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USAID/Bulgaria 

Operational Plan 

FY 2006 

June 13, 2006 
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Please Note: 

The attached RESULTS INFORMATION is from the FY 2006 Operational Plan and was assembled 

and analyzed by the country or USAID operating unit identified on the cover page. 

The Operational Plan is a "pre-decisional" USAID document and does not reflect results stemming 

from formal USAID review(s) of this document. 

Related document information can be obtained from: 

USAID Development Experience Clearinghouse 

8403 Colesville Road, Suite 210 

Silver Spring, MD 20910 

Telephone: (301) 562-0641 

Fax: (301) 588-7787 

Email: docorder@dec.cdie.org 

Internet: http://www.dec.org 

Portions released on or after July 1, 2006 
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Program Performance Summary FY 2005: Two major events shaped Bulgaria’s political scene in 2005: 

the signing of the treaty of Bulgaria’s accession to the European Union (EU) on April 25, 2005 and the 

Parliamentary elections in June 2005. The EU accession treaty was an impetus for the country to move 

quickly forward with important legislative changes required by the membership. The rush to meet EU 

requirements was counter balanced by mid-year elections, which substantially slowed down reform efforts 

for several months during the summer. This was followed by another surge in legislative activity, several 

weeks before the European Commission (EC) published its October monitoring report. Even so, the 

country did make significant progress in achieving its ambitious goal of EU accession. The report of the 

European Commission confirmed that Bulgaria should be able to accede to the EU on January 1, 2007, 

provided that promised reforms are implemented. However, behind a mixed overall assessment lies the 

very harsh reality of Bulgaria’ progress - or lack thereof - in several key sectors over the last six months. 

The EC has identified six areas where Bulgaria reforms lag behind. Reform of the judicial system, 

development of institutional capacity, and fighting against corruption and organized crime are among the 

biggest concerns expressed by the EC. The government will need make significant progress to prevent 

the Commission from recommending a one-year delay. 

The parliamentary elections of June 2005 demonstrated citizens’ distrust in political parties. With a 

depressingly low voters’ turnout, at around 56%, the leftist coalition led by the Bulgarian Socialist Party 

won the elections with only 33% of the vote. This produced a fragmented Parliament, followed by 

prolonged wrangling over the composition of the new government. EU accession constitutes the glue 

holding together an otherwise fractious ruling coalition. A delay of Bulgaria’s planned EU accession in 

2007 will shake political stability in Bulgaria and possibly its strong western orientation. Although the 

formation of the new government removed most short-term political uncertainty, there remains a 

significant risk of renewed political instability in late 2006. The biggest surprise of the elections was the 

success of the Ataka coalition, a radical Bulgarian nationalist formation with electoral platform hostile to 

the U.S. as well as to the Turkish and Roma minorities. 

 

Over the last several years Bulgaria has made impressive progress towards long-term stability and 

sustained growth. As a result of sound macroeconomic policies and deep structural reforms, average 

growth has reached levels comparable to that of the eight recent EU entrants (EU8) at close to five 

percent per year in 2000-2004, with projected 5.7% in 2005. A broad structural reform program 

contributed to solid economic performance. Growth is led by the private sector which now accounts for 

75% of the economy - on par with the EU8 average. Integration with external markets has expanded, 

Foreign Direct Investment (FDI) flows increased, and investor confidence has improved both domestically 

and externally. Per capita income increased by an average 6.4% per year since 1998 (at purchasing 

power parity in real terms). Unemployment has been reduced substantially to 10% in October 2005 from 

18.1 in 2000, and continues to fall. Stability, growth, and Bulgaria’s extensive social protection system 

contributed to a substantial reduction in poverty. 

Despite overall positive performance Bulgaria continues to be one of the poorest countries in Central and 

Easter Europe. The gross national income per person in 2004 is still 92% of the 1989 level. Pockets of 

poverty persist among certain groups, particularly the unemployed, ethnic minorities (Roma), and large 

households. The torrential rains and floods that hit the country between May and August have caused 

severe damage and impacted 3.2 million Bulgarians. While much of the bill to cover the damages 

(estimated at EUR 456 million or 2.1% of the GDP) will be paid by the government, the effects of the flood 

will continue to make the life in the impacted regions even more difficult. 

 

I. Democratic Reform 

A. Country Situation: According to the Freedom House Nations in Transit (NIT) 2005, Bulgaria’s 

democracy score has improved from 3.25 to 3.18, continuing the positive trend since 1997. The 

conclusion is that albeit slowly, the country is consolidating its move forward towards democracy. 

According to NIT, Bulgaria has made progress in achieving a more mature and active civil society, in 

dealing with corruption, and in improving local and national governance. However, the scores for media, 

judicial reform and electoral process remained stagnant. Driven by the EU accession priorities, the legal 

framework for the functioning of the justice system has undergone important changes, including the 
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adoption of a new Penal Procedure code in October 2005. Although accounting for only 2.19% of the 

state budget, the budget for the judiciary increased by 12% in 2005 compared to 2004. All legal 

professions now have ethical codes, although, there is little evidence of enforcement of these codes. The 

National Institute of Justice continued to implement training program for magistrates in close cooperation 

with foreign donors. For the first time training courses for court clerks were organized. In spite of these 

positive developments, the justice system suffers from a lack of accountability and remains inefficient. 

Systematic delays in implementing an automated case management system have further exacerbated the 

issues. The first national Ombudsman was finally elected in April 2005, but the Ombudsman does not 

have an office and is generally ineffective. While efforts to combat corruption have had some impact, 

notably in relation to administrative/petty corruption, the country continues to suffer from substantial 

organized crime and high-level corruption, which law enforcement and judicial institutions have been 

unable to effectively counter. 

With regard to local government, despite the decentralization strategy approved in May 2005, reform has 

not progressed as expected. The government lacks a clear reform vision for the overall fiscal 

decentralization process and progress in national reform has been mixed. The general elections in June 

2005 and the negotiations to form a coalition government considerably delayed the implementation of the 

Government of Bulgaria’s (GOB's) Fiscal Decentralization Program. The major step that would drive the 

decentralization reform in the country would be the political decision to undertake constitutional changes 

that would give the authority for municipalities to set local taxes. 

The effective and sustainable integration of Roma remains a major concern. The efforts to implement the 

Framework Program for Equal Integration of Roma into Bulgarian Society lack sufficient strategic 

approach, coordination, and finance. Key reforms in combating discrimination in education, healthcare, 

and housing are still outstanding. The unemployment among Roma (8 to 10 % of the population) is as 

high as 90 %, living conditions in their neighborhoods are poor, and health and educational problems 

persist. The increased levels of inflammatory racist rhetoric and physical confrontations with Roma have 

become more commonplace over the past several months and have received wide media coverage. 

