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The East: Open Societies Speed Recovery Says USAID Administrator

Prague, 27 May 1997 (RFE/RL) -- The United States will help the post-Communist countries in their efforts to build open and democratic societies capable of sustaining economic recovery.

That was the message Brian Atwood, administrator of the United States Agency for International Development (USAID), brought today to Prague.

USAID's technical and economic assistance programs to Prague have provided some $170 million in grants and loans since 1990. The programs assisted the Czech Republic in its successful transition to a free market democracy. They are due to conclude by the end of this year.

Speaking at a press conference at RFE/RL, Atwood said U.S. assistance programs will now concentrate on countries in southeastern Europe and the former Soviet Union where "societies' experience with democracy has historically been less pronounced than in Central Europe."

The USAID administrator said the assistance program to the Czech Republic is ending because the country now has an "irreversible" democratic system which gives it the strength to make its own changes to complete its economic transition.

He pointed to the Czechs' success in creating an open society which encourages economic growth as a precedent for other countries in the region to consider.

He said that United States and countries like the Czech Republic have "learned together that economic development is more than simply a matter of providing resources." He said an "enabling environment must precede large infusions of private and public capital." He said that this "means respect for the rule of law, strong democratic institutions, open and accountable capital markets, and political stability."

He also said that development experience has taught that "bad politics" means "bad business." He observed that "mutually reinforcing economic and political reform is the best guarantee of equity, growth, good governance, and democratic pluralism."

Atwood called active civic involvement in government an essential condition for economic recovery. Sustained growth cannot occur when entrepreneurs are not certain their "growing business will not be undermined by social or political unravelling," he said, and participatory democracy is the best gurantor of social and political stability.

The U.S. official noted that "the command approach of the communist system nearly destroyed civic culture," meaning that today in many countries both governments and the public underestimate its importance. He said that now "reformers in new democracies face the challenge of educating citizens ... about the virtues and benefits of true civic participation." He said "citizens must organize not just to place new demands on already beleaguered governments, but also to build the capacity to do more themselves."

Atwood warned that reform is not easy and that "difficulties along the way can fuel cynicism and skepticism." But he said that many eastern countries have made great progress.

He said that "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 (and) where courts -- not apparatchiks -- mediate civil affairs." He said that in these countries "markets determine prices, and ... market-based institutions such as stock exchanges and small privately-owned businesses are contributing to the development of dynamic economies."

As another indicator of growth, the USAID Administrator said that "well over 60 percent of the 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."

And, Atwood, noted, "foreign investment continues to grow, particularly in those nations which are aggressively combatting corruption and creating the right kind of enabling environment."

(See special report USAID And The East.)