GAO

United States General Accounting Office

Report to the Chairman, Committee on 

International Relations, House of 

Representatives

August 1999 FOREIGN 

ASSISTANCE

U.S. Economic and 

Democratic 

Assistance to the 

Central Asian 

Republics

GAO/NSIAD-99-200

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-283079 Letter

August 11, 1999

The Honorable Benjamin A. Gilman

Chairman, Committee on International Relations

House of Representatives

Dear Mr. Chairman:

This report responds to your request that we examine the economic and democratic assistance that 

the United States has provided to the Central Asian Republics of Kazakhstan, the Kyrgyz Republic, 

Tajikistan, Turkmenistan, and Uzbekistan. With the break up of the Soviet Union in 1991, the United 

States has provided a broad foreign assistance program to these republics, including development of 

market-oriented economies and democracy building.

Unless you publicly announce its contents earlier, we plan no further distribution of this report until 

30 days after its issue date. At that time, we will send copies to the Honorable Madeleine K. Albright, 

the Secretary of State; the Honorable Harriet C. Babbitt, the Acting Administrator of the U.S. Agency 

for International Development; and other interested congressional committees. We will also make 

copies available to others upon request.

Please contact me at (202) 512-4128 if you or your staff have any questions about this report. Other 

GAO contacts and staff acknowledgements are listed in appendix II.

Sincerely yours,

Benjamin F. Nelson

Director, International Relations and 

 Trade Issues

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Page 2 GAO/NSIAD-99-200 CAR Assistance

Executive Summary

Purpose With the breakup of the Soviet Union in 1991, the five countries that 

comprise the Central Asian Republics (CAR)1

—Kazakhstan, the Kyrgyz 

Republic, Tajikistan, Turkmenistan, and Uzbekistan—became independent 

along with Russia and the other former republics of the Soviet Union. The 

United States has important strategic interests in CAR, including 

dismantling Kazakhstan’s nuclear arsenal; developing oil and gas reserves; 

and helping stabilize a region surrounded by China, Iran, and Russia.

The FREEDOM Support Act of 1992 authorized a broad foreign assistance 

program for the independent states of the former Soviet Union that 

included development of market-oriented economies and democracy 

building.2

 Since fiscal year 1993, the U.S. Agency for International 

Development (USAID) has provided about $274 million for economic and 

democratic reform initiatives in the five republics. Expressing concern 

about what USAID has accomplished in CAR and USAID’s oversight of its 

CAR programs, the Chairman, House Committee on International 

Relations, asked GAO to determine 

• what USAID’s economic and democratic reform initiatives in CAR were 

designed to achieve; what has been accomplished; and what factors, if 

any, have limited the implementation of reforms; 

• whether lessons learned from similar USAID programs in Central 

Europe3

 and Russia have been applied in CAR; and

• how USAID ensures that its assistance funds in CAR are spent for 

intended purposes.

Results in Brief USAID’s economic and democratic reform initiatives in the five republics 

are designed to help develop market-oriented economies, increase citizen 

participation in economic and political decision-making, and promote more 

democratic and responsive governments. With USAID and other donor 

assistance, the CAR governments have made progress in this regard. Most 

notably, Kazakhstan and the Kyrgyz Republic—the two republics most 

committed to reforms—have privatized many small and medium-sized, 

1

CAR is a term of convenience applied by the Department of State to the five independent republics and 

does not signify a political or economic union among them.

2

The “Freedom for Russian and Emerging Eurasian Democracies and Open Markets Support Act of 

1992,” also known as the FREEDOM Support Act. (P.L. 102-511, 106 Stat. 3320, 22 U.S.C. sec. 5801).

3

The Central European countries gained their independence from the Soviet Union in 1989.

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Executive Summary

Page 3 GAO/NSIAD-99-200 CAR Assistance

state-owned enterprises; implemented trade and financial reforms; and 

developed nongovernmental organizations and independent broadcast 

news stations to encourage greater citizen involvement in governmental 

activities. 

However, the goal of reaching a market-oriented democracy in each of 

these five republics is decades away. Even those republics that appear to 

have the greatest commitment to reform—Kazakhstan and the Kyrgyz 

Republic—have not completed many reforms. For example, both still have 

many large, state-owned enterprises that have not been privatized and new 

tax codes that have not been effectively enforced. With the exception of 

the Kyrgyz Republic, none have supported key democratic reforms, such as 

holding fair and free elections. Several important factors have affected the 

implementation of reforms in all the republics, including long-standing 

government corruption; inadequate resources to implement and enforce 

new laws and regulations; inexperience in managing market economies 

and democracies; and, most importantly, the governments’ limited 

commitment to implement comprehensive reforms at the national level. 

USAID’s programs in CAR reflect numerous lessons learned from similar 

programs in Central Europe and Russia. For instance, based on efforts to 

privatize economies in Central European countries, USAID designed an 

integrated program to privatize the CAR economies, stressing simultaneous 

reforms in the fiscal, legal, and financial sectors. Similarly, based on 

experience with democratic reforms in Russia, USAID has focused on 

working with citizen groups rather than with national political leaders and 

institutions that are adverse to reforms.

To ensure that assistance funds are spent for intended purposes, USAID 

requires that cognizant technical officers carry out various project 

oversight requirements. Based on GAO’s review of 14 CAR projects, USAID 

was meeting these requirements.

Background Based on the FREEDOM Support Act of 1992, the current U.S. strategy for 

CAR seeks to have each country adopt and implement policies, laws, and 

regulations that provide the framework for market-oriented economies and

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Executive Summary

Page 4 GAO/NSIAD-99-200 CAR Assistance

democratic societies.4 The strategy provides the basis for USAID’s 

economic and democratic reform initiatives.

Complicating USAID’s efforts, however, is the region’s long history of 

isolation. According to USAID, over 150 years of Russian and Soviet 

domination left CAR isolated from western technology, economic progress, 

and political development. In addition, unlike the other newly independent 

states (NIS) in the former Soviet Union and Central Europe, CAR had no 

history as independent nation states. The historical lack of citizen 

involvement in economic and government decision-making has led to the 

underdevelopment of citizen involvement with and experience needed to 

operate market-oriented democracies. Consequently, CAR began the 

transition process far behind the other former Soviet Union states.

Principal Findings

USAID’s Assistance Has 

Contributed to Economic 

and Democratic Reforms 

USAID, in conjunction with other donors and the host governments, has 

helped the two republics most committed to reform—Kazakhstan and the 

Kyrgyz Republic—begin the transition to market-oriented democracies. 

USAID has concentrated its reform efforts on these two republics, 

providing $150 million and $83 million, respectively, since fiscal year 1992, 

or more than 85 percent of USAID’s economic and democratic assistance to 

CAR.

• USAID’s overall economic reform strategy is to help the CAR 

governments (1) privatize state-owned enterprises, (2) introduce tax 

and budget reforms, (3) promote the growth of private enterprise, and 

(4) improve the financial sector. 

• USAID’s democratic reform initiatives are aimed at promoting 

democracy at the national level, increasing citizen participation in 

economic and political decision-making, and advancing more 

responsive local government.

USAID provided advisors, training, small grants, and some equipment to 

assist both governmental and nongovernmental organizations (NGO) in 

4

United States Assistance and Economic Cooperation Strategy for Central Asia (Washington, D.C.: 

Department of State, July 1994).
Executive Summary

Page 5 GAO/NSIAD-99-200 CAR Assistance

designing and implementing economic and democratic reforms. For 

example, in Kazakhstan and the Kyrgyz Republic,

• USAID helped privatize 17,000 and 1,000 small to medium-sized, 

state-owned enterprises, respectively; adopt modern tax codes; enact 

commercial legislation; convert over 2,000 enterprises to the use of 

international accounting standards; improve the banking systems; and 

establish stock exchanges. In the Kyrgyz Republic, USAID helped the 

government join the World Trade Organization.

• USAID helped increase public participation in the political process by 

developing over 2,500 NGOs; strengthening over 100 independent radio 

and television news stations; and assisting in organizing town hall 

meetings, political debates, and public hearings.

USAID has not provided much assistance to the other three republics. The 

Turkmenistan and Uzbekistan governments generally have not been 

committed to reforms, and civil strife has limited opportunities to initiate 

reforms in Tajikistan. State and USAID rank Tajikistan, Turkmenistan, and 

Uzbekistan as having made the least progress in their transition to 

sustainable, market-oriented democracies compared to other countries in 

NIS. Nevertheless, USAID has assisted with some accomplishments in 

each country, such as privatizing about 500 small state-owned enterprises 

in Tajikistan, increasing the number of NGOs in Turkmenistan, and 

implementing a modern tax code in Uzbekistan.

USAID and State officials said it could take decades before CAR’s transition 

to market-oriented economies is complete. USAID’s economic reform 

initiatives have been supported by the national governments, at least in 

part, because of the potential income from foreign investment and resource 

development. Yet, despite the privatization of nearly two-thirds of the 

small- and medium-sized enterprises in Kazakhstan and the Kyrgyz 

Republic, many large enterprises are still owned and operated by the 

governments. Moreover, many of the laws and regulations that support a 

market-oriented economy are either not being enforced or are 

nonexistent—new tax codes have not been effectively enforced, most 

commercial legislation has not been fully implemented, and the banking 

sector has not been fully reformed. In all the republics, corruption is 

longstanding and pervasive. For example, unnecessary export licensing 

processes remain a source of bribery and corruption. 

With the exception of the Kyrgyz Republic, the CAR governments have 

been slow to initiate democratic reforms because they threaten the 
Executive Summary

Page 6 GAO/NSIAD-99-200 CAR Assistance

incumbent governments’ control. Only the Kyrgyz Republic has committed 

to hold free and fair elections at the presidential and parliamentary levels. 

