U.S. Department of State

II. Country Assessments - Georgia

Political Overview

As in previous years, 2002 brought no resolution to the separatist conflicts in Abkhazia and South Ossetia. Largely due to these two unresolved conflicts, Georgia's 1995 constitution is silent on the question of local and regional governments' administrative structure and relations to the central government. The central government's authority also is limited in the autonomous, but not separatist, region of Ajara. Tensions between Russia and Georgia increased this past summer, following a series of crossborder bombing incidents by Russian aircraft aimed at Chechen fighters on Georgian territory. In September, President Putin asserted that if Georgia did not take military action against such fighters, Russia reserved the right to take its own unilateral measures to pursue them in Georgia's Pankisi Gorge. Tensions were reduced after an October meeting between Presidents Shevardnadze and Putin at the CIS Summit in Chisinau. This meeting led to the signing of an agreement between the two countries' border services on enhancing cooperation. However, Georgia and Russia continue to disagree on a timetable for the closing of Russian military bases on Georgian territory. Georgia also continues to complain about Russian support for the separatist regimes in Abkhazia and South Ossetia.

In early November 2001, President Shevardnadze dismissed his entire cabinet in the wake of public demonstrations against attempts by security officials to pressure an independent television station. The local elections that had been scheduled for November 2001 were finally held in June 2002, but were widely regarded as flawed. Georgia nevertheless made significant progress in passing democratic reform-oriented legislation, although implementation continues to be slow. Georgia still has serious human rights problems, especially police misconduct and harassment of non-traditional religious groups. However, despite these ongoing problems, Georgia has a lively free press, and its laws are among the region's most compliant with Council of Europe (COE) and World Trade Organization (WTO) norms. Although public cynicism and disillusionment with the pace of reform are widespread, public debate on the issues of corruption, human rights and democracy is spirited. Close cooperation in the security area has continued to be a highlight of U.S.-Georgian relations. Georgia has a strong commitment to nonproliferation and the interdiction of transit shipments of proliferation concern. While military and security organizational reforms have been slow in Georgia and plagued by problems of corruption and a lack of financial support, U.S. Government assistance has successfully facilitated progress on several high-priority security issues.

Economic Overview

The Georgian economy continues to struggle, hampered by widespread corruption and low revenue collection. The Georgian Government's operating budget in 2002 is less than $500 million. GDP in 2001 was $3.6 billion, with a per capita GDP in 2002 estimated to be $680. Georgia has a substantial "shadow" economy, with estimates ranging from 60 to 70 percent of GDP. Living standards have declined sharply in Georgia since the country gained its independence, and this past year was no exception, despite GDP increases of 4.5 percent in 2001 and a projected 3.7 percent increase in 2002. Agriculture accounts for some 25 percent of Georgia's GDP. Key exports include scrap metal, manganese, wine, bottled mineral water and agricultural products. The Georgian Government's monetary policy continued to be tight and the exchange rate for Georgia's national currency, the lari, remained stable, despite a slight depreciation following the November 2001 government crisis. Georgia experienced a growing fiscal deficit, as planned privatizations failed to materialize and revenue collection continued to be poor.

Overview of U.S. Government Assistance

In FY 2002, the U.S. Government provided an estimated $187.00 million in assistance to Georgia:

• $90.63 million in FREEDOM Support Act (FSA) assistance;

• $31.00 million in Foreign Military Financing (FMF), including $20.00 million in Emergency Response Fund supplemental funds;

• $9.00 million in U.S. Department of Agriculture (USDA) food assistance;

• $11.61 million in other U.S. Government assistance; and

• privately donated and U.S. Defense Department excess humanitarian commodities valued at $44.76 million.

U.S. Government-funded assistance programs supported economic development, energy-sector reform, democracy-building, and regional security, non-proliferation and law enforcement. In FY 2002, U.S. Government security assistance was expanded significantly. Under the Georgia Train and Equip Program, U.S. trainers are helping Georgia to enhance its border-control capabilities by creating, train and prepare four combat infantry battalions and one mechanized company team to maintain central control over the Pankisi Gorge so that it cannot be used as a safe haven by Chechen fighters, criminals, foreign mujahedin, and al Qaeda terrorists.

In FY 2002, the previous Five-Point Program of structured high-level policy dialogue between the U.S. and Georgian Governments was reduced in scope to focus exclusively on energy security. The impetus for this change was the turnover in government ministers in the wake of the November 2001 political crisis and the increased instability of Georgia's energy sector in 2001. The bilateral working group that was created to establish a strategy and work plan for the country's power sector achieved some notable successes in mobilizing the Georgian Government to meet conditionalities that were attached to U.S. assistance in order to help mitigate the effects of the crisis.

Training, Exchange and Educational Reform Programs

Since 1993, U.S. Government-funded exchange programs have brought over 3,450 Georgian citizens to the United States for short-term professional or long-term academic training, including over 390 in FY 2002. These programs give participants an opportunity to develop their skills and establish valuable contacts with U.S. counterparts.

U.S. Department of State - Public Diplomacy Exchanges: In FY 2002, almost 380 Georgians traveled to the United States on professional and academic exchange programs administered by the U.S. Embassy's Public Affairs Section (PAS) in collaboration with the Bureau of Educational and Cultural Affairs (ECA).

• Professional Exchange Programs: Since 1997, the Community Connections Program has sent approximately 470 Georgians to the United States for short-term, community-based internships. The 70 Georgian participants sent in FY 2002 included 40 entrepreneurs and 30 professionals whose programs focused on ecology and secondary school administration. Four Community Connections newsletters showcased successful program alumni and highlighted additional support resources for alumni. A second alumni directory was published, listing over 350 program participants and profiling more than 80 successful alumni. In FY 2002, Project Harmony issued small grants for the following alumni projects: training for parents and a conference addressing the needs of disabled children, an Internet studio/gallery, a television program on how to start a business, an educational webpage on processing and marketing subtropical goods, training in dental prosthetics, a booklet for journalism students, and a small-business marketing network. In addition, over 65 Georgians traveled to the United States on International Visitor (IV) programs focusing on topics such as combating terrorist financial networks, national energy management, secondary school education, fiscal oversight, tax administration, American studies and regional agricultural trade.
  
  
• Academic Exchange Programs: In FY 2002, Georgian students and educators participated in the following programs:
  -- 50 high school students studied in U.S. high schools under the Future Leaders' Exchange (FLEX) Program;
  -- 19 students attended U.S. universities under the FREEDOM Support Act Undergraduate Exchange Program;
  -- 29 graduate students traveled to the United States for one- to two-year masters' and non-degree programs under the Muskie/FSA Graduate Fellowship Program;
  -- six teachers traveled to the United States under the Teachers' Excellence Awards (TEA) Program, which supports secondary school reform and development. The TEA Program also awarded 37 semi-finalist teachers (and their schools) book and equipment packages worth over $2,000 each;
  -- five faculty members were selected to improve the teaching of fields such as economics, linguistics, journalism and public health under the Junior Faculty Development Program;
  -- five Georgians conducted research in the areas of conflict resolution, children's rights, insurance, sociology, law, demography and education under the Contemporary Issues Program; and
  -- three Fulbright scholars conducted U.S.-based research in architecture and urban planning, archeology, political theory and corruption.
  
  
• Partners in Education (PiE) Program: In FY 2002, the PAS inaugurated the PiE Program for civic education teachers and school directors. Ten Georgian school teachers and four school directors were selected to travel to the United States for professional development seminars. In addition, a three-year civics education curriculum development project between the University of Iowa and the English Teachers' Association of Georgia (ETAG) was initiated. This project produced a ninth-grade textbook that was written by Georgian teachers using Georgian case studies. This book was approved by the Ministry of Education for use throughout the country and has already been piloted under this project.

U.S. Department of State - Educational Advising: In September 2002, the PAS organized an educational and career fair for alumni of U.S. Government-funded exchange programs and other English-speaking students and professionals. Over 70 American, international, and Georgian educational institutions and businesses participated in the two-day event, which attracted nearly 400 students and alumni.

USAID Training Programs: As part of a new, field-driven program, USAID trained more than 670 Georgian citizens in FY 2002, approximately 31 percent of whom were women, through U.S.-based, in-country, and third-country training programs. Training focused on humanitarian assistance issues, social transition, economic growth, democracy and governance, and energy and environment.

USAID "Young Leaders for Development" Program (YLDP): YLDP, which was initiated by USAID in 1998, has trained 510 Abkhaz and Georgian youth, establishing a cadre of young future leaders from both sides of the conflict who have built a foundation of mutual trust, confidence and understanding. YLPD brings together Georgian and Abkhaz youth to advance the process of conflict resolution through community-based confidence- and trust-building activities. In FY 2002, a project office was opened in Sukhumi in Abkhazia, where Abkhaz and Georgian youth clubs were organized into independent non-governmental organizations (NGOs). Plans are being made for joint activities in FY 2003, including a conflict resolution seminar in Yerevan, Armenia.

U.S. Department of Commerce - Special American Business Internship Training (SABIT) Program: A total of nine Georgians received month-long training under in the SABIT Program in FY 2002. Program topics included plastics, telecommunications, chemical standards, oil-spill cleanup, and oil and gas equipment, pipelines and exploration.

