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5 YEARS of PARTNERSHIP YEARS 15 OF PARTNERSHIP: A PHOTO RETROSPECTIVE Ukraine 2007 Table of Content: 4 U.S. Ambassador Affirms Continued Support 5 USAID Mission Director: Ukraine Has Made Steady Progress 6 Privatization 8 Agriculture 10 Finance and Banking 12 Business 14 Energy and Environment 16 Local Governance 18 Media 20 Civil Society 22 Political Processes 24 Legal Reform 26 Health 28 Social Assistance 30 Anti-Trafficking 32 HIV/AIDS USAID MISSION to improve the economic and social well- being of all Ukrainians through democratic processes U.S. Ambassador Affirms Continued Support ince the United States recognized Ukraine as an independent country in January 1992, we have consistently sup- ported Ukraine’s declared intention to Stransform itself into a democratic society with a market economy. The cooperation between our two countries has strengthened and deep- ened over the years to the point where we have a strong strategic partnership. We have encouraged democratic institu- tion building, economic restructuring and busi- ness development, and transformation of the country’s health and social welfare system. We have also backed measures to counteract the effects of the Chornobyl nuclear disaster along with building a new shelter for the destroyed reactor. Today we are working with Ukraine to stem corruption. Over the last 15 years, USAID has worked in partnership with public and private Ukrainian institutions to establish democracy and rule of law programs that have helped build and strengthen civil society, the media and a just legal environment. USAID has worked to foster the revamping of Ukraine’s banking and financial infrastructure and development of small and medium business. While businesses have been bolstered through credit and training programs, society has benefited from the introduction of the best international health practices, as well as support for family planning and a fos- ter care system for Ukraine. Together, we have worked to combat HIV/AIDS, the TB epidemic and trafficking in persons. Notwithstanding periodic setbacks, Ukraine has made real progress in achieving the goals it has set for itself. Today it has a vibrant civil society and has held internation- ally-recognized free and fair elections. Its economy continues to expand. It is on the verge of attaining membership in the World Trade Organization and is strengthening its relations with Europe. Despite the significant advancement of the past 15 years, serious economic and so- cial challenges remain. Implementation of enacted laws has been slow and inconsistent. Widespread corruption hampers the development of rule of law and the growth of business and foreign investment. Wasteful and inefficient energy use reduces Ukraine’s competitiveness in international markets and increases its dependency on imported energy. Tuberculosis and HIV/AIDS continue to plague the country. Although the resolve and fortitude of the Ukrainian people to build a democratic, market-oriented, sovereign state has grown over the years, the process has been more difficult and slower than most international experts and Ukrainians had expected. Nonetheless, notable progress has been achieved. As USAID celebrates 15 years of partnership with Ukraine, the U.S. government reiterates its firm commitment to continued support for Ukraine and its people. We will continue to support the country’s move to strengthen Euro-Atlantic alliances and to provide effective development assistance to the extent our resources allow. Our goal is identical to Ukraine’s: to transform the country into a stable and affluent demo- cratic society. 4 USAID Mission Director: Ukraine Has Made Steady Progress hen the first USAID employees arrived in Kyiv in the spring of 1992, social systems were collapsing, the economy was Wplunging and inflation was on the rise. The gov- ernment of the newly independent Ukraine, a relabeled but not reformed Soviet apparatus, while publicly espousing democratic principles and free markets, actively sought international expertise. In 1992, USAID signed a bilateral agree- ment on humanitarian, economic and technical cooperation with Ukraine to help the country develop its economic, political and societal po- tential. USAID and the Ukrainian government identified three strategic objectives: create a broad-based market economy; help to build a participatory democratic political sys- tem; and assist in social sector reforms to ease the difficulties of transition, particularly among the most vulnerable members of society. Thus began a 15-year partnership that has endured, animated by the belief that by working together we can forge a secure and prosperous future for all Ukrainians. Since then, Ukraine has seen growth and development, often steady and at times dynamic, albeit