Democratic development is still characterized by a lack of citizen 

involvement and government controls over the broadcast news media have 

led to self-censorship and a reluctance to report stories that might offend 

public officials. 

USAID Has Incorporated 

Lessons Learned From 

Other Similar Programs

USAID officials said that incorporating lessons learned from Central 

Europe and Russia was inherent in the CAR program’s design and 

implementation, as illustrated by the following: 

• Based on USAID’s approach to privatization in Central Europe, USAID 

designed an integrated plan for market development. USAID found in 

Central Europe that five elements were essential to enable private 

sector growth following privatization. These included the development 

of (1) tax reform to support the financial obligations of the government; 

(2) the legal framework for commercial, trade, and investment activity; 

(3) accounting reform to provide credible financial data for economic 

decision-making; (4) bank reforms to provide the capital for private 

sector growth to improve corporate governance; and (5) stock markets 

to help enterprises raise capital. USAID incorporated each of these 

elements in its development plan for the republics.

• Based on USAID’s experience in Eastern Europe and Russia, USAID has 

focused its democratic assistance on working with citizens to develop a 

civil society that would push for democratic reforms from the bottom 

up, rather than focusing on the national government. USAID found in 

Russia that without the political support of national leaders, assistance 

targeting national institutions and political processes was not likely to 

achieve democratic reform. USAID has adopted this strategy to 

establish and support nongovernmental organizations to build 

consensus for democratic reform and has purposely avoided providing 

direct assistance to national governments that have not been supportive 

of democratic reform. 

These and other lessons applied in CAR were identified through various 

studies, conferences, and staff experiences. Although the use of lessons 

learned was envisioned from the start of the USAID program in CAR, 

USAID is now taking steps to develop a more formal system. USAID 

officials said such a system would help identify and disseminate lessons 

learned more effectively than the current system. 
Executive Summary

Page 7 GAO/NSIAD-99-200 CAR Assistance

USAID Is Meeting Its 

Oversight Requirements

USAID ensures that assistance funds are spent for intended purposes 

through various project oversight requirements. USAID regulations and 

guidance generally require its cognizant technical officers to maintain 

communications with contractors and grantees, conduct site visits to verify 

work performance, and review programmatic and financial reports to 

compare actual progress and costs against expected results and costs. 

GAO reviewed seven economic and seven democratic reform projects in 

CAR and found that USAID had complied with its oversight requirements.5

Recommendations GAO is not making any recommendations in this report.

Agency Comments The Department of State and USAID were provided a draft of this report for 

comment. USAID provided written comments (see app. I), which State 

said it concurred with. USAID also provided technical comments that we 

have incorporated, as appropriate. In its written comments, USAID noted 

that the report makes a number of important points about the region and 

does a good job of describing USAID’s efforts in CAR. USAID also provided 

a listing of recent changes in CAR that are not specifically addressed in the 

report.

5

Funding for the economic reform projects selected represented $136 million or 6 2percent of the total 

economic assistance to CAR since fiscal year 1992. Funding for the democratic reform projects 

selected represented $32 million or 60 percent of the funding for democratic assistance since fiscal year 

1992.
Page 8 GAO/NSIAD-99-200 CAR Assistance

Contents

Executive Summary 2

Chapter 1

Introduction

 10

U.S. Economic and Democratic Reform Strategies 10

Historical Constraints to Development 12

The Central Asian Republics 12

Objectives, Scope, and Methodology 14

Chapter 2

USAID’s Assistance 

Has Contributed to 

Economic and 

Democratic Reforms

 16

Economic Reforms 16

Democratic Reforms 25

CAR’s Economic and Democratic Transitions Are Far From Complete 31

Conclusions 33

Chapter 3

USAID Has 

Incorporated Lessons 

Learned in Its Car 

Programs

35

Lessons Learned 35

USAID Is Formalizing Its Lessons Learned Process 37

Chapter 4

USAID Complied With 

Its Oversight 

Requirements

38

Communications 39

Site Visits 39

Performance and Financial Reports 40

Files 41

Appendixes Appendix I: Comments From the U.S. Agency for International 

Development 42

Appendix II: GAO Contacts and Staff Acknowledgments 46

Table Table 1.1: USAID Obligations for CAR Economic and Democratic 

Assistance Programs by Country, Fiscal Years 1992-98 11
Contents

Page 9 GAO/NSIAD-99-200 CAR Assistance

Figures Figure 1.1: Map of the Central Asian Republics 13

Figure 2.1: Ratings of Economic Policy Reforms and Democratic

Freedom in Central Europe and NIS 32

Abbreviations

CAR Central Asian Republics

CTO cognizant technical officer

IMF International Monetary Fund 

NGO nongovernmental organization

NIS newly independent states

USAID U.S. Agency for International Development

WTO World Trade Organization
Page 10 GAO/NSIAD-99-200 CAR Assistance

Chapter 1

Introduction Chapte1r

Significant economic, political, and security interests have shaped U.S. 

assistance to the five Central Asian Republics (CAR)—Kazakhstan, the 

Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. In addition to 

furthering the nuclear disarmament of Kazakhstan, U.S. interests in CAR 

include (1) promoting market-oriented economic reforms; (2) establishing 

democratic political institutions; (3) developing energy resources in the 

region; and (4) fostering regional stability, including the movement toward 

greater integration with western and international institutions. This report 

examines the U.S. Agency for International Development’s (USAID) 

assistance program to help each of these republics develop 

market-oriented economies and make the transition from communism to 

democracy. Since fiscal year 1992, USAID has provided about $274 million 

to assist CAR in this transition.

U.S. Economic and 

Democratic Reform 

Strategies

The FREEDOM Support Act of 1992 authorized a broad foreign assistance 

program for the independent states of the former Soviet Union that 

included development of market-oriented economies and democracy 

building. The current U.S. strategy for CAR forms the basis for USAID 

economic and democratic reform initiatives.1

 The strategy seeks to have 

each country adopt and implement policies, laws, and regulations that 

provide the framework for market-oriented economies and democratic 

societies. Specifically, the strategy calls for 

• competitive, market-oriented economies in which the majority of 

economic resources are privately owned and managed and 

• transparent (open) and accountable governments and the 

empowerment of citizens, working through civic and economic 

organizations that ensure broad-based participation in political and 

economic life.

The U.S. strategy recognized the importance of other donors in the region, 

including the International Monetary Fund (IMF), the World Bank, and the 

European Bank for Reconstruction and Development. These institutions 

have provided CAR over $4.3 billion in financial assistance since 1992, and 

significantly influence economic reforms by setting certain requirements or 

“conditions” for their loans and grants. The strategy called for systematic 

in-country coordination with these and other donors to avoid duplication, 

1

United States Assistance and Economic Cooperation Strategy for Central Asia (Washington, D.C.: 

Department of State, July 1994).

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Chapter 1

Introduction

Page 11 GAO/NSIAD-99-200 CAR Assistance

to assure consistency in programming and advisory services, and to 

leverage U.S. resources. 

USAID has developed strategic objectives, action plans, and strategies for 

its own programs to implement the U.S. strategy. Table 1.1 illustrates 

USAID funding for its economic and democratic reform initiatives in CAR 

for fiscal years 1992-98.

Table 1.1: USAID Obligations for CAR Economic and Democratic Assistance 

Programs by Country, Fiscal Years 1992-98 

Note: Obligations are commitments to provide federal funding resulting in the immediate or future 

outlay of funds.

Source: U.S. Government Assistance to and Cooperative Activities With the New Independent States 

of the Former Soviet Union, Fiscal Year 1998 Annual Report (Washington, D.C.: the Office of the 

Coordinator of U.S. Assistance to NIS).

The strategy also stated that the size and type of the U.S. assistance were 

expected to reflect the extent to which national leaders demonstrated a 

commitment to reforms. USAID has concentrated its economic and 

democratic reform efforts in Kazakhstan and the Kyrgyz Republic—the two 

republics most committed to reform. USAID has limited its assistance to 

Turkmenistan and Uzbekistan because of their lack of commitment to 

reforms, while Tajikistan has had few opportunities to initiate reforms due 

to civil strife. 

USAID does not provide U.S. funds directly to the CAR governments. 

Instead it funds U.S. contractors and grantees that, in turn, provide 

technical assistance, small grants, and equipment to CAR government 

agencies and nongovernmental organizations (NGO) involved in economic 

and democratic reforms. For example, USAID hired experts to advise CAR 

ministries on drafting laws needed to privatize the state-controlled 

Dollars in millions

Country

Economic

reform

Democratic

reform Total

Percentage

of total

Kazakhstan $122 $28 $150 55

Kyrgyz Republic 70 13 83 30

Tajikistan 3 4 7 2

Turkmenistan 3 2 5 2

Uzbekistan 23 6 29 11

Total $221 $53 $274 100

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Chapter 1

Introduction

Page 12 GAO/NSIAD-99-200 CAR Assistance

economy. USAID advisors also worked with citizen groups to help develop 

NGOs and provide advice and equipment needed to establish independent 

broadcast news stations. 

Historical Constraints 

to Development

According to State and USAID, CAR is the most undeveloped region in the 

newly independent states (NIS) of the former Soviet Union. None of the 

countries had experience with market-oriented economies or democratic 

governments before the breakup of the Soviet Union. First Russian and 

then Soviet, domination left the area isolated from western technology, 

economic progress, and political development. 

