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USAID and the East

J.Brian Atwood, administrator for the U.S. Agency for International Development (USAID), visited RFE/RL's Prague headquarters on May 27, 1997, to observe the successful conclusion of the United States' formal assistance program to the Czech Republic in its transition from communism to a free market democracy.

Atwood delivered a major address on the economic and political transition in Central and Eastern Europe and the Newly Independent States. The speech, entitled "Sustaining the Momentum: Reform at a Crossroads," was delivered to the press, the Prague diplomatic corps, past recipients of the USAID program and RFE/RL staff. Atwood was accompanied by U.S. Ambassador to the Czech Republic, Jenonne Walker, and the Assistant Administrator of USAID for Europe and the New Independent States, Tom Dine.

USAID has administrated U.S. foreign assistance programs worldwide since 1961. The Czech program was part of the Support for Eastern European Democracy, or SEED, Program funded by the U.S. Congress in 1989. USAID will end its program in Czech Republic in September, 1997, in recognition of the outstanding progress of the Czech people in overcoming the challenges of transition. Similarly, the United States Peace Corps volunteer program in the Czech Republic came to an end in a U.S. Embassy closure ceremony last week in Prague.

The East: Open Societies Speed Recovery Says USAID Administrator

USAID: Europe And The New Independent States

Transcript Of Remarks By USAID's J. Brian Atwood

Prague, 27 May 1997 (RFE/RL) -- The following is a transcript of remarks made in Prague today by J. Brian Atwood, the administrator of the U.S. Agency for International Development (USAID). He spoke at the headquarters of Radio Free Europe/Radio Liberty.

"Thank you very much Mr. Gillette (Bob Gillette, Director of Broadcasting for RFE/RL) for that very kind introduction and for reviewing the role that USAID has played in this region.

I want to welcome the distinguished ambassadors that are here representing countries from the region, in particular my good friend Ambassador (Jennone) Walker, the ambassador of the United States to the Czech Republic, and all of the employees of Radio Free Europe and Radio Liberty.

It is truly a privilege to speak to you today in this headquarters of the radios -- this place that used to be a Soviet (-style) parliament. It seems to me it is more vibrant with you here than it ever has been before.

I noticed when I came in that there was a good deal more attention being paid to Tom Dine than there was to me. I don't resent that, that always is the problem when I travel with Tom Dine. But there is a lot of particular interest in him here because as you know he will soon become the president of Radio Free Europe/Radio Liberty.

He is one of our best and I'm very sorry to see him leave USAID, but he has worked in this region in the past few years with so much energy and he has done so much good that I'm glad he will continue to work here. This is the region of the world where his own ancestors were born, so it is really a labor of love that brings him to Radio Free Europe and Radio Liberty.

Less than a year ago, the First Lady of the United States, Hillary Clinton, and America's most famous Czech-American, Secretary of State Madeleine Albright, spoke in this same room. Mrs. Clinton stressed the rich symbolism of Radio Free Europe and Radio Liberty operating in the former Czechoslovak Parliament. She pointed out that just a few years ago, when members of the old Soviet-style parliament filled this room, this was a place where free speech was a stranger; a place where ideas were suppressed. Today, we can proudly say, this is a place where the free exchange of ideas is flourishing.

Tomorrow, I will be in the Netherlands to celebrate an important hallmark of freedom, the 50th anniversary of the Marshall Plan.

To this day we regret that the Marshall Plan did not extend to Central and Eastern Europe. The then-Foreign Minister of Czechoslovakia, Jan Masaryk, wanted it to cover this land and he went to Moscow and asked that it be covered, that he be given permission to invite the Marshall Plan to the Czech Republic, to Czechoslovakia. You know the story. The Soviets refused. Masaryk ended up a martyr in the cause of freedom, one of many who stood up to Soviet communism.

Masaryk and people like him were the inspirations for the cause that these radios -- these voices of freedom -- took up. For so many years yours was the voice of truth, yours was the voice that confirmed the cruelty, the incorrectness of this region's communist present and the correctness of its democratic past. And now you have a new role. Now you speak to the people of this region about its future. Now you speak of membership in NATO, in the European Union, of peace and prosperity.

The Marshall Plan is often called the most successful foreign policy initiative ever undertaken by the United States. It laid the groundwork for the bold, brave steps which had to be taken to help Western Europe pull itself out of the tragedy and chaos of World War II.

When the Marshall Plan was first proposed in the United States there was strong opposition. One columnist wrote that believing U.S. aid would work was "like believing that the Atlantic could be bailed out with a soup ladle." Opposition in our Congress was considerable. Polls indicated that only one third of Americans supported U.S. participation in a European recovery program. Fortunately, the skeptics did not prevail. George Marshall, and others like him, convinced the American people that peace and stability in Europe were an investment we could not afford to neglect. And they were right.

