the contraceptive supplies dispensed by doctors trained with USG funding. For FY 2006 the target was reached. This data is collected by the Ministry of Health from local public health authorities.

FY 2001 Baseline

FY 2005 Actual

FY 2006 Actual

FY 2007 Target

66,000

283,000

294,000

325,000



Impact of U.S. Assistance on the Above Indicator: USG funded training activities for family doctors, donated contraceptives, and worked with the Ministry of Health to ensure that the family planning program is funded by the state budget. As a result of these efforts, more than 80% of rural communities benefited from a trained general practitioner who provides family planning services and dispenses contraceptives free of charge.

Peace and Security

Romania's NATO membership and strategic location in the Black Sea region and in the Balkans make it a vital U.S. ally. Romania is an active partner for stability in the Balkans, with troops serving in Kosovo and Bosnia. It plays a key role in the Global War on Terror (GWOT) and its troops serve side-by-side with U.S. forces in Iraq and in Afghanistan. In early FY 2006 U.S. Secretary of State Condoleezza Rice and the Romanian foreign minister signed an agreement that provides access for U.S. forces to a number of Romanian military facilities. Use of these facilities helps U.S. forces deploy more rapidly to confront 21st century security challenges and provides enhanced training opportunities in the region for U.S., Romanian and other forces.

U.S. ASSISTANCE PRIORITIES

The USG helped to restructure and modernize Romania's military so that it can contribute more effectively to NATO's evolving missions. The USG assisted the GOR to improve cooperation with neighboring states, particularly those along NATO's new frontier to the north and east. Improved cooperation worked to resolve outstanding disputes and led to increased success against cross-border criminal activity.

USG priorities were to improve Romanian law enforcement and regional intergovernmental cooperation in the areas of organized crime, cyber-crime, human trafficking, and counter narcotics. Fighting corruption and advancing the rule of law in Romania supported U.S. national interest in the Black Sea Region. Programs also worked to strengthening the capacities of the regional Southeast European Cooperative Initiative (SECI) Center and the Southeastern Europe Prosecutor's Advisory Group (SEEPAG) as regional organizations.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

America's security interests require that Romania strengthen its anti-terrorism capabilities. The USG trained police and prosecutors in new investigative techniques and in tracing money flows. USG assistance also worked to build the capacity of the SECI Center and SEEPAG to improve coordination among law enforcement agencies, both within Romania and in the Black Sea region, and to establish interagency coordination to reduce organized crime, cyber-crime, illegal traffic in persons (TIP), conventional weapons, weapons of mass destruction, and narcotics.

USG funds were used for continued assistance to cyber crime and anti-narcotics elements in Romania's General Directorate for Combating Organized Crime and Drugs (DGCCO). With an increase in caseload, the number of officers fighting these crimes rose, increasing the demand for assistance. Additionally, the National Police continued to move from centralized decision making to a decentralized approach. To support this, the USG funded a training needs assessment and established a partnership between Romanian institutions and a U.S. law enforcement agency.

The USG assisted Romanian agencies as they drafted and implemented new criminal procedures. Assistance supported improved pre-trial services and increased access of victims to the courts. Donations of U.S. equipment increased the capacity of local task forces to conduct undercover investigations. The USG promoted institutional development to encourage the cooperation of TIP victims with the criminal justice system. USG assistance also facilitated the creation of a criminal procedure working group to identify best practices and advise Romanian officials on proposed amendments to the criminal code. A USG-funded alternate dispute resolution program assisted the overburdened court system by providing an accepted legal alternative.

OUTPUTS

USG military assistance included advising senior Ministry of Defense officials regarding the purchase and upgrading of five C-130 aircraft, improved surveillance and secure communications in the Black Sea region, the running of a simulation center to reinforce U.S. and NATO doctrine prior to troop deployments, and the purchase of critical equipment and training to support the deployment of Romanian troops with American and NATO forces. The USG continued to develop Romania's niche capability by providing anti-terrorism training to improve special forces and intelligence capabilities. The USG supported the Romanian Non-Commissioned Officer (NCO) Academy to develop the professional officer and NCO corps. Assistance funded the attendance of 142 officers and NCOs at U.S. military educational and training institutions.