As a result, according to State and USAID, the development of market 

economies requires major changes in attitude and incentive systems for 

individuals as well as businesses. For example, USAID officials pointed out 

that in three out of the five republics, current leadership continues in the 

hands of former Communist Party chairmen who have recast themselves as 

national leaders, renamed the party, and were elected unopposed or with 

limited opposition. In general, according to State, the parliaments remain 

dominated by these national leaders, and there is little understanding of 

large-scale, rule-based democracy among the general public, who are 

largely disinterested in politics. 

The Central Asian 

Republics

With the breakup of the Soviet Union, the United States and other countries 

recognized CAR’s strategic location and largely untapped natural 

resources. Figure 1.1 illustrates the region’s geographic significance, with 

CAR bordering China, Iran, and Russia. 
Chapter 1

Introduction

Page 13 GAO/NSIAD-99-200 CAR Assistance

Figure 1.1: Map of the Central Asian Republics

Following is a brief description of each of the republics.

• Kazakhstan is the ninth largest country in the world and stretches from 

Mongolia to the Caspian Sea. It has large reserves of oil, gas, and 

minerals. Its size, location, and overall political and economic stability 

have made Kazakhstan an important regional force. Despite being a 

very large country, Kazakhstan has a population of just under 15 million, 

according to a recent census, with a per capita income of $1,300. 

• The Kyrgyz Republic is a small, mountainous country situated south of 

Kazakhstan and west of China. It is landlocked, with few natural 

resources and limited industrial and agricultural production. The 

United States considers the Kyrgyz Republic an enthusiastic regional 

Russia

China

Iran

Kazakhstan

Caspian Sea

Afghanistan

Kyrgyz 

Republic

Tajikistan

Uzbekistan

Ashgabat

Tashkent

Dushanbe

Bishkek

Almaty

Tashkent

Almaty

Ashgabat

Kazakhstan

Turkmenistan

Aral Sea
Chapter 1

Introduction

Page 14 GAO/NSIAD-99-200 CAR Assistance

reformer and views it as a “laboratory” for demonstrating the 

effectiveness of market-oriented democratic reforms. Its population of 

4.5 million has a per capita income of $440.

• Tajikistan is bordered by Afghanistan, China, the Kyrgyz Republic, and 

Uzbekistan. Civil war broke out in 1992 and, despite a 1997 peace 

accord, continued fighting poses a challenge to peace in the republic. 

U.S. assistance is primarily focused on humanitarian aid and promoting 

the peace process. Tajikistan’s 6 million citizens have a per capita 

income of $330.

• Turkmenistan is primarily a desert country, which borders Iran and 

Afghanistan. Turkmenistan possesses the world’s fourth largest known 

reserves of natural gas and significant reserves of oil. Turkmenistan’s 

population of 4.4 million has a per capita income of $630.

• Uzbekistan borders the other four republics. The Department of State 

views Uzbekistan as central to maintaining the stability and 

independence of the region. Uzbekistan’s 22 million population is the 

largest in CAR, and its relatively large market is viewed as a potential 

launching point for commercial expansion in the region. Uzbekistan’s 

per capita income is $1,000. 

Objectives, Scope, and 

Methodology

To determine what USAID’s economic and democratic reform initiatives 

were designed to achieve, what has been accomplished, and what factors 

have limited their implementation, we reviewed program documents, 

including State and USAID strategy documents and project assessments. 

We also interviewed State and USAID officials in Washington D.C., who 

designed and managed the program, and met with headquarter 

representatives of key USAID contractors and grantees involved with 

projects in CAR. Our references to and observations about CAR or former 

Soviet Union laws and regulations are based on interviews with USAID and 

CAR government officials and other secondary sources, rather than our 

own independent legal analysis.

In Kazakhstan and the Kyrgyz Republic, which accounted for about

85 percent of USAID’s economic and democratic reform assistance to CAR, 

we reviewed USAID documents discussing accomplishments and 

impediments, survey data, and independent evaluations of USAID’s 

economic and democratic reform efforts. We also met with the U.S. 

Ambassador to the Kyrgyz Republic; the U.S. Chargé d’Affaires in 

Kazakhstan; the USAID Director for CAR; various USAID project officers 

and USAID’s in-country contractors and grantees; and host government 

officials, including members of parliament, the Supreme Court, and 
Chapter 1

Introduction

Page 15 GAO/NSIAD-99-200 CAR Assistance

government ministries. We visited project sites and observed training 

sessions to see how transition activities were implemented and to discuss 

the views of the recipients of USAID assistance. 

To determine whether USAID applied lessons learned to its country 

programs in CAR, we reviewed program documents and evaluations of 

USAID’s assistance programs in Central Europe and Russia and compared 

the strategy and program implementation with those of CAR. We 

interviewed USAID officials in Washington, D.C.; Kazakhstan; and the 

Kyrgyz Republic and analyzed program documents to catalogue examples 

of lessons learned. In the region, we attended regularly scheduled 

discussions hosted by the USAID mission with its contractors and grantees 

to see how program experiences were communicated and coordinated. 

Finally, we reviewed documentation used by USAID to identify and 

communicate lessons learned. 

To determine how USAID ensures that its assistance funds in CAR are 

spent for intended purposes, we reviewed relevant federal regulations 

including Office of Management and Budget circulars; Federal Acquisition 

Regulations; and USAID regulations and guidance for contracts, grants, and 

cooperative agreements. To assess USAID's compliance with its oversight 

requirements, we selected seven economic and seven democratic reform 

projects as case studies. Funding for the economic reform projects 

selected represented $136 million or 5 9percent of the total economic 

assistance to CAR since fiscal year 1992. Funding for the democratic 

reform projects selected represented $32 million or 64 percent of the 

funding for democratic assistance since fiscal year 1992. To determine if 

USAID was complying with USAID regulations, we reviewed the 14 project 

files; observed meetings between USAID and its contractors and grantees; 

conducted site visits; and interviewed contractors and grantees, cognizant 

technical officers, and USAID Office of Procurement officials. 

We conducted our review from July 1998 to June 1999 in accordance with 

generally accepted government auditing standards.
Page 16 GAO/NSIAD-99-200 CAR Assistance

Chapter 2

USAID’s Assistance Has Contributed to 

Economic and Democratic Reforms Chapte2r

In working with other donors and the CAR governments, USAID has 

assisted with a number of economic and democratic achievements in all 

the republics. These include privatization of small and medium-sized 

state-owned enterprises; trade, investment, and financial reforms; and the 

development of NGOs and independent broadcast news stations to 

promote reforms. However, most of the achievements have occurred in 

Kazakhstan and the Kyrgyz Republic—the two republics most committed 

to reforms. Officials from CAR governments and local NGOs said that 

USAID assistance was instrumental in furthering these achievements. 

USAID and State officials said it could take decades before CAR’s transition 

to a market-oriented democracy is complete. Even in Kazakhstan and the 

Kyrgyz Republic, many large enterprises are still owned by the 

governments; new tax codes have not been effectively enforced; most 

commercial legislation has not been fully implemented; and the financial 

sectors have made few loans. With the exception of the Kyrgyz Republic, 

none of the countries have instituted critical democratic reforms at the 

national level, such as holding fair and free elections for the heads of 

government, or endowing the legislative representatives with the 

independence or authority to challenge the executive branch. 

Furthermore, Tajikistan, Turkmenistan, and Uzbekistan have not 

demonstrated a commitment to implementing comprehensive reforms.

USAID and State officials cited several factors that have impeded reforms, 

including long-standing government corruption, the lack of resources to 

implement and enforce new laws and regulations, and the governments’ 

limited commitment to implement comprehensive reforms at the national 

level. 

Economic Reforms CAR’s command economies and its economic dependence on Russia 

present major challenges to the development of market economies in CAR. 

The historical lack of citizen involvement in economic decision-making has 

led to the underdevelopment of citizen involvement with and experience 

needed to operate market-oriented economies. USAID’s efforts to promote 

economic reform have been impeded by these historical constraints, as 

well as by the resistance of CAR governments to make comprehensive 

economic reforms.

To facilitate CAR’s transition to a market-oriented economy, USAID 

initiated programs to help the governments (1) privatize state-owned 

enterprises, (2) introduce tax and budget reforms, (3) improve the trade 

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Chapter 2

USAID’s Assistance Has Contributed to 

Economic and Democratic Reforms

Page 17 GAO/NSIAD-99-200 CAR Assistance

and investment climate, and (4) develop the financial sector. Although 

USAID has provided assistance to all five republics, it has focused on 

Kazakhstan and the Kyrgyz Republic because they have been more 

supportive of reform. 

USAID has helped the governments of Kazakhstan and the Kyrgyz Republic 

begin creating the foundation for market economies. Both have privatized 

most of their state-owned enterprises; passed market-oriented laws to spur 

commerce, trade, and investment; and created the basic institutions 

needed for banking and capital markets activities. However, the complete 

transition to market-oriented economies is decades away. Impediments 

include the limited government commitment to comprehensive economic 

reforms, inexperience in operating a market economy, insufficient 

resources to pay the costs associated with implementing new institutions 

and laws, and pervasive corruption in the region.

Privatization of State-owned 

Enterprises

In CAR, as in the rest of the Soviet Union, Moscow’s central planners 

established production patterns based on political objectives rather than 

economic efficiencies. Free enterprise was not permitted, and monopoly 

production through giant state enterprises dominated economic activity, 

skewing incentive structures, misallocating resources, and encouraging 

wasteful production patterns. The privatization process sought to break 

the linkage between the government and enterprises to allow private sector 

activity to develop.