More than 40 years later the nations of Central and Eastern Europe and the former Soviet Union face a challenge as difficult as rebuilding Western Europe after World War II. And once again, many skeptics in America argue against U.S. assistance. They say there is little we can offer. They say that America has fulfilled its promise with the collapse of the Berlin Wall. But destroying a wall, destroying a system of control and oppression, is not the same as building democratic nations.

As in 1947 and 1948, this region's nations also faced an historic turning point following the collapse of communism in 1989 and 1990. They had to make hard choices about whether or not to liberalize their economies and establish participatory democracies. Some opted to pursue reform whole-heartedly. Others were obsessed with fighting their internal demons.

The forward path of reform is not easy, and the difficulties along the way can fuel cynicism. Opponents of reform -- often those who enjoyed power in the old autocratic systems -- wanted to push nations back in time, back toward less freedom, greater state control and discredited economic schemes. These anti-reformers are still present and they're still eager to exploit economic, social and ethnic tensions to hold on to power. But the cost of taking the backward path is high.

The United States and the European Union must continue to invest in freedom. We still need radio stations that reach millions who do not trust their own media. We still need development programs that create partnerships for democratic reform. We still need to work with our friends from this region to create the policies, the institutions and the attitudes that will enable market democracies to thrive.

There is much to be done but great progress has been made. At least two-thirds of the population of the former Soviet Union and Central and Eastern Europe now live in countries where politicians are more accountable to the people who elected them, where courts -- not apparatchiks -- mediate civil affairs, where markets determine prices, and where market-based institutions such as stock exchanges and small privately owned businesses are contributing to the development of dynamic economies.

I am proud that the United States has had the opportunity to work with this region to achieve these changes. We have not helped by simply providing resources. We have learned together that reform and the creation of an 'enabling environment' must precede large infusions of private and public capital. That means respect for the rule of law, strong democratic institutions, open and accountable capital markets and political stability.

USAID has joined nations in this region as they have privatized their economies. Well over 60 percent of gross national product in Central Europe is now generated by the private sector, compared to about 15 percent when the Berlin Wall fell in 1989. That is remarkable in a region that did not know the concepts of private property or supply and demand one decade ago.

Remarkable strides have also been made in advancing fiscal reform. Throughout the region, USAID has worked with governments to adopt more effective budgeting and spending procedures, reform tax regimes to make them more conducive to business growth, and to improve tax administration to raise the revenues essential for good governance.

In nearly every country in the region, we have worked to assist enterprises to operate more competitively and help reduce government interference in the marketplace.

We are also helping establish stock markets and improve commercial banks so that businesses have access to investment and operating capital and can buy and sell assets. We provided technical expertise to help establish the Prague Stock Exchange in 1993, and the Over the Counter Market in Romania, also known as RASDAQ, which opened in 1996. And we helped create regulatory institutions -- Securities and Exchange Commissions -- that are essential in combating corrupt practices and insuring the integrity of trading and financial systems.

USAID is also helping improve efficiency in energy production and use, while reversing the effects of decades of indifference to the environment. For example, we were a major partner in the privatization of the Hungarian power system, which in its first phase attracted over $1 billion of foreign investment.

The difficult individual and societal sacrifices required by economic restructuring are starting to pay off. Economic growth since 1994 throughout much of Central Europe has outpaced the European Union. Foreign investment continues to grow, particularly in those nations which are aggressively combating corruption and creating the right kind of enabling environment.

In the New Independent States of the former Soviet Union, significant progress has been made toward price stability, a precursor to higher economic growth. Furthermore, the severe output declines experienced by most NIS countries since the collapse of the Soviet Union appear to have bottomed out.

Clearly, remarkable progress has been made. And obviously, the transition is not over. Reform has not yet affected the personal economic well-being of many workers and families. This will, of course, be the ultimate indicator of successful reform.

Despite the hardships, continuing down the reform path is the only viable option. History has taught us that a market-based economy is the only means of achieving sustainable economic prosperity. This is a hard lesson that has been learned and accepted on every continent.

There is an equally important lesson, however, that is perhaps less accepted -- and that is that bad politics is bad business.

Healthy, stable societies cannot persist without participatory democracy. Entrepreneurs must operate in a free environment. They must know that growing businesses will not be undermined by social or political unraveling. Mutually reinforcing economic and political reform is the best guarantee of equity, growth, good governance and democratic pluralism.