U.S. Department of Agriculture (USDA) - Cochran Fellowship Program: A total of 11 Georgians participated in the Cochran Fellowship Program in FY 2002, including three participants whose planned travel was postponed from September 2001. Program topics included agricultural credit, agricultural policy and marketing cooperatives. An evaluation of Cochran activities indicates that program participants are now managing their enterprises more efficiently and are sharing their newly acquired knowledge with their colleagues. Program participants have established model farms and have continued to spread awareness of modern farming techniques to their colleagues in Georgia. Many of the participants are maintaining contact with their U.S. counterparts.

Democracy Programs

Anti-Corruption Assistance: Anti-corruption efforts continued to be a central element of U.S. Government assistance to Georgia in FY 2002.

• U.S. Department of Justice (DOJ): Two years of close cooperation between the DOJ Resident Legal Advisor (RLA) and his Georgian counterparts culminated in December 2001 with the creation by President Shevardnadze of a Power Ministry Reform Commission, headed by the Chairman of Georgia's Supreme Court. The RLA has worked closely with the Reform Commission, which in October 2002 presented its concept for the reform of the Georgian criminal procedure system to the President. The RLA is now actively involved in implementing the concept with the Procuracy and the Ministry of Internal Affairs. DOJ is working with the Georgian Government to help analyze the current situation and suggest implementation procedures for these entities. In FY 2001, President Shevardnadze created an Anti-Corruption Coordinating Council (ACCC). The RLA has continued to support the work of the ACCC by, among other things, assisting it in locating new office space for January 2003, and funding all rental expenses, security-related upgrades, office furniture, and computer equipment. The ACCC meets regularly, supporting various reform legislation proposals, including proposals for reorganization of the executive system, salary increases for public servants, liberalization of the business environment, and financial management of state resources. The RLA plays an important advisory role to the Executive Secretary of the ACCC and will continue to provide technical assistance and training to the ACCC in FY 2003, including support for strengthening its public education and awareness programs and involving the ACCC in public outreach. The Council's efforts to shine light on corruption in Georgia resulted in the departure of three high-level officials within the Georgian government in FY 2002. DOJ's Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) also helped establish and train a specialized corruption and economic crime unit at the Procuracy comprised of both prosecutors and investigators; assisted then-Minister of Justice Sakaashvili with the creation of legislation that places the burden of proof on government officials suspected of purchasing property with illegally obtained monies; and helped to draft a Law on Forensic Experts that promotes the process of cross-examination to qualify a forensic expert in court proceedings, thereby replacing a corrupt licensing process. With funding from OPDAT, American University/TraCCC launched both a Money Laundering/Economic Crime Research Center and an Organized Crime and Corruption Research Center project in Georgia, modeled on those operating in Russia and Ukraine. These centers provide electronic and print resources to academics and practitioners researching these types of criminality in Georgia as well as a competitive small-grants program. The latter funds production of research for law and policy makers and law enforcement, diplomatic and intelligence personnel for use in Georgia and abroad.

• USAID Anti-Corruption Assistance: USAID's approach to fighting corruption entails helping institutions to enhance government transparency and accountability and reduce opportunities for rent-seeking and abuse of power. USAID supports the empowerment of citizens by raising public awareness of their legal rights and providing legal access mechanisms that enable them to pursue these rights. USAID assistance also seeks to increase the capacity of legal institutions to enact and implement better laws and regulations in a predictable and transparent manner. In FY 2002, "know your rights" public service announcements were launched on all major television channels and covered issues such as bribery, equality under the law, court decisions and religious rights. As a result, citizens' demand for justice under the law has increased, as demonstrated by additional requests for legal advice when their rights are being violated. The General Administrative Code and the Administrative Procedure Code, both of which help achieve the objectives noted above, went into force in January 2000 and represented extraordinary advances for Georgia. In FY 2002, USAID continued to support the implementation of these administrative codes through assistance to organizations such as the Georgian Young Lawyers' Association and the Liberty Institute. As a result of these efforts, a reformed judiciary has adjudicated cases and given meaning to the codes' progressive provisions. NGOs have begun to demand from the executive branch information once considered privileged but now required to be disclosed by law. For example, the NGO Free Journalist Club took the Minister of Defense to court and demanded that they disclose budget information. The Court upheld the complaint, forcing the Ministry to comply with the NGO's request. With the support of USAID and other donors, a reform-oriented Licensing Law harmonized with the provisions of the Administrative Code was enacted in FY 2002. Implementation of this new law provides opportunities to improve the administrative process for individual citizens and small and medium-sized enterprises (SMEs). Georgia's progressive freedom-of-information portion of the Administrative Code is now being used by citizens throughout the country to demand information from local councils to hold government officials accountable for services. USAID programs supported a major public awareness campaign launched in the regions to educate citizens about their rights concerning budget hearings. Open budget meetings are now being held on a regular basis, and many cities have resumed previously suspended payments to teachers and pensioners.

U.S. Department of State / U.S. Department of Justice (DOJ) - Law Enforcement Training: The RLA conducts quarterly seminars and serves as an instructor at the International Law Enforcement Academy (ILEA) in Budapest on such topics as combating corruption, ethics, trial advocacy, criminal procedure, and human rights abuses. By the end of FY 2002, over 500 Georgians had participated in U.S. Government-funded law enforcement training conferences and seminars, both in Budapest and in Georgia. DOJ-sponsored training for Georgian prosecutors, investigators, judges, Members of Parliament and policy makers covered various law enforcement-related subjects, including transnational organized crime, money laundering, public corruption, criminal procedure, excessive force/human rights violations and interrogation techniques (the latter training was conducted by the FBI).

U.S. Department of Justice (DOJ) - Procuracy Reform Program: Since FY 2001, the RLA has been providing financial and technical assistance to the Procuracy and the Council of Justice to support competency examinations for all members of the Procuracy. The first exam was given to 250 prosecutors on November 30, 2002. Testing will continue in FY 2003 until all prosecutors have been tested. DOJ also initiated and coordinated an international effort to conduct an assessment of the Procuracy using as its standard the Council of Europe's (COE) standards for the role of the procuracy in a democratic society. Representatives from DOJ and the European Union carried out the assessment together with other donor organizations such as the World Bank. In addition, DOJ began a program aimed at improving the legal infrastructure of the Procuracy and its regional offices. DOJ has provided the General Procuracy with a modern law library with computer access to electronic legal databases, computers, and photocopying and communications equipment for the management staff. This effort will continue into FY 2003, with the planned completion of modern law libraries for all Regional Procuracy (both civil and military) offices. Seven law libraries were established in FY 2002, with another five planned for FY 2003. Also, in conjunction with the Reform Commission's Concept of Reform, a DOJ assessment team, together with the COE, will be helping the Procuracy to streamline its internal structure and methods of investigation.

U.S. Department of Justice (DOJ) - Criminal Law Reform : In FY 2002, with DOJ support, the American Bar Association's Central European and Eurasian Law Initiative (ABA/CEELI) continued to provide instruction to the Chamber of Control (Georgia's audit agency) and the Georgian Procuracy unit designated to receive referrals from the Chamber. This assistance continued to focus on a special unit within the Chamber that screens matters under audit for potential criminal violations and subsequent referral to the Procurator General's Office. In addition, ABA/CEELI began helping Georgia to combat human trafficking by helping the Procuracy set up an anti-trafficking unit, working with the Ministry of Justice to draft an anti-trafficking law, and working with the Parliament's Legal Affairs Committee to establish awareness of the need for such legislation. As an advisor to the Parliament's Legislative Affairs Committee, the RLA not only provided regular guidance on drafting a revised, COE-compliant criminal procedure code, but also on the kind of domestic trafficking in persons legislation needed to implement the Human Trafficking Protocol of the United Nations Convention Against Transnational Organized Crime. ABA/CEELI also facilitated the convening of the first roundtable talks between relevant NGOs and Ministries on human trafficking. Upon DOJ's recommendation, President Shevardnadze created an interagency working group to draft a new anti-money laundering/terrorist financing law. The DOJ RLA and the ABA/CEELI staff attorney provided expert and material support to the group, including commentary on drafts of the law, copies of the applicable United Nations and Council of Europe (COE) conventions, as well as U.S., European and Russian legislation in this area. DOJ and ABA/CEELI co-sponsored a money laundering conference in Tbilisi in October 2002, bringing in DOJ and United Nations experts. In addition, over the course of FY 2002, OPDAT established criminal law libraries at the General Procuracy and in all 10 regional procuracy offices.

USAID Legal Reform Programs: In FY 2002, the Council of Justice held one judicial qualification examination for the appointment of judges. After passing the examination, the seven candidates participated in a competition for vacant positions and underwent a vetting process. The implementation of a merit-based system for selecting judges represents a major achievement for judicial independence. Furthermore, the USAID-supported Conference of Judges, which includes all of Georgia's judges, met for the third time, focusing on judicial ethics and sound management practices. Judges who completed the ethics training were awarded certificates of merit; those who did not undergo this training have since requested it. In addition, the position of Regional Managing Judge was approved, and several positions were filled at the conference. The Judges of Georgia (JOG), a private judges' association that has benefited from USAID support, continues to grow and has extended its services to judges in the regions. Over the years, JOG's membership has increased 20 percent as more judges see the benefits of such an advocacy organization. Georgian judges have identified the need for bar reform as a critical, missing link in judicial reform. The progress of judicial reform could also be stymied if the judges do not start receiving adequate salaries in a timely manner. After several years of stiff opposition from Soviet-era legal associations, the Georgian Parliament, with support from USAID-supported legal advocacy organizations and private attorneys, enacted a progressive Law on Advocates. This law mandates advocate qualification examinations and calls for the introduction of a code of ethics for advocates. Unfortunately, prior to the examinations, the Collegium of Advocates (the former Soviet lawyers' union) initiated retrograde amendments to the law. These amendments are still pending in Parliament, thus stalling the entire process of introducing qualification exams and establishing of a national bar association. Supporters of the new law have urged enactment of the legislation. Negotiations have resumed, and it appears that more progressive amendments will be forthcoming.