In its strategy, State considered privatization of state-owned enterprises to 

be the single most important element in the economic transformation of 

the region. Privatization was needed to transfer the majority of economic 

resources from the CAR governments to the private sector. USAID’s 

assistance aimed to help CAR governments design and implement 

privatization programs. This included providing experts to help the 

governments put in place policies to promote competitive privatization 

procedures, such as methodologies to determine the value of state-owned 

enterprises, and procedures to accelerate their sale. They also trained local 

staff that worked closely with their government counterparts to help 

implement and monitor enterprise sales during the privatization process. 

The degree of privatization has varied based on the governments’ 

commitment to reforms. Kazakhstan, the Kyrgyz Republic, and to a lesser 

extent, Tajikistan, have been the most committed to privatization. For 

example, 

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Chapter 2

USAID’s Assistance Has Contributed to 

Economic and Democratic Reforms

Page 18 GAO/NSIAD-99-200 CAR Assistance

• Kazakhstan privatized over 17,000 small- and medium-sized state-owned 

enterprises by the end of 1997, or nearly 70 percent of all state-owned 

enterprises in the country; 

• the Kyrgyz Republic privatized approximately 1,000 enterprises by the 

end of 1996, or about 70 percent of small- and medium-sized enterprises; 

and 

• Tajikistan privatized 500 small enterprises by the end of May 1998, and 

an estimated 65 percent of the small enterprises are now in the private 

sector, with the government planning to complete privatization of these 

small enterprises by the end of March 1999.

However, Kazakhstan and the Kyrgyz Republic have backed away from 

their commitment to privatize their largest, most profitable, state-owned 

enterprises, including those in the energy and mineral sectors. USAID 

considers privatizing these enterprises critical to the overall success of the 

economic reform efforts because of the potential foreign investment value 

and potential contribution to their respective countries’ tax base. USAID 

and State officials said that corruption was a key factor in the governments’ 

retrenchment, as it would reduce government officials’ ability to control 

the enterprises for kickbacks and profit skimming. Tajikistan has not 

privatized many of its medium- and large-scale enterprises, and the process 

has been plagued by problems, such as how to value the enterprises. 

According to USAID/CAR1

 officials, Tajikistan has recently begun planning 

to privatize additional enterprises in response to deadlines required to meet 

World Bank loan requirements. Turkmenistan has rejected advice on 

privatization from USAID, the World Bank, and IMF because it lacks the 

commitment to reforming its economy.

Tax and Budget Reforms Under the Soviet Union, tax systems often stymied the growth of private 

enterprise through excessive taxation, and none of the CAR governments 

had experience overseeing a decentralized, voluntary, compliance-based 

tax regime. Local governments were dependent on subsidies from the 

national governments and lacked the autonomy or the authority to raise 

and spend revenue on its needs. Annual budget allocations were based on 

ad hoc adjustments to traditional expenditure patterns, and 

performance-based budgeting was nonexistent. 

1

We use USAID/CAR to refer to USAID’s mission for CAR located in Almaty, Kazakhstan. USAID/CAR 

manages USAID’s programs in all five republics.
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USAID’s action plan considered tax and budget reforms as necessary to 

help create a stable macroeconomic environment. USAID focused its 

efforts at the national level on (1) implementing modern tax codes and 

improving tax administration, (2) rationalizing the finance system between 

national and local governments, and (3) improving budget planning and 

implementation. 

• In the tax reform area, USAID advisors provided technical support to 

the governments in the development of the new tax codes, provided 

technical support and training on tax administration, developed a 

strategy to automate tax administration, and helped develop software 

for the automated system. 

• For fiscal decentralization, USAID provided advisory support and 

training to promote basic fiscal decentralization.

• In the budget reform area, USAID provided long-term advisors and 

training support designed to help the governments rationalize their 

expenditure process and provided technical expertise in the 

development of a budget process law designed to rationalize the annual 

budgeting process and modernize the budget classification systems. 

With USAID assistance, Kazakhstan, the Kyrgyz Republic, and Uzbekistan 

became the first countries in NIS to adopt modern tax codes, enacting the 

new codes in 1995, 1996, and 1998, respectively. Kazakh and Kyrgyz 

officials said USAID assistance, which included drafting the new codes and 

providing training for its administration, was instrumental in gaining these 

achievements. Despite the enactment of the new tax codes, tax collection 

has not improved in Kazakhstan or the Kyrgyz Republic. According to 

USAID, these governments have not developed the strong tax 

administration capabilities necessary to improve tax collection efforts, and 

must substantially improve their tax collection to maintain macroeconomic 

stability. USAID is working with these governments to make these 

improvements but has been stymied by funding limitations and government 

resistance to fully implementing reforms. 
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USAID officials also stated that the governments had made little progress 

on intergovernmental finance and budget reforms. For example, 

accordingto a 1998 USAID report,2

 the following conditions existed:

• In Kazakhstan, the government was not committed to reforming its 

intergovernmental finance and fiscal analysis systems, and in budget 

reforms, the Ministry of Finance was resisting changing expenditure 

norms. In addition, ministry officials were unwilling to implement cash 

control systems necessary to prevent a commitment of funds beyond 

available resources.

• The Kyrgyz Republic had not proceeded with reforms of 

intergovernmental finance or the budget systems, despite assistance 

from USAID, the World Bank, and others. This was due, in part, to the 

relatively poor economic conditions of the local governments, which 

reduced their ability to implement reforms. As for budget reforms, the 

lack of automated systems reduced the government’s ability to produce 

accurate budget reports. 

More recently, according to USAID/CAR officials, the situation has 

improved in both countries, with USAID helping the governments develop 

program budgeting. USAID advisors are also helping to draft a law on 

intergovernmental finance in Kazakhstan.

Nevertheless, according to USAID/CAR officials, these reforms would have 

proceeded much more quickly if government bureaucracies in both 

Kazakhstan and the Kyrgyz Republic were less corrupt and less reluctant to 

cede power over funding sources. Regarding intergovernmental reforms, 

the Kazakhstan government has not wanted to decentralize control, while 

in the Kyrgyz Republic, the problem is the relative poverty of most 

regions—five of the seven Kyrgyz regions are financed by the remaining 

two, providing few options for a systematic solution. In addition, budget 

reforms are considered more difficult to make than tax reforms because 

there is little public interest in reforming a system that most people know 

little about. USAID officials said that both national and local government 

ministries have resisted the development of transparent budgets, fearing 

that it could lead to budget reductions. This occurred in Turkmenistan, for 

example, where USAID’s fiscal reform program has made limited progress 

because, in part, ministries refused to reveal their real expenditures.

2

Strategic Review of Fiscal Reforms in the NIS (Washington, D.C.: USAID, Oct. 1998).
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Improving the Investment 

Climate

Under the Soviet Union, laws provided little protection for private property 

or investor rights, which dampened the willingness of domestic and foreign 

investors to invest in CAR. USAID is helping the CAR governments create 

the legal and regulatory systems needed to establish a stable investment 

climate for private enterprise. USAID’s assistance is aimed at helping the 

governments (1) draft, pass, and implement key commercial laws and 

regulations; (2) join the World Trade Organization (WTO) which would help 

promote passage of commercial laws and help integrate the countries with 

international trade organizations; (3) implement international accounting 

standards to promote transparency and investment and improve 

management capability; and (4) improve the customs services to increase 

foreign investment. 

Commercial Laws The lack of commercial, trade, and investment laws has been a major 

impediment to the development of market-oriented economies in CAR. 

USAID’s commercial law initiative is designed to put the legal and 

regulatory framework in place to promote commercial transactions and 

spur local and foreign investment in CAR. 

With USAID assistance, Kazakhstan and the Kyrgyz Republic have adopted 

a number of commercial laws. For example, the Kyrgyz Republic passed a 

modern civil code (with sections on contracts, leasing, and intellectual 

property), as well as laws on collateral, bankruptcy, customs, procurement, 

and foreign investment. A judge on the Kazakhstan Supreme Court, as well 

as the Director of the Legal Department in the Kyrgyz White House, both of 

whom had participated in the reform efforts, said that USAID assistance 

was critical in the development and passage of their country’s new 

commercial laws. According to USAID, these laws provide a basic 

framework for commercial activity. 

According to USAID, neither government has fully implemented most of 

the new laws or developed the institutional capacity to enforce them. 

USAID officials said that the governments do not have the necessary funds 

to publish and disseminate new laws and regulations. Nor do the 

governments have adequate funds to train the thousands of administrators 

necessary to interpret and enforce the new laws and regulations. 

Furthermore, the governments have yet to establish an enforcement 

system for the efficient adjudication of commercial disputes. 

World Trade Organization 

Accession

USAID has supported CAR efforts to join WTO as a way to promote a 

greater understanding of and commitment to trade and investment 
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liberalization.3 USAID/CAR officials have also encouraged WTO 

membership as a means to cement links with critical international 

institutions and to pursue policy dialogue on a number of investment 

issues. These include the passage of commercial laws on intellectual 

property rights, contracts, licensing, customs, tax administration, 

bankruptcy, and collateral. USAID has provided technical assistance and 

training support to encourage a range of investment reforms that are 

crucial for the economic growth prospects in CAR. USAID also provided 

assistance to help interested governments draft WTO membership 

documents and technical support to prepare the governments for 

negotiations with WTO on membership.

With USAID assistance, Kazakhstan, the Kyrgyz Republic, and Uzbekistan, 

have taken their initial steps toward WTO membership. In 1998, the Kyrgyz 

Republic became the first country in the former Soviet Union to join WTO. 

According to a director in Kazakhstan’s Ministry of Energy, Industry, and 

Investment, as well as the Deputy Minister for Economic Policy in the 

Kyrgyz White House, USAID advisors played an indispensable role both in 

helping the countries’ progress toward WTO membership and in 

encouraging overall trade and investment reforms. 

