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U.S. Department of State

Diplomacy in Action

FY 2007 U.S. Assistance to Eurasia


Bureau of European and Eurasian Affairs
FY 2007 U.S. Government Assistance to and Cooperative Activities with Eurasia
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Country Overview

U.S. FOREIGN POLICY AND FOREIGN ASSISTANCE OBJECTIVES & PRIORITIES

Ukraine’s strategic location as a large state on the eastern border of the North Atlantic Treaty Organization (NATO) and the European Union (EU) makes it a linchpin of stability for Eastern Europe. With parliamentary elections in March 2006 and September 2007 judged by observers to be up to international standards, Ukraine has advanced toward becoming a model of democratic transition for the region– a model that is in the U.S. interest to support.

The U.S. Government (USG) places a priority on facilitating Ukraine’s continuing transformation to a democratic society with a market-based economy under the rule of law, thereby assisting Ukraine to achieve its stated objective of integration into Euro-Atlantic institutions. Ukraine's economy, which has grown in recent years, is becoming increasingly integrated into global markets and offers opportunities for mutually-beneficial bilateral trade and investment. A member of NATO’s Partnership for Peace, Ukraine is the only non-NATO country that is contributing to every current NATO operation. Ukraine contributed one of the larger contingents of troops to Operation Iraqi Freedom through the end of 2005, continues to provide up to 50 staff and trainers, and also contributes to operations in nine countries, including Afghanistan, Kosovo, Liberia, and Darfur. Ukraine inherited an extensive weapons-of-mass-destruction (WMD) infrastructure from the Soviet Union; it is in the U.S. interest to ensure that Ukraine’s technological capabilities are directed to civilian purposes and are safeguarded with appropriate controls.

The goal of USG foreign assistance is a democratic, prosperous, and secure Ukraine fully integrated into the Euro-Atlantic community. Through its assistance, the USG seeks to help Ukrainians strengthen democratic gains by supporting legislation and sustainable institutions that promote democratic, judicial, legislative, and market reform, human rights, and economic growth. A reformed justice system, a healthy economy, and energy security are necessary elements to realize the full benefits of democracy. Assistance programs focus, too, on helping Ukraine to be an independent, law-abiding state that can be a long-term partner of the U.S.

OPERATING ENVIRONMENT

The government of President Yushchenko and Prime Minister Yanukovych initially had some successes in FY 2007 by passing legislation necessary for Ukraine's WTO bid first in November 2006 and then in May 2007. Continued disagreements between the President and Prime Minister meant, however, that there was little progress in enacting other reform legislation. Accelerating political differences led the President to dissolve parliament in early April; by late May, the country's political leadership had agreed on new pre-term parliamentary elections as a way out of political deadlock. Elections were held September 30, 2007, and were judged fair and competitive. However, the elections produced a very close outcome, with delays in the formation of a governing coalition and a ruling government named only on December 20, 2007.

Throughout this period, Prime Minister Yanukovych's government remained in office. But with the absence of a sitting parliament from April to October, legislative initiatives stalled. Economic growth remained strong in 2007 as a continued robust steel market helped Ukraine's exports, while growing wage levels bolstered domestic demand. These factors, abetted by growing world food and energy prices, made inflation an increasing worry by the end of FY 2007. Energy security remained a top concern as Ukraine's continued reliance on yearly price and supply agreements meant there was uncertainty over price increases for natural gas imported through Russia.

Most USG assistance projects continued to operate successfully. However, political uncertainty and, in particular, the absence of a working parliament throughout the second half of FY 2007 slowed implementation of some initiatives, as necessary legislation could not be enacted. For example, Ukraine began implementing its MCC Threshold Country Program, which was approved by the MCC in June 2006. But the lack of a parliament prevented enactment of necessary legislation related to combating corruption. In general, however, the Yanukovych government, like its predecessors, has continued to support USG assistance efforts.

FY 2007 Country Program Performance

PEACE AND SECURITY

The objectives of the USG-support foreign assistance programs in Peace and Security are to: harmonize Ukraine’s law enforcement structures, training, and procedures with the EU’s while strengthening Ukrainian authorities’ ability to prosecute corruption, intellectual property theft, and trafficking in persons; and, promote WMD security through control of radiological materials, better control of biological pathogens, and employing former weapons scientists for civilian purposes. The U.S. remains the largest single country donor supporting stabilization of the existing sarcophagus over the destroyed Chornobyl nuclear reactor and construction of the new Chornobyl Shelter.

Combating Weapons of Mass Destruction - In FY 2007 USG assistance helped enhance the capabilities, independence, and effectiveness of Ukraine’s nuclear regulatory authority by assisting Ukraine’s State Nuclear Regulatory Committee review the safety analysis reports for pilot plants, develop regulatory guidance on handling pressurized thermal shock to reactor pressure vessels, and create new regulations to govern Ukraine’s nuclear power sector. Notably in FY 2007 the State Nuclear Regulatory Committee, with USG assistance, issued regulatory technical guidance governing the wet storage of VVER-type reactor fuel. This guidance will ensure safe storage of reactor fuel from the Chernobyl reactor for 50 years.

The international community is helping Ukraine cope with the aftermath of the 1986 Chornobyl nuclear accident through two projects. The USG is the largest single country donor for the stabilization of the existing, deteriorating Chornobyl sarcophagus and reconstruction of the new Chornobyl shelter. The stabilization measures for the existing Sarcophagus completed in FY 2006, were operationally tested and then commissioned in November 2007. The European Bank for Reconstruction and Development resolved contractual problems including a tender dispute and subsequently awarded a contract to construct the new safe confinement to a French Consortium on September 17, 2007. The USG is also a major donor to the Nuclear Safety Account, which funds the construction of the decommissioning facilities at the Chornobyl industrial site. The Chornobyl Interim Spent Nuclear Fuel Storage Facility experienced significant cost overruns and schedule delays, causing a suspension of work for almost three years with no technical solution in sight. In September 2007 a U.S. firm received the contract for the facility’s completion, moving the Chornobyl reactors a step closer to decommissioning.

The USG engaged former weapons scientists in civilian research and entrepreneurial activities in FY 2007, contributing to USG non-proliferation objectives. The USG launched eight new U.S.-Ukrainian cooperative research projects, in conjunction with the Ministry of Education and Science of Ukraine (MESU), which contributed $10,000 per project. Fifty percent of these projects include former weapons scientists. The USG also funded a program to market the results of joint research and development projects between Ukrainian research teams and U.S. industry partners. Twelve Ukrainian scientists and entrepreneurs visited the U.S. In addition, USG assistance launched a new initiative to develop multidisciplinary research and education centers of excellence in Ukrainian universities. These science centers will strengthen the research capabilities of Ukrainian universities to meet economic and technological needs, train the next generation of young Ukrainian scientists, and integrate research and education as a key step in Ukraine’s transition towards a knowledge-based economy. In May 2007 the grant for the first pilot center was announced to focus on geological structures, mineral and energy resources, environmental rehabilitation, and remediation of mining areas. Four additional centers are planned for 2008 with an additional $300,000 from the MESU.

The USG also assisted Ukraine to strengthen the effectiveness of its licensing controls. The USG supported the State Service for Export Control (SSEC) by funding six trade seminars that educated 130 corporate employees on licensing system requirements. At a seminar on administrative enforcement, eight SSEC employees learned how U.S. laws are enforced. As a result of this assistance, the SSEC developed productive relations with the companies involved in the export of licensable products and developed an enforcement strategy. The State Customs Service of Ukraine (SCSU) incorporated a course on control of licensable cargo into training at its Academy. In the five sessions held in FY 2007, 125 Officers were trained to process export licenses for licensable materials.