USAID Support for Legal Clinics: USAID provides significant resources to support human rights through legal clinics and legal service organizations. In FY 2002, the legal aid centers have been expanded into Georgia's regions to cover larger groups of indigent citizens. USAID-supported Georgian legal NGOs have opened six regional offices to provide legal counsel to citizens. The number of cases brought to court by these NGOs more than doubled between 2001 and 2002, going from 198 cases in 2001 to 438 in 2002. Also, consultation sessions with qualified legal counsel increased by 13 times to almost 14,000 in 2002. This dramatic increase was not only due to the increased availability of counsel, but also increased public awareness that legal avenues are a preferred remedy for solving problems.

U.S. Department of State - Democracy Funds Small Grants Program: In FY 2002, the U.S. Embassy's Democracy Commission awarded 21 small grants totaling $250,000 to Georgian NGOs to support regional development, local governments, and mass media. Highlights of the FY 2002 Democracy Commission program include a grant in support of a groundbreaking conference on interethnic and interfaith dialogue. This conference was co-sponsored by the All Muslim Directorate in Baku, Azerbaijan, and featured participation by President Shevardnadze, the Georgian Patriarch, Muslims leaders from Baku, the Armenian Orthodox Church, and local Catholics, Jews and Protestants. Other highlights include a grant to the United Nations Association of Georgia to translate 12 major UN and international conventions for combating terrorism, which led to a public hearing in the parliament to promote Georgia's accession to these conventions; and a grant to the Odishi television station in the western Georgian town of Zugdidi to buy equipment for live news reporting. Following its recent reporting on corruption by local police, Odishi was attacked by local authorities, which in turn, led to a public outcry.

USAID Civil Society Strengthening: USAID seeks to strengthen the NGO sector and to aid civil society to more effectively advocate for reforms by focusing on citizen advocacy at the national and local levels. The Citizen Advocacy Program, launched in August 2002, will help leading Georgian NGOs establish a firm constituency base, become financially sustainable, lobby more effectively for citizen interests and proactively address legislative concerns governing NGOs. In FY 2002, through the combined efforts of NGO lobbying and donor pressure, NGOs effectively thwarted a proposed tax on grants. Through the Horizonti Foundation, USAID fosters partnerships between NGOs, government, and the private sector, supports coalition-building activities among NGOs, and provides small grants to implement these activities. NGOs are now forming their first coalitions, focusing on citizen concerns about service delivery as their primary focus. Successful projects funded by Horizonti Foundation included the establishment of an intensive care unit in the Guria Region, creation of a sanitation center in Telavi, and design of a poverty reduction strategy in one of the mountainous regions of Georgia. USAID's implementing partner, the International Foundation for Election Systems (IFES), supported civic education programs in 14 Georgian cities and surrounding villages: Rustavi, Bolnisi, Telavi, Gurjaani, Gori, Khashuri, Surami, Kareli, Borjomi, Akhaltsikhe, Aspindza, Kutaisi, Zestaphoni and Samtredia. IFES brought together groups of citizen activists, NGO representatives, students, and local government representatives to help educate them about their rights and responsibilities in a democracy. These "active citizen" campaigns also engaged secondary schools, where teachers work with parents and foster self-help activities in their communities. During FY 2002, Georgian NGOs increased their institutional viability and capacity, laying the groundwork for improved sustainability. For example, after years of support from USAID, the Georgian Young Lawyers' Association has raised sufficient funding from other sources and collected sufficient membership revenue to purchase their own building.

USAID Local Governance Programs: USAID continued its two-track approach for helping Georgians reform their local governments. The first approach focuses on local governments themselves, through intensive training of officials in fundamental techniques of financial management, outreach to constituents, service delivery through a small grant program, and budget training skills to maximize the limited resources available to local governments in Georgia. The second focus is on building a strong, active citizenry that is able to hold government officials accountable for providing needed community services. By working simultaneously with both the "supply side" (local government services) and "demand side" (citizen needs), USAID aims to help Georgians achieve both an active citizenry and an accountable local government system. In FY 2001, USAID implemented this two-pronged strategy in the five pilot cities of Poti, Ozurgeti, Zestaphoni, Mtskheta and Lagodekhi. In FY 2002, USAID implemented several programs to build upon these initial efforts. In building on last year's work to increase local government's capacity to manage limited local resources through intensive budget and financial training, the pilot cities created separate program budgets that include at least two areas of community service improvements. Projects were selected through a collaborative process with local citizens and NGOs, and included trash removal, park renovations, condominium repairs and water delivery improvements. Selected projects were launched in each of the pilot cities through USAID's Local Government Reform Initiative (LGRI), implemented by the Urban Institute. USAID provided funds to assist these cities to implement their programs, but before qualifying for USAID funding, each local community had to match USAID funds with their own contributions, including labor, building supplies, etc. As part of this program, each city had to demonstrate, through the budget process, separate line-item expenditures to cover future maintenance to ensure sustainability of their projects. In addition to the work in the five pilot cities, selected components of the LGRI's FY 2001 training on budget and financial training, citizen outreach, and techniques to provide for more open and transparent local government meetings were provided in FY 2002 to the cities/villages in the areas surrounding the pilot cities. This expansion of the project increased the desired impact by providing the training to a wider selection of local government officials affiliated by geographic location and to the rayon-level officials, as rayon executives still retain a significant role in local council budgets.

• With USAID support, 12 dialogue sessions were held throughout Georgia in FY 2002 on local government issues, such as local taxes, property transfer and fiscal decentralization. These meetings provided a forum for key stakeholders at the local and national levels to meet and identify main legislative actions that would give local government the ability to meet the needs of local citizens. The chairman of the parliamentary Committee for Local and Regional Issues participated in all of these sessions. Information from the sessions was used by a coalition of Georgian NGOs, led by the Association of Independent Experts on Local Government, to draft legislation dealing with local government budgets and finance, property transfer from the central government to local governments and fiscal decentralization. It is anticipated that all three draft bills will be presented to the Parliament for consideration in FY 2003.
  
  
• In FY 2002, USAID continued to assist the Councils Association of Georgia (CAG) in developing local and regional council associations. Through the National Democratic Institute (NDI), USAID helps local and regional CAG chapters to create grassroots organizations that promote legislative changes supported by the LGRI; provide a forum for local council members to exchange information; and help build the capacity of local council members to carry out their duties in cooperation with local citizens. A successful example of this cooperation was a series of training sessions conducted for new council members after the June 2002 local government elections, addressing budget and finance issues, open meetings, constituent outreach, and city-specific information from outgoing and incumbent council members.

USAID Media Programs: USAID's support for the development of independent print and broadcast media throughout Georgia in FY 2002 focused on training media outlets to become more financially viable, improving journalists' professionalism and creating journalists' associations. At the end of FY 2002, USAID launched its Media Innovations Program, which aims to improve journalistic skills, foster management skills so that media outlets will emerge as profit-making businesses, and improve the legal and regulatory framework to support free speech and access to public information. Georgia's first National Broadcasters' Association was launched in September 2002 and found immediate success in effectively lobbying Parliament to finally adopt reformist amendments to the Laws on Communications and Post. The amendments regulate licensing television and radio broadcasting so that, after a four-year hiatus, independent broadcasting stations will now be licensed, protecting them from threats of politically motivated shut-downs. USAID assistance promotes independence in the newspaper industry by training publishers to raise revenues by selling advertisements. As a result, the newspaper industry is becoming more aware of and responsive to advertisers, and more concerned about what readers want and how to attract them. A pilot advertising project resulted in seven newspapers appointing full-time advertising managers, who, as part of this project, produced an eight-page advertising supplement that appeared in all seven papers. For two of the papers, the revenue from that single supplement exceeded all their advertising revenue for the previous two years. Georgia's first newspaper advertising cooperative was launched and is producing monthly supplements on a continuing basis.

U.S. Department of State - Support for Independent Media: In FY 2002, the U.S. Embassy's Public Affairs Section (PAS) sent seven broadcast journalists from throughout Georgia to the United States for three weeks on an International Visitor (IV) program to attend the annual broadcasters' association conference in Las Vegas and to familiarize them with American-style television journalism standards. The participants visited television stations and associations in Washington State, Washington, D.C., and New York. Upon returning to Georgia, these television managers changed the structure of the fledgling Georgian Broadcasters' Association and modeled it on the American National Broadcasters Association, which they found more appropriate for Georgia than a European association model. The Georgian association will have a board of television and radio managers with a ratio of two to one. In additional, the group claimed that as a result of the trip, they better realized the concrete benefits of such associations for both television and radio broadcasters. In FY 2002, the PAS arranged three two- to eight-week Professional in Residence (PIR) programs on the topics of radio network management, newsroom management and professional press office operations:

• A PIR program on radio network management worked with Georgia's Radio Green Wave's new regional affiliates on content development, program sharing and national advertising. As a result of this program, the network affiliates joined Radio Free Europe/Radio Liberty (RFE/RL) as affiliates and received subsequent training and equipment from the International Broadcasting Bureau (IBB).
  