During the recent national elections, anti-minority rhetoric entered mainstream media and the political 

arena. This trend culminated in the entry into Parliament of an extremist anti-minority party that is antiNATO, anti-U.S. and opposes Bulgaria’s joining the EU. There is increasing concern about the spread of 

Wahhabi fundamentalist Islam in Bulgaria, especially among the Pomak population in the Western 

Rhodopi region. Although there is concern about the rise of extremism in the country, the Mission does 

not believe that Bulgaria is currently vulnerable to conflict or crisis. 

With the Parliamentary elections in June, the lengthy negotiations for the establishment of a new 

government, and finally its complicated coalition structure, the GOB’s commitment to reform has stalled. 

B. U.S. Assistance Priorities: In FY 2005, USAID democracy portfolio in Bulgaria focused on Rule of Law 

(ROL), strengthening local governance, and supporting civil society by building the capacity of 

independent media, non-governmental organizations (NGOs), and encouraging public-private 

partnerships as an approach to address community issues. Thus, USAID programs directly contribute to 

the MPP goals for: reforming Bulgaria’s law enforcement and judicial system so as to enable it to combat 

crime and corruption; reinforcing democratic systems and human rights, under-girded by effective local 

institutions and a multi-ethnic community; and, promoting regional stability. 

The rule of law program continued to be the centerpiece of our assistance efforts with three major 

components: justice sector reform, anti-corruption efforts, and reducing trafficking in persons. To address 

the many judicial reform issues in Bulgaria, the Mission has taken a comprehensive approach with both a 

bottom-up and a top-down approach by working at the national and local levels with regional, district, and 

appellate courts, lawyers, governmental entities, non-governmental organizations, and professional 

organizations. USAID provided a mix of technical assistance, training, grants, and equipment to improve 

court administration/case management, improve the capacity of magistrates and court staff, and assist 

with drafting and implementing key laws and regulations to support more effective rule of law. These 

efforts were complemented by initiatives to strengthen the professional development of attorneys, a 

quintessential element of any effectively functioning judiciary, by introducing and implementing new 
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standards and procedures for admissions and discipline; providing sustainable continuing legal education; 

promoting methods for alternative dispute resolution; and, remedying the lack of practical training so 

universally recognized in Bulgarian legal education. The Mission’s anti-corruption activities aimed to 

strengthen the GOB’s institutional capacity to prevent corruption and enhance transparency and 

accountability, especially in the government audit, internal controls, and public procurement areas. In 

addition, civil-society components promoted anti-corruption public awareness, monitored public 

administration work, and investigated corruption allegations. The anti-trafficking activity aimed at building 

the capacity of Bulgarian institutions at the national and local levels to identify the associated risks and 

cope with this problem. 

In the local governance arena, USAID assistance focused on fiscal decentralization, building the capacity 

of municipalities to cope with increased responsibilities, and supporting NGOs that advocate on behalf of 

local governments. Community-level activities provided increased opportunities for ethnic minorities and 

encouraged greater ethnic and religious tolerance. Building stronger civil society organizations, 

strengthening parliamentary practices, and improving the advocacy of the independent media further 

supported Bulgaria’s transition to a strong democratic society. 

C. Program Performance: 

Judicial Reform: USAID's major achievement in the justice sector is the National Institute of Justice (NIJ), 

established in 2004 and already recognized by the magistrates as their training institution which now 

receives state funding. As a result of our assistance, NIJ improved its administrative capacity, 

infrastructure, and competence to develop new training modules and programs. The Institute delivered 

almost 8,500 training days this year and trained all new magistrates, introduced mentor judges, and 

began delivery of continuing magistrate training program. Thus, NIJ has been directly contributing to the 

improved professionalism of the judges. A good sign of the growing maturity of the institution is the fact 

that now USAID is only covering 20% of the cost for training of magistrates, compared to 90% in the past. 

The improvement in both the quality and availability of judicial training help magistrates better manage the 

dispensation of justice at all levels. USAID continued to build partnerships with 21 Bulgarian courts 

helping them to address issues of effectiveness, transparency, and independence. Over the past year 

USAID provided technical and drafting assistance for important legislative changes such as amendments 

to the Judicial System Act define clear rules for the appointment and promotion of magistrates and the 

establishment of the court administrator’s position. The Attorneys Act mandates a rigorous professional 

qualification exam, continuing legal education, a modern Code of Ethics, and permits the creation of law 

firms. Legal clinical education has been introduced, accepted and institutionalized. Passage of the 

Mediation Act in late 2004 and its implementing regulations in early 2005 establish the legal basis for 

court-referred mediation, a national register of mediators, a Code of Ethics, and qualification standards for 

mediators, and several mediation centers are operational and sustainable. To avoid the delays of court 

proceedings, many individuals and businesses are starting to opt for mediation, obviating the need to file 

court proceedings. Having cases referred to mediation frees judges to focus their time on more complex 

matters. A reduction in case backlog is already noticeable as older cases are being referred and 

successfully mediated. 

In spite of the progress, the Freedom House’s Nations in Transit score for Judicial 

Framework/Independence remained stagnant at 3.25. The results are not satisfactory and might threaten 

Bulgaria’s EU accession on January 1, 2007. From USAID perspective, the performance of our judicial 

reform programs has been mixed. A key reason for this result is the lack of a strong political will in the 

country to move quickly with the reform. In addition, difficult and controversial coordination, particularly 

with the EU, has been a major stumbling block. Two years before graduation USAID wants to make sure 

that reform efforts in the important areas of our involvement are either sustainable or can rely on other 

donors’ support. There is hope that our efforts will be successful, based on the productive relationship we 

have built with the new Spanish EU technical twinning partner in providing assistance to the NIJ and in 

strengthening the Supreme Judicial Council (SJC). The USG remains the only donor with a 

comprehensive ROL program, which serves as bridge funding for the large EU projects planned for 

Bulgaria. 

Anti-Corruption: As a way to improve the transparency of Bulgarian public entities USAID funded the 
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GOB’s state-of-the-art Public Procurement Register and made significant advances in involving business 

associations in monitoring pubic procurement. Fraud detection and procurement training for NAO 

auditors continued in FY 2005. One hundred and twenty professionals benefited from this training, while 

a leading business association received a grant to monitor public procurement. Updated NAO manuals 

systematically reformed procurement procedures. This led to more regular and consistent detection of 

procurement violations, which attracted more media attention. In an effort to bring Bulgaria’s internal 

audit function more in-line with EU requirements and international best practices, USAID continued to 

support targeted ministries in streamlining the work of their internal administrative controls to assure 

adherence to effective management policies, and fraud prevention and detection. Two hundred and fortyfive professionals from government and auditing bodies were trained in Freedom of Information legislation 

in FY 2005. USAID supported Coalition 2000 in its efforts to monitor corruption trends and promote the 

appointment of a National Ombudsman and local ombudsmen. During the past two years, our efforts in 

building transparent and accountable state entities have been greatly supported by the EU, which has 

energized policy reform efforts of the government. 