not without the occasional hiccup, sporadic backward glance or even some intermittent backsliding. Nonetheless, Ukraine has raised itself from a country that during the early 90s some experts believed was on the brink of collapse to one of the more democratic states of the former Soviet Union, fully fixed on a market economy track and on the verge of membership in the World Trade Organization. USAID is proud that it has provided support where requested in helping Ukraine to attain the many goals it has already realized. The pillars of our development strategy – economic reform, democratization, and social protection – are anchored in the fundamental precept that Ukraine’s most pre- cious resource is its people. USAID’s many assistance programs are tailored to meet the needs and aspirations of Ukrainian men and women. Working with governmental and non-governmental organizations, we have pro- vided farmers with land-titling and marketing skills. We have provided guidance and training to entrepreneurs, and to groups of citizens with a desire to start their own civic groups or non-governmental organizations. We have given humanitarian relief to flood and mine disaster victims, and supported the most vulnerable in society – the young, the elderly and the sick – with special programs. We have also developed special initiatives to fight corruption and the illegal cross-border trafficking of persons. Today we are continuing a concentrated effort to rein in Ukraine’s burgeoning tuberculosis and HIV/AIDS epidemics. This catalogue, which accompanies a photo retrospective titled “15 Years of Part- nership” with Ukraine, gives just an overview of what USAID has done here since 1992. We hope that it will give you a better idea of the extent and depth of the cooperation between USAID and Ukraine. OVERVIEW n February 28, 1994, representatives of the Government of Ukraine (GOU), USAID, the World Bank, the European Union and the EBRD jointly signed a Memorandum of Understanding (MOU), pledging support for a GOU priva- tization program. The general objectives were: 1) to distribute shares rapidly Oand equitably to the citizens of Ukraine; 2) to develop capital markets and capital market infrastructure; and 3) to rapidly create a critical mass of privately owned enterprises to allow necessary restructuring and modernization to proceed under the direction of new private owners. OUR PROGRAMS Mass Privatization (1994-1998) he Mass Privatization Project contributed to one of Ukraine’s most significant reform ini- Ttiatives – a massive transfer of the ownership of Ukraine’s in- dustrial sector from the state ATION to the private sector. In 1994, USAID together with Ukraine’s Cabinet of Ministers and the Z State Property Fund developed a program to privatize nearly 10,000 medium and large indus- trial enterprises by transferring 25% to 100% of their shares to employees, the general pub- lic, financial intermediaries and strategic investors. Shares were extended to interested parties in exchange for privatization certificates (vouchers), which IVATI were distributed to the general public in a nationwide program. Forty-eight million priva- tization certificates (PPC) were printed, allowing 90% of the population to obtain certifi- cates and open privatization accounts; 41 million PPCs were invested; 35% of Ukraine’s citizens became shareholders through the mass privatization program. PR Small-Scale Privatization (1992-1999) In 1992, the small business sector in Ukraine was virtually non-existent, and the coun- try was lagging behind in market reform as compared to neighboring countries that were going through similar transitions. The goal of the Small-Scale Privatization Project (1992- 1999) was to foster the emergence of a viable private sector in the Ukrainian economy by assisting in the rapid privatization of small state-owned enterprises, mostly in retail trade, and consumer services sectors. The first auction of small-scale objects was successfully held in Lviv on February 20, 1993. This auction was intended to jump-start the process of small-scale privatization in Ukraine and lead to rapid replication of the auction-based Lviv model for the privatization of state-owned small-scale enterprises throughout the country. It was not until the second half of 1995, however, that the small-scale privatization process gathered momentum. With strong support from the President and Cabinet of Ministers, capable leadership from the State Property Fund, growing support from city officials and growing grassroots approval, by the end of 1995, USAID – through the Inter- national Finance Corporation – had developed auction pipelines in city after city, increased the number of resident consultant teams and finally achieved total coverage of the country including
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