FY 2008 Foreign Operations Appropriated Assistance

Bureau of European and Eurasian Affairs
FY 2008 U.S. Government Assistance to and Cooperative Activities with Central and Eastern Europe


FY 2008 Foreign Assistance Goals

In February 2008, Kosovo declared independence and officially ended nine years of United Nations (UN) administration when its Constitution entered force in June. In this context, United States Government (USG) assistance to Kosovo has sought to support a peaceful transition to independence and help lay the groundwork for the development in Kosovo of a stable, democratic society that respects minority rights, is at peace with its neighbors, and is on a path to Euro-Atlantic integration. USG assistance complemented diplomatic efforts through a period of transition. This included extensive involvement in international policing efforts and training for the Kosovo Police; adoption of a Constitution, which protects the rights of all citizens; and intense activities to reach out to minority communities, particularly Kosovo Serbs. Significant long-term development achievements were also registered in the areas of Economic Growth and Governing Justly and Democratically.

Total FY 2008 Foreign Operations Appropriated Assistance: $147.18m*

FY 2008 Areas of Focus

P&S: Peace and Security

GJD: Governing Justly and Democratically

IIP: Investing in People

EG: Economic Growth

HA: Humanitarian Assistance

XCPS: Cross-Cutting Program Support
Date: 01/01/2009 Description: Kosovo: Total FY 2008 Foreign Operations Appropriated Assistance: $147.18m ,  Peace and Security=$52.83m, 36% , Governing Justly and Democratically=$31.23m, 21% , Investing in People=$16.00m, 11% , Economic Growth=$42.40m, 29% , Humanitarian Assistance=$1.50m, 1% , Cross-Cutting Program Support=$3.23m, 2%. State Dept Photo

(*Foreign Operations appropriated assistance, excluding centrally managed Foreign Operations funds that are not budgeted for specific countries.)

Highlights of FY 2008 Performance by Area of Focus

Peace and Security

In FY 2008, USG assistance:

  • Aided the Ministry of Internal Affairs (MOIA) in establishing administrative procedures and standards for hiring, promotion, and discipline of the Kosovo Police. USG-funded advisers were instrumental in helping Kosovo address the challenges of becoming a new state, including drafting law enforcement legislation, establishing new institutions for citizenship and asylum, creating new travel and identification documents, and improving Kosovo’s capacity to combat complex crime, including organized crime and trafficking in persons.

  • Enabled Kosovo to draft and implement a comprehensive anti-trafficking in person’s law enforcement and victim assistance strategy and targeted training to the border police that helped in the seizures of fraudulent documents and illicit goods. In an effort to strengthen links between communities and police, the USG funded the development of eight multi-ethnic community safety action teams (CSATs). In consultation with the MOIA, the CSATs work with community stakeholders to develop community-based public safety strategies. USG funding also supported the conduct of a rule of law technology assessment that identified gaps in data collection and storage.

  • Provided funding to equip and train the Kosovo Security Force (KSF). USG assistance was also provided to support the development of the Ministry for the KSF and demobilize members of its predecessor, the Kosovo Protection Corps.

  • Supported continuous monitoring of conflict trends through four quarterly “Early Warning System” reports providing analysis to government and international peace-building actors in Kosovo. In advance of the declaration of independence, the USG provided support to a “Crisis Response Group,” which prepared contingency plans for any tension or conflict that might arise. This included assisting in the creation of a reporting platform for coordinated response efforts, establishing a communication network for Kosovo Serb community members that could be used if violence broke out, and providing technical support for the development of a public campaign to encourage peaceful reaction to independence.

Governing Justly and Democratically

In FY 2008, USG assistance:

  • Helped Kosovo’s constitutional commission organize its work, including public outreach efforts (via different media and public fora), to collect public input resulting in the completion and adoption of a new constitution in June 2008. To build Kosovo’s capacity to draft legislation, a function previously under the authority of the international civil administration, a Legislative Drafting Training Program was designed and delivered to drafters from a number of institutions including the Kosovo Judicial Council and the Ministry of Justice and the Assembly of Kosovo. Also, with USG support, significant progress was made on several justice sector laws, including development of a new court system.

  • Worked closely with several model courts to focus and fine-tune reforms being introduced. Once successfully piloted, reforms will be adopted system-wide. Several courts created centralized filing systems for the first time; others conducted detailed caseload inventories to identify and correct causes of case backlogs. Other initiatives including the development of a Civil Execution Handbook have resulted in a reduction in civil execution cases. For example, in the Gnjilane/Gjilan Municipal Court, the first to pilot these procedures, the reduction was 54 percent. In addition, quantifiable court performance measures were developed and accepted for the court system. The Kosovo Judicial Council has also issued a schedule of standardized court fees and expenses. A manageable disciplinary procedure was crafted and outreach efforts to build public trust in the newly independent judiciary are ongoing.

  • Helped produce revised legislation that is consistent with Constitutional provisions and international standards for local good governance, municipal autonomy, and protections for minorities. Advisers helped the Ministry of Local Government Administration (MLGA) draft key laws for Local Self-Government, Municipal Boundaries, Local Elections, and Municipal Finance. Advisers also helped MLGA amend laws on Public Finance and Public Debt to assure fiscal oversight. Support for MLGA-led International Working Groups has been critical to garnering other donor support for the Government of Kosovo’s ambitious Decentralization Plan.