Despite progress toward WTO membership by Kazakhstan, it missed a 1998 

self-imposed goal to join WTO and failed to adopt key trade and 

investment-related legislation. USAID/CAR officials attributed this delay to 

pressure from Russia not to join WTO before Russia does, which, according 

to USAID officials, will not occur in the foreseeable future. Uzbekistan 

submitted its application for WTO membership but has not passed key 

commercial legislation necessary for membership. According to USAID 

officials, USAID has provided no assistance to Tajikistan because of the 

ongoing civil strife, and Turkmenistan has not made a commitment to join 

WTO. 

International Accounting 

Standards

When CAR gained its independence, the republics had no standardized, 

credible financial data with which to make rational economic decisions. 

Without accurate, reliable financial data, private domestic and foreign 

firms, banks, and governments cannot make key business decisions. 

3

 WTO is a multilateral organization that provides the legal and institutional framework for the 

international trading system. It also serves as a forum for international trade negotiations.
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To help provide accurate financial information, USAID has encouraged 

CAR to adopt International Accounting Standards as a means to attract 

international investment. USAID officials said that accounting standards 

are critical for potential investors to analyze and act on investment 

opportunities and for enterprise management’s decision-making. USAID 

helped the governments implement the standards. In late 1996, Kazakhstan 

became the first of the former Soviet Republics to adopt International 

Accounting Standards, and as of December 1998, 1,500 Kazakhstani 

enterprises had converted to the new standards. 

In January 1998, the Kyrgyz Republic became the second country in NIS to 

adopt the standards. USAID helped the Kyrgyz Republic convert 

approximately 800 enterprises to the new standards and trained over

260 accounting specialists in training institutions, audit and accounting 

firms, and enterprises undergoing conversions on how to implement the 

new standards. 

However, USAID has not yet succeeded in establishing fully functional 

self-regulatory organizations required to develop and enforce professional 

standards for the accountants and auditors needed to fully implement the 

new standards. According to USAID/CAR officials, however, significant 

progress has been made in both Kazakhstan and the Kyrgyz Republic in this 

area during the first half of 1999.

Customs Reforms To facilitate trade and investment, USAID has provided technical 

assistance to improve customs procedures in CAR. For example, 

• Kazakhstan adopted rules to improve customs processing and has 

eliminated export tariffs and the requirement to register exports;

• the Kyrgyz Republic passed laws to eliminate repetitive and 

burdensome licensing requirements; and 

• Uzbekistan passed both a customs code and a customs tariff law, as well 

as issuing implementing regulations on customs valuation.

According to USAID/CAR officials, corruption and the lack of political 

commitment to fully implement the new laws and complete additional 

reforms have hampered progress. In both Kazakhstan and the Kyrgyz 

Republic, the licensing process remains a source of bribery, with chaotic 

procedures and no standardization of requirements across ministries. 

Unnecessary licensing requirements remain both as obstacles to 

investment and sources of corruption. USAID officials also said that the 

governments lack adequate funds for training customs officials and do not 
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normally provide funding for the printing and distribution of new laws and 

regulations. The Director of the Legal Department of Kazakhstan’s 

Customs Committee said that, as a result, customs officers are not always 

aware of new laws or regulations or understand how to interpret them.

Improving the Financial 

Sector

Key financial institutions, such as banks and capital markets, did not exist 

in the western sense in CAR. In response, USAID adopted two initiatives, 

banking reform and capital markets development, to promote private 

sector growth. According to USAID’s strategy, these were needed to 

provide (1) new sources of capital to enterprises as they restructured under 

private ownership, (2) investors with accurate information on the financial 

status of newly privatized enterprises and (3) mechanisms for capital to 

flow to profitable enterprises and away from nonviable ones. 

Banking Reforms With USAID assistance, Kazakhstan and the Kyrgyz Republic have 

strengthened their financial sector through banking reforms. Central bank 

representatives from both countries said that USAID provided critical 

assistance in helping the banks implement international banking 

regulations and enhance their monitoring of commercial banks. These 

officials said that, as a result of these reforms, the health of the commercial 

banks has improved. For example,

• the Kazakhstan Central Bank closed insolvent banks and reduced the 

number of banks from 230 to 75 to improve capitalization through 

implementation of stricter licensing procedures; and

• the Kyrgyz National Bank implemented new capital adequacy 

requirements and closed insolvent banks; as a result, the number of 

banks meeting the new capital requirements rose to 85 percent in 1997 

compared to 42 percent in 1995.

Despite these achievements, banking reforms are far from complete. In 

both Kazakhstan and the Kyrgyz Republic, the banking sector is lending at 

very low levels, with an adverse impact on business development. USAID 

and the central banks lack adequate funds to completely implement 

additional reforms, and the governments have not fully committed to 

supporting these reforms. For example, the Kyrgyz Republic has yet to 

complete the automation of its accounting system, adopt a modern 

payments system law, and implement an efficient electronic payments 

system for the banking sector.
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Capital Markets Development Institutional mechanisms for raising capital through equity or secured debt 

did not exist in CAR. USAID’s strategy was to provide technical assistance 

and training support to the reform-minded governments in CAR to help 

develop key laws and institutions needed for securities markets, including 

a stock exchange, broker-dealer associations, and national securities 

commissions.

USAID assistance has helped Kazakhstan, the Kyrgyz Republic, and in a 

very limited way Uzbekistan develop and implement the laws, regulations, 

and infrastructure necessary to establish capital markets. USAID officials 

said that, despite these achievements, none of the three stock exchanges 

are fully developed. 

• Activity on the markets is low due to public mistrust and limited savings 

and, more recently, the Asian and Russian financial crises and the 

resulting capital flight from the emerging markets.

• Both the Kazakhstan and Kyrgyz governments have pulled back from 

their plans to offer high-quality shares of state-owned enterprises for 

sale through the stock exchanges. USAID/CAR and U.S. embassy 

officials in Kazakhstan and the Kyrgyz Republic attributed these 

decisions to corruption associated with government control over these 

lucrative state-owned enterprises, as well as to low prices associated 

with the slump in the global commodities markets. 

• For a while, the Kyrgyz Republic was not able to bring “gray market” 

(outside of the exchange) trading into the stock market. In May 1999, 

however, the Kyrgyz Republic ended this activity, which accounted for a 

significant percentage of trading. In order to enhance the prospects for 

sustainability, a Presidential Decree stipulated that all trading shall be 

conducted through the exchange. 

• Uzbekistan has maintained government control over the securities 

regulatory body, the central depository, and the stock exchange. 

According to USAID officials, this is a clear conflict of interest, and as a 

result, these institutions have not developed.

Democratic Reforms CAR’s closed political systems, combined with the dual legacy of 

communism and CAR’s centralized regimes, present major challenges to 

democratic development. The lack of citizen involvement in government 

decision-making has led to the underdevelopment of a civil society and 

fostered the belief that citizens have little ability to influence government 

decisions affecting their daily lives. USAID’s efforts to promote democratic 
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reform have been impeded by these historical constraints as well as by the 

resistance of CAR governments to make the necessary changes.

As a result, USAID has focused its assistance on CAR citizens, as opposed 

to national institutions, in an effort to develop a broad-based consensus for 

democratic change. USAID is promoting increased and better-informed 

citizen participation in political and economic decision-making. To meet 

this goal, USAID has (1) targeted national pro-reform officials to promote 

democratic reforms, (2) helped develop NGOs to lobby for reforms,

(3) increased independent news media to better inform CAR citizens, and 

(4) recently initiated a program to promote democratic reforms at the local 

government level. 

Promoting Effective 

Government at the National 

Level 

USAID has sought to increase the CAR governments’ transparency, 

responsiveness, and accountability to its citizens by assisting newly elected 

legislatures, judicial bodies, and electoral commissions to organize and 

carry out their functions. USAID worked to support the development of 

democratic institutions and practices within national governments (except 

in Turkmenistan) by targeting pro-reform government officials for 

assistance. USAID provided (1) training and technical assistance to 

improve parliamentary practices and legislative drafting; (2) legal resource 

and judicial training centers in order to help organize the legal system, 

improve training, and adopt ethical codes of conduct; and (3) electoral law 

development and civic/voter education in preparation for upcoming local, 

parliamentary, and presidential elections.

• In Kazakhstan, USAID focused its democracy assistance on areas 

outside of national government institutions, concluding that the 

government would not support democratic reforms. The Kazakhstan 

government is dominated by its president, who was recently reelected to 

a second 6-year term. However, the primary opposition candidate was 

not allowed to run in the election, which the U.S. embassy considered 

flawed. Despite the government’s resistance to democratic reforms, 

USAID has had some recent successes in promoting government 

accountability, including staging a debate where parliamentary 

candidates discussed issues in a nationally televised broadcast for the 

first time. 

• The Kyrgyz Republic is considered the most open and democratic 

country in the region and, unlike in the other republics, USAID has 

provided technical assistance and training to the parliament and 

judiciary. For example, USAID training and liaison support increased 
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the capacity of the parliament to initiate and draft legislation. USAID 

also played an active role in persuading members of the parliament to 

meet with their constituents and allow USAID-assisted NGOs to 

contribute to the legislative process. 

• Tajikistan is still emerging from over 6 years of civil war. A peace 

accord signed between the government and the opposition in June 1997 

formally ended the civil war. However, splinter groups and warlords 

fighting over the drug trade have continued to destabilize the country. 

Due to the political situation, USAID has focused its democracy 

activities in Tajikistan on promoting and supporting the peace process. 

However, USAID also provided guidance on constitutional and judicial 

reform issues and assisted the government in developing a voter 

registration system to promote elections to meet international 

standards. 