USG assistance contributed to the increased effectiveness of border controls by delivering inspection tools to the SCSU (300 tool kits, 35 contraband detection kits, 25 busters, 175 radiation pagers, and a ZBV scanning van), and to the State Border Guard Service (SBGS) (175 radiation pagers). Fifty officers were trained to use the contraband detection kits and six to operate the scanning van. With this inspection equipment, the SCSU can conduct non-intrusive examinations of shipments, increasing security with minimal negative effect on legitimate trade. In addition, 13 Customs Officers and 12 Border Guards received training in integrity awareness, while 27 Customs Officers were trained in risk management. The Training on risk management allowed the SCSU to build a Risk Management Department that will facilitate trade, enhance security, and minimize opportunities for corruption. Integrity Awareness Training for SCSU and SBGSU is part of both organizations’ ongoing effort to combat corruption.

To increase the GOU’s ability to respond rapidly and safely to alarms generated by radiation detection equipment, the USG procured 35 radiation detection and identification units and laptops for the Ecology Department and trained 40 Ecology officers on the use of the equipment. This equipment, which is in the process of being transferred to the GOU, will allow Ecology Department officers to deploy rapidly across Ukraine to respond to alarms. For example, in the Sumy region along the Russian border, where most of the alarms occur, having radiation and detection equipment available on site will enable ecological officers to respond immediately to alarms rather than waiting up to seven hours for their headquarters personnel to arrive from Kyiv.

Stabilization Operations and Security Sector Reform – Destruction and Security of Conventional Weapons - Ukraine has large stockpiles of excess munitions and weaponry that constitute a source of instability in the region and a threat to U.S. and coalition forces. Since Man Portable Air Defense Systems (MANPADS) and small arms and light weapons (SA/LW) are vulnerable to smuggling and sale to conflict zones, USG assistance is supporting a NATO Partnership for Peace (PfP) Trust Fund project to destroy 1,000 MANPADS, 400,000 SA/LW, and 15,000 tons of munitions in Ukraine. This three-year project, which is being conducted in cooperation with other international donors, is scheduled to meet these targets by the end of calendar year 2008. The project will eventually destroy, in addition to the MANPADS, 1.5 million SA/LW and 133,000 tons of munitions in Ukraine. To date, the Trust Fund project has destroyed 1,000 MANPADS missiles and 90,612 SA/LW. The Ukrainian Government had to reclassify additional stocks of SA/LW to permit destruction, but a return to regular deliveries in 2008 should allow the remaining SA/LW to be destroyed on schedule. In addition, a multi-site plan for destruction of munitions has been agreed upon, including a full breakdown by nature of the ammunition and the proposed destruction sites. A U.S. firm has won the contract to install an explosive waste incinerator in Donetsk, which will provide a permanent munitions destruction facility for Ukraine to augment its current capabilities.

Stabilization Operations and Security Sector Reform – Defense, Military, and Border Restructuring, Reform, and Operations - There are five USG security cooperation priorities for bilateral US-Ukraine military assistance. They include: preparing Ukraine for entrance into the NATO Membership Action Plan process; transforming and restructuring Ukraine’s military from a conscription-based force to into a professional, contract-based force; strengthening Ukraine’s capability to field NATO-interoperable Joint Rapid Reaction Forces (JRRF); developing Ukraine’s capabilities to sustain forces on deployment in international coalition operations; and, assisting in the strengthening of Ukraine’s cooperation with regional partners to enhance regional security and stability.

Equipment provided by the USG to Ukraine in FY 2007 included tactical communications packages, and “visit, board, search & seize equipment”, as well as training for Navy JRRF vessels. In addition, the U.S. provided defense planning assistance, battle staff training capability and tactical training aids and, non-commissioned officer corps development. As a result of this assistance, Ukraine was able to maintain forces on station in Kosovo, West Africa, and Iraq, as well as begin deployments to Afghanistan and Operation Active Endeavor in the Mediterranean Sea. In addition, Ukraine made significant progress in achieving its NATO Partnership Goals and developed and approved a comprehensive reform plan for its Human Resource Management system.

The USG funded a training program that gave 52 Ukrainian students the opportunity to attend 39 different courses and programs in the U.S. that focused on providing professional military education at War and Staff Colleges for middle and senior level officers. The U.S. also trained officers assigned to JRRF units, as well providing training to non-commissioned officers and civilian defense officials involved in the NATO-Ukraine Civilian Professional Development Program. These programs continue to develop a cadre of professional military and civilian officials that understand and are able to work closely with their USG counterparts. The Ukrainian Ministry of Defense manages the selection and follow-on assignment of students trained in the U.S. and has placed them in key positions throughout the ministry and general staff.

Stabilization Operations and Security Sector Reform – Law Enforcement Restructuring, Reform, and Operations - Reform of the criminal justice system is essential if Ukraine’s goal of Euro-Atlantic integration is to be met. The creation of credible Ukrainian law enforcement agencies will also strengthen USG efforts to combat transnational crime, including the proliferation of WMD, terrorism, and trafficking in persons (TIP). USG assistance supports joint U.S.-EU efforts to transform the State Border Guards Service (SBGS) from a Soviet-era, paramilitary, conscript-based institution into a civilian law enforcement body that is professionally staffed and compliant with EU Schengen by 2015. In FY 2007 USG projects assisted the SBGS develop an EU-compliant recruitment, training, and career path system for non-commissioned SBGS personnel. The U.S. also helped it to refocus its training from military skills to law enforcement skills, including the adoption of Western law enforcement teaching methodologies. USG efforts also assisted SBGS to identify the reforms necessary to achieve its goal of EU-compliant Risk Assessment and Criminal Analysis capabilities by 2009.

The USG assisted the Ministry of Interior’s (MOI) Forensic Center to establish processes and procedures towards international ISO/IEC 17025 accreditation for the Ballistics Unit by November 2008, for the DNA/Digital Evidence Units by May 2009, and for the overall forensics center by November 2009. This will provide the justice system with professionally assessed evidence for prosecutions. It will also help the MOI Forensics Center to meet EU standards, and allow evidence collected in Ukraine to meet the standards for U.S.-based trials on transnational crime.

A USG project also assisted the development of a 4,000-station local area network at MOI and institutionalized the capability to expand and maintain the system to serve its 300,000 personnel nation-wide. This new IT capability will allow the MOI to meet EU-standard operational police requirements.

Transnational Crime - In FY 2007 the USG’s efforts to counter-trafficking in persons (TIP) provided reintegration services to more than 390 victims of trafficking, including psychological, legal, and medical assistance, counseling, social integration, and education. The network of non-governmental organizations (NGOs) assisting victims of trafficking was expanded to 90 organizations. Approximately 94% of the beneficiaries of USG reintegration assistance found employment or were reinstated into the Ukrainian education system. Because the largest churches in Ukraine have developed strategies to combat trafficking and are actively involved in preventive work with victims of trafficking, the U.S. provided counter-TIP training for 1,466 students in Ukrainian Orthodox Church seminaries. USG programs had notable successes during the past year in targeting male victims of trafficking, with approximately 23% of the assisted victims being men. The two-fold increase in the percentage of assisted male victims demonstrates the success of the program's efforts to improve identification techniques and reintegration services available to male victims of trafficking. Through increased public education initiatives, 78% of Ukrainians surveyed now understand the real risks of TIP. The Government of Ukraine (GOU) has shown increased commitment to combating trafficking-in-persons by adopting, in March 2007, a new state program against human trafficking. For the first time, the GOU allocated a specific budget to counter human-trafficking. Also in FY 2007 the GOU supported the work of 19 NGOs by providing premises, utility subsidies, partial coverage of staff costs, and small grants.