  • Helped in the preparation of a capacity building strategy for municipalities, trained municipal officials, and facilitated the handover of municipal authorities following the November 2007 elections. Training prepared local officials on new laws, establishing budgets, hiring personnel, and carrying out their new mandate within the law. Over 1,100 local and Ministry officials were trained during FY 2008 (33 percent of who were women).

  • Worked with municipal governments to improve outreach to citizens, especially minorities. A three-year community-based initiative program, which ended in October 2008, encouraged local communities and their leaders to be active partners, together with municipal authorities, in improving living conditions. With USG assistance, communities used consensus building and other democratic process to complete 135 infrastructure projects. These projects included roads, schools, sports fields, health centers, and water and sanitation projects, improving the lives of over 400,000 people.

  • Helped the Kosovo Assembly meet the many legislative and oversight demands placed upon it during the transition. USG assistance to the Assembly helped four key committees use research and analysis in decisions, improve operations, and increase public outreach. A chief success in FY 2008 was the establishment of a permanent Committee for Rules of Procedure (RoPs), which now takes the lead in interpreting, enforcing, and amending the rules to improve Assembly functions. Amendments to the RoPs now allow parliamentary group statements in plenary sessions and standardized plenary agendas.

  • Helped civil society develop advocacy networks to influence government policy and combat corrupt public sector practices. Activities led to increased interaction among local governments and non-governmental organizations (NGOs). USG-supported organizations held 354 public hearings/open forums, attracting approximately 37,034 participants (including 15,488 women) from civil society organizations, general public, private sector, government, and international organizations. Substantive participation and advocacy efforts led by civil society are believed to have influenced 16 governmental policy decisions including six relating to anti-corruption.

Investing in People

In FY 2008, USG assistance:

  • Helped improve the administration, management, and transparency at the University of Pristina (UP), established a School of Public Service at the American University in Kosovo (AUK), and streamlined ongoing participant training efforts into Kosovo institutes of higher education.

Economic Growth

In FY 2008, USG assistance:

  • Continued to build local capacity in the Budget and Treasury departments of the Ministry of Finance and Economy (MFE). With USG assistance, a new law on budget was drafted and passed by the Assembly. The Budget Department provided analysis in order to prepare budget ceilings, presented these to Budget Organizations, and used budget requests to prepare Kosovo’s first multi-year budget. Assistance to the Treasury Department helped revise the organizational structure to improve succession planning, institute more robust cash management processes, and introduce an electronic bar code system for tracking revenues. As a result of new cash management procedures, the Treasury realized a 15 million euro increase in revenue. The Treasury Department also continued to implement processes and procedures required for decentralization of management of municipal expenditures. The USG also provided technical assistance in drafting a comprehensive debt law.

  • Supported implementation of a strategic plan to bring the tax administration into compliance with international standards and helped increase municipal tax collection through outsourcing of collection and enforcement programs.

  • Strengthened the technical proficiency of financial examiners and improved Central Bank of Kosovo’s (CBK) institutional management. With USG assistance, the CBK used an approach to bring strong, experienced institutions into Kosovo`s financial sector. During FY 2008, the CBK granted four banking licenses to subsidiaries or branches of financial institutions already active in the region.

  • Addressed problems with Kosovo’s aging and strained electricity infrastructure through support for the financial performance of the Kosovo Electric Corporation (KEK). During 2008, payment collections on invoiced sales increased by 5.5 percent, while energy billed to end-customers as a proportion of aggregate energy delivered to the network also increased by 5.4 percent, yielding a total increase in collections as a proportion of delivered energy of 8.4 percent. While for most of 2008 this increase was predominantly attributable to the increase in consumption by a single large industrial customer that makes regular on-time payments, other factors have begun to contribute to further improvements in KEK’s collection performance. USG advisers assisted KEK’s management in the implementation of new management techniques at the district level in the area of customer billing and collections. In September 2008, in the first district where these new techniques were applied, collections increased by over 70 percent compared to September 2007. Preliminary results for October 2008 confirm similar collection improvements.

  • Supported the development of Kosovo’s Energy Regulatory Office (ERO) and KEK’s participation in the regulatory process. This collaboration resulted in the significant decision by the regulator in April 2008 to allow a modest tariff increase for end-users (5 percent on average). The USG initiated a twinning/peer exchange relationship between the Kosovo ERO and the Illinois Commerce Commission, which began with an inaugural exchange in October 2008.

  • Increased the number of jobs in the agriculture sector through technical assistance, training and marketing trade fairs. Assistance in the poultry sector resulted in the establishment of a full supply chain, from egg production to raising broilers and layers. A full broiler-raising operation, absent from the Kosovo economy since the conflict, now has the capacity to house 15,000 chickens.

  • Provided intense support on the development and finalization of several key pieces of legislation to improve the business climate in Kosovo, including new laws on Civil Aviation, Public Financial Management and Accountability, and Local Government Finance. Additionally, a comprehensive training program for judges covering six commercial laws, including Trademark, Business Organizations, Arbitration, Pledges, Copyrights, and Obligations was developed and the first round of training sessions were conducted. In an effort to resolve property ownership cases with Serbia, the USG continued assistance to the Kosovo Property Agency, which adjudicated 16,659 of 39,939 claims received.

Success Stories

Major Successes Resulting from USG Support to Kosovo Energy Sector – Two major energy-related successes in FY 2008 hold promise for improvement of the beleaguered sector: a Government of Kosovo decision to privatize the distribution functions of the publicly owned electricity utility; and the agreement to move forward with the “New Kosovo” initiative, a plan to build a new, privately owned 2,000-plus megawatt coal-fired electricity plant. USG assistance and coordination with other donors was central to both achievements.