• In Turkmenistan, the president has dominated the national government 

since his days as head of the Communist Party in 1985. According to 

State, the president has retained power over the judiciary and a 

50-member parliament. Given this, USAID has limited democracy 

programs in Turkmenistan.

• In Uzbekistan, USAID has made limited progress assisting the 

government in becoming more transparent and accountable to its 

citizens. According to State, Uzbekistan is ruled by a highly centralized 

presidency, comprised of the president and a small circle of advisers. 

Nonetheless, USAID’s efforts recently resulted in the formation of a 

judges’ association and its adoption of a code of ethics, signs that 

provide some encouragement for future reform initiatives.

With the exception of the Kyrgyz Republic, CAR’s governments have 

resisted opening and liberalizing government and have impeded USAID’s 

efforts to promote democracy at the national level. As a result, USAID 

attempted only modest reform efforts to achieve this goal and targeted its 

assistance in areas where it was most likely to achieve positive results. 

Government officials in the region were largely holdovers from the Soviet 

period. State officials noted that these officials were generally tolerant 

only to democracy initiatives that were not perceived as threats to their 

control and so have largely resisted democratic reforms at the national 

level. 

Developing NGOs Because USAID views CAR as lacking the political commitment to institute 

democratic reforms at the national level, it has focused on promoting 

democracy by increasing citizen participation through the development of 
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NGOs. According to USAID, the underlying rationale for this approach is 

that systemic reforms cannot be forced upon a government. If the political 

will to reform does not exist at the national level, then primary emphasis 

needs to be placed on local level reforms. 

USAID has worked with NGOs that are active across a wide spectrum of 

disciplines, from economic to social development. A growing number are 

involved in public advocacy efforts and, through targeted USAID training 

and technical assistance, have demonstrated a capacity for developing 

governmental relations, providing public education, and performing 

community organizing. For example, a film documentary on tuberculosis 

produced by a public advocacy organization led the Kazakhstan 

government to initiate a tuberculosis eradication campaign. Also, an NGO 

in the Kyrgyz Republic that 2 years ago was unable to obtain an 

appointment with government officials now has its counterparts in the 

government regularly travel to the organization’s offices to coordinate with 

them on consumer rights legislation and regulations.

USAID’s effort to develop the CAR’s NGO sector has achieved measurable 

results. Less than 5 years ago, the only NGOs were social welfare 

organizations connected with the government and a limited number of 

environmental groups. At the end of 1998, over 2,500 were active in CAR—

609 in Kazakhstan, 870 in the Kyrgyz Republic, 515 in Tajikistan, 117 in 

Turkmenistan, and 439 in Uzbekistan—an increase of 65 percent from 1996. 

USAID played a critical role in the development of these NGOs by 

providing training, technical assistance, legislative drafting, and legal 

support.

Despite these achievements, the NGOs in CAR still have funding and other 

problems that challenge their viability. The majority of NGOs are 

dependent on external financing to maintain operations and activities. 

Most organizations have low memberships and a narrow constituency 

base. The majority of these organizations—which are predominantly 

located in the capitals and some major cities—have an urban bias and 

underserve rural areas. USAID officials told us that pending legislation in 

several of the CAR parliaments, such as tax laws on charitable giving, 

would be a key factor in enhancing the sustainability of NGOs. USAID was 

assisting in drafting and supporting the passage of such legislation.

Promoting Independent 

Broadcast News Media

Increasing the availability of information is a key component of USAID’s 

efforts to encourage better-informed citizen participation in economic and 
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political decision-making. A diverse flow of information is a means to 

promote government transparency and accountability and serves as 

protection against corruption. USAID worked to strengthen and promote 

independent media by providing (1) radio and television station 

management training, (2) technical assistance, (3) broadcast equipment, 

and (4) legal and legislative drafting assistance. 

USAID assistance has helped strengthen over 100 independent news 

broadcasting stations and has provided citizens with an alternative to 

state-controlled media. USAID assistance has contributed to an increase in 

independent daily news broadcast time and the percentage of the 

population with access to independent news. For example, USAID 

estimates that in Kazakhstan, 26 television and 18 radio stations averaged 

25 minutes of independent daily news broadcast time, and 40 percent of the 

population had access to independent news. Similarly, in the Kyrgyz 

Republic, 16 television and 11 radio stations averaged 20 minutes of 

independent daily news broadcast time, and 81 percent of the population 

had access to independent news. The number of stations and news time in 

Tajikistan and Uzbekistan was less impressive, but nonetheless had 

increased as the result of USAID’s efforts. USAID has not conducted 

independent media activities in Turkmenistan because the government 

opposes an independent media.

USAID’s training was highly valued by media officials we met. Station 

management training modules were credited with making outlets more 

economically viable, and the provision of broadcasting equipment was 

viewed as a key input that enabled stations to be competitive with 

state-owned stations in terms of production quality. USAID legal assistance 

was responsible for helping broadcast stations throughout the region 

obtain licensing and maintain compliance in an uncertain regulatory 

environment, thereby preventing many stations from being closed.

Despite the gains in independent media outlets, serious challenges to the 

media exist in the region. The greatest challenge to an independent media 

was in Kazakhstan, where recent actions by the government, including 

cost-prohibitive rates for licenses, have increased government controls 

over the media and resulted in the closing of 36 television and radio 

stations. In addition, throughout CAR, the independent media face many 

common problems, including challenges to editorial independence and to 

economic survival. Independent stations are subject to both direct and 

indirect pressure from government officials. According to media officials 

we spoke with, there is a clear understanding on their part about what can 
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and cannot be reported, and self-censorship is practiced. Government 

officials at the national and local level apply pressure to restrict reporting 

on political matters, resulting in the media’s shying away from stories that 

might offend public officials. USAID officials report that governments 

manipulate access to information by channeling information to 

government-controlled stations. Finally, many independent stations, 

especially those located outside major urban areas, have difficulty 

generating advertising revenues to sustain their operations.

Assisting Local 

Governments

In the summer of 1998, USAID began promoting effective, responsive, and 

accountable local governments in Kazakhstan and the Kyrgyz Republic.4

 

By supporting the development of democratic institutions at the local level, 

USAID sought to promote decentralization, citizen involvement, and 

appropriate resource management. 

Historically, CAR has had little experience with local government, as most 

administrative and financial decision-making power resided at the national 

level. USAID is providing a broad array of technical assistance, including 

assistance in budgeting, financial management, competitive procurement 

systems, public hearings, and policy development guidance to local 

government officials. 

In Kazakhstan, USAID has been limited in its ability to address local 

government reforms due to resistance by the national government. USAID 

assisted in several attempts to draft an effective local government law to 

increase fiscal and administrative decentralization, but the national 

government either withdrew or weakened the draft laws before submitting 

them to parliament. This was largely because after independence, the 

national government allowed oblasts (provinces) significant autonomy, but 

several northern oblasts with large Russian populations pressed for 

secession from Kazakhstan. As a result, the national government 

significantly limited its efforts to give local government greater authority 

and autonomy. USAID’s start-up activities have been hampered by the lack 

of a national government counterpart to coordinate and advocate for local 

government initiatives.

4

USAID has not pursued this strategic objective in Turkmenistan or Uzbekistan due to a lack of central 

government commitment to local government reform and in Tajikistan due to the ongoing civil conflict.
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According to USAID officials, the Kyrgyz Republic government appears 

committed to decentralization, and it is beginning the process of devolving 

authority to local governments. Elections for council members were held 

in over 450 villages, and all villages had enacted charters (20 towns, 

including the capital, Bishkek). The national government created an Office 

of Local Government that actively promotes an agenda to strengthen local 

government. The existence of a counterpart agency in the government 

facilitated start-up activities, and most of USAID’s project tasks were being 

implemented on schedule. However, despite these achievements, local 

governments remained constrained by the Ministry of Finance’s control 

over their budgets. Until local governments are able to generate sufficient 

revenue to cover their expenses, the ability to achieve effective, 

responsible local government will be significantly limited. 

CAR’s Economic and 

Democratic Transitions 

Are Far From 

Complete

USAID and State monitor the pace of economic and democratic transitions 

of the 25 countries that constitute Central Europe and NIS. A 1998 

State/USAID report5

 ranked three of the five countries in CAR—Tajikistan, 

Turkmenistan, and Uzbekistan—among the least economically and 

democratically developed of the 25 countries that made up Central Europe 

and the former Soviet Union. The semi-annual report used a wide variety 

of indicators drawn primarily from non-U.S. government sources such as 

the Freedom House and the European Bank for Reconstruction and 

Development Investment. These indicators cover such areas as whether 

(1) most of the gross domestic product is derived from private enterprises, 

(2) foreign investment and foreign trade are encouraged, (3) the head of 

state and parliaments are elected through free and fair elections, and

(4) the media is free and independent.

The Kyrgyz Republic was rated the most advanced in CAR with economic 

and democratic reforms ranked 12 and 16, respectively. Kazakhstan was 

ranked 16 economically and 21 politically. Figure 2.1 depicts the economic 

reform and democratic freedom rankings for the countries of Central 

Europe and NIS.

5

Monitoring Country Progress in Central and Eastern Europe and the New Independent States

(Washington, D.C.: USAID and the Department of State, Apr. 1998). 
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Figure 2.1: Ratings of Economic Policy Reforms and Democratic Freedom in Central 

Europe and NIS

Source: Monitoring Country Progress in Central and Eastern Europe and the New Independent States.