The USG provided assistance to the SECI Center task forces that coordinated and facilitated more than 130 arrests in regional operations involving trafficking of persons, narcotics, vehicles, and cigarettes. The Center was used to exchange law enforcement information throughout the region at least 4,000 times during the year. SECI also pioneered the use of video conferencing in trafficked victims' testimony and by the end of FY 2006 was well on the way to creating the first ever law enforcement teleconferencing network. The USG continued to assist the creation of a technical support service within the General Prosecutor's task force to assist in undercover investigations. Consistent with regional strategies promoted through the Southeast European Prosecutorial Advisory Group, the USG supported the cross-border relocation of protected witnesses.

The USG provided training in organized crime investigation, computer forensics, public corruption, forensic chemistry, cyber crime, case management, and undercover operations. Both police and prosecutors were included in these courses in order to increase the exchange of information and prosecutors' understanding of computer crimes. The USG continued to provide the General Inspectorate of Romanian Police "Anti-Drug Unit" with equipment that was used in more than 100 police operations and increased their success rate.

Romania remains on the U.S. watch list for intellectual property rights (IPR) infringements. A USG program supported seminars in Romania on cyber crime that incorporated instruction on IPR occurring over the Internet. The USG also promoted the creation of a specialized unit to prosecute IPR offenses and further cooperation between governmental and non-governmental institutions involved in IPR enforcement.

Policy-making on TIP shifted from an Inter-Ministerial Group to a new National Anti-Trafficking Agency. USG-provided advisors worked with the new agency to incorporate new victims' programs into the national strategy. To complement this program, the USG donated video testimony equipment to five courts of appeal to assist in prosecuting TIP cases and other cases with vulnerable victims.

The USG continued to promote alternative dispute resolution. In FY 2006, 120 additional mediators were trained in the Craiova Mediation Center, bringing the total to 360. Assistance also supported regional awareness seminars targeted for the public and the legal community, especially judges and local bar associations.

PROGRAM PERFORMANCE/IMPACT

U.S. assistance has helped the GOR to implement military reforms to improve Romanian-U.S. interoperability and meet NATO force goals. USG law enforcement training and equipment has resulted in Romania's increased capacity to investigate cyber crime and counter narcotics.

Due in large measure USG military financing assistance, Romania continued to make significant strides in transforming its military and developing an expeditionary capability to directly support the U.S. in the GWOT. Romania owns a fleet of five C‑130 aircraft and can deploy and support its own forces in Afghanistan and Iraq. Through USG programs, Romania developed its special forces and intelligence niche capabilities. The USG supported the training and equipping of approximately 2,000 Romanian troops currently deployed in Iraq, Afghanistan, and Kosovo. With the assistance of USG, Romania enhanced its capability to monitor the Black Sea region and securely share information with the U.S., significantly improving U.S. knowledge of events in Southeastern Europe.

The USG anti-corruption strategy dovetailed with the initiatives of the Basescu government. The USG donated equipment to the National Anti-Corruption Department that brought it up to standards similar to U.S. task forces. These donations resulted in the creation of a sustainable technical support service to assist in undercover investigations of public corruption. This service is being expanded to include a series of territorial offices and has resulted in significant investigations of bribery by local officials and judicial officers. The USG also facilitated and improved the bi-lateral relationship between the Romanian and U.S. financial intelligence units (FIU). It continued to increase the profile of the FIU among Romanian institutions and supported the adoption of legislation expanding the FIU's jurisdiction over non-financial institutions.

Statistics from the General Inspectorate of Romanian Police reveal that 153 cyber crime cases were investigated jointly by Romanian and USG authorities in 2005. In 2006, that number increased to 166. The General Directorate for Combating Organized Crime, under which the cyber unit is organized, advised that 80% of internet fraud cases investigated by the police involve American businesses or individuals. USG-GOR inter-governmental cooperation reached a new high in FY 2006. Indictments for IPR offenses have doubled from 2005.

The USG's work with alternative dispute resolution led to the recognition of mediation as a legal profession in Romania. This decision will ensure the use of this mechanism more widely throughout the justice system.

FY 2006 Funds Budgeted for U.S. Government Assistance to Romania [PDF format]



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