Local Governance: The local government system at both the policy and local capacity levels grew 

stronger over the past year largely due to USAID assistance efforts. USAID-supported policy changes 

and the improved financial management of the local governments led to the most stable local fiscal 

environment in the last ten years. The adoption of the Municipal Debt Act provided a consolidated and 

clear framework for municipal borrowing, including a reasonable debt ceiling for long- term debt and 

transparent borrowing procedures. USAID provided considerable assistance at all stages of the 

legislative drafting process, and the Act received strong support from the investor community. Another 

important development was a $15 million loan portfolio guarantee agreement for municipal infrastructure 

projects signed between USAID and HVB Bank Biochim, the fourth largest bank in Bulgaria. This is the 

first USAID Development Credit Authority (DCA) agreement totally dedicated to Bulgarian municipalities. 

USAID's program has directly and indirectly impacted the level of domestic and foreign investment in the 

assisted Bulgarian municipalities resulting in new jobs and improved infrastructure. The position of a 

local economic development (LED) specialist, previously unknown in Bulgaria, has been created in 16 

municipalities and a dedicated LED department has been established in an additional 13 municipalities, 

leading to several substantial investments and the creation of hundreds of jobs in a number of 

communities. 

The USG is continues to be the only donor in Bulgaria who has been providing systematic assistance to 

the local governance reform efforts since the mid-1990s. The institutions established with our support as 

well as the best practices introduced through our programs will remain as one of the most prominent 

landmarks of USG assistance in Bulgaria. The EU PHARE program has allocated EUR 10-15 million 

from their FY 2005 funds for training of municipal staff to adequately access EU structural funds. 

However, these funds will not be available until 2007. 

Civil Society: On the civil society side, USAID-assisted community foundations moved closer to 

sustainability by demonstrating capacity to raise local funds. The growing financial and in-kind 

contributions from individual and corporate donors ($250,573 in FY 2005 vs. $177,873 in FY 2004) 

demonstrate an increased interest in local philanthropy. One of the key developments in the last year has 

been the devolution of responsibility for social service delivery from national to local governments through 

the decentralization process and involvement of private providers. Contracting out to non-profit 

organizations by local authorities affords an efficient alternative that improves service delivery by 

providing better-quality at lower cost and increases accountability in the use of public resources. USAID 

assisted two municipalities to develop model procedures for contracting of social services (day care 

centers for street children, soup kitchens and shelters) that we will now widely replicate. USAID also 

continued working with social service NGOs supporting marginalized groups such as the disabled, street 

children, and other vulnerable populations. The NGOs were trained to operate successful businesses to 

earn income to further their missions. By developing an income-generating venture as a social enterprise 

and through enhancing the entrepreneurial culture, the NGOs have started overcoming major challenges 

for financial sustainability and created opportunities for disadvantaged groups and communities. In FY 

2005 there were 20 operational social enterprises, with half of them now earning income to support the 

social mission of the NGO. 
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Ethnic Tolerance: USAID worked in 13 Bulgarian communities with Roma and Turkish populations in an 

attempt to demonstrate working models for ethnic integration, ready for nation-wide replication. The 

model introduced by USAID resolved conflicts through the local community and has altered traditional 

attitudes and prompted a search for alternative avenues for ethnic reconciliation. As a result, new 

mediation centers were established in four towns. These new centers, along with three existing ones, 

provided 181 mediation services during 2005, with 47% of the cases resulting in full resolution and 23% 

partial resolution. Also during FY 2005, 162 ethnic minority representatives (Roma and Muslim) 

completed comprehensive leadership training and 42 participants passed the exam for trainers and were 

certified. This training improved the capacity of Roma and Muslim leaders to address community issues 

and participate in the political process. In 2005, the program also registered 89 sustained jobs in three 

towns and 143 new jobs created by the supported micro-businesses in four other towns. 

Media and Elections: USAID views Bulgarian media as major partners in advocating for reform. The 

activity focused on the qualitative side of the media development process by building high professional 

standards through training. In FY 2005, 120 journalists received specialized training in both technical 

skills and reform issues. The USAID-supported weekly anti-corruption investigative television program, 

“Na Chisto,” won a series of awards, exposed corruption by the National Posts Director, improved access 

to information at the Ministry of Energy, and expedited passage of the Private Enforcement Act. USAID 

assisted the main political parties in Bulgaria to develop campaign plans and messages that reflect the 

concerns of the voters. To encourage youth participation in the elections, USAID conducted a national, 

nonpartisan, voter education and get-out-the-vote (GOTV) campaign targeting young urban voters in 

twenty cities throughout the country. The target group, eligible voters aged 18-29, had a 57.3% 

participation rate compared with the national turnout of 55.7%. In cities where the campaign took place, 

illustrative polling of the target group suggests that over 75% of those surveyed knew about the GOTV 

campaign and over half said that it influenced their decision to vote. 

II. Economic Reform Assistance 

A. Country Situation: Bulgaria has maintained macro-economic stability with strong growth (estimated at 

5.7% in 2005), relatively low inflation (4.5% estimate in 2005), and falling unemployment. The private 

sector share of GDP continued to grow - the gross value added generated by the private sector reached 

75%, and the private sector provided 75% of the total employment in the country. According to Central 

Bank, the credit activity grew in the country and domestic credit reached 45% of GDP, although still below 

Western European standards. Continuing the current pace of reforms will enable the country to cope with 

the competitive pressure and market forces within the EU. During the year Bulgaria’s progress in the 

economic sector was challenged by events, both internal and external: the Parliamentary elections in mid 

2005 and the increasing price of fuel in the international market, to name two. Nevertheless, Bulgaria’s 

performance with respect to the Global Competitiveness Report continues to improve, although a bit 

slower than expected. This year the country ranked 58th, moving up from the 59th place last year. 

Bulgaria continues to outrank the other two E&E countries scheduled to graduate, Croatia and Romania, 

which ranked 62nd and 67th respectively. The inflow of Foreign Direct Investment in to the country 

continues to grow. For the period January-September 2005, it amounted to EUR 1.3 billion which is 

11.5% higher compared to the same period in 2004. 

Despite sustained macroeconomic stability and continued economic growth in FY 2005, the GOB’s 

commitment to reform remained stagnant in FY 2005 and several issues continue to impede improvement 

of the business environment. Deficiencies in Bulgaria’s judicial system, which is not sufficiently effective 

in solving commercial disputes, registering businesses and enforcing court judgments, hamper the 

development of a more supportive business climate. Government interference in the private sector has 

become a larger constraint this year. Energy sector reform needs further efforts to support the effective 

functioning of competitive, private energy market and its successful integration into the newly-established 

regional common energy market. Small and medium enterprises (SME) continue to be burdened with 

excessive licensing requirements. The consultation mechanisms for public-private dialogue with business 

associations on policy matters related to business are still evolving and require additional USG 
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assistance. Further improvement of labor market performance is constrained by education and 

vocational training systems which has not adapted to respond to current needs of employers. With the 

financial sector becoming more competitive through introduction of new and riskier products and the 

increasing number of financial conglomerates, the lack of coordination between banking and non-banking 

regulatory institutions might pose a threat to the integrity of the financial system. In addition, money 

laundering is increasingly more sophisticated and detection is becoming much more difficult. 