GOVERNING JUSTLY AND DEMOCRATICALLY

The objectives of USG democracy assistance programs in Ukraine are to promote fair elections administration and develop strong political parties, legislature, civil society, and independent media. Strengthening and sustaining rule of law reforms in the Ukraine is dependent on making public officials more accountable, combating corruption, reforming the courts and law enforcement structures, and strengthen the rule of law in ways needed to sustain Ukraine’s reforms. These ongoing bilateral assistance efforts to combat corruption are coordinated with programs funded through the Millennium Challenge Corporation (MCC) Threshold Country Program.

Rule of Law - Ukraine’s aspiration to join the Euro-Atlantic community requires it to ensure that its justice system comports with European norms and standards. However, 15 years after the collapse of the Soviet Union, Ukraine still has not replaced its Soviet-era Criminal Procedure Code (CPC). The lack of a unified Ukrainian Bar Association, in contrast to the European norm, impedes the development of a system of continued legal education and inhibits the establishment of uniform procedures to enforce professional ethics, discipline, and anti-corruption initiatives for defense attorneys. The over-use of pre-trial detention and the poor availability of alternatives to incarcerating accused persons awaiting trial are factors highlighted as not meeting minimum European norms.

USG assistance projects are designed to help Ukraine address these challenges. One core project supported the GOU’s drafting of a Council of Europe (CoE)-compliant CPC. This draft CPC was undergoing final revisions at the end of 2007 and is to be introduced into parliament by early 2008. The new CPC will be the most important mechanism for ensuring the implementation of the Concept for Justice Reform, developed with assistance from the USG. Once approved by the National Security and Defense Council, the Concept will legally require the GOU to amend laws pertaining to the law enforcement community, the judiciary, and defense attorneys, bringing them into compliance with European standards and norms.

One recommendation of the CoE is to put in place a single Draft Law on the Bar. In FY 2007 the USG began to assess the three competing Draft Laws on the Bar using European standards. When completed, the assessment will allow parliament by early 2008 to consolidate the legislative-drafting process, so as to create a recognized organization of advocates authorized to govern and control the defense practice of law, to create an effective mechanism for the establishment of a continued legal education system, and to introduce necessary anti-corruption safeguards into the overall system of the Defense Bar.

The U.S. supported a network of 27 consultation centers and clinics that provided more than 8,000 legal consultations, filed nearly 1,800 administrative actions, and represented clients in nearly 1,400 lawsuits in FY 2007. The direct support provided through pro bono legal consultations, advocacy services and public awareness campaigns to disadvantaged and vulnerable populations, in conjunction with training programs for pro bono lawyers on substantive and procedural law issues, ensured Ukrainians have increasing access to high quality, competent legal services and information. Assistance programs also included workshops for law professors on human rights, EU law, and legal research. To increase justice sector efficiency and accountability, the U.S. trained 600 staff, improved judicial selection and disciplinary procedures, and fostered consensus-building dialogue around judicial reform for 165 key policy makers. Programs promoted the creation of a comprehensive legislative framework for judicial reform by providing legal advice and expertise for draft legislation, thereby aligning Ukrainian reform initiatives with international standards.

As a result of USG activities, half of the recommended changes to the key draft Law on the Judiciary were approved by the president and forwarded to parliament. An important change is transferring authority for the appointment and removal of chief judges from the executive branch to the Council of Judges. USG assistance programs also supported six public hearings on legal reforms, civic monitoring in 49 courts, and expert analysis, publication, and distribution of court decisions. With USG support, the High Administrative Court has started publishing its decisions on the Internet since September 2007. To date, 225 decisions have been published on the Internet and 261 more decisions are pending. The number of people using the official registry of the court decisions on the web site has increased, and the feedback is very positive. The results of this pilot reform will be used to develop recommendations for the State Court Administration on improving case management.

Good Governance - Despite a large intake of new Members of Parliament (MPs) and a political crisis that essentially froze legislative activity for six months, the national legislature (Verkhovna Rada, or VR) improved its committee oversight capacity as a result of U.S. training programs for MPs and their staff in the legislative and budget processes, committee operations, and citizen access. The U.S. helped to professionalize the VR’s operation by developing, publishing, and distributing six comprehensive guides on the legislative process. The USG-funded parliamentary internship program complemented this effort by exposing promising young graduates to the legislature's work, engaging them in the parliamentary process, and further opening the VR's operations to the public. However, the VR assumed less financial and administrative responsibility for the internship administration than originally planned because the political crisis prevented the secretariat from focusing on long-term planning issues. The U.S. provided reference resources covering all major aspects of parliamentary practice, and which complement VR institutional staff development and training. With U.S. support, VR gender outreach expanded as a result of regular gender focus group meetings and professional workshops on gender issues.

USG assistance contributed to increased VR transparency in FY 2007. The parliament took steps to improve working conditions for journalists to complete the strategic communication plan developed in close cooperation with USG experts. Other programs helped to improve cooperation between the VR, Ukrainian NGOs, and foreign donors through an information fair in the VR, as well as field committee hearings that attracted hundreds of citizens and local NGO representatives. To further promote transparency, the USG funded two small grants to indigenous NGOs to provide Ukrainian voters with timely, accurate information about the activities of their MPs and to analyze various proposals for constitutional reform. As a result, the political parties that won pre term parliamentary elections and finally formed majority coalition in the Verkhovna Rada declared their intensions to amend the Ukrainian Constitution to balance the powers of various branches of government.

Even after the VR was officially dissolved in mid-summer 2007, USG assistance supported the conduct of small group sessions to improve working relations between majority and opposition representatives. In order to build linkages and improve communications within the executive branch, the USG brokered discussions with political appointees in the Cabinet of Ministers and Presidential Secretariat oriented toward helping the political actors work effectively after elections.

The USG facilitated the decentralization and strengthening of local government capacity in FY 2007. With this support, local authorities developed performance-based budgets in 85 cities, attracted $70 million in foreign direct investment, trained nearly 17,500 elected and appointed city officials, and drafted 20 laws, regulations, and policies. USG efforts increased state budget transparency, efficiency, and accountability by helping to implement performance program budgeting at five national ministries, three regional oblasts, and at the local level. As a result, three national working groups formed on macroeconomic forecasting and budgeting, enabling strategic planning for long-term budget implementation. Twenty-four cities implemented strategic economic plans, resulting in small- and medium-sized enterprise (SME) growth, work force development, increased foreign direct investment, communal service improvement, increased communal land utilization, and heightened private sector competitiveness.

The USG worked with the central government to promote greater fiscal and policy decentralization, helping to draft legal acts on local self-government, submit related draft laws in Ukraine’s parliament, strengthen the economic autonomy for local self-governance, and train local government officials in 16 separate self-government disciplines. Although the GOU was supportive of several regulatory initiatives, GOU personnel and policy changes following the September election could jeopardize these initiatives. Hopefully, working relations were sufficiently institutionalized to increase understanding of the need for greater decentralization. To build upon the reforms mandated by the passage of new equal opportunities legislation, over 52% of the individuals that received USG training to facilitate decentralization and strengthen local governance were female.