The report also noted that none of the 25 countries have completed their 

economic and democratic transitions. Even the most reformed countries, 

such as Poland and Hungary, still have far to go relative to the economic 

policies of industrial market-oriented economies. In addition, the report 

said that CAR, like others in the former Soviet Union, have implemented 

the “easiest” reforms, such as privatizing small and medium-sized 

enterprises and passing new laws. None of the countries in the former 

Soviet Union or Central Europe have completed the hardest transitions. 

These include implementing commercial laws, banking reforms, and 

capital markets development—reforms that often challenge the vested 

interests of the ruling elite or require the full involvement of the region’s 

citizens. 

USAID/CAR officials agreed that, despite the accomplishments in CAR, the 

transitions are far from complete and the remaining tasks are the most 

12345

1

2

3

4

5

Democratic freedoms

Economic policy reforms

Turkmenistan

Tajikistan

Belarus

Azerbaijan

Ukraine Macedonia

Latvia

Uzbekistan

Moldova

Albania

Romania

Bulgaria

Slovenia

Lithuania

Kazakhstan Armenia Georgia

Kyrgyz Republic

Croatia

Russia

Slovakia

Czech Republic

Poland

Hungary

Estonia
Chapter 2

USAID’s Assistance Has Contributed to 

Economic and Democratic Reforms

Page 33 GAO/NSIAD-99-200 CAR Assistance

difficult. However, they noted that the State/USAID rankings do not give 

sufficient credit to the amount of progress made by CAR, particularly 

Kazakhstan and the Kyrgyz Republic. They said that the region was much 

less developed than those countries in Central Europe that had a tradition 

of market-oriented democracies to build upon and the report’s rankings do 

not adequately portray the degree of movement thus far. They noted that 

neither the ruling elite nor their citizens have any experience with the 

institutions nor the behaviors needed to operate market economies and 

democracies and that this could take generations to develop. Given the 

historical constraints to development in CAR, and where CAR began the 

development process, USAID/CAR officials said that Kazakhstan and the 

Kyrgyz Republic had made considerable progress since the beginning of the 

USAID program.

USAID’s 1998 Agency Performance Report further stated that CAR, like 

other areas of NIS, continues to have transition difficulties.6

 According to 

the report, two-thirds of USAID’s economic programs failing to meet 

USAID expectations were in NIS. Contributing factors included (1) the 

difficulties of replacing entrenched communist institutions, (2) USAID’s 

limited experience (approximately 10 years) in helping countries transition 

from communism compared to its 40 years of development work, (3) the 

limited USAID field presence in NIS, and (4) unexpected political and 

economic crises. Democratically, the report ranked Kazakhstan, Tajikistan, 

Turkmenistan, and Uzbekistan as “not free,” while the Kyrgyz Republic was 

ranked “partly free.” The report stated that all of the countries in NIS 

continue to face challenges to a fuller transition to democracy. Organized 

crime and corruption undermine effective governance, while the economic 

woes of the republics leave citizens little time for political participation.

Conclusions USAID has helped Kazakhstan and the Kyrgyz Republic begin the transition 

to market-oriented economies and lay the foundation for democratic, civil 

societies. Kazakhstan and Kyrgyz officials said that USAID assistance was 

instrumental in their achievements. However, the reforms are far from 

complete, and further development of the region must be considered a 

long-term effort. USAID’s economic reform initiatives have been supported 

by the national governments, at least in part, because of the potential 

income from foreign investment and resource development. In contrast, 

with the exception of the Kyrgyz Republic, the CAR governments have 

6

1998 Agency Performance Report (Washington, D.C.: USAID, Apr. 1999).
Chapter 2

USAID’s Assistance Has Contributed to 

Economic and Democratic Reforms

Page 34 GAO/NSIAD-99-200 CAR Assistance

been slow to make democratic reforms because they threaten the 

incumbent governments’ control. 
Page 35 GAO/NSIAD-99-200 CAR Assistance

Chapter 3

USAID Has Incorporated Lessons Learned in 

Its Car Programs Chapte3r

Incorporating lessons learned from Central Europe and Russia into the 

CAR program was envisioned from the beginning of the program. State’s 

strategy document stated that lessons learned from Central Europe and the 

other regions of the former Soviet Union would figure prominently in the 

design and implementation of the CAR programs.1

 USAID’s action plan for 

economic reforms was based on USAID’s economic reform efforts in 

Central Europe. USAID officials noted that the application of lessons 

learned was inherent in devising their program strategies and operations, 

and numerous channels exist for their continued utilization. Nevertheless, 

USAID recently began an effort to formalize its lessons learned process to 

help the agency identify and communicate those lessons. 

Lessons Learned USAID/CAR officials provided numerous examples of lessons learned from 

similar programs in Central Europe and Russia that had been applied to the 

economic and democratic reform programs in CAR. They said that the 

identification and implementation of lessons learned was an integral part of 

their planning and program operations. Among the most prominent 

lessons were that USAID should (1) take an integrated approach to 

privatization to help create the enabling environment necessary for private 

sector development, (2) coordinate with other donors working in the 

region, (3) focus democratic assistance at the grassroots level if national 

governments do not support democratic reforms, and (4) ensure that NGOs 

and independent media have the necessary legal and financial 

underpinning for sustainability. USAID officials said that lessons learned 

emanated both from efforts to refine ongoing USAID programs as well as in 

response to specific problems identified in Central Europe and Russia.

Economic Reform Lessons 

Learned

Based on USAID’s approach in Central Europe, USAID designed an 

integrated approach to market development. USAID found in Central 

Europe that five priority areas must coincide with the privatization process 

to create the enabling environment needed for private sector development. 

These include development of (1) tax reform to support commercial 

development and the fiscal sustainability of the government;

(2) commercial laws and regulations to provide the legal framework for 

trade, investment, and commercial activity; (3) accounting and audit 

reform to provide the standardized and credible financial data necessary 

1

United States Assistance and Economic Cooperation Strategy for Central Asia.
Chapter 3

USAID Has Incorporated Lessons Learned in 

Its Car Programs

Page 36 GAO/NSIAD-99-200 CAR Assistance

for rationale economic decision-making; (4) bank reforms to provide the 

capital for private sector growth and improve corporate governance; and 

(5) capital markets development to serve as a source for enterprises to 

raise capital and provide market discipline. USAID incorporated all five 

elements in its action plan and has accomplishments in each area.

Also using lessons learned from Central Europe, USAID/CAR has 

coordinated with other donors working in CAR. Although USAID provides 

relatively small amounts of money compared to the World Bank and IMF, 

USAID found that by working with these institutions it could use its 

expertise to help countries implement World Bank and IMF programs that 

support USAID goals. USAID/CAR has employed this approach. For 

example, USAID/CAR worked with (1) the World Bank to get commercial 

banks in Kazakhstan to convert to international accounting standards;

(2) IMF to train monetary policy officials in Kazakhstan and the Kyrgyz 

Republic on how to implement IMF’s macroeconomic stabilization 

programs; and (3) IMF to develop tax codes for Kazakhstan, the Kyrgyz 

Republic, and Uzbekistan.

USAID/CAR also used USAID’s successful approach in Central Europe to 

help integrate CAR into the world economy by developing their links with 

international multilateral economic institutions, such as the World Bank 

and IMF. Central European countries, according to USAID, had a strong 

incentive to proceed with reforms based on the prospects of memberships 

with these western institutions, and the reforms required for such 

membership are closely aligned with USAID objectives. For example, 

USAID used the Kyrgyz Republic’s desire to join WTO to encourage the 

passage of commercial, trade, and investment laws needed for 

membership. Similarly, all the republics in CAR are members of the World 

Bank and IMF, and the Kyrgyz Republic has joined WTO. 

Democratic Reform Lessons 

Learned 

USAID has focused its democratic assistance on citizens rather than on the 

national government. In Russia, USAID found that without the political 

support of national leaders, assistance targeting national institutions and 

political processes was unlikely to achieve democratic reform. This lesson 

is especially relevant for CAR, where four of the five national leaders have 

resisted democratic reforms. As a result, USAID worked with citizen 

groups to help develop a civil society that would push for democratic 

reforms. Thus far, the CAR national governments and institutions have not 

been directly affected and, as previously noted, USAID has helped 

numerous NGOs get started. 
Chapter 3

USAID Has Incorporated Lessons Learned in 

Its Car Programs

Page 37 GAO/NSIAD-99-200 CAR Assistance

Based on USAID’s experience in countries throughout the former Soviet 

Union, USAID worked to provide the legal foundation to establish NGOs. 

USAID has given legislative drafting assistance to parliaments, using 

examples of laws adopted elsewhere in NIS to encourage a number of 

legislative reforms. These laws are intended to help NGOs develop and 

thrive, and secure their right to exist and operate in society.

In addition, in Russia, USAID found that the biggest problem facing 

independent television and radio stations was maintaining their economic 

viability. As a result, USAID has incorporated advertising and business 

management seminars into its CAR training programs. In addition, to help 

stations increase their revenues with advertising, USAID has also 

commissioned ratings surveys to demonstrate to potential advertisers the 

audience levels of the independent stations.

USAID Is Formalizing 

Its Lessons Learned 

Process

These lessons learned (and others) were identified by USAID through 

various channels, including USAID conferences, publications and reports, 

and weekly and monthly discussions between USAID and its contractors 

and grantees. In addition, USAID’s selection process for hiring advisors 

gives significant weight to prior work experience in the former Soviet 

Union. These advisors in turn had their own mechanisms for incorporating 

lessons learned into their activities.