  
• A PIR program in newsroom management brought two specialists to work with state television Channel One's nightly news program "Moambe." The specialists worked with the news crews on reporting assignments, focusing on interviewing techniques, ethics issues, diversification of focus, and camera work.
  
  
• A PIR press office program brought an experienced political spokesperson to Georgia for two one-week seminars for government and non-government spokespersons. The program also translated the speaker's book, A Responsible Press Office, into Georgian for distribution to the participants and others.

In FY 2002, the PAS also administered a one-year citizen exchange grant to the International Center for Journalists for a print media editors' development program. The program included training in Georgia and the United States for the editors of 10 leading newspapers on the topics of professional ethics, business development and personnel issues.

U.S. Department of State - Internet Access and Training Program (IATP): FY 2002 funding provided for the expansion of the IATP network to include 10 public-access Internet facilities in seven cities throughout Georgia, as well as one satellite facility. The IATP provides Internet training for targeted audiences and provides small grants for website development and additional training activities. The IATP program in Georgia is sponsored by the Bureau of Educational and Cultural Affairs and administered by the International Research and Exchanges Board (IREX).

USAID Election-Related Assistance: Through its implementing partner, the International Foundation for Election Systems (IFES), USAID finalized preparations to launch Georgia's first electronic voter registry in FY 2003, starting with a pilot system covering three districts in early 2003. This pilot system will form the basis for a nationwide registry, which will hopefully be supported by the Georgian Government and other donors. Also in preparation for the 2003 parliamentary elections, USAID will continue to provide assistance for certifying election commissioners and training election officials.

USAID Political Party Training: The International Republican Institute (IRI) and the National Democratic Institute (NDI) provided candidate training and assistance to regional branches of 13 major political parties. Political candidates and parties were trained in consistent, issue-based message development, campaign tactics and constituent outreach. In FY 2002, seminars and training courses helped the parties develop their organizational structures and platforms. Parties and candidates also learned to use the media to convey their messages effectively. Several week-long training sessions were offered to candidates with actual video-taping sessions, teaching them how to effectively present themselves and their issues to the public. Participants were not only taught what sort of message will resonate best with voters, but also how to best structure their speeches. Such training was deemed critical prior to the municipal and first-ever mayoral elections in June 2002. Parties and candidates demonstrated a greater outreach to constituents during their campaigns, as well as a greater understanding of the importance of having a message that resonates with the electorate. The leaders of two major parties in the Tbilisi city council elections completed the training, and both were elected to office: analysts credited their success partly to their sophisticated and enhanced use of the media. Fostering cooperation between political parties remains a strong focus in USAID's portfolio. NDI increased its work with Parliament and political parties to unite key reformers around common interests. These efforts will become increasingly critical as the country prepares for the 2003 parliamentary elections. USAID sponsored a number of activities in preparation for the 2002 municipal elections:

• NDI launched a major "Women in Politics" campaign in several regions of Georgia. A total of 41 women received intensive candidate training in the months preceding the elections, of whom 36 ran for office, 21 were elected, and five were forced to withdraw their candidacies due to pressure from political parties and government officials.
  
  
• IRI completed candidate training for young independent candidates. Of the 20 persons trained, five were elected to local offices—their first foray into the political arena.
  
  
• IRI conducted a "get-out-the-vote" campaign aimed at younger voters. The campaign boosted youth voter turnout by more than 10 percent throughout the country, and by over 30 percent in eight cities.
  
  
• USAID sponsored several voter education campaigns throughout the country during the weeks preceding the municipal elections, including a series of neighborhood meetings.
  
  
• Also with USAID support, candidate debates were held on television, and local newspapers provided expanded election coverage.
  
  
• With USAID support, more than 2,000 trained domestic monitors observed the elections.
  
  
• Taken as a whole, these efforts helped bring about a higher-than-expected turnout: more than 60 percent of the electorate took part in the elections.

U.S. Department of State - Georgian Women's Leadership Program (GWLP): The Georgian Women's Leadership Program concluded in FY 2002. Administered by Project Harmony, the program was designed to empower Georgian women from communities in four regions of Georgia by providing leadership and guidance in the areas of civic stewardship, community development, public health and education. Under GWLP, 100 women were trained in civic participation skills, 36 women were trained in leadership skills, and 24 women were trained as mentor-trainers. Through this program, the U.S. Government was able to reach isolated communities of Georgia. One of GWLP's main goals was to produce online and print resources that would further promote the work of women's initiatives in Georgia and popularize the potential of Georgian women to serve in leadership positions in their families, work places, communities and governments. Project Harmony accomplished this goal by launching a GWLP website and publishing Hard Won Wisdoms: The Women of Georgia, a book that showcases the 24 women who completed the mentor training.

Economic Development Programs

U.S. Department of the Treasury - Technical Advisors: In FY 2002, the Treasury Department continued to provide four advisors to the Government of Georgia: two for tax assistance and one each for budget, and debt issuance and management. In budget assistance, the Treasury Department is assisting the Minister of Finance in establishing a budget formulation database, consolidating government expenses into the budget, introducing a system for establishing expenditure priorities, and improving the system of cash management. The debt issuance and management advisor works with the government's borrowing program: with this assistance, the issuance of treasury bills has grown from six million Georgian lari to 45.5 million lari over the 18-month period ending in September 2002. The debt advisor also advises the government on Paris Club and bilateral debt issues. Treasury Department tax advisors continued to assist Georgia's tax department in streamlining its organization and management to help it increase tax revenues and improve taxpayer services. As a result of this assistance, the Large Taxpayer Inspectorate (LTI) has finalized its inventory of large taxpayers, and is now working on an audit plan for FY 2003. The other tax advisor is focusing on restructuring the Inspector General's office, which was opened in FY 2001.

USAID Private Enterprise Development Programs: USAID's private enterprise activities programs are designed to create the conditions necessary to foster business growth in Georgia. These programs include tax and fiscal reform activities to support the establishment of a modern and transparent tax administration, support for land privatization, a banking supervision reform program, credit lines and financial infrastructure, assistance to micro-enterprises, assistance to farmers and agribusinesses, and restructuring and policy advice for the Ministry of Agriculture and Food.

• Tax and Fiscal Reform Program: In FY 2002, USAID provided technical assistance to the State Tax Department to help it fairly and efficiently enforce tax laws, increase government revenues, improve transparency, ensure taxpayer compliance, and develop a tax system more conducive to private-sector growth. This assistance produced many concrete results in FY 2002: the major regional tax inspectorates, the Large Tax Inspectorate, and headquarters have been computerized and linked through a communication network; a fully operational training center has been established in eastern Georgia; a set of tax regulations has been drafted; a Plain-Language Guide to the Tax Code has been drafted and circulated for comments; an anti-fraud program for the value-added tax (VAT) as been submitted to the Minister of Revenue; a tax registration drive presented the new tax registration form; new administrative collection provisions and regulations were drafted, and training on collections was conducted; criteria for selection as a taxpayer to be in the Large Taxpayer Unit were developed; and software programs were developed for audit selection, personnel management and management reporting.

• Land Privatization Program: In FY 2002, USAID continued its land privatization program by providing technical assistance to the Georgian Government, particularly to the State Department of Land Management and the Association for the Protection of Landowner Rights (APLR). USAID programs supported systems to register ownership rights for small agricultural and commercial land parcels, supported secondary land transactions, helped landowners to ensure protection of their land property rights, advised the government on legal land reform, assisted in further land privatization, and helped the APLR build its institutional capacity. USAID uses existing Georgian technology, expertise and information to provide on-the-job training and assistance to local registrars in carrying out the registration efforts. The registration methods are largely manual, with some automation used to accelerate the initial registration. In FY 2002, more than 500,000 agricultural land parcels were surveyed, registered and titled, bringing the total number of registered titles to 2,050,000. This program supported increased activity in the real estate market, with 20,000 transactions (sales and mortgages) registered in FY 2002. APLR has been actively involved in the USAID Land Market Development Project since its inception and has gained considerable experience in all aspects of the project. In fact, APLR implements USAID's land privatization program with little assistance from U.S. advisors. It also implements outreach and educational programs for the United Nations Development Program (UNDP) and British Petroleum.

• Banking Supervision Reform Program: With USAID support, the National Bank of Georgia (NBG) employed more sophisticated inspection procedures in FY 2002, which benefited from the enhanced technical skills and judgment of the inspectors. An accreditation program was substantially completed and a complete revision was made to two key laws that impact the NBG and the commercial banking system. Under the new National Law on Commercial Banks passed by Parliament, the NBG issued a number of key regulations, including asset classification, internal audit, and restrictions on insiders and related parties. It also implemented a new Chart of Accounts in compliance with International Financial Reporting Standards (IFRS), which was introduced to the commercial banks. USAID placed considerable emphasis on bank consolidation and problem bank resolution. There were no bank failures in Georgia during FY 2002, and bank deposits, although small, continued to grow.