Political Competition and Consensus Building - With the introduction of a fully proportional electoral system, political parties became the sole formal participants in the electoral process and the critical vehicles for Ukrainian governance. While parties still need to improve their governance and policy-making capacity and their ability to build lasting governing coalitions and establish effective links between legislative and executive branches, they have become more critical for Ukraine’s democratic consolidation than at any point since independence.

USG assistance to political parties strengthened their coalition-building capacity, particularly at the local level. After the announcement of snap elections following the spring 2007 political crisis, political party training largely focused on campaigning and coalition-building. Additionally, USG assistance worked to build the capacity of young political leaders and local elected officials. USG assistance also helped Ukrainian youth engage more effectively in the political process by providing practical skills in basic party organization and mobilization. These activities were complemented by an annual opinion survey gauging citizens’ views on political and social developments in Ukraine, which provided key insights into public views on the democratic transition.

With the support of USG assistance, the elections law was amended to include provisions requiring that printed articles commissioned by parties be appropriately marked and that parties use budget funds for paid political advertising only on national TV channels. This effectively halved public expenditures for pre-election campaigning in media. The USG also supported small grants to indigenous NGOs to support activities such as exit polling, voter education, get-out-the-vote efforts, poll monitoring, media monitoring, and youth participation for the September election. This support helped contribute to the third election in Ukraine’s history designated as meeting OSCE and international standards.

Civil Society - This year's political crisis and parliamentary dissolution stalled national-level NGO legislative initiatives, including a major new draft law on associations designed to bring Ukraine’s NGO-enabling environment in line with European standards. However, future prospects for passage of this major law remain good because it is included in the EU-Ukraine Action Plan. Despite political instability, the USG contributed to a number of positive changes in the legal environment for NGOs. New value-added tax (VAT) exemptions on charitable assistance came into effect; NGO membership fees were exempted from income tax; the minimum threshold for deductible donations was removed; and the maximum threshold of 5% was recognized by the tax authorities as a result of a court decision. USG assistance helped the Ministry of Justice improve regulations on NGO registration, reducing paperwork and reconciling previous jurisdictional disputes between public registrars.

The USG worked to strengthen Ukrainian civil society by providing assistance to approximately 1,100 NGOs to improve their organizational capacity, increase professional standards, strengthen internal governance, and build advocacy skills. USG support enabled NGOs to engage citizens in key issue areas including community development, anti-corruption, youth leadership, NGO law reform, and NGO ethics. This helped improve the financial viability of NGOs by promoting community philanthropy, corporate social responsibility, and social entrepreneurship initiatives which supported vulnerable populations, created new jobs, and generated revenue to support core NGO mandates.

In FY 2007 USG grants continued to support networks that promote civic participation in areas key to Ukraine’s democratic development. For example, the USG funded 18 organizations to promote equal opportunities for women and men. Network participants monitored the implementation of Equal Opportunities legislation on the national and regional levels and conducted training for media on how to cover gender issues. Monitoring results will be distributed nation-wide and recommendations for changes to the Equal Opportunities legislation will be submitted to parliament for review and consideration in spring 2008. USG funding was used to establish a national system of patients’ rights protection, which will bring together 15 leaders to promote patients’ rights, raise public awareness of violations in the medical sphere, and encourage public involvement and influence to make changes in the system. USG assistance supported the organization of 24 human rights discussion clubs across Ukraine in order to promote discussion of human rights issues to raise public awareness and encourage participants to become advocates for human rights. USG assistance also supported a network of 14 organizations to set up a system of student leadership in Ukraine’s universities. Student councils created in each region advocated for quality education and combat corruption. USG-sponsored small grants also supported the core activities of indigenous organizations. These programs included support for research, seminars, publications, websites, and press monitoring on issues such as legislative reform, civic participation, NGO development, Crimean affairs, defense policy, and military reform. USG-funded projects targeted eco-corruption, corruption in public procurement, and government transparency.

A special focus of USG assistance to strengthen civil society was support to key legacy organizations capable of serving the NGO sector in a number of areas, including the development of progressive NGO legislation, providing intermediary training, financial and other support resources, conducting policy analysis, and performing watchdog and public oversight functions. USG programs also contributed to incremental improvement in public perceptions of NGO activities by organizing regional press tours on a variety of civil society and advocacy issues. Training for journalists on reporting on the NGO sector also increased media awareness of NGO contributions. Overall, information regarding the achievements of local grantees appeared in more than 200 national and regional publications, 95 reports in electronic media, and on 40 television channels throughout the country.

The USG provided 16 grants to allow U.S. exchange program alumni to use the skills and experience they acquired in the U.S. to become agents of democratic change in Ukraine by undertaking projects in democracy building, economic reform, and community service in their hometowns. Through training seminars, workshops, conferences, and the development of Internet resources and manuals, alumni disseminated information related to topics such as peer mediation, women as leaders, youth leadership, tolerance, education reform, a code of ethics for higher education, volunteerism, corporate social responsibility, European integration, globalization, and critical thinking. Activities primarily targeted youth, high school teachers, university professors, educational administrators, community leaders, and representatives of NGOs. The USG also brought three U.S. experts to Ukraine to speak on topics including student government, promotion of tolerance, and the responsibilities of regional government press offices.

In the area of media in FY 2007, USG assistance worked to increase access to independent information, particularly in the regions, through intensive media monitoring and training to strengthen basic reporting skills, civic journalism, journalistic ethics, election coverage, and investigative reporting. USG funded supported training for more than 1,430 Ukrainian journalists. In addition, the USG provided technical assistance to approximately 200 non-state regional news outlets on media business development. USG efforts strengthened the organizational capacity of eight key media partners and expanded their role in facilitating public discussions on media issues. The 2006 /2007 MSI (Media Sustainability Index) score showed the most significant increase for the “business management” objective (2.83 compared with 2.26 in 2005). The overall 2006 /2007 MSI score for Ukraine is 2.37. USG efforts strengthened the organizational capacity of eight key media NGO partners. As a result, media broadcast and print publishers associations have become strong advocates of industry interests, provide effective assistance, and protect the rights of member outlets. Media watchdog NGOs widely publicized media monitoring results and increased public debate on key media issues.

To improve professional standards, USG assistance helped develop a model editorial statute for television and radio companies that guarantees editorial independence. The statute was adopted by a number of television and radio companies, including the National Television Company of Ukraine. The USG contributed to efforts to reform the legal and operational environment for the media sector, including new legislative bills on television and radio, and on state and municipal print editorial freedom. These bills were under consideration by parliament when it was dissolved. The USG also worked to improve media independence by providing privatization training to representatives of municipal and state-owned media. As a result of USG-funded consultations and technical assistance, 16 state-owned media outlets decided to begin privatizing without waiting for a government initiative.