B. U.S. Assistance Priorities: The USAID economic assistance portfolio addressed these challenges in 

three ways. First, our programs focused on streamlining the enabling environment for business 

development to reduce barriers to market entry and attract investments to the country. To improve the 

business climate USAID worked on commercial law reforms that relieve the court system from several 

administrative activities. Activities under this priority also assisted with the development of the energy 

sector regulatory framework and secondary legislation - critical for the continued privatization in the sector 

and the opening of the electricity market. Second, by providing technical assistance to Bulgarian SMEs 

and business consulting firms, USAID strengthened the capacity of local business consultants to provide 

services to SMEs in growth-oriented industry clusters with the greatest potential for job creation and 

increased exports. To bridge the gap between demand and supply of labor, the labor market program 

implemented initiatives to improve the employability of young people. Third, by implementing microlending programs and loan guarantee mechanisms, the USG empowered the private sector to grow and 

undertake investments in order to maintain and expand local, regional, and global market shares. At the 

same time, the USG continued to invest in building strong financial sector institutions and regulators. 

USAID programs directly contribute to the MPP goal for fostering economic development and job creation 

that will increase prosperity, encourage regional cooperation, enhance stability, and expand the potential 

for U.S. exports and investment. In addition, our activities contribute to achieving the counter-terrorism 

and regional stability goals. 

C. Program Performance: 

Business environment: In 2005, our most significant accomplishments were the areas of enforcement of 

judgments, company registration, and commercial dispute resolution. USAID lead the reform of Bulgaria’s 

grossly ineffective judgment enforcement system that was not compatible with European norms. With the 

passage of the Law on Private Enforcement Agents, Bulgarian businesses and foreign investors are 

much more confident that their interests will be better protected and their commercial cases will be 

finalized in a timely manner. The businesses further benefited from the opening of the two mediation 

centers in the country offering an inexpensive and swift alternative to the cumbersome judicial process 

while at the same time relieving the courts workload. Following lengthy lobbying efforts supported by 

USAID, a noteworthy breakthrough was the decision of the government to remove the currently 

antiquated process of business registration from the court and transfer it to the executive authorities. 

Collaboration with the World Bank was crucial and resulted in incorporating a conditionality addressing 

business registration reform in the Bank's new loan to Bulgaria. As a result, the GOB adopted a Reform 

Strategy and formed a working group which received extensive technical assistance from USAID to 

develop draft legislation. The real impact of the reform is yet to be seen, but at least three things will 

happen: the company registration will be simplified and expedited, the judges will be relieved from dealing 

with administrative matters, and the procedure will be transparent, thus reducing the opportunity for 

corrupt practices. 

Economy Restructuring: In 2005, USAID supported the restructuring of two key sectors in Bulgaria - 

energy and transport. In June 2005, USAID completed its support to the Ministry of Transport and 

Communications regarding the sale of the concession rights for the two Black Sea airports, Varna and 

Bourgas. As a result of USAID technical assistance, the transaction was completed in compliance with 

the highest international standards for transparency and openness and a concession contract was signed 

with the selected winner. The concession deal will result in more than USD 1.5 billion in revenue to the 

country. The transaction is of significant importance for the further development of the Black Sea tourism 

industry, one of the competitive sectors in the country. However, two of the participants in the tender filed 

a legal challenge and the final implementation of the transaction is now subject to judicial determination. 

In the energy sector, USAID assistance helped the country to move closer to the establishment of a 

competitive energy market and its integration into the regional market. After the successful privatization 
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of the electricity distribution companies last year, in 2005 USAID supported the privatization of four 

electricity generation companies by developing the regulatory framework for electricity generation. As a 

result, Bulgaria received four bids with highly competitive prices for two of the utilities. The first 

agreement for the privatization of the thermal power plant in Varna was signed in October 2005. USAID 

continued to provide assistance to the State Energy and Regulatory Commission (SEWRC) in order to 

build their capacity to act as an independent regulator playing a critical role for the liberalization of the 

energy market. USAID worked closely with the SEWRC on the energy sector tariff reform and finalized 

the tariff methodologies and the regulatory Chart of Accounts for the natural gas and the heat supply 

sectors. 

Private Sector: In FY 2005, the number of SMEs in the country continued to grow and so did their 

contribution to the GDP, thus proving the importance of the small and medium enterprises for the 

Bulgarian economy. To improve the competitiveness of the SMEs and prepare them for the European 

market, USAID successfully continued to implement its second generation enterprise development 

program by working extensively with private business consulting firms that provide a broad range of 

services to export-oriented SMEs in industry sectors with high growth potential, such as biotechnology, 

information and computer technologies, agriculture, tourism, commercial wine production. Throughout 

the year, a broad range of interventions were implemented to promote investments and new product 

development in these key areas. As a result of the expanded provision of services, USAID-supported 

business consulting firms’ revenues increased by an average of 23%, and the revenues of SMEs 

receiving USAID funded consulting services by 8%. The increased revenue is a prerequisite for growth of 

the private sector and for creation of new jobs. 

 

Labor market: In the labor market, USAID focused on and played an instrumental role in addressing one 

of the most pressing issues identified by the business community - the shortage of people with practical 

knowledge and skills relevant to the new economic realities in Bulgaria. Education and training 

institutions still fail to provide these skills and there are few incentives for companies to develop and train 

staff. To overcome these challenges, USAID undertook a concerted effort targeted towards improving the 

market orientation of universities and their ability to deliver up-to-date skills by launching an extensive 

network of Career Development Centers (CDCs). The aggressive promotional campaign among students 

and employers resulted in more than 50,000 students signed up for using the services of the CDCs and 

more than $100,000 committed by businesses to support the centers. From a different perspective but 

again with the objective to prepare young people for the new realities of the labor market, USAID 

continued to educate the entrepreneurial spirit of young people by supporting entrepreneurial and 

business training at schools and the establishment of student operated companies. In FY 2005, 32,000 

students from 220 schools in 81 cities and 81 student companies throughout Bulgaria were given the 

opportunity to demonstrate their outstanding business and entrepreneurial skills at national and 

international events. 