• Assistance to Small and Medium-Sized Enterprises (SMEs): Through its Caucasus SME Finance Program, USAID provided technical assistance and training to two Georgian commercial banks—TBC Bank and the Bank of Georgia—in order to better meet the nationwide demand for credit. USAID also supported the introduction of new financial products for SMEs through the partner banks, including a loan that supports the growth of micro-enterprises to the SME level of operation, and real estate-based lending for commercial entities and households. The project ended in September 2002, but the banks continued to administer funds provided by the International Finance Corporation (IFC) for SME loans. In FY 2002, USAID also trained loan officers, credit committee members and real estate appraisers, similar to the training on the Uniform Bank Performance Report with the NBG inspectors and commercial bankers. A banking computer simulation was provided for bank executives. As a result of these activities, over $4 million in loans was disbursed to over 300 Georgian SMEs in FY 2002.

• Assistance to Micro-Enterprises: In FY 2002, USAID increased access to credit for Georgian micro-entrepreneurs by providing technical assistance to the Georgian micro-finance institution Constanta Foundation and continuing to support the micro-finance activities of the Foundation for International Community Assistance (FINCA). These programs benefited 60,000 borrowers in FY 2002, approximately 75 percent of whom were women. To more directly assist the regions of Georgia, the Constanta Foundation opened a new branch, a mobile office and five service points, while FINCA opened two new branches in FY 2002, all in regions where there are virtually no other commercial sources of micro-credit. In total, USAID partner financial institutions have established models of successful lending by not only providing a range of innovative loan products to micro-, small and medium-sized businesses but also maintaining a near 98-percent repayment rate.

• Assistance to Farmers and Agribusinesses: USAID continued to support credit for farmers and agribusinesses through six regional credit associations that were developed between 1996 and 1999. Their total loan portfolio at the end of FY 2002 was $2.4 million with 1,510 active borrowers. This activity is presently the only viable agricultural lending program in the country.

• Restructuring Assistance and Policy Advice for the Ministry of Agriculture and Food: USAID continued its technical assistance for restructuring the Ministry of Agriculture and Food in order to develop a supportive environment to enable growth and expansion of private agricultural enterprises. Successes in FY 2002 included the identification and removal of corrupt officials and the adoption of a ministry-wide strategy for meeting the challenges of private sector agriculture. Continuing goals include developing food quality and safety standards, collecting and disseminating statistical data, developing a sustainable capacity to conduct agricultural policy analysis and further reorganizing and downsizing of the Ministry.

• Support Added-Value Enterprises in Agriculture (SAVE): USAID began to address agribusiness problems in FY 2002 through a multi-phased activity whose goal is to identify markets for Georgian value-added products and then work back through the marketing chain, identifying and mitigating critical constraints, to enable the production, processing and sale of the specific product. Phase I of SAVE has identified potential markets for several products, including wild mushrooms and apple concentrate for export to the United Kingdom, and early-season vegetables (in particular, early potatoes) and fruits for Moscow, Kiev and St. Petersburg.

U.S. Securities and Exchange Commission (SEC): In April 2002, the SEC provided background information to the Georgian Securities Commission on the SEC's code of conduct for employees.

U.S. Department of Transportation - Federal Aviation Administration (FAA) - Air Safety Study: The FAA completed an air safety study in Georgia that examined its existing regulatory processes and entities in order to determine the steps needed to restructure and finance a viable aviation regulatory authority.

U.S. Department of Commerce - Good Governance Program (GGP): In FY 2002, GGP further developed its business ethics initiative in Georgia, which was begun in FY 2001. The GGP conducted a one-day business ethics training session in Bethesda, Maryland, for a group of visiting Georgian entrepreneurs in coordination with the U.S. Department of State's Community Connections Program and the Foundation for International Arts and Education. The GGP also included three Georgian professionals in its 2002 "train-the-trainer" program on business ethics, who subsequently conducted business ethics training sessions for their home enterprises. In addition, the GGP obtained agreement with the American Chamber of Commerce in Georgia to assist the alumni in providing training to local entrepreneurs on how to create ethics codes and compliance programs.

Trade and Investment Programs

In FY 2002, the U.S. Government continued to work with the Georgian Government to help develop a legal and regulatory environment conducive to free trade and investment. At present, foreign direct investment is decreasing each year because of complex regulations, corruption, and arbitrary and abusive tax administration practices. U.S. Government programs in FY 2002 focused on banking supervision and fair, transparent, and efficient implementation of tax laws.

U.S. Trade and Development Agency (TDA): TDA is supporting a feasibility study on underground gas storage. Total funding for the project is $683,000. The storage facilities are expected to operate as an integral part of the South Caucasus Gas Pipeline, which will connect the Shah Deniz gas fields in Azerbaijan with Erzurum in Turkey.

Energy and Environmental Programs

USAID Energy Sector Programs: USAID continued to provide training and technical assistance to build the institutional capability of Georgia's energy sector in FY 2002. USAID completed international audits of six enterprises, which were carried out in anticipation of their commercial credit and international financial institution (IFI) credit applications. USAID assistance was also instrumental in analyzing and justifying a proposed electricity tariff increase in November 2002. While still well below international market prices, the increase was hotly debated in political circles and was delayed for several months. In FY 2002, management contracts for Georgia's electricity transmission, distribution and wholesale electricity market entities were concluded and mobilized. A contract for management of the electricity distribution sector outside of Tbilisi is currently being developed. In addition to 24 pilot demonstration projects in demand-side management, three demonstration projects were completed in metering, billing and collections. Two micro-hydro power plants were installed, serving 300 families previously not served with electricity. These projects were carried out in connection with other USAID-funded community development activities in a coordinated effort to support economic development in communities that are aggressively seeking to improve their overall situation. Georgia's newly organized private-sector-led power industry is developing public awareness campaigns to help residential and commercial customers reduce energy consumption and save on electricity bills. The State Agency for Oil and Gas Regulation (SAOGR) received further training in contract preparation and legal responsibilities, as well as environmental and site-safety programs, through partnerships formed with U.S. counterpart agencies from Oklahoma, Colorado and Pennsylvania. With USAID assistance, SAOGR conducted the first-ever public international tender for the rights to develop a number of oil production tracts in Georgia.

USAID Environmental Programs: Environmental programs in FY 2002 included conclusion of a regional water project and continued assistance to government and NGOs on issues concerning the oil and gas pipelines planned to traverse Georgian territory.

• Regional Water Project: In FY 2002, USAID's Caucasus Regional Mission and the USAID Mission in Armenia completed implementation of a regional program to promote dialogue and cooperation among Armenia, Azerbaijan and Georgia on trans-boundary river basin management. The program addressed pilot watershed programs on two sub-basins of the Kura and Aras Rivers and mobilized community stakeholder groups in developing basin-wide water resource development plans. This project has resulted in improved water monitoring in the three Caucasus countries and renewed cooperation between the countries to coordinate management of shared water resources.
  
  
• Technical Assistance on Pipelines: With the signing of the host-government agreement for the Baku-Tbilisi-Ceyhan oil pipeline and the intergovernmental agreement for the Shah Deniz gas pipeline, the Georgian Government committed itself to improving its environmental monitoring and evaluation capabilities. USAID provides technical assistance to Georgia's Ministry of Environment and Natural Resources, the country's NGO community, and the Georgian companies responsible for oversight of the transit gas and oil pipelines to enhance their environmental monitoring and evaluation capabilities. The first stage in this process is to improve public participation in the environmental decision-making process and to expand outreach to a broader constituency, and is in full implementation. USAID also supported a preliminary assessment of environmental impacts of the pipelines and suggesting alternative mitigation options to the Government of Georgia. In FY 2002, USAID-funded experts again reviewed the environmental study and presented their findings to the Government of Georgia. This review served as the basis for the government-issued environmental permit for the Baku-Tbilisi-Ceyhan pipeline from the Minister of Environment.

U.S. Environmental Protection Agency (EPA): With funding provided by the EPA, the Caucasus Regional Environmental Center (REC-Caucasus) awarded about $150,000 to NGOs for environmental education and awareness, water quality, mountain ecosystems, and desertification problems, as well as for NGO strengthening and registration. In 2002, the REC developed a water initiative, entitled "Public Participation in Transboundary Water Management Issues in the South Caucasus," under which grants were issued in support of improving water quality and a database of international and local water activities was developed. Also, the REC organized a regional conference on desertification, with participation by government authorities at the ministerial and parliamentary levels from all three countries in the region.

Social Sector Programs and Humanitarian Programs

USAID Drought Relief Programs: The U.S. Government has contributed to a multi-donor response to a severe drought in western Georgia in 2001. In FY 2002, USAID provided 60,000 farming households with agricultural inputs, enabling them to plant a new crop after having lost almost everything to the drought.

USAID Georgia Winter Heat Assistance Program (GWHAP): In FY 2002, for the fourth year in a row, USAID provided winter heating subsidies for pensioners and social institutions throughout Georgia (except Abkhazia and South Ossetia) for the months of December 2001 through the first week of April 2002, totaling $10.1 million. Without these subsidies, over 180,000 vulnerable households, 1,540 internally displaced person (IDP) centers and 560 socially critical institutions would most likely have had their electricity cut off during the winter, causing significant human suffering and possible social unrest. In addition, this injection of cash payments into the energy sector helped to secure critical natural gas and electricity deliveries that would otherwise not have been available. GWHAP was especially crucial in responding to the crisis caused by the accident at the Gardebani thermal power plant, which caused a sudden and radical reduction in the amount of power available in Georgia in December 2001 and January 2002. For the second year in a row, GWHAP was also supported by the British Petroleum oil company, which contributed $1 million.