In FY 2007 the USG awarded 78 grants to independent Ukrainian media organizations in 14 oblasts to support projects on information distribution, local governance and accountability, citizen rights, media advocacy, and pre-term parliamentary elections coverage. Several USG-funded grants were targeted to support Internet-based outlets and projects, particularly in the regions. For example, the U.S. awarded small grants to local entities such as the Donetsk-based Internet newspaper Ostriv. Such assistance increased access to independent information in Eastern Ukraine, where much of the population still receives its news from official Russian sources just across the border. With USG support, Ostriv’s website began arranging interviews and live Internet chats with national political figures and their regional representatives and provided local journalists and political analysts the opportunity to produce online diaries. Ostriv received around 9,000 visitors each day, and its stories were cited by the regional media more often than any other local news source. Its articles and analytical essays were reprinted in large-circulation media outlets. FY 2007 the U.S. also helped to open 16 new Internet centers in previously under-served cities, including areas with minority population, bringing the total of USG-funded centers nationwide to 131. Library directors at the new Internet centers received training on access to electronic information as an important function of a public library in a democratic society.

The U.S. promoted the development of a sustainable free and independent press in Ukraine by establishing long-term partnerships between Ukrainian and U.S. media outlets, as well as U.S. outlets and Ukrainian students. One project sponsored internships in the U.S. for Ukrainian media professionals, and also financed visits to Ukraine for their American counterparts. The USG also continued to support visits of Ukrainian broadcasters to the U.S. to produce documentaries jointly with counterpart U.S. media outlets. In FY 2007 the Ukrainian television station Tonis, one of the leading stations in the country, participated in a program on alternative energy. The USG also awarded travel grants to media practitioners to increase their understanding of international standards of journalism, NATO/ EU integration, and ethnic tolerance. USG assistance also supported internships at leading media outlets for 400 students on such topics as news reporting, journalism investigation, photo journalism, and editing. Additionally, many participants attended seminars, workshops, and conferences in Europe and the U.S. The experience significantly contributed to promoting competitive and viable regional media. Journalists’ exposure to modern methods of communication and methods of preparing and delivering information improved the quality of print and broadcast materials on both national and regional levels.

ECONOMIC GROWTH

USG-supported economic assistance programs focus on encouraging an open economic climate in which business can thrive. FY 2007 programs concentrated on building capacity in trade policy (including assistance to Ukraine's World Trade Organization [WTO] accession), agricultural restructuring, developing financial services, strengthening local economic development, and promoting energy security through nuclear fuels diversification, energy efficiency and coal mine safety. All contribute to making Ukraine a more transparent, stable, and prosperous foreign policy partner.

Macroeconomic Foundation for Growth - Fiscal Policy - USG macroeconomic policy assistance helped Ukraine to use separate fiscal and monetary policies so the government and the Central Bank could encourage strong, sustainable, non-inflationary economic growth. To encourage the required domestic sovereign debt market development, the USG and the lead economist of the World Bank prepared a paper on the financial costs and negative economic externalities of foreign debt issuance. The paper was presented at an international seminar for Ministry of Finance (MOF) and Central Bank officials. The MOF, with USG support, subsequently sought to issue domestic securities on a regular basis and developed proposals for a primary dealer system and for a debt management strategy. The paper also described how to select appropriate currencies when external debt is needed and helped officials to better monitor market developments. After the government did not pursue the passage of a sovereign debt law, the USG worked to change proposed references to debt in the Budget Code. The USG’s suggestions were adopted and the Code was left intact.

The USG also developed a specific plan to turn government debt held by the Central Bank into marketable securities, thereby facilitating open market operations. The plan cited the possible destabilizing effect of MOF attempts to manage its account at the bank and proposed changes to the 2008 Budget Law to prevent this. These efforts were strongly supported by the Central Bank. The MOF and Central Bank supported the plan’s recommendations on why capital controls should not be lifted until financial markets, especially the government securities market, were more developed. Additionally, the plan provided specific policy recommendations to encourage a very gradual introduction of flexibility to the exchange rate. These included discussions on the need to focus on the real as opposed to the nominal rate, as well as advice to avoid swap-type transactions that incorporate a commitment to maintain a nominal exchange rate. The Central Bank endorsed the plan and the GOU is expected to accept it. To encourage transparency and better economic analysis, the USG developed a reliable data base and began work towards improving published data.

The USG provided the services of an intermittent advisor to increase the GOU’s capacity to manage the economy through the expansion and contraction of government spending. The USG recommended changes to the Budget Code that would allow the MOF to invest in the Treasury Single Account and trained MOF managers in general and financial management, specifically debt management. The USG also helped the MOF develop a conceptual design for a government financial management system, including eliminating capital controls and targeting inflation.

The USG advisor also completed a series of detailed reviews of budget execution legal and regulatory requirements, administrative interfaces among the ministries and local governments, and management responsibilities and made a series of recommendations for amendments to the law and organizational structures. The USG then involved Ukraine in the Public Expenditure Management- Peer Assisted Learning Network Budget Community of Practice and the Regional Senior Budget Officers organization to give continuing sources of technical peer advice from other ministries, and allow it to benchmark its progress in comparison to other countries.

Trade and Investment - The USG assisted Ukraine to prepare for WTO accession, including preparing for the Working Party (WP) meetings, reviewing comments on the draft WP report, and replying to WP member questions. During this process, the USG helped the GOU work with the private sector to amend and improve over 40 legal/regulatory documents that govern trade. The USG helped draft or provided advice for rules related to customs clearance, food safety, intellectual property rights (IPR), technical regulations, and import/export to conform to WTO requirements. The USG also helped establish a regulatory infrastructure for Hazard Analysis and Critical Control Points (HACCP) and provided assistance to SMEs to adjust to sanitary and phytosanitary (SPS) standards and HACCP.

The GOU demonstrated its commitment to implement reforms by drafting legislation to combat corruption in government procurement in accord with USG recommendations. The USG program developed guidelines for negotiating the WTO Government Procurement Agreement and strengthened the capacity of Ministry of Economy (MOE) staff to launch this process, which should begin upon accession to WTO. The MOE adopted a manual on SPS notifications/enquiries and for involving the private sector in standard setting. The USG hosted roundtables to involve the private sector in discussions on proposals for harmonization with Codex (food safety standards) in the context of the National Codex Commission. The USG began to assist the private sector adjust to Codex and comply with HACCP by developing manuals.

The USG also assisted the MOE and other Ukrainian Government institutions to undertake the legal, regulatory, and administrative reforms necessary to meet WTO requirements. In FY 2007 the USG provided Ukrainian partners with technical guidance on draft laws and regulations, translation assistance, and comments on official materials prior to submission to the WTO Secretariat. The USG advised the GOU on how to develop transparent notifications and national enquiry procedures in line with WTO obligations and organized a training seminar for Ukrainian and Russian customs officials to promote enhanced IPR enforcement and implementation of WTO IPR commitments. The USG and Ukrainian experts collaborated on a comprehensive IPR training manual, in both English and Ukrainian, to help train GOU officials. This USG assistance helped Ukraine bring 19 laws and five regulatory acts into compliance with WTO rules, allowing Ukraine to make a major push toward accession. The USG's work on national enquiry points helped Ukraine to create an informational WTO website that now provides relevant and up-to-date information to the government and private sector, allowing for a more coherent trade policy and better investment decision-making. The IPR training manual gave Ukrainian authorities a valuable tool to systematize training efforts and bolster enforcement at the local level.