The command approach of the communist system nearly destroyed civic culture. In the era of communism, people had little awareness of how they could participate in government to change their lives and those of their neighbors. Governments, in turn, did little to encourage citizen participation.

Today, reformers in new democracies face the challenge of educating citizens, long coerced into civic involvement, about the virtues and benefits of true civic participation. Voluntary association and active civic involvement are critical to sustain democracies. Citizens must organize not just to place new demands on already beleaguered governments, but also to build capacity to do more for themselves and to do more in partnership with government and the private sector.

A perfect democracy is, I believe, an oxymoron. As Mrs. Clinton said in this room, 'For more than two centuries we Americans have been striving to perfect democracy, and we will continue to do so but without any assurance we will ever fully succeed. Human nature guarantees that democracy requires constant nurturing and vigilance.'

There is a lot we still have to learn in America, and there is much Americans can take from the courageous transitions being made across Central and Eastern Europe and the former Soviet Union. However, there is a universal lesson we must all heed, and that is the importance of tolerance and respect of fellow citizens whatever their ethnic background, gender or religious belief.

Religion teaches us to 'love thy neighbor as thyself.' In its purest form, citizenship might reach that standard, but democracy does not require you to love your neighbors. It asks you to respect them. It asks you to preserve their right to speak out, to associate, to vote, to participate in the life of your society. Whatever their religion or their place of origin or their ethnic background, if a person qualifies for citizenship in your country, then he or she IS a citizen -- he or she IS a Pole, a Czech, a Hungarian, a Romanian, a Russian, or whatever.

That is not an easy concept to grasp in this region. Ethnic conflict may be the greatest threat you face as you seek political stability and economic growth. The only antidote to this is to embrace the concept of citizenship. If you do, you may even come to understand, as we do in America, that strength comes from diversity. Strength comes from a society that exploits all of the talents of its diverse citizens -- all of the experience of its different cultures, its different languages, its different peoples.

Minority rights, and not just majority rule, are the foundations of democracy. The region's challenges in this area are immense. History has taught us that these matters cannot be ignored. And that is why the United States applauds the efforts of the European Union and the Council of Europe to address these issues, and we will continue to support the involvement of the Organization for Security and Cooperation in Europe through its special representative on national minorities.

Nowhere in the region has there been a greater display of intolerance for diversity and human rights than in Bosnia. Secretary Albright and I will be visiting Bosnia in a few days to witness, firsthand, the worst destruction on this continent since World War II.

The war in the former Yugoslavia was fueled by leaders who spread the rhetoric of hate through the media to exploit societal divisions. This exploitation must stop -- and politicians and the press must contribute to the healing process and pull communities and people together.

Important first steps towards recovery in Bosnia are being taken through the implementation of the Dayton Peace Accords. Great strides, for example, have been made establishing joint institutions and a working presidency.

Formidable challenges remain and we cannot ignore them. The Balkans must move quickly to establish economic institutions and adopt significant structural and economic reforms. Secretary Albright has said in recent days we will not allow the Dayton Accords to die. In the coming months, you will see the alliance pursue peace in Bosnia with renewed vigor.

We understand that ethnic conflict in one country in this region affects all countries in this region and Western Europe as well. Immigration destabilizes new democracies and it threatens to resurrect old nationalist movements even in the stable democracies. So as NATO and the European Union expand, we cannot allow extremists to exploit fear and hatred and we cannot allow Bosnia to return to civil war.

The importance of Serbia and Croatia in the political and economic recovery process in Bosnia likewise cannot be ignored. Alliances between the governments of Croatia and Serbia and nationalist leaders in Srpska and parts of the federation in Bosnia are undermining the legitimacy of a unified Bosnian state. Greater progress in these areas is vital to the region's short-term prospects for stability. Creating a security and policy environment in which Dayton's potential can be realized is absolutely essential.

Let me close by thanking the quiet heroes who through their courage and perseverance overcame totalitarianism, a system of oppression some said could not be overcome. I refer in the first instance to the dissidents, the people who fought communism with printing presses and leaflets and radio broadcasts, some of whom served as prisoners of conscience. Many of these people came to the West eventually, and many came to Radio Free Europe and Radio Liberty. We thank you for being the voice of freedom for millions of your countrymen and women.

But the dissidents who gained prominence are the few. I ask you to remember the many, the parents who by educating their children at home in the ways of democracy, ensured that their own heritage of freedom would not die. These are the many. These are the people who are building the new societies of Central-Eastern Europe and the former Soviet Union. These are the people who are building the foundations for societies of tolerance, diversity and civic participation. These are the people who never want to go back. So trust them and honor them as you do the dissidents, because they are the future.

Thank you very much."

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special reports 1997