Financial Sector: A key aspect of USAID financial sector efforts has been strengthening the capacity of 

the Financial Supervision Commission (FSC) and the Bulgarian National Bank (BNB) to combat money 

laundering through the development of anti-money laundering manuals and provision of formal and onthe-job training. USAID was instrumental in assisting with the development of landmark draft legislation 

protecting the rights of the increasing number of borrowers. The legislation is modeled on the “Truth-InLending” Regulation Z of the United States and is in compliance with EU directives. In order to provide 

the best insurance protection for bank depositors, as well as help build a stronger commercial banking 

sector, USAID has been assisting the Bulgarian Deposit Insurance Fund to design and introduce riskbased deposit insurance premiums recognizing that banks engaged in more risky activities should pay 

higher premiums. Our advisors were instrumental in helping the BNB to develop its plan for establishing 

a modern Cash Center. This facility will enable the Bank to produce Euro banknotes and coins and 

incorporate measures against counterfeiting. 

Access to Credit: To improve access to credit and enhance business opportunities in key competitive 

sectors of the economy such as: energy efficiency, agriculture, tourism, high technology, and light 

manufacturing, the Mission continued to utilize the Development Credit Authority (DCA) portfolio 

guarantee vehicle. At the end of September 2005 the cumulative utilization of the five active DCAs 
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exceeded $60 million. In FY 2005 alone, the USAID-partner banks extended over $14.8 million in loans, 

of which over $11.7 million was used to improve the Bulgarian private companies’ competitiveness in the 

targeted sectors. Another $3 million was agricultural credit and the remaining $ 173K was for energy 

efficiency projects. USAID micro-credit program, implemented by the Nachala cooperative, continues to 

be an alternative lending mechanism accessible to start-up businesses and women entrepreneurs, 

covering 88% of the territory of Bulgaria. The current number of clients of the cooperative is 2,400 (close 

to 50% of them are women) and their cumulative number exceeds 12,500. More than 56,000 jobs have 

been created or sustained due to this micro-finance program. At present its active portfolio amounts to 

$3.7million. Nachala is already financially and operationally self-sustainable. An important recognition for 

its work has been the fact that in May 2005, the cooperative received the award for the best credit 

cooperative in Bulgaria for 2004. The second microfinance program funded by USAID and graduated in 

FY 2004 (USTOI cooperative) continues to operate and is sustainable both operationally and financially. 

 

III. Social Reform and Humanitarian Assistance 

A. Country Situation: Although the government is pursuing an active employment-creation policy, which 

has resulted in a decline in unemployment to a record low of 10 % in October 2005, unemployment levels 

are double the EU average and remain among the highest in the region. With a minimum wage of EUR 

77, average salary of EUR 190, and average pension of EUR 67 monthly, Bulgaria maintains the lowest 

compensation levels in the region. With aging population, inadequate delivery systems, and excessive 

infrastructure, the modernization of health and education services poses a major challenge for the 

country. Health care reform continues at an uneven pace and often is cited as a reason for public 

discontent. The population’s health status is well below the EU average. Although HIV/AIDS infection 

rates remained low, a World Bank report warns about the possibility of a pandemic increase in the region. 

The educational system is also failing to meet the needs of the country’s job market. Substantial 

investments in health and education will be required to reverse the deterioration of social indicators and to 

improve Bulgaria’s competitiveness. Although the new coalition government has identified the health and 

educational reforms as a priority, their commitment to a change remains only on paper. The recent 

strikes of the teachers and the scandal with the dismissal of prominent medical doctors from the boards of 

several leading hospitals in the country pose a concern as to the ability of the GOB to implement the 

reforms. 

U.S. Assistance Priorities: Due to its graduation in 2008 and the shrinking resources, USAID has not 

been approaching the social issues in the country in a systematic way. Further, in the early 1990s the 

USG strategy did not include health and educational reform efforts. Nevertheless, several programs have 

significantly contributed to social reform efforts in the country. Our social sector activities focused on 

consolidation of pension reform and health care reform, with emphasis on hospital restructuring and 

decentralization. In addition, a number of activities already described under the democracy or economic 

sections also have major social impacts. The ethnic integration program creates jobs for minorities and 

addresses key health and educational issues that the Roma and Muslim minorities face. USAID labor 

market efforts in addition to responding to the needs of the employers, directly contribute to reducing the 

unemployment level in the country by creating new opportunities particularly for the young people. In 

addition, through our participant training programs and support to the American University in Bulgaria we 

directly promote the development of a qualified workforce in Bulgaria capable to deal with the competitive 

challenges of the EU accession and the market economy. 

C. Program Performance: In FY 2005 USAID graduated two important programs contributing to the social 

reform in Bulgaria - the pension reform and health finance reform programs. The models and practices 

implemented through these programs can be used by all the countries in the region which have not yet 

embarked on health and pension reform. 

Pension Reform: USAID leaves in Bulgaria a sustainable legacy of a three-pillar pension (mandatory 

public, mandatory private, and voluntary private) system to provide better retirement income for future 

generations. At present close to 3 million Bulgarian workers participate in private pension schemes and 

the net assets managed by Bulgaria's eight private pension companies amount to more than BGN 1 
11

billion (approximately $600 million) which is 2.5% of the GDP. The success of pension reform extends 

not only to improving the social protection landscape in Bulgaria but it also has a long-term positive 

impact on the financial markets and economic growth and development as the private pension funds are 

strengthened and become mature institutional investors. 

Health Reform: In the health sector, our assistance dealt with the health finance reform focusing primarily 

on in-patient financing and hospital care restructuring. Given the lack of experience in managing the 

health sector in a market-based environment, USAID has identified the niche as crucial for restructuring 

the system and improving its efficiency and transparency. This was one of the most important steps in 

the reform and the government lacked the capacity to implement it alone. One of the most important 

USAID achievements was the establishment in the Ministry of Health of the National Health Accounts 

(NHA) division to compile, analyze, and report on national health expenditures. Bulgaria is the first 

Central and Eastern European country to institute health accounts. NHA describes who is spending how 

much and for what health services. This broad profile of the flow of financial resources through the 

system provides new and useful information to decision-makers on efficiency, equity, and impact. 

Another aspect of our health reform effort focused on measuring financial inputs for services delivered. A 

new inpatient financing system based on Diagnostic Related Groups was developed and applied in thirtyeight pilot hospitals. With USAID assistance, over 1,800 coders from all Bulgarian hospitals were trained 

in preparation for national implementation. As part of the hospital restructuring effort, assessments in 

over thirty-three hospitals were conducted. A variety of recommendations resulted from this work ranging 

from consolidation of underused departments to conversion of some facilities into another type of health 

facility more useful for their communities. Although none of the recommendations have been 

implemented thus far, the World Bank is very interested in our assessments and will use the same model 

to assess the hospitals throughout the country. There are some indications by the Ministry of Health that 

the restructuring of the hospitals will be piloted in two regions starting in 2006. 

