Summary: GAO provided information on the status of U.S. economic assistance to eastern Europe, focusing on: (1) program elements and the earmarking of funds under the Support for East European Democracy Act of 1989 (SEED); and (2) U.S. objectives and coordination of assistance.
GAO found that the Department of State was concerned over congressional earmarking of SEED funds for specific programs or projects in Poland and Hungary, since the: (1) congressional allocation of some training funds did not serve U.S. government policy interests; (2) heavy emphasis on assistance to the private sector hampered program effectiveness and limited the ability to work with the host government public sectors; and (3) earmarks prevented the United States from responding to quickly changing circumstances in Eastern Europe. GAO also found that: (1) other U.S. agencies reported that neither the international donor community nor the host governments set economic assistance priorities; (2) Hungarian officials did not clearly identify the type and amount of assistance it needed; (3) donors provided uncoordinated technical assistance that could be duplicative, overlapping, or conflicting; (4) the United States stated that, if the host governments failed to set their own priorities, the U.S. government will go ahead with its priorities; (5) the U.S. objectives in eastern Europe included political pluralism, economic reform, enhanced respect for human rights, and friendly relations with the United States; and (6) the implementing agencies were critical of the Agency for International Development's attempts to exercise management authority over projects it was not implementing.
