A Living Legacy
USAID helps to drive America’s successful partnerships with Europe and Eurasia nations
When COVID-19 struck Bulgaria, the health care system struggled to respond. In its conversations with national hospital directors, the America for Bulgaria Foundation (ABF), a USAID partner, learned that the greatest need was financial, as local hospitals had to purchase the basics — like masks, protective gear, gloves. ABF immediately contributed $180,000 to support two hospitals in desperate need of these supplies to protect both patients and staff.
Recognizing that more was needed, ABF spearheaded a matching campaign. Partnering with the American Chamber of Commerce, the U.S. Embassy, and several other businesses, ABF offered to match all donations up to $60,000 with the funds benefitting frontline hospitals and the most impacted communities.
The fund-raising effort, “United Against COVID,” raised over $620,000 to support projects around the country reaching over 700,000 people in need by providing aid to hospitals and other medical institutions, non-governmental organizations, schools, community centers, municipal governments, and small and micro enterprises.
ABF was in the right place at the right time. In its decades-long mission to promote private sector development in Bulgaria, the foundation cultivated relations with the government, civil society, and the business community, enabling them to quickly respond to this unanticipated crisis.
ABF represents only one of nine foundations operating in Europe and Eurasia, founded by the United States through USAID and designed to foster private sector growth in the region. Many of these legacy institutions helped to respond to the first and second order impacts of the pandemic.
A History of Success
The United States moved quickly in the early 1990s to support the countries of Central and Eastern Europe and the former Soviet Union to undertake the difficult and unprecedented transition from communism to democracy, and a command and control economy to private ownership and free markets. The enormity of this undertaking called for an equally ambitious development response. USAID piloted a new model of private sector support through the creation of 10 investment funds, known as Enterprise Funds, mandated to support private sector development and to demonstrate that it was possible to invest profitably in these emerging markets.
The funds received an initial $1.2 billion in American taxpayer support and operated under the direction of pro bono boards of directors drawn from the U.S. business community. And they were remarkably successful, boosting confidence in the region’s economic potential and to catalyze foreign direct investment and raising over $7.1 billion from the private sector to support economic growth in the region.
Nearly three decades later, seven of the Enterprise Funds have closed. The $225.5 million returned to the U.S. Treasury underscores their success. The remaining proceeds from those closed funds, approximately $1.3 billion, were used to set up nine Legacy Foundations, including ABF. The three remaining funds still have assets of $285 million.
Delivering Results, Today and Tomorrow
The Legacy Foundations have an impressive track record of driving inclusive economic growth through private sector development. Their work educates and prepares young people to contribute and succeed in a dynamic market economy; enables small farmers to connect with new markets; and fights systemic corruption.
For example, the Albanian-American Freedom Foundation (AADF) was an early and eager supporter of the Junior Achievement program in Albania, helping to grow a new generation of entrepreneurs. AADF supported the establishment of Junior Achievement in Albania in 2012, reaching approximately 450,000 students. The program uses experiential learning to teach entrepreneurship, financial literacy, and the principles of a free market economy to young people, a vitally important undertaking in this post-communist country.
In Romania, where many farmers still live on the verge of subsistence farming, the Romania-American Foundation united small farmers through the establishment of four farmer’s cooperatives. Working together within the co-ops, the farmers were able to form new, profitable relationships with major supermarket chains and compete with the larger industrialized farms. The success of the cooperatives caught the attention of the government, which included support for farmer’s associations in its National Plan for Rural Development and made funds available to support the creation of new cooperatives.
ProZorro, which means “transparent” in Ukrainian, is an award winning electronic public procurement system that the Government of Ukraine mandates for use in a wide array of transactions, including all federal procurements and an expanding list of low-level privatizations. The ProZorro system was developed with seed funding from the Western NIS Enterprise Fund (WNISEF). Ukraine has saved more than $2 billion through the use of the e-procurement tool, which makes all government procurement more transparent and easily trackable by the public. The ProZorro procurement system won the World Procurement Award in 2016 for its success reducing opportunities for corruption.
But most importantly, the funds and foundations have created lasting partnerships with governments, businesses, and civil society in the countries where they operate. These countries in turn have become allies and trading partners, whose interests and values align closely with the United States.
The Foundations are a testament to the United States’ continued commitment to build mutually beneficial partnerships with these countries that endure. With over $1.2 billion in assets remaining, many of the Legacy Foundations will continue to deliver results well into the future, and continue to be agents of transformation, supporting the development of stable, prosperous, and democratic societies in Europe and Eurasia.
About the Author
Brock Bierman is the Assistant Administrator of the USAID Bureau for Europe and Eurasia.