Human Capacity Development: In 2005 USAID continued to build the capacity of individuals to implement 

reform models effectively by providing short-term tailored trainings in the United States, Bulgaria, or other 

countries. EU accession demands helped define USAID training priorities. These priorities facilitated the 

travel of Bulgarian decision makers and professionals to EU countries to examine the most appropriate 

EU models for reforms as Bulgaria readies itself for EU membership in 2007. 295 participants from 

indigenous institutions and organizations benefited form 24 tailored training events, thus bringing the total 

number of Bulgarians trainees to 2,700. Participants included ministers and other high-level 

governmental officials, members of the Parliament, mayors, Supreme Court judges, and key business 

association leaders. Examples of training results include: new judgment enforcement legislation drafted 

and passed; and reduced case delays and customer service strategies in targeted courts. The Small 

Grants component of the participant training program continued to produce tangible results for a large 

group of beneficiaries. Grant funds were used to establish computer and information centers in poor 

Roma neighborhoods, develop a regional economic development plan, enhance professionalism and 

ethnic tolerance through multi-ethnic training of journalists, and a series of seminars to involve citizens in 

local government. 

American University in Bulgaria: Established in a region that has a long history of conflict driven by ethnic 

tensions and nationalist tendencies, the mission of the American University in Bulgaria (AUBG) is to 

educate future leaders committed to serving the needs of the region by promoting the values of an open, 

democratic society. Fiscal year 2005 was a difficult one for the University. AUBG’s financial performance 

was less than stellar as the operating deficit climbed from $1 million to $1.6 million. This was primarily 

due to lower-than-expected enrollment numbers. Nonetheless, the future is promising and AUBG has 

made positive strides towards financially sustainability. The University successfully recruited the largest 

freshman class ever for school year 2005/2006 (FY 2006). This growth in numbers was achieved while 

holding average net tuition steady at approximately $4,500 per student. In spite of the financial setbacks, 

AUBG only withdrew $1.1 million from the principle of USAID’s endowment of approximately $10 million, 

which is 30% less than last year’s drawdown. It also marks the second year in a row that AUBG has not 

exceeded its projected drawdown. 

Humanitarian Assistance: From May 2005 through September 2005, Bulgaria experienced several waves 
12

of torrential rains that caused heavy flooding throughout the country. The damage proved extensive and 

over 3.2 million people or one-third of the Bulgaria population was affected. USAID accessed funding 

through the Office for Foreign Disaster Assistance (OFDA) ($1.45 million) and the U.S. State Department 

($250,000). The funds were used to provide equipment for immediate recovery efforts such as pumps, 

generators, protective clothing, inflatable boats with outboard motors, and chemical toilets and for direct 

assistance (food, water, and heating materials) to the affected population. 
13

FY 2006 Program 

SO: 183-0130 Economic Growth and Increased Prosperity 

Improve Economic Policy and the Business Environment 

Improve Economic Policy and the Business Environment: ($1,450,000 AEEB). USAID will provide 

assistance in streamlining commercial legislation primarily pertaining to company registration. Efforts to 

improve the system of judgment enforcement will include: technical assistance (TA) and training to the 

Ministry of Justice to effectively exercise its supervisory role over private enforcement agents; TA to the 

chamber of private enforcement agents to develop budget and management skills; and TA and training to 

build skills in the private enforcement agents’ profession. USAID will fund an advocacy campaign for the 

passage of a critical law transferring the system of business registration from the courts to a user-friendly 

administrative agency. USAID will assist three commercial mediation centers by helping to prepare 

business plans and training trainers in commercial mediation. Four USAID-developed commercial law 

courses (collateral law, company law, alternative dispute resolution, and corporate governance) will 

become sustainable through their integration into the curriculum of the National Institute of Justice, the 

Attorneys Training Center and other local institutions. Over one hundred judges and lawyers will benefit 

from these training events in FY 2006. 

Using bilateral funds to supplement a USAID regional energy program, the Mission will enhance the 

capacity of the State Energy and Water Regulatory Commission (SEWRC) to regulate the energy sector. 

Activities include, but are not limited to, funding SEWRC membership in the energy regulators regional 

association, and SEWRC participation in association meetings in such areas as licensing/competition and 

tariff/pricing. Through exchange of visits and internships under a partnership between SEWRC and the 

New Jersey Board of Public Utilities, the SEWRC will acquire additional technical expertise in setting 

rates and tariffs and valuing plant and equipment in the water sector to support it with its newly-assigned 

responsibilities for the water sector. Principal contractors and grantees: Bearing Point (prime), National 

Association of Regulatory Utility Commissioners (prime). 

Improve Private Sector Competitiveness 

Improve Private Sector Competitiveness: ($1,736,000 AEEB, $366,561 AEEB carryover). USAID will 

support small and medium enterprise (SME) development through TA and trade and finance facilitation to 

private companies and local SME consulting firms in key sectors: information technology (IT), tourism, 

food and agriculture, and apparel. Four resident American volunteers will work with local consulting firms 

and associations to help them improve the quality of services. At least five publicity and/or investment 

events will be organized throughout the year in priority sectors to help attract investment. USAID will 

conduct a public awareness campaign targeting SMEs to create awareness of the implications of new 

regulations and tax regimes. USAID will provide technical advisory support to the Economic Growth 

Council and the Invest Bulgaria Agency regarding effective licensing regimes. 

USAID will work with 180 schools to implement entrepreneurship training. At least 100 student-operated 

mini-companies will be mentored to develop entrepreneurial expertise among youth. Institution 

strengthening support to the Business for Education Foundation will ensure the sustainability of a USAIDsupported network of Career Development Centers in Bulgarian universities and vocational schools. 

USAID will fund the Stevens Institute of Technology Master of Science in Information Systems program at 

Sofia University to develop management skills in information technology leaders. Principal contractors 

and grantees: Volunteers for Economic Growth Alliance (prime), Junior Achievement Bulgaria (prime), 

Stevens University, (prime). 

Strengthen The Financial Services Sector & Increase Access to Capital 

Strengthen the Financial Services Sector & Increase Access to Capital: ($1,634,310 AEEB, $100,000 

AEEB carryover). USAID will assist the Bulgarian National Bank and the Financial Supervision 
14

Commission to finalize anti-money laundering manuals as well as provide on-the-job training for more 

than one hundred regulators. To develop supervisory approaches for the conglomerate institutions in the 

financial market, USAID will use TA for: drafting conglomerates legislation, preparing agreements 

between bank and non-bank regulatory bodies and joint training initiatives. Significant attention will be 

devoted to raising general public awareness of new financial products as well as consumer protection 

safeguards. At least four financial sector educational events will be organized for judges aimed at 

enhancing judges’ knowledge of the financial sector, including regulatory aspects. 

Pending regional approval, USAID will co-fund a Global Development Alliance (GDA) for a wind farm 

project to provide clean energy for Bulgarians and support investment by an American company. Another 

potential GDA will create a country-wide microfinance network for Roma entrepreneurs. Principal 

contractors and grantees: Emerging Markets Group (prime), EnCon Services International (prime), TBD. 