USAID Assistance to Internally Displaced Persons (IDPs) and Pensioners: During FY 2002, USAID funding improved the shelter and basic living conditions of 2,085 IDPs accommodated in 10 collective centers. Each collective center also established a system to fund future maintenance activities. Nearly 5,000 isolated, vulnerable pensioners received hot meals five times each week in several regions of the country. In December 2001 and January 2002, an emergency program provided wood for heating and cooking to 350 vulnerable households in the politically sensitive separatist region of South Ossetia.

USAID Community Mobilization Programs: A total of 288 community projects were completed in FY 2002, and the Georgian NGO partners and community members were key to the projects' success. The communities themselves selected projects that addressed priority needs in health, social infrastructure, shelter, and economic opportunity. Communities contributed over $1.15 million in labor, materials, and cash for these projects. Using community mobilization as a methodology, the following types of programs were implemented:

• Social Infrastructure Programs: A total of 215 social infrastructure projects were implemented, including rehabilitation of schools, outpatient clinics, hospitals, irrigation canals, water supply systems, sewage systems, rainwater drainage systems, roads, bridges, electrification, recreation centers and community rooms in IDP collective centers. The Valoni high voltage electrical system rehabilitation project was a good example of the results achieved by these projects: improved access to reliable electricity supplies allowed the school, health clinic, and kindergarten to be reopened and employ more people (60 additional jobs) in local businesses (bakery, poultry shop, and wood and metal workshops). The rehabilitation of the road to the Gezruli community shortened the route to the nearest market center from 55 miles to 3 miles, drastically reducing travel expenses and assisting increased sales of local produce.
  
  
• Earthquake Response: In response to the April 2002 earthquake, an emergency post-earthquake rehabilitation program was implemented. A total of 26 schools, kindergartens, and IDP shelters were rehabilitated with USAID and local government funding. The emphasis of these rehabilitation projects was on water and sanitation in order to prevent the outbreak of disease.
  
  
• Community Health Programs: Over 30,000 community members benefited from improved primary health care services and health education, and 6,531 people participated in pilot cost-recovery programs.
  
  
• Economic Opportunity Programs: A total of 614 micro-credit and individual loans were awarded to entrepreneurs and businesses in FY 2002. After years of technical assistance, two Georgian NGOs are now implementing, managing and sustaining their own credit programs and have taken over management of loan funds. To better equip Georgians to meet the demands of the current job market, vocational training centers in Zugdidi and Kutaisi offered computer, English language and other classes in FY 2002, improving the skills of over 1,000 individuals. In the area of household and commercial agricultural production, economic opportunities were increased through 18 agricultural community micro-projects. Typical agricultural programs included seed distribution, livestock dispersal, veterinary assistance, development of rural credit associations, and the provision of agricultural production grants. Approximately 6,600 households benefited from these agricultural projects.

USAID Conflict Resolution Programs: In FY 2002, USAID addressed conflict management concerns by expanding conflict resolution programs into potentially volatile regions inhabited by national minorities (ethnic Armenians and Azeris) and into the Georgian villages surrounding the tense Pankisi Gorge. Initial reports from implementing partners indicate that these activities address legitimate needs in these neglected regions, while helping to defuse more radical demands for separatism or autonomy. For example, separatist groups walked out of community meetings once it became apparent that community members were more interested in seeking better education for their children than in agitating for separatism. Implementers routinely receive comments from community members that the only real help they receive is through such programs. Youth programs focused on increasing contact and cooperation between over 7,300 youth (both Abkhaz and ethnic Georgian youth) affected by the conflict in Abkhazia. A total of 20 youth clubs and four youth houses located in Sukhumi and Ochamchire (located in the separatist-controlled region of Abkhazia), Tbilisi and Zugdidi provided psycho-social programming and opportunities for personal growth, such as film projects, design of a local website, children's book publishing, and eco-club activities. Conflict management and prevention training was provided to 510 Abkhaz and Georgian youth. As a result of these activities, program participants are staying in school, continuing on to institutions of higher education, and reporting improved relations between ethnic groups on opposing sides of the conflict.

USAID Women's Health Program: The goals of USAID's "Care for Each Other" campaign were to prevent unintended pregnancies and to increase the use of family planning/reproductive health services through improved service and marketing. A women's reproductive health survey carried out by the Centers for Disease Control and Prevention (CDC) indicates that only three percent of single or previously married women in Georgia are currently sexually active; the main target of the projects is therefore married women of child-bearing years. Results from a 2002 survey in Tbilisi found that the percentage of married women in Tbilisi having abortions in the last three years decreased from 45 percent in 2000 to 28 percent in 2002; and the percentage of married women currently using a modern contraceptive method increased from 25 to 37 percent during the same time period. In addition, USAID's Safe Motherhood Initiative supported development of perinatal clinical guidelines adopted at the national level to address clinical and organizational issues in delivery of perinatal services. A Community Education Program implemented in 20 communities educated approximately 9,500 women of reproductive age about factors affecting a successful pregnancy and the value of antepartum and postnatal care. As a result, demand for antepartum care has risen and the percentage of pregnancies registered in the first trimester increased from 63 to 80 percent. Care providers contacted in the evaluation noted that their patients were better informed as a result of the project and were posing more questions to them. In addition, a condom awareness campaign was launched in FY 2002, reaching 100,000 youth through nationwide events such as rock concerts in Tbilisi and Batumi, and media advertisements promoting condoms and awareness of safe sex. Over 600,000 condoms were distributed to young men and married couples across Georgia. Additionally, the project trained local NGOs to implement peer education in HIV prevention and sexual health awareness campaigns.

USAID Support for Immunization Programs: Since 1995, USAID has been providing assistance to the United Nations Children's Fund (UNICEF) to strengthen Georgia's national immunization program. As a result of the strengthened program, overall child immunization coverage has risen from 74 percent in 2001 to 85.7 percent in FY 2002. USAID's Health Information System (HIS) Project aims to strengthen the surveillance of vaccine-preventable diseases and improve the management capacity of health departments in pilot regions. During FY 2002, the percentage of reports on immunization practices from pilot regions that were correct and submitted in a timely manner increased from 57 to 80 percent. USAID is also working to improve the use of data as a decision-making tool used to monitor vaccine use and analyze immunization data in countrywide vaccination campaigns. The goal of USAID's new HIV/Sexually Transmitted Infection (STI) prevention activity is to reduce transmission of HIV/STIs in targeted urban centers in Georgia. As Georgia is still a "low prevalence" country, monitoring and reporting will principally focus on behavior change among key "high-risk" subnational populations. USAID's implementation partners have designed a baseline survey to measure the impact and to improve efficiency and coverage of prevention and mitigation activities. This research is critical to measure the impact and improve the efficiency and coverage of prevention and mitigation activities, which will take place over the next three years of this program.

Security, Regional Stability and Law Enforcement Programs

U.S. Department of State - Georgia Border Security and Law Enforcement (GBSLE) Assistance Program: A major element of the State Department's Export Control and Related Border Security (EXBS) Program, the GBSLE continues to be the largest single U.S. Government-funded assistance program in Georgia. In FY 2002, the U.S. Government provided $17 million in GBSLE assistance to the Georgian Border Guards (GBG)/Georgian Coast Guard (GCG), Georgian Customs Service (GCS), Ministry of Defense (MOD) and other export and border control and law enforcement agencies, bringing the cumulative FY 1998-2002 program total to over $89 million. The GBSLE Program provided essential support for border control and interoperability training between the Border Guards and Ministry of Defense under the U.S. Train and Equip efforts in Georgia. GBSLE is administered by the U.S. Customs Service (USCS) under State Department guidance and policy oversight. USCS funds and coordinates efforts with other federal agencies (including the Departments of Commerce, Defense and Energy, and the U.S. Coast Guard), the U.S. Embassy in Tbilisi and the Georgian Government. USCS also supervises a three-person in-country advisory team. In FY 2002, the GBSLE Program provided equipment, training and services, including communications equipment (radios and base stations to enhance command and control operations), vehicles and helicopters with spare parts for transport and patrol, surveillance and detection equipment, computers for automation of applications, licensing and regulatory systems, forensics laboratory assistance, and a wide array of EXBS and law enforcement training. GBSLE provided $250,000 in uniforms, similar amounts in vessel and aircraft maintenance, radar and facilities operation and management, and new tactical utility vehicles, 90 percent of which were given to the GBG land border forces for mountain duty and some to the OSCE border observer mission. The remainder went to the Georgian Coast Guard for crew transport, shift changes, and security. While GBSLE assistance has enhanced Georgia's capabilities to control its borders since the 1998 departure of Russian border guards, much remains to be done. Hostilities in Chechnya continue to pose a threat to the sovereignty and territorial integrity of Georgia. GBSLE program highlights are provided below:

Georgian Border Guards (GBG):

• GBSLE assistance continued to develop the GBG's communication capabilities. Provision of radios and base stations has enhanced the command and control operations for the GBG and their ability to communicate. These radios have allowed the northern border posts to report real time information, events, and activities. To enhance this function, GBSLE has contracted with a Georgian firm to develop an integrated software package that will allow uniform, prioritized reporting and archiving from field outposts to GBG headquarters in Tbilisi. The GBSLE contribution to the Georgia Train and Equip Program (GTEP) has been primarily in the area of communications equipment procurement, making the tactical communications systems of the GBG and Ministry of Defense forces that are undergoing training fully compatible.
  