The U.S. provided business training internships for Ukrainian professionals in U.S. companies. In FY 2007 thirty-four professionals were trained in hospital administration, agribusiness association development, airport management (safety, security, finances, equipment, and infrastructure), road construction, oil pipeline management, food processing and packaging, and hotel and business management. Results reported in the last year include an alumnus who used contacts made while on the program to finalize an agreement with a company in Illinois. The U.S. company agreed to provide services for a hydro-purification project, and to assist in the design and construction of a hydro-dewaxing unit used with diesel fuels. An alumna received a promotion to the head of a Ukrainian airport complex after returning from the program. She has maintained contact with a U.S. company regarding IT applications that can help modernize operations at her facility

Financial Sector - Financial Sector Enabling Environment - In FY 2007 the USG completed assessments and signed protocols of cooperation with major market institutions and regulators, reflecting their strong commitment to reform. The USG and WB initiated a programmatic technical assistance partnership (PTAP) to develop the capital markets to accommodate private pension investment. The PTAP received positive reviews from the GOU, market participants, and regulators as a road map for capital markets development. The effort allowed counterparts to work together to establish strong self-regulatory organizations and improve licensing requirements for market participants, organized study tours on pension reform, capital markets, regulations development, and risk management, and helped establish linkages with European markets. USG support was also provided to the Securities Exchange Commission to successfully pilot the Ukrainian Electronic Disclosure System. For the first time in Ukraine, financial information on companies will be available on-line to investors. The system will be rolled out to up to 500 listed companies and will become mandatory in 2008.

In FY 2007 there was growing demand among Ukrainian enterprises for the certified international professional accountant (CIPA) program, which allows accountants to validate their competencies in international accounting standards and practices. This demand resulted in a 35% annual increase in certified accountants. The GOU is committed to implementing international financial reporting standards (IFRS) and, in addition to the pending draft law, has developed a strategy and to begin IFRS implementation in 2010. Women remain active in Ukraine’s financial markets and are assuming positions of leadership such as head of the country’s largest stock exchange. Half of the trainees and participants in conferences and training sessions were women, and over 80% of CIPA exam candidates were women.

Financial Sector - Financial Services - The GOU strongly supports the USG-supported efforts to develop mortgage, municipal, and government bond issuances to build a viable fixed-income market. Mortgage lending grew from $4.1 billion to $7.5 billion in FY2007. Ukraine issued its first pilot mortgage-covered bond, an investment-grade security suitable for pension fund investment. Lviv became the first city to issue a pilot municipal bond for $10 million to upgrade its infrastructure. This demonstrated that smaller cities can access the capital markets. More cities are in the pipeline for bond issuance.

GOU support for pension reform remains strong. The USG drafted a Pillar II Pension Law, which passed its first reading in the VR. The USG sponsored ten roundtables on pension and financial sector issues and produced a TV spot on private pensions. As a result, in FY 2007 the number of private pension funds increased from 75 to 92 and assets grew from $27.4 million to $40 million.

Ukraine’s major stock exchange upgraded its trading system and established dual listing with the Warsaw Stock Exchange. The USG continues to support the market-owned Interregional Securities Union (MFS) depository, which is negotiating a correspondent relationship with the Polish depository. To protect ownership records, the program provided the MFS depository with a back-up data system.

Over 12 years the enterprise fund has invested $162 million in over 40 companies. Foreign investors are considering Ukrainian companies for acquisition. The Agricultural Developmental Credit Authority (DCA) expired in 2007, bringing the cumulative loans to small farmers to $3.7 million, or 62% of the total facility. One of the Municipal DCAs was terminated due to no utilization; the second DCA is being restructured.

Infrastructure -Modern Energy Services - Through the extensive assistance provided by the USG over the past twelve years, Ukrainians markedly improved their knowledge, tools, and capabilities in nuclear plant safety. USG assistance contributed to a higher rate of capacity utilization and significantly reduced the number of reportable operational events at Ukrainian nuclear power plants. In the joint US - Ukraine Nuclear Fuel Qualification Project, the U.S. is fabricating and delivering one reload batch of 42 fuel assemblies for the South Ukraine Nuclear Power Plant unit 3. These fuel assemblies will be delivered for insertion into the reactor during the 2009 refueling outage and will operate for four years. Ukraine will provide the low enriched uranium for these fuel assemblies.

In addition, Ukraine will be responsible for the necessary safety analysis to obtain the regulatory approval to install and operate these fuel assemblies. This safety analysis will be conducted utilizing the technology and capabilities transferred to Ukraine during the early phase of the project. In FY 2007 the GOU signed a contract with a U.S. company for fabrication of the 42 fuel assemblies, all agreements were finalized with one of Ukraine’s nuclear power companies, the initial six fuel assemblies in the South Ukraine reactor continued their successful operation, and a contract was issued to provide uranium to a U.S. company. The GOU also established a working group to negotiate terms and conditions of a long-term fuel supply contract with a U.S. company for one or more reactors.

The USG program on coalmine safety introduced safety-enhancing techniques at Ukrainian coal mines and encouraged reform within the coal mining sector. The USG procured and delivered to Ukraine an advanced horizontal drill used to reduce methane concentrations in mines, provided training to Ukrainian drill operators, and oversaw operation of the drill at a mine. The USG introduced advanced roof control techniques, providing roof bolting equipment and designing a roof control plan, at a pilot mine. The USG also funded a detailed study of nationwide mine-related accidents in order to help Ukrainian authorities to develop more effective safety policies.

As a result, Ukraine's State Drilling Company gained expertise in operating horizontal drilling equipment and can now expand use of this sophisticated technique at mines throughout the country. Ukrainian mine managers were exposed to advanced roof control techniques for the first time. These efforts will help improve safety conditions in Ukraine, which, since independence in 1991, has experienced the second worst coalmine fatality rate in the world with over 4,000 fatalities. Increasing safety at the targeted coalmines will translate into increased productivity, which will help reduce Ukraine's dependence on foreign sources of energy and make the sector more financially viable.

Agriculture - Agricultural Sector Productivity - The USG provided U.S.-based agricultural training opportunities to senior and mid-level specialists and administrators from the public and private sectors involved with agricultural trade, agribusiness development, management, policy, and marketing. In April 2007 eighteen fellows from Ukraine were trained in supermarket management, increasing the potential for exports of U.S. high-value added food products to Ukraine and assisting Ukraine to adopt advanced marketing and management technologies.

Private Sector Competitiveness - Business-Enabling Environment - Under its broader regulatory reform initiatives, in FY 2007 the USG assisted the State Committee for Regulatory Policy and Entrepreneurship in the development of the second phase of President Yushchenko’s Quick Deregulation Initiative (QDII). QDII is scheduled to commence in FY 2008 in the sectors of construction, land use, and tourism and in the spheres of licensing and permitting. With USG assistance, the Ministry of Regional Development and Construction (MRDC) began to carry out regulation of construction permitting following the QDII methodology. The MRDC formed a consultative public council, with extensive representation from the private sector, which will take part in QDII. Late in the FY 2007 President Yushchenko signed the decree “On Urgent Measures of Improving Regulation of Entrepreneurial Activity in Ukraine,” which supports QDII. A working group, in which the USG actively participated, developed the program of regulatory reforms contained in the decree.

The commercial courts have dramatically increased their transparency by publishing more than 700,000 decisions in the USG-supported Registry of Judicial Decisions that can be accessed on the Internet. In FY 2007 the parliament amended the enforcement of judgments law and the bankruptcy law, thus easing the burdens on business. In FY 2007 the USG funded an assessment of Ukraine’s enforcement regime that exposed loopholes and gaps in the legislation and used these findings for the preparation of amendments to the enforcement law and for the training of bailiffs. The USG helped train approximately 1,000 bailiffs, 140 entrepreneurs, and 200 judges in the application of commercial law and enforcement of contracts. Nonetheless, Ukraine’s commercial law framework remains incomplete. Inconsistencies still exist between the Civil and the Economic Codes. Due to the dissolution of the parliament in April 2007, Ukraine was unable to advance additional legislative initiatives.