FY 2006 Program 

SO: 183-0220 Enhanced Rule of Law 

Promote And Support Anti-Corruption Reforms 

Promote And Support Anti-Corruption Reforms ($1,350,000 AEEB, $650,000 AEEB carryover). During FY 

2006, USAID will provide TA and training to staff at the National Audit Office (NAO), the Public 

Procurement Agency (PPA), the Internal Control Directorate in the Ministry of Finance, the Ministry of 

Health, and the Ministry of Regional Development and Public Works to improve internal controls and 

procurement procedures. USAID will promote the Public Procurement Register through a public 

awareness campaign targeting the private sector. USAID will also provide specialized training to build the 

capacity of the PPA, and will target ministries, oversight bodies, and business associations to monitor 

public procurement. USAID will also address high level corruption by providing TA to the NAO to develop 

a web-based public register disclosing the assets of high ranking government officials. 

USAID will provide training and TA to the NAO to establish an integrated framework to build internal 

control and audit capacity in target ministries and oversight bodies. USAID will assist in preparing audit 

reports at participating Ministries to assist in the development of implementation experience in internal 

controls and provide oversight for procurement and various accounting activities. These units will provide 

methodological guidelines to ensure a system of checks and balances in budget spending units. 

The Center for the Study of Democracy (CSD) will focus on developing the capacity of a national 

ombudsman by drafting administrative regulations to facilitate implementation of responsibilities 

associated with the office. CSD will provide specific policy reform recommendations to the GOB to assist 

in developing anti-corruption and good governance measures. Principal contractor and grantee: DPK 

International (prime) and the Center for the Study of Democracy (prime). 

Reduce Trafficking In Persons 

Reduce Trafficking In Persons ($145,000 AEEB, $600,000 AEEB carryover). USAID will support antitrafficking efforts in conjunction with other USG programs. USAID will provide TA, training and capacity 

building to the national and local Commissions for Combating Human Trafficking. Efforts are underway to 

identify additional anti-trafficking activities to fill critical gaps that are not being addressed by other donors. 

Principal partner: International Organization for Migration (prime). 

Strengthen the Justice Sector 

Strengthen the Justice Sector ($4,000,000 AEEB, $83,010 AEEB carryover). As perhaps the weakest 

component of the judicial sector, the Supreme Judicial Council (SJC) is a major focus of USAID 

assistance. Through the use of study tours for stakeholders in the reform effort, USAID will build the 

SJC’s capacity to oversee court administration; develop a program-based budget in an independent, 
15

transparent and objective manner; adopt needed standards for court administration and judicial 

recruitment/promotion; and serve as the national court administration office. USAID will support 22 model 

courts with the implementation of their court improvement plans so as to increase their effectiveness, 

transparency and independence. By providing software, hardware and technical support, USAID will 

provide assistance for courthouse automation, and public access. An additional component of the court 

improvement plans focuses on improving bench-bar relations which will also aid in improving court 

performance. The best practices pioneered in the court improvement plans used by the model courts will 

provide guidance for formulating new court standards. USAID will also provide approximately 50 grants 

to local non-governmental organizations to support judicial reform efforts with courts at the local level. 

USAID will assist the National Institute of Justice (NIJ) to improve its capacity to function as a training 

institution for magistrates and court clerks. In FY 2006, a class of 50 incoming judges will attend the NIJ’s 

six month training program. A continuing needs assessment will also identify courses and training 

programs that will be developed. One thousand judges, court clerks and administrators will receive 

specialized training. USAID will work closely with the Ministry of Justice to produce amendments to the 

legal education act to require that law faculties include clinical education in their curricula and thus ensure 

the sustainability of the USAID’s efforts in this area. USAID will support the development of the new civil 

procedure code or possible revisions to the current one to reduce case delay and expedite resolution of 

the backlog of court cases. In addition, amendments to the Judicial System Act and possible new 

implementing regulations will be pursued. Principal grantees: East West Management Institute (prime) 

and ABA/CEELI (prime). 

FY 2007 Program 

SO: 183-0220 Enhanced Rule of Law 

Promote And Support Anti-Corruption Reforms 

Promote And Support Anti-Corruption Reforms: 

Reduce Trafficking In Persons 

Reduce Trafficking In Persons: 

Strengthen the Justice Sector 

Strengthen the Justice Sector: 

Strengthen the Legislative Function/Legal Framework 

Strengthen the Legislative Function/Legal Framework: For this SO, the Mission is not requesting FY 2007 

funding. FY 2006 funding will be spent in FY 2007 and USAID will start closing out its activities in the 

country. 

FY 2006 Program 

SO: 183-0230 Local Governance More Effective and Accountable 

Mitigate Conflict and Support Peace 

Mitigate Conflict and Support Peace ($229,070 AEEB). The ethnic integration program will continue 

funding local mediation centers and projects in 10 towns with significant minority populations to address 

economic, education, and social issues of Roma and Bulgarian Muslims. USAID will increase its efforts 

to train Roma and Muslim leaders and to promote inter-ethnic tolerance by conducting a number of 

national and regional events focused on disseminating best practices of ethnic integration already 
16

implemented at the community level. Principal grantee: Partners Bulgaria Foundation (prime). 

Strengthen Civil Society 

Strengthen Civil Society ($600,000 AEEB). The Community Funds program will consolidate its 

assistance to the existing community foundations and social enterprises by providing matching funds for 

their community initiatives. An expanded social contracting procedure allowing municipalities to contract 

out to indigenous non-governmental organizations for provision of social services will be implemented in 

seven new municipalities. Additionally, small-scale community initiatives developed by Peace Corps 

volunteers will receive support. Principal grantees and agencies: Counterpart International (prime) and 

Peace Corps (prime). 

Support Democratic Local Government & Decentralization 

Support Democratic Local Government & Decentralization ($2,431,000 AEEB, $102,440 AEEB 

carryover). USAID will consolidate its work on fiscal decentralization to ensure sustainability of the 

reforms through drafting legislation and regulations as well as ensuring their effective implementation 

through practical training for municipal officials. USAID’s legislative efforts will target a Constitutional 

amendment to allow municipalities to set their own local tax rates. The issue of municipal insolvency is 

also another legislative priority. USAID will complete technical assistance to indigenous local government 

support organizations. These organizations will serve as USAID “legacies” to build the capacity of 

municipalities to successfully advocate for and implement greater fiscal autonomy after USAID 

graduation. The local government portfolio will also focus on the replication of successfully implemented 

management practices during earlier program phases with support from “legacy” organizations such as 

the National Association of Municipalities of Bulgaria and the Foundation for Local Government Reform (a 

think tank and training institution). Principal contractors and grantees: Research Triangle Institute 

(prime), International City/County Management Association (prime), National Association of Municipalities 

(prime), Foundation for Local Government Reform (prime), and several regional associations of 

municipalities (subs). 