  
• A $4.2 million renovation/construction project for the GBG in FY 2002 included construction of a modern, full-service base at the Red Bridge border post, and an Administrative and Operations building at the Georgia Coast Guard base in Poti. Construction began in April 2002 and will be completed in FY 2003. GBG are currently being taught how to operate the site utility systems. Contracts were awarded for the development of a GBG headquarters operations center, for aviation facility improvements to enhance aviation/border patrol capabilities, and for a new shell for the GBG Communications and Service center in Lilo.
  
  
• State-of-the-art maintenance support for the three U.S.-donated GBG Mi-8 helicopters currently in service and two Mi-2 helicopters has been enhanced with $1.5 million of spare parts and laboratory diagnostic equipment. GBSLE bought and refurbished an An-28 light transport aircraft for the GBG.

• In May 2002, GBSLE delivered to the GCG the former U.S. Coast Guard 82-foot cutter Point Baker under the U.S. Excess Defense Articles (EDA) Program, along with a self-contained, fully outfitted workshop with a full complement of tools. This supplements the Point Countess cutter delivered in January 2001.
  
  
• Other deliveries included high-frequency radios and the installation of a 27-meter radar tower and a 31-inch display at the GCG base in Poti;
  
  
• A U.S. Coast Guard training team developed and taught boarding and sailing techniques to GCG trainees.

• In FY 2002, the GCS underwent another change in leadership, which caused some delays in GBSLE implementation. The new chairman appears to be committed to implementing reform initiatives, improving the infrastructure at ports of entry, enhancing the GCS's existing computer system, and conducting drug testing on headquarters staff.
  
  
• In early FY 2002, an assessment team visited Georgia and provided the GCS with a plan to increase revenue collections and enforcement activities in Georgia.
  
  
• A USCS computer specialist provided assistance in system design and software provision for the GCS's computer system that will allow the GCS to efficiently track and record cargoes through a nationwide computer networking system. USCS purchased the computers and fiberoptic lines, set up a training room, and began installation of the system.

• GBSLE continued support for the radar system provided for the Port of Supsa pipeline terminal to enhance Georgia's maritime border control capabilities;
  
  
• The GBG/GCG was provided with four Mi-8 and two Mi-2 transport/patrol helicopters (including spare parts), two AN-28's, and one patrol aircraft, as well as vehicles, support for Coast Guard vessels, uniforms, tents, heaters, generators, flashlights, radiation detection equipment, GPS systems, fuel for training operations and maintenance support;
  
  
• GBSLE provided expert advisors to help the GCS, GBG, and Revenue Ministry develop plans for organizational reform and restructuring;

U.S. Department of State - Anti-Crime Training and Technical Assistance (ACTTA) Program: In FY 2002, ACTTA's forensic lab development project in Georgia gained momentum. The lab management staff was selected and began undergoing extensive technical and management training in Georgia and the United States. A building for the lab has been selected, and lab design work has begun. A distance-learning fingerprint identification training program has been initiated for training lab personnel. Efforts have also been made to establish a drug testing program as part of the lab project to test Georgian Customs Service and other government employees. Under the ACTTA Program, the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL) continued to fund a U.S. Justice Department, Office of Overseas Prosecutorial Development, Assistance and Training (DOJ/OPDAT) Resident Legal Advisor (RLA) tasked primarily to work on anti-corruption initiatives with the Government of Georgia. The RLA is a key member of a commission to reform certain key ministries of Georgia established by the President of Georgia and headed by the Chairman of the Georgia Supreme Court. The RLA conducts seminars and serves as an instructor at the International Law Enforcement Academy (ILEA) in Budapest on such topics as combating corruption, ethics, trial advocacy, criminal procedure, and human rights abuses. The DOJ-sponsored training for Georgian prosecutors, investigators, judges, members of Parliament and policy makers in FY 2002 also covered additional law enforcement related subjects, including transnational organized crime and money laundering.

U.S. Department of Justice - Overseas Prosecutorial Development, Assistance and Training (OPDAT): In FY 2002, OPDAT and the American Bar Association's Central European and Eurasian Law Initiative (ABA/CEELI) continued to post a Resident Legal Advisor (RLA) and Criminal Law Liaison (CLL), respectively, in Tbilisi. In October 2001, OPDAT partnered with the Council of Europe (COE) and the European Commission to produce an assessment of the Georgian Procuracy, with the goal of assisting international donors in effectively targeting assistance. In late FY 2002, the Procuracy agreed to administer competency exams to be followed by a mandatory character and fitness review as a prerequisite to being employed as a prosecutor, and OPDAT agreed to provide technical assistance and financial support for these efforts. OPDAT and its RLA were also the principal advisors to a presidentially mandated Power Ministry Reform Commission, chaired by Supreme Court Justice Lado Chanturia. OPDAT furnished expert advice, materials and support to the Commission, including conferences for selected Commission members in Washington, D.C., and Tbilisi to discuss and debate the reform proposals under consideration by the Commission, as well as a trip for selected members of the Georgian Parliament's Legal Affairs Committee and Georgian criminal law practitioners to Moscow for a series of meeting with representatives of Russia's Criminal Procedure Code Working Group to discuss their experiences writing and implementing Russia's new code. In addition, OPDAT sponsored a series of regional procurator roundtables to solicit practical input from procurators for a reformed criminal procedure code, as well as to discuss effective investigative techniques and prosecutorial strategies for a variety of transnational crimes. ABA/CEELI coordinated activities among and input from the NGO and international organization (IO) communities in Georgia, resulting in the production of an NGO/IO draft concept paper, large parts of which were adopted by the Commission. The Commission's final blueprint for reform, which mandates a criminal procedure code compliant with international standards and the elimination of the Procuracy's Soviet-style investigative power, was signed by President Shevardnadze in late FY 2002. OPDAT will assist the Georgians in implementing the reforms encompassed in this document over the course of FY 2003.

U.S. Department of Defense (DoD) - Cooperative Threat Reduction /Defense and Military Contacts: The Defense and Military Contact Program promotes U.S. counterproliferation, demilitarization, and defense reform objectives by fostering dialogue and cooperation with Georgia. FY 2002 events in Georgia included bilateral defense consultations, non-commissioned officer (NCO) corps development activities, participation in the International Security Advisory Board, defense reform, and other interoperability exchanges.

U.S. Department of Defense (DoD) - Warsaw Initiative: Warsaw Initiative assistance addresses near-term problems which could limit a country's ability to engage in Partnership for Peace (PfP) activities; promotes interoperability with NATO; defense reform; seeks to increase the level of participation in PfP exercises; and supports efforts to deepen defense and military cooperation between U.S. and NATO and their PfP partners. Among other activities in FY 2002, the Cooperative Best Effort '02 exercise was hosted in Vaziani, Georgia . This annual NATO Partnership for Peace exercise tests joint, multi-national infantry squad-level peacekeeping skills.

U.S. Department of Defense (DoD) - Other Bilateral Programs: A multi-service Military Liaison Team (MLT) consisting of a mix of active duty and reserve personnel has been deployed to Georgia on long-term temporary duty assignments. In FY 2002, the MLT merged with the Office of Defense Cooperation to create the Bilateral Affairs Office (BAO). The merger allows the office to expand its activities beyond familiarization to include participation in MinuteMan Fellowship Programs, Partnership for Peace exercises and other humanitarian assistance programs. The program managed by the U.S. European Command (EUCOM) under the Joint Contact Team Program (JCTP) conducts four types of activities:

• Traveling Contact Teams (TCTs) come to Georgia and share information on procedures within the U.S. military. This is the most effective type of event for reaching the greatest number of mid-grade host-country personnel.
  
  
• Familiarization Visits send limited numbers of foreign military personnel to Western Europe or the United States when the scope or level of the event makes a TCT impractical.
  
  
• Conferences are conducted when multiple nations are mutually interested in a particular subject.
  
  
• A limited number of individual exchanges of staff officers (or NCOs) allow in-depth exposure to U.S. operations.

U.S. Department of State - Military/Ammunition Relocation: At the OSCE Summit in Istanbul in November 1999, Russia and Georgia agreed to a series of steps that were subsequently incorporated into the Final Act of the Conventional Forces in Europe (CFE) Treaty. In the Final Act, the Russian side agreed to the following:

• To reduce its Treaty-Limited Equipment (TLE) located within the territory of Georgia to specified levels by no later than December 30, 2000. Russia met this commitment on time; with the exception of the withdrawal of 76 armored combat vehicles (ACVs) from Georgia to Armenia and the removal of all TLE from Gudauta in October 2001; all equipment withdrawal and destruction was observed by U.S.-led multinational teams, a prerequisite for potential US Government reimbursement of certain withdrawal and destruction costs. U.S. Government reimbursement will be provided under the Military Relocation Program based on validated costs. The U.S. Implementation Proposal for Reimbursement Arrangements was accepted formally by Russia in 2002; the U.S. Government is now waiting to receive Russian documentation of costs. The U.S. Government indicated to the Russian Government that while it would reimburse costs associated with withdrawal of military equipment to Russia, it would not do so for relocation of such equipment to Armenia. The U.S. has allocated funding for transportation costs associated with Russian withdrawal from the Sagarejo Weapons Storage Facility, but removal is pending results of Russian-Georgian planning discussions.
  
  
• To disband and withdraw two of its bases in Georgia (Gudauta in separatist Abkhazia, and Vaziani near the capital) by July 1, 2001. The Vaziani base withdrawal was completed according to schedule, and equipment was removed from Gudauta in October 2001. However, the Gudauta base has not been legally transferred to the Georgian side, and Georgia and Russia have not yet reached agreement on its status, including appropriate transparency arrangements.
  