Through grants, loans, and technical assistance, USG assistance supported local initiatives for the development of private entrepreneurship, public policy, and civil society. In partnership with the Organization for Security and Cooperation in Europe (OSCE), a USG-sponsored program supporting local development through public-private partnerships helped groups generate economic opportunities and resolve problems using local resources. Local governments, businesses, and charities worked together to foster entrepreneurship, generate new jobs, and attract investment. In FY 2007, the project attracted more than $200,000 from local sources and created 117 new businesses, 352 new jobs, and four agricultural cooperatives. Over 2,000 people received training on starting a business, legal aspects of entrepreneurship, financial management, marketing, crafts techniques, agricultural cooperation, green tourism, fruit and vegetable growing, and hotel management.

USG assistance increased the use of alternative and energy saving technologies and improved the efficiency of the energy sector by supporting municipal partnerships in eight regions. The activity resulted in an analysis of region-specific energy saving opportunities, the creation of four training centers, and the completion of public awareness campaigns in each region. USG assistance also conducted a national discussion on administrative reforms with over 2000 people participating in community-level roundtables and close to 14,000 copies of books and informational materials distributed.

USG assistance also promotes local leadership in philanthropy and corporate responsibility. In partnership with Philip Morris, the U.S. provided support to five Kharkiv-based NGOs that work with people with special needs, and four NGOs to establish six community clubs for elderly and vulnerable people. As a result, nearly 500 disabled people in the Kharkiv region gained employment, 163 disabled residents were trained in business and vocational skills, and over 1000 beneficiaries received services ranging from employment consultations and help in composing a curriculum vitae (CV), marketing, accounting, and legal consultations, to psychological and social support

INVESTING IN PEOPLE

Health-related programs assist Ukraine's stability by addressing the serious HIV/AIDS epidemic, tuberculosis, avian influenza, and maternal/child health. Humanitarian programs in Ukraine focus on improving the daily lives of the most vulnerable people through provision of medicines, clothing, and adequate shelter, and are directed to residents of Eastern Ukraine and the Crimea.

Health/HIV/AIDS - During FY 2007 USG HIV/AIDS programs contributed to Ukraine’s national efforts to reduce the transmission and impact of HIV/AIDS through three principal strategic approaches: strengthening the delivery of HIV/AIDS information and care and support services; reducing the stigma and discrimination associated with HIV/AIDS; and enhancing the policy and legislative environment for HIV/AIDS programming.

In the eight priority regions with the highest HIV/AIDS burden, local USG-supported NGOs with strengthened capacity to plan and deliver inter-sectoral outreach and prevention services expanded their coverage to an estimated 40% of significant most-at-risk groups, or approximately 100,000 injecting drug users, commercial sex workers, and males who have sex with males. Strengthened NGOs also played key roles in expanding access to voluntary counseling and testing (VCT) services. During FY 2007, for example, community partnerships facilitated joint training of local medical and social service providers from AIDS Centers, drug abuse clinics, and NGO service sites. Strengthened referral between these facilities led to improved quality and reach of VCT for vulnerable populations, with approximately 10,000 individuals tested for HIV during 2007. Similarly, the development of community-based strategic plans for the prevention of maternal to child transmission in eight oblasts not only improved coordination between local NGOs, health facilities, and AIDS Centers, but enhanced the levels and quality of testing and follow-up care. In Crimea and Donetsk, media campaigns and informational activities conducted in health, educational, social, and professional institutions by trained peer educators raised public awareness of HIV/AIDS, reduced the stigma associated with HIV/AIDS, and increased tolerance towards people living with HIV/AIDS

To improve the sustainability of HIV/AIDS programs, FY 2007 activities focused on strengthening the policy environment to increase access to services. In eight oblasts, multi-sectoral AIDS coordination committees and multi-sectoral working groups functioned effectively in identifying and eliminating operational policy barriers to services and information. Policy training of NGOs improved access to services by marginalized groups in priority regions from 12% in 2004 to 45.5% in 2007. Finally, the design and dissemination of national protocols and operational guidelines for preventing mother and child transmission and VCT improved the quality of key HIV prevention services.

Health - Tuberculosis - During FY 2007 tuberculosis (TB) control interventions continued to expand throughout eight priority administrative territories in Southern, Eastern, and Central Ukraine (these territories represent 40% of TB cases and have the highest burdens of TB-HIV co-infection in the country). In close collaboration with the Ministry of Health (MOH) and local and international organizations, the USG intensified Directly Observed Treatment Short Course (DOTS) rollout activities in these regions to build momentum for MOH-supported national implementation. Training of TB clinicians and primary health care workers in DOTS improved case detection and treatment, while training of laboratory staff in sputum microscopy (along with the provision of educational materials, 170,000 microscopy slides, and 47 ultraviolet lamps) improved diagnostic knowledge and capacities and enhanced lab quality control procedures. U.S. sponsored roundtable meetings with media, and video and radio spots in target oblasts, enhanced public awareness of TB.

DOTS programs in FY 2007 expanded to 72 new sites, covering 55-80% of targeted regions, including prison and penitentiary facilities. Sputum collection points covered 100% of sites after the USG’s provision of 135,000 sputum collection containers to health and penitentiary facilities in target areas. Training of HIV/AIDS Center Physicians on TB case detection and referral, and of NGO staff on referral and support systems, improved outreach, education, and support for co-infected individuals and increased their adherence to treatment. In addition, referral systems established between TB dispensaries, NGOs, and the penitentiary system will facilitate on-going treatment of prisoners upon release.

USG assistance led to the establishment of a National TB Control Program based on DOTS and the development of national and local TB control legislation to buttress an increasing political commitment to DOTS expansion. Additionally, in FY 2007 both DOTS training and smear microscopy quality control procedures were incorporated into the training curricula of continuing medical education institutes throughout Ukraine, strengthening institutionalization and sustainability of DOTS-based approaches.

Health - Maternal and Child Health - In FY 2007 the U.S. funded programs that USG strengthened and institutionalized evidence-based perinatal, antenatal, and pediatric practices in 159 service delivery facilities in 12 oblasts, the Autonomous Republic of Crimea, and the cities of Kiev and Donetsk. Training on the prevention of maternal-to-child transmission for staff at maternity wards in target sites also improved practices to prevent HIV transmission during labor and pre- and post-delivery. 2007 monitoring and evaluation data illustrated a decrease of over 50% in postpartum bleeding and an increase in normal deliveries from 40% to 70%, underscoring the contribution to reducing maternal mortality. A campaign to prevent Sudden Infant Death Syndrome in Lugansk Oblast increased awareness of appropriate preventive practices in over 50% of the population. With additional oblasts now prepared to fund similar campaigns, program interventions are on track to support reductions in infant deaths in the year ahead.

