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Diplomacy in Action

FY 2007 SEED Act Implementation Report


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

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

As a member of the North Atlantic Treaty Organization (NATO), the European Union (EU) and, through 2007, the United Nations (UN) Security Council, Slovakia is a key partner in a multitude of international issues significant to U.S. interests. These issues include, but are not limited to: support for a durable solution in Kosovo, peacekeeping in Afghanistan and other priority NATO and UN countries; democracy promotion in Eastern Europe; and, energy independence in the region. No longer a recipient of international assistance for democratization and reform, Slovakia has shown in recent years the ability to serve as an agent of transformational democracy, sharing its experience to assist reformers outside its borders and providing critical support to international missions. The current government, formed in July 2006, continues to carry out the international commitments and objectives established by Slovakia’s previous government. However, it is less naturally inclined to take an active role in promoting democracy or participating in peacekeeping missions. In response, the U.S. Government (USG) has redoubled its efforts to persuade the Slovak Government of their country’s unique experiences and ability to help bring democracy, stability, and reform to its neighbors, particularly within the context of its multilateral commitments, and facilitate Slovakia’s ability to be an active player in the process.

To help Slovakia contribute to NATO operations and improve regional stability, the USG uses assistance funds to reform and enhance Slovak military capabilities. These programs were crucial in convincing Slovakia to increase its troop contributions to NATO operations in Afghanistan and in Kosovo in 2007. To promote long-term economic partnership between the U.S. and Slovakia, the USG continues to support the Slovak-American Investment Fund. Now in its final stages, in FY 2007 the Fund focused on investing in informational technology, renewable energy, and other knowledge-based products that form a basis for long-term cooperation. USG programs to foster integration of the Roma community into Slovakia’s political and economic sphere finished during FY 2007, but the USG and the U.S. Embassy in Bratislava continue to prioritize the issue and work closely with former program participants.

OPERATING ENVIRONMENT

The current government led by Prime Minister Robert Fico, formed in July 2006, views the many international commitments made by previous Prime Minister Mikulas Dzurinda with skepticism, but remains open to maintaining Slovakia’s participation in most key activities. In 2007 Fico followed through on his campaign promise to remove troops from Iraq. Nevertheless, communication between the USG and the Government of Slovakia (GOS) remains strong, which contributed to the Prime Minister’s decision to increase Slovak military presence within NATO missions in Afghanistan and Kosovo. The Fico government has been less inclined to support the official and nongovernmental organization (NGO) democracy promotion efforts promoted by its predecessor, as evidenced by Slovakia’s decision to budget slightly lower levels of official development assistance in FY 2007 for such programs. The Slovak government has, however, reinstated provisions that allow individuals to assign their income taxes to NGOs, including those involved in human rights promotion abroad. Taking into account the worldview of the current Slovakian Government, USG assistance programs have shifted toward convincing the GOS and the Slovak people of the unique role Slovakia plays in bringing about stability and democratic transformation throughout the region and world, and convincing the GOS to provide material support for these objectives. The outlook of the GOS has not altered the USG’s ability to implement its core assistance programs, nor has it lessened their impact. In fact, USG assistance programs arguably have much more impact now than they did with the previous government. In any case, the government’s skepticism toward some international engagements has required the U.S. to intensify its outreach to the government, parliament and NGOs, and to reorient recipients of USG public diplomacy assistance.

FY 2007 Country Program Performance

PEACE AND SECURITY

USG security assistance was designed to enhance the interoperability and deployability of Slovak military forces. More broadly, assistance was designed to help Slovakia meet its NATO obligations, to strengthen U.S.-Slovak partnership on NATO and other security issues, and to help prevent terrorism. Within the context of NATO and other international mission operations, programs were targeted in large part toward improving Slovakia’s capacity to provide operations such as combat engineering and Provincial Reconstruction Team (PRT) base security in Afghanistan, and the domestic disposal of nuclear, biological, and chemical (NBC) weapons. The U.S. also increased export control assistance to help Slovakia strengthen its counter-terrorism capabilities, particularly on its border with Ukraine.

Military Assistance - To modernize force capabilities, the USG provided assistance to develop a training complex that ties in training from maneuver units and simulated command post forces. USG security assistance has directly assisted Slovakia’s Force 2010 Defense Reform Program over the past five years primarily through the advice and assistance given by Cubic, a USG-funded defense advisory group. Via this program, Slovakia recently purchased large quantities of NBC equipment, communications equipment for special ops units, and explosive ordnance disposal equipment and training.

USG military assistance provided key support and training during the Slovak military reform process. During FY 2007 USG assistance provided equipment and training for military police, nuclear, biological, and chemical detection equipment, and night-vision goggles. All of these categories were specifically requested by the Slovak Ministry of Defense as priority needs in order to protect the country‘s borders and carry out peacekeeping missions.