Although numerous lessons learned from Central Europe and Russia have 

been applied in CAR, USAID’s Bureau for Europe and New Independent 

States has begun considering ways to help ensure that such experiences 

are not overlooked or forgotten. According to USAID officials, the “lessons 

learned” system has been largely dependent on staff sharing their 

experiences with one another. But many veterans of the region are retiring 

or rotating to different posts. USAID risks losing their acquired knowledge 

and expertise without a central mechanism to identify, analyze, and 

communicate lessons learned. Consequently, the Bureau has undertaken a 

number of stock-taking exercises to extract "lessons learned." These 

include assessments of nearly 10 years of progress on each of the Bureau's 

program objectives. In the fall of 1999, USAID plans to sponsor a “Lessons 

in Transition Conference,” where public and private sector leaders from all 

NIS countries will exchange experiences in transforming their economic, 

political, and social systems. The Bureau is also preparing a strategic plan 

that will incorporate lessons learned into guidance for field missions. On 

this foundation, USAID plans to begin development of a more formalized 

system to identify and communicate lessons learned. 
Page 38 GAO/NSIAD-99-200 CAR Assistance

Chapter 4

USAID Complied With Its Oversight 

Requirements Chapte4r

Oversight for assistance activities in CAR is shared between USAID 

headquarters in Washington, D.C., and USAID/CAR in Almaty, Kazakhstan. 

Initially, all U.S. assistance activities in CAR were managed from 

Washington, D.C., as was the case with other NIS countries because USAID 

had few staff and resources in the region. As USAID/CAR’s staffing has 

increased, USAID has shifted the management of assistance activities to 

the mission to provide for more direct oversight and greater accountability. 

According to USAID, USAID/CAR managed about 65 percent of USAID’s 

assistance programs in CAR as of December 1998. By the end of fiscal year 

1999, USAID/CAR expects to manage 80 percent of USAID’s assistance 

programs in CAR. 

USAID safeguards its assistance funds to CAR through various oversight 

requirements. For the 14 CAR activities we examined,1

 USAID is meeting 

its project oversight requirements for contracts, grants, and cooperative 

agreements—the financial instruments used by USAID.2

 USAID 

regulations and guidance3

 generally require its cognizant technical officers 

(CTO) to provide oversight of contractor and grantee activity. According to 

these regulations and guidance, CTOs are required to maintain 

communications with contractors and grantees, conduct site visits to verify 

work performance, and review programmatic and financial reports to 

compare actual progress and costs against expected results and costs. 

CTOs working with contracts must also maintain files documenting 

significant actions, and, while not specifically required, CTOs are 

encouraged to do the same for grants and cooperative agreements.

USAID’s regulations and guidance give broad authority to CTOs to 

determine the level of required oversight. For example, CTOs have wide 

latitude in determining how often they should communicate with 

contractors or grantees and how many site visits they should conduct. 

According to USAID’s Office of Procurement, this gives CTOs the 

discretion to determine how best to manage their programs. 

1

Funding for the economic reform projects selected represented $136 million or 62 percent of the total 

economic assistance to CAR since fiscal year 1992. Funding for the democratic reform projects 

selected represented $32 million or 60 percent of the funding for the democratic assistance since fiscal 

year 1992.

2

Contracts are used to acquire property or services. Grants and cooperative agreements are used to 

transfer money, property, or services to grantees whose programs support U.S. goals and objectives. 

We use “grantee” to refer to both grant and cooperative agreement awardees.

3

USAID oversight guidance for contacts is in its “Contractor Information Bulletin 93-8,” while the 

oversight requirements for grants and cooperative agreements are in its Automated Data System-303 

regulations.
Chapter 4

USAID Complied With Its Oversight 

Requirements

Page 39 GAO/NSIAD-99-200 CAR Assistance

Communications CTOs are required to maintain regular communications with the contractor 

or grantee. We found that USAID/CAR CTOs had regular, if not daily, 

interactions with contractors and grantees via telephone and electronic 

mail, and weekly meetings with contractors and grantees at USAID/CAR 

offices for program updates and coordination of development strategies. 

In addition, CTOs, contractors and grantees, and the Ambassador met 

monthly to discuss progress on and impediments to meeting project goals 

and objectives. USAID/CAR also had country representatives in each of the 

satellite offices in the Kyrgyz Republic, Tajikistan (until all U.S. personnel 

were evacuated in mid-1998), Turkmenistan, and Uzbekistan who 

maintained communication with CTOs, monitored projects, and served as 

liaisons for the contractors and grantees and the respective embassies. 

The five Washington, D.C.-based CTOs we interviewed said that they 

maintained regular communication with the U.S. offices of contractors and 

grantees. We documented examples of this communication, including 

electronic mail, facsimiles, and telephone conversations with their U.S. 

offices concerning progress and impediments in meeting project 

objectives, workplans, and funding issues. In addition, they relied upon 

project officers in USAID/CAR for oversight of contractor and grantee 

activities in CAR. These project officers attended the weekly and monthly 

USAID/CAR meetings with contractors and grantees used to assess 

program status. 

Site Visits CTOs are required to visit project sites to help gauge project progress. 

USAID’s Office of Procurement officials stated that CTOs could meet this 

requirement by delegating this responsibility to project officers in country. 

CTOs for the projects we reviewed all met USAID’s requirement.

In the USAID/CAR project files we reviewed, we found numerous trip 

reports documenting CTO site visits. For example, USAID/CAR CTOs and 

staff attended a conference on accounting conversion and evaluated a 

contractor’s progress toward implementing accounting reforms at two 

Kazakhstan factories. We also participated in numerous site visits with 

CTOs in Kazakhstan and the Kyrgyz Republic. During these site visits, 

CTOs met with the contractors and grantees as well as with government 

and NGO officials. 

Two of the five Washington, D.C.-based CTOs we interviewed had 

conducted site visits in CAR. But, due to time and resource constraints, 
Chapter 4

USAID Complied With Its Oversight 

Requirements

Page 40 GAO/NSIAD-99-200 CAR Assistance

these CTOs said they often relied on project officers at USAID/CAR to 

make site visits on their behalf. 

Performance and 

Financial Reports

CTOs are required to review periodic performance and financial reports 

filed by the contractor or grantee. CTOs we interviewed all used 

performance and financial reports submitted by contractors and grantees 

to monitor performance and progress toward meeting project objectives 

and to verify key cost elements in the award. Several Washington, 

D.C.-based CTOs said that, given their distance from CAR, reviewing 

performance reports was critical to staying informed about grantee 

activities. We also found that CTOs used the reports to evaluate the 

performance of contractors and to support USAID/CAR’s contractor 

performance reports. Based on these reports, in one instance, USAID/CAR 

forced a contractor to make personnel changes to improve project 

performance. 

CTOs we interviewed also reviewed financial reports submitted by 

contractors and grantees to determine whether USAID funds were properly 

expended. Records in the files we examined showed that CTOs had 

reviewed the financial reports for correctness and appropriateness of costs 

billed to USAID, as required. CTOs at USAID/CAR assessed the accuracy of 

the financial reports based on their weekly and monthly meetings with 

their contractor or grantee, site visits, and review of performance reports. 

Washington, D.C.-based CTOs said that they relied on information from 

USAID/CAR project officers, the contractor and grantee, performance 

reports, and past experience when reviewing the reasonableness of costs. 

USAID/CAR officials stated that further verification provides additional 

assurance that costs billed by contractors conform to award provisions. 

USAID/CAR was conducting line-by-line payment verifications on all the 

monthly vouchers submitted by contractors, using time and attendance 

sheets; expense records for travel, per diem, and direct costs; and other 

financial documentation. USAID/CAR officials stated that this level of 

effort was justified based on an October 1998 analysis that found that five 

of eight contractors in CAR provided inadequate documentation to support 

their vouchers or presented questionable costs for reimbursement. For the 

three USAID/CAR-managed contracts we reviewed, payment verifications 

had been done. 
Chapter 4

USAID Complied With Its Oversight 

Requirements

Page 41 GAO/NSIAD-99-200 CAR Assistance

Files USAID requires CTOs to keep files that include financial and program 

reports; CTO trip reports; briefings; and correspondence among the 

contractor, the contracting officer, and CTO. Based on our review of three 

USAID/CAR contract files, all were in compliance with USAID regulations. 

However, the USAID/Washington, D.C., contract file we reviewed was 

missing all monthly and quarterly performance reports. The CTO stated 

that he had received and reviewed the reports, as required, but his files 

were not readily available, and we could not independently verify his 

assertion. 

Although CTOs are not required to keep files for grantees, CTOs for the one 

grant and five cooperative agreements we reviewed maintained files that 

included program reports, vouchers, and correspondence among the 

grantee, CTO, and project officers in country. Files for the five cooperative 

agreements we reviewed also contained workplans and staffing approvals 

for the grantee’s in-country personnel. 
Page 42 GAO/NSIAD-99-200 CAR Assistance

Appendix I

Comments From the U.S. Agency for 

International Development ApenxIdi
Appendix I

Comments From the U.S. Agency for 

International Development

Page 43 GAO/NSIAD-99-200 CAR Assistance
Appendix I

Comments From the U.S. Agency for 

International Development

Page 44 GAO/NSIAD-99-200 CAR Assistance
Appendix I

Comments From the U.S. Agency for 

International Development

Page 45 GAO/NSIAD-99-200 CAR Assistance
Page 46 GAO/NSIAD-99-200 CAR Assistance

Appendix II

GAO Contacts and Staff Acknowledgments ApenxIdi

GAO Contacts Jess T. Ford, (202) 512-4268

A.H. Huntington, III (202) 512-4140

Acknowledgments In addition to those named above, Edward J. George, Jr.; Patrick A. 

Dickriede; Jodi M. Prosser; Jiyearn Chung; and Rona Mendelsohn made key 

contributions to this report.

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