The U.S. continued to promote a policy environment supportive of improved maternal and infant care, establishing Centers of Excellence to guide regional dissemination of improved practices, and increasing local political and financial support for improving perinatal, antenatal, and pediatric services. To this end, the MOH endorsement and dissemination of six Governmental Decrees on obstetric/gynecological care, neonatology, and epidemiology will support enhanced maternal and infant care and strengthen approaches to the prevention of nosocomial infections. In FY 2007 a continued focus on building cadres of trainers at Centers of Excellence positioned the Centers to increasingly lead in the rollout of maternal and infant health interventions at the oblast level. Partnerships with oblasts have generated investment of local health and civil authority funds, which have been used to co-share training and equipment costs for targeted maternity hospitals. With the exception of the training of trainers, all oblast level training courses in FY 2007 were paid for with local funds. Similarly, a public-private alliance between a Ukrainian oil and gas company and a USG-supported Ukrainian NGO, facilitated the rollout of maternal and infant health interventions and improved services in five oblasts in Eastern Ukraine.

Health - Family Planning and Reproductive Health - In FY 2007 the USG’s family planning/reproductive health efforts mobilized both the public and private sectors to expand access to quality services and modern contraceptives beyond urban areas in seven oblasts. A public-private partnership, launched between the MOH and contraceptive manufacturers, supported the promotion and distribution of a contraceptive package which broadened the range of affordable contraceptive methods. Pharmacist certification programs trained over 1,000 providers to provide accurate information on modern contraceptives; clinical trainings improved quality of care by strengthening the knowledge and skills of over 1,600 health providers. As a result, a total of 547 pharmacies and 461 health facilities are now certified as "Family Planning Friendly.” Contraceptive sales data from pharmacies measured in Couple Years of Protection, for example, show a nationwide increase of 11.7% between 2005 and 2007.

USG family planning assistance continued to strengthen Ukraine’s policies and systems to support a sustainable national family planning/reproductive health program during FY 2007, including the Cabinet of Ministers’ adoption of a $150 million State Program on Reproductive Health of the Nation to 2015. This program commits national and local government resources to increasing contraceptive use, reducing unintended pregnancies, and decreasing rates of abortion. It allocates specific resources to contraceptive procurement to increase access to vulnerable groups, including persons living with HIV/AIDS. To further generate support for sustainable local family planning and reproductive health programs, Partnership Conventions signed with oblasts mobilized over $400,000 in public and private contributions. On-going institutionalization of evidence-based medicine led to the MOH’s adoption of clinical protocols that reduced medical barriers to family planning by removing outdated lab requirements and increased access to family planning by strengthening guidance to health providers on prescribing contraceptives. The protocols are consistent with WHO recommendations and provide guidance to health workers in prescribing the broad range of contraceptive methods available in Ukraine today. Distribution of protocols nationwide, reinforced by targeted training of over 1,000 pharmacists and 1,600 health workers, promoted improved quality counseling on contraceptive method choice

Education - Higher Education - In FY 2007 the USG supported a faculty exchange program designed to increase the capacity of Ukraine's institutions of higher agricultural education to provide modern support to the agricultural sector. USG funding provided a U.S.-based, one-semester training program for instructors of agricultural economics to increase their technical knowledge and improve their curriculum in their home university. In FY 2007 five university instructors received grants, developed new or revised course outlines, and collected information and material while establishing linkages with U.S. agricultural universities to facilitate the continual exchange of information. A three-day extension conference held at Vinnitsa State Agrarian University, (with partial support from Penn State University), was attended by alumni from Ukraine, Russia, and Kazakhstan. Additionally, two participants completed their theses based largely on information collected during the program; six new courses were developed, four of which are already being taught. One alumnus was recently promoted to rector and another was promoted to vice dean of their respective universities.

HUMANITARIAN ASSISTANCE

Crisis Assistance and Recovery - Support of otherwise underserved, vulnerable populations not only allows the USG to fulfill its obligations to the global community by providing assistance to desperately needy people, but it also allows the U.S. to support the people of Ukraine during a transitional period when they are repairing and improving their infrastructure until they can support their own vulnerable populations. USG efforts are directed towards Crimea and Eastern Ukraine, two high-priority regions for Embassy outreach.

In FY 2007 USG funding provided donated humanitarian assistance commodities, including food, clothing, medical equipment, and medical supplies. The USG shipped 146 surface containers to Ukraine, valued at $22.5 million. In addition, funding completed selected small reconstruction projects to upgrade facilities at hospitals and orphanages.

FY 2007 Measures of Country Performance

The following data are based on the Monitoring Country Progress in Europe and Eurasia system developed by USAID to measure and track progress in the region. The system uses four different indices to monitor progress, drawing on readily available standardized country-level data on economic reform, economic structure and performance, democratic reform, and human capital. The primary data sources are the European Bank for Reconstruction and Development (EBRD), the World Bank, the United Nations Children’s Fund (UNICEF), and Freedom House. The data for each of the four indices are converted and standardized to a 1-to-5 scale, with a “5” representing the best performance of the Eastern Europe and Eurasia region, and a “1 the least advancement of the region.

Ukraine’s Democratic Reform* Scores in 2006 compared to Romania and Bulgaria in 2002

TDate: 01/01/2008 Description: The graph to the left shows Ukraines democratic reform scores in 2006* (the grey shaded area) as compared to the average of Romanias and Bulgarias democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept Photohe graph to the left shows Ukraine’s democratic reform scores in 2006* (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2007 scores not yet available


Ukraine’s Democratic Reform Scores in 2006 compared to its Reform Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows Ukraines democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows Ukraine’s democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

*Actual 2007 scores not yet available

* Democratic reforms include the electoral process (the extent to which elections are free, fair and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform) and the scope of corruption as well as anti-corruption income.


Ukraine’s 1st Stage Economic Reform* 2007 Scores Compared to Bulgaria and Romania in 2002

Date: 01/01/2008 Description: The graph to the left shows Ukraines stage one economic reform scores in 2007 (the grey shaded area) as compared to the average of Romanias and Bulgarias economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows Ukraine’s stage one economic reform scores in 2007 (the grey shaded area) as compared to 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.


Ukraine’s 1st Stage Economic Reform 2007 Scores Compared to its Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows Ukraines stage one economic reform scores in 2007 (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows Ukraine’s stage one economic reform scores in 2007 (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

Ukraine’s 2nd Stage Economic Reform 2007 Scores Compared to Bulgaria and Romania in 2002

Date: 01/01/2008 Description:
            The graph to the left shows Ukraines stage two economic reform scores in 2007 (the grey shaded area) as compared to the average of Romanias and Bulgarias economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows Ukraine’s stage two economic reform scores in 2007 (the grey shaded area) as compared to 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.

Ukraine’s 2nd Stage Economic Reform 2007 Scores Compared to its Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows Ukraines stage two economic reform scores in 2007 (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows Ukraine’s stage two economic reform scores in 2007 (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

* Economic reforms include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and “second stage” reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

Ukraine’s Progress on the USAID Country Progress Indices between 1998 and 2007

Date: 01/01/2008 Description: Ukraines Progress on the USAID Country Progress Indices between 1998 and 2007. State Dept Photo

(1) Economic reforms index include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and second stage reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

(2) The economic structure and performance index tracks indicators such as the size of the private sector as % of GDP, export share of GDP, and the size of the small and medium enterprise sector as % of GDP, economic growth, inflation, debt, and foreign direct investment.

(3) The Democratic reforms index include the electoral process (the extent to which elections are free, fair, and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform), and the scope of corruption as well as anti-corruption efforts.

(4) USAID tracks progress on the Human capital index by analyzing trends in health (life expectancy, under five mortality rates, and public expenditures on health), education (secondary school enrollment rates and public expenditures on education) and per capita income.



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