FY 2007 Program 

SO: 183-0230 Local Governance More Effective and Accountable 

Mitigate Conflict and Support Peace 

Mitigate Conflict and Support Peace: 

Strengthen Civil Society 

Strengthen Civil Society: 

Support Democratic Local Government & Decentralization 

Support Democratic Local Government & Decentralization: For this SO the Mission is not requesting FY 

2007 funding. FY 2006 funding will be spent in FY 2007 and USAID will start closing out its activities in 

the country. 

FY 2006 Program 

SO: 183-0420 Program Support Objective 

Establish & Ensure Media Freedom & Freedom Of Information 
17

Establish & Ensure Media Freedom & Freedom Of Information ($105,000 AEEB). 

USAID will continue advocacy and public awareness efforts in key areas of reform specifically ethnic 

integration, anti-trafficking, and judicial reform. This program will continue to produce the anti-corruption 

TV show Na Chisto. Through its Media Development program, USAID will give exposure to prominent 

national and local Roma local leaders, journalists, and professionals to promote a positive image of Roma 

in an effort to counter the increasing level of inflammatory anti-Roma rhetoric. While the training of 

journalists will continue within this program, the number of journalists trained will be reduced in reflection 

of the growing maturity of broadcast journalism within Bulgaria. The strengthening of the institutional 

capacity of the Broadcast Training Center to ensure its sustainability beyond USAID assistance is a 

priority. Principal grantee: Broadcast Training Center (prime). 

Improve Quality of Workforce through Vocational/Technical Education 

Improve Quality of Workforce through Vocational/Technical Education ($1,200,000 AEEB, $297,943 

AEEB prior year recoveries). During FY 2006, USAID will continue to fund U.S.-based, in-country, and 

third-country training opportunities for Bulgarian officials, non-governmental organizations, and 

entrepreneurs with increased focus on in-country and third-country trainings. USAID will train 

approximately 300 individuals through this program. Participant training resources will also be used to 

support the local partner entities through tailored human capacity, furthering the impact of ongoing USAID 

programs. Principal contractor: World Learning (prime) 

Increase Capacity of Higher Education to Contribute to Development 

Increase Capacity of Higher Education to Contribute to Development ($200,000 AEEB carryover). 

USAID will conduct a financial assessment of the American University in Bulgaria (AUBG), a key recipient 

of significant USAID funding since 1991. This assessment will focus on the management and operations 

systems at AUBG. The result of this review will be that AUBG, USAID and other stakeholders will be able 

to measure AUBG’s progress towards financial sustainability and ultimately, long-term viability. Equally 

important, it will enable stakeholders to identify areas where AUBG needs assistance and subsequently 

to target assistance more effectively. Beyond the improved effectiveness of operations achieved by 

implementing suggested refinements, AUBG will also be better-positioned to request assistance from 

other donors by having a better understanding of its needs. Principal contractor: to be determined 

(TBD). 

Program Support 

Program Support ($1,592,730 AEEB, $422,000 AEEB carryover). This activity will continue to be the 

major support vehicle for program activities, staff, and logistics. Program Development and Support 

resources will be used for program-related audits, studies, final assessments, and close-out evaluations, 

as well as for activities in support of selected partner organizations and legacies. These legacies will 

institutionalize or seek to further the goals of USAID programming after the Mission closes in 2008. 

These funds will also support staff critical to manage and oversee USAID programs. Various contractors 

and grantees. 

Provide Emergency Assistance 

Provide Emergency Assistance ($250,000 AEEB carryover). Assistance for flood-affected areas will help 

address key equipment needs of schools and kindergartens and needs for food and winter heating of 

affected communities, and accelerate the process by which lives of the most affected population begin to 

return to normal. Principal grantee: CARE International. 

FY 2007 Program 
18

SO: 183-0420 Program Support Objective 

Establish & Ensure Media Freedom & Freedom Of Information 

Establish & Ensure Media Freedom & Freedom Of Information: 

Improve Quality of Workforce through Vocational/Technical Education 

Improve Quality of Workforce through Vocational/Technical Education: 

Increase Capacity of Higher Education to Contribute to Development 

Increase Capacity of Higher Education to Contribute to Development: 

Program Support 

Program Support: 

For this SO, the Mission is not requesting FY 2007 funding. FY 2006 funding will be spent in FY 2007 and 

USAID will start closing out its activities in the country. 
19

Results Framework 

183-0130 Economic Growth and Increased Prosperity 

Program Title: Private Sector Development 

 1.3.1.: Improved Business Climate 

 1.3.1.1.: Improved and Transparent Legal and Regulatory Environment (in cooperation with US Treasury 

and USDA) 

 1.3.1.2.: Improved Social Sector Performance to Promote Business Opportunities 

 1.3.1.3.: Effective Legal Policies and Practices to Promote Transparency (in cooperation with ROL team) 

 1.3.2.: Jobs Created through Strengthened Private Sector 

 1.3.2.1.: Sustained SME Growth 

 1.3.2.2.: Trade Capacity Built and Promoted 

 1.3.2.3.: More Efficient Labor Markets 

 1.3.3.: Improved Access to Financial Resources 

 1.3.3.1.: Reduced Barriers to Credit 

 1.3.3.2.: Increased Investment in the Economy 

 1.3.3.3.: Sustainable Micro-lending Mechanisms Developed 

 1.3.4.: A More Competitive Agricultural Sector, USDA 

183-0220 Enhanced Rule of Law 

Program Title: Rule of Law 

 2.2.1.: A Strengthened Judicial System 

 2.2.1.1.: Improved Court Administration 

 2.2.1.2.: Improved Capacity of Legal Professionals 

 2.2.1.3.: Key Laws and Regulations Support Effective ROL 

 2.2.2.: Reduced Corruption through Enhanced Transparency & Accountability 

 2.2.2.1.: Procurement Policies and Procedures Enacted and Implemented to Increase Integrity 

 2.2.2.2.: Strengthened External and Internal Audit Mechanisms 

 2.2.2.3.: Increased Capacity of CSOs and Media to Demand Greater Transparency and Accountability of 

Public Institutions 

 2.2.3.: Improved Law Enforcement Mechanisms (US Treasury, DOJ) 

 2.2.3.1.: Regional Criminal Justice against organized crime 

 2.2.3.2.: Prosecutorial Strengthening 

 2.2.3.3.: Frauds and Financial Crimes Task Force 

183-0230 Local Governance More Effective and Accountable 

Program Title: Local Governance 

 2.3.1.: Authority, Responsibility& Resources Decentralized to Local Government 

 2.3.1.1.: Key Laws to Support Decentralization in Place 

 2.3.1.2.: Increased Fiscal and Administrative, Decision-making and Service Delivery Capacity of Local 

Government 

 2.3.2.: Increased Ability to Address Community Building Issues 

 2.3.2.1.: Increased Citizen Participation, Especially by Vulnerable Groups, in Policy Decisions 

 2.3.2.2.: Increased Community Generated Resources to Address Local Problems 

183-0420 Program Support Objective 

Program Title: Cross-Cutting Programs