The military training program sent 34 Slovak soldiers and defense ministry civilians in 2007 to a broad range of specialty courses in the U.S.. The mission is multiplying the benefits of the program by creating and periodically bringing together an alumni group of graduates. This group provides steady, friendly input into defense planning.

USG assistance also carried out a military-to-military team program sustained by the U.S. European Command, which continued to assist the Slovaks with its training complex, NCO training, and staff planning. A state partnership program with the Indiana National Guard focused on executing military-to-military events to enhance Slovak peacekeeping capabilities and use of the National Military Command Center.

USG programs focused on modernizing the Slovak military were greatly effective in facilitating Slovakia’s ability to work regionally and overseas. Slovakia has focused on the following international military commitments, the first three of which are scheduled to continue at least through 2008: Afghanistan (ISAF): 57 combat engineers and two officers ISAF HQ; Kosovo (KFOR): 135 Peacekeepers; Cyprus (UNFICYP): 196 Peacekeepers; and, Syria (EUNDOF): 95 Observers (This mission will end in June 2008).

During FY 2007 Slovakia increased its deployment of soldiers to NATO operations in Afghanistan and Kosovo. USG military training and equipment assistance was the crucial factor in facilitating Slovakia’s decisions to increase cooperation with USG and NATO-led multilateral forces in Afghanistan and Kosovo, and to maintain troop presence elsewhere. The training and equipment provided in Afghanistan, for example, helped make it possible for Slovak combat engineers to work effectively in Kandahar province in 2007. FMF equipment and training provided this year to Slovak military police will help fulfill future commitments to provide base security in 2008 for a PRT led by the Netherlands in Uruzgan province. The GOS provided matching funds for these USG assistance programs, which enhanced their commitment to the partnership and increased the program’s effectiveness.

Border Security - Export and border control assistance provided commodity identification training for Slovakia’s border police, and also donated computer work stations and software to both border police and the Department of Sensitive Goods at the Ministry of Economy. These donations were made from FY06 EXBS funds during 2007

USG funding supported the installation of radiation detection equipment at three checkpoints along the Slovak-Ukrainian border. This new equipment will better enable Slovakia to detect, deter and prevent the transfer of nuclear and other radioactive material across its border and into the European Union. Equipment will be installed at two more checkpoints in 2008.

ECONOMIC GROWTH

To strengthen investment in small and medium-sized entrepreneurial ventures, in FY 2007 the USG continued to support the Slovak American Enterprise Fund (SAEF). SAEF will cease issuing new loans in March 2008. As the Fund approaches its end, it has focused more on knowledge-based products that will be crucial to Slovakia’s continued long-term economic growth. The Embassy and the SAEF board continue to discuss plans for a potential SAEF legacy program, financed by the proceeds of the successful investments made by SAEF.

Since its inception in 1993, SAEF has invested more than $54 million. Of that amount, $50 million went into went into 48 Slovak companies in the form of equity ($31.5m) or loan ($18.5m) under the program of Direct Investments. Total equity and loans investments in FY 2007 were $5.7 million, a significant increase from the $2.5 million invested in 2006. The small loan program has provided $4.5 million to 51 companies.

In FY 2007 SAEF focused on maximizing its remaining investment period until March 2008 by exiting its underperforming assets and targeting investments in IT, high-tech and renewable energy. The fund sold off Slovlepex, a wood processing company, and reached a settlement agreement to exit a long-dormant investment with Schramko company. In 2007 the fund took a 55% stake in the newly established company CarDealer, an online firm that connects consumers with local car dealers. The fund also invested in SunCol, which has a solar panel prototype, with the option to increase its investment in serial production if the prototype is successful. The pipeline for the remaining three months of investing includes a post-production film company, a renewable-energy technology distributor and an e-commerce venture.

INVESTING IN PEOPLE

In March 2007 USG concluded its four-year Roma Integration Program (RIP) focused on the economic, political, and social integration of the Roma community. The program, launched in 2003, included the Czech Republic, Hungary, and Slovakia, and addressed continuing challenges to integration of this minority population, including high unemployment, substandard housing, low rates of educational achievement and political participation, a distorted image in the media, and direct and indirect discrimination. During its last six months, the RIP program held advocacy and local governance trainings for Roma community leaders in the Central and Eastern Slovak towns of Kezmarok, Presov, and Rimavska Sobota. Training was provided to health care assistants working in the Romani community, and a conference on housing discrimination (a timely issue in 2007) was organized. Program participants also produced a biweekly television program (So Vakeres) in the Romani language on news issues of interest to the community. Over the course of its four years, RIP facilitated sustainable development of both civic organizations within the Roma community and Slovak institutions designed to improve Slovak-Roma relations. In a follow-up analysis conducted in late 2006, an NGO working in the community determined that over 80% of grantees have been able to find follow-up funding for projects initiated or supported by the USG program. Although RIP has been discontinued, Roma integration continues to be a key mission priority, and the Embassy continues to provide support for organizations working with the Roma community through Public Affairs grants.



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