  
• To complete negotiations with Georgia regarding the status and duration of remaining Russian bases at Batumi and Akhalkalaki. The duration of the Russian military presence at the remaining bases in Batumi and Akhalkalaki remains unresolved and is the subject of ongoing talks between Russia and Georgia. In 2002, the U.S. contributed to the OSCE Voluntary Fund for Georgia in an effort to facilitate those negotiations; the Russians have indicated that costs are a major concern regarding removal of the bases.

U.S. Department of State - Foreign Military Financing (FMF) / International Military Education and Training (IMET): In FY 2002, Georgia received $11 million in FMF assistance and an additional $20 million in FMF assistance under the Emergency Supplemental Appropriation. Approximately $2.2 million of this funding was used to purchase UH-1H helicopter support items that will increase the capability of Georgian military forces to participate in NATO Partnership for Peace activities and will greatly enhance the Georgian military's ability to transport soldiers and equipment in support of the Global War on Terrorism, specifically against possible targets in the Pankisi Gorge. The last of the Georgian pilots and maintenance technicians finished their specialty training in aviation-related topics to help them operate and maintain the six UH-1H aircraft that the U.S. Government delivered in September 2001. Most of the FMF assistance was used to establish, sustain and support the Georgia Train and Equip Program, under which U.S. trainers are helping create, train and prepare four combat infantry battalions and one mechanized company team to defend Georgia against the potential terrorist threat posed by possible al Qaeda terrorists using the Pankisi Gorge as a refuge and for use against other threats identified during the Global War on Terrorism. Georgia also received $850,000 in IMET assistance to send members of the Georgian military to U.S. military training courses, English language training, and courses in civil-military relations.

U.S. Department of State - Peacekeeping Operations (PKO): Through the PKO Account, the State Department has funded operations to strengthen peace, regional stability and rule-of-law mechanisms in the Eurasian region. In FY 2002, the PKO account provided $1.4 million for the Organization for Security Cooperation in Europe (OSCE) Georgia Border Monitoring mission. This mission provides key independent assessments of the situation along the Georgian-Chechen border and underlines the international community's support for Georgian independence and territorial integrity.

U.S. Department of State - NATO Tour: In FY 2002, the U.S. Embassy's Public Affairs Section organized its sixth annual NATO tour for seven Georgian Government officials, bringing the total number of participants since 1998 to 45. The FY 2002 NATO tour took Georgian participants to NATO and SHAPE headquarters in Brussels. A follow-on program to the Hague included meetings with high-level officials at the International War Crimes Tribunal and the Dutch Ministry of Foreign Affairs and Parliament, where they discussed Georgia's future participation in PfP and NATO's other projects. The tour deepened Georgian officials' understanding of their need to reform the Georgian Armed Forces and to focus on defense capabilities and NATO standards. FY 2002 NATO tour participant David Gamkrelidze, leader of the New Rightists faction in Parliament, founded "Georgia for NATO", and NGO aiming to raise public awareness about political, economic, and military reform requirements for Georgia to meet NATO membership standards by 2010.

U.S. Department of State - Science Centers Program: Georgia was the only independent state of the former Soviet Union to hold memberships in both the International Science and Technology Center (ISTC) in Russia and the Science and Technology Center in Ukraine (STCU) during FY 2002. The Department of State funded $1 million in civilian research projects proposed by former Georgian weapons-of-mass-destruction (WMD) scientists in such areas as nuclear reactor containment; electro-membrane technologies for water purification; solar energy; and non-linear optical and acoustical waves.

U.S. Department of Health and Human Services (HHS) - Biotechnology Engagement Program (BTEP): BTEP projects are planned or underway at four Georgian scientific institutions: Eliava Institute of Bacteriophage, Microbiology and Virology; National Center for Disease Control of Georgia; National Center of Tuberculosis and Lung Disease; and the Georgian AIDS and Clinical Immunology Research Center.

U.S. Department of State - Support for the Civilian Research and Development Foundation (CRDF): The CRDF activated four new Cooperative Grant Program awards totaling $194,500 to Georgian scientists in FY 2002. The four projects involve 19 participants in Georgia, three of whom are weapons scientists. To date, a total of 15 awards have been made to joint research teams. In addition, the CRDF received 21 proposals from U.S.-Georgian research teams in response to its Special Competition for Research on Minimizing the Effects of Terrorist Acts on Civilian Populations. The CRDF also made four awards to Georgian scientists under its Travel Grants Program and continued work with four CRDF-funded Regional Experimental Support Centers in Georgia. In FY 2002, the CRDF initiated support for the Georgian Research and Development Foundation (GRDF), an independent science-funding organization patterned on CRDF-supported models in Armenia and Moldova. In April 2002, after receiving training from CRDF, the GRDF staff delivered three Georgian-language proposal-writing seminars, the first such CRDF-funded activity which did not require the presence of U.S. experts. The seminars elicited 88 proposals to the first GRDF-CRDF Bilateral Grants Program. This is a record number both for CRDF's Georgian competitions and for a first-time program. Also notable is the percentage of proposals involving former weapons scientists (78 percent), young investigators (89 percent, including five of the Georgian principal investigators), and female scientists (82 percent, including five of the Georgian principal investigators). The GRDF and the CRDF have agreed to fund 22 of the proposals at an average of $30,000 per project. Fifteen of the funded projects include former weapons researchers. Two additional projects may be funded depending on the recommendations of an USG interagency review process.

U.S. Department of State - Anti-Terrorism Assistance (ATA): In FY 2002, over 100 participants from the Government of Georgia were provided with training in five course topics: terrorist crime scene investigation; hostage negotiation; officer survival; vital installations security; and airport security management.

U.S. Department of Energy (DoE) - Nuclear Material Protection, Control & Accounting (MPC&A) Program: The Institute of Physics in Tbilisi is receiving support from DOE's MPC&A Program to upgrade its former nuclear facilities safeguards in accordance with the International Atomic Energy Agency's (IAEA) 1999 revised guidelines. DOE assisted in completing prior upgrades and transporting all nuclear material to the United Kingdom for permanent storage in 1998.

U.S. Department of Energy - International Nuclear Export Control Program (INECP): INECP provides support to the State Department Export Control and Related Border Security (EXBS) Program's nonproliferation goals by focusing resources on cooperative projects in the three themes that guide its domestic program: licensing, industry outreach and enforcement. INECP has extended its activities into the Caucasus, thus far focusing on Azerbaijan and Georgia. Since these countries are at risk of being used as routes for the illicit transit of nuclear-related commodities to countries of concern, INECP's primary goal is to strengthen enforcement. In 2002, INECP provided two workshops for Georgian and Azerbaijani border guards and customs officers in the basics of nuclear proliferation, radiological safety, and inspections methodologies. INECP included technical experts from the scientific communities of both nations to expose them to the subject matter, and conducted separate technical meetings to discuss nonproliferation issues in the region and the indigenization of training courses.

Humanitarian Programs

U.S. Department of State - Coordinator's Office Humanitarian Assistance: In FY 2002, the Office of the Coordinator of U.S. Assistance to Europe and Eurasia transported $44.76 million in U.S. Defense Department excess and privately donated humanitarian commodities to Georgia at a total cost of $3.61 million to the U.S. Government. Assistance provided included support for small and medium-sized U.S. private voluntary organizations that need assistance in transporting humanitarian commodities to Georgia. In addition, grants to support the monitored distribution of donated medicines were awarded to International Relief and Development, the United Methodist Committee on Relief, A Call to Serve International, World Council of Hellenes and Counterpart International.

U.S. Department of State - Office of Humanitarian Demining Programs: In FY 2002, the Department of State initiated a humanitarian demining program for Georgia. This program funded HALO USA to support mine and unexploded ordnance clearance, minefield marking, surveys, and mine awareness operations in Abkhazia.

U.S. Department of Agriculture (USDA) - Food Assistance: In FY 2002, USDA donated commodities valued at $9.01 million to Georgia. Under the Section 416(b) Program, USDA donated 35,000 metric tons of wheat to the Georgian Government to be used to stabilize the country's pension system. Under the Section 416(b) Global Food for Education (GFE) program USDA donated 1,500 metric tons of soybean oil to International Orthodox Christian Charities (IOCC) for use in Georgia. IOCC, a private voluntary organization, used the proceeds from the sale of the commodity for school feeding and school support programs. USDA donated about 600 metric tons of U.S. agricultural commodities to Counterpart International, Inc., (CPI) for use in Georgia under the Global Food for Education (GFE) program. CPI, a private voluntary organization, used the commodities for school feeding and school support programs. The donation included 1,000 metric tons of bulghur, 100 metric tons of nonfat dry milk, 500 metric tons of vegetable oil.

Partnership Programs

USAID Health Partnerships: USAID continued its support to five health partnerships in FY 2002, including partnerships on women's health, hospital infection control and prevention, health care management, primary health care development and the establishment of a blood bank. Approximately 350 health care professionals were trained through partnership programs during the reporting period.

• In FY 2002, the first rural Georgia Primary Health Care (PHC) Center opened in Mtskheta became fully operational and expanded its activities region-wide. Ten Mtskheta physicians underwent a national certification, which made them the first licensed family medicine physicians outside of Tbilisi. The partners have introduced new models of healthcare management practices, increased patient-to-physician interaction (number of patient visits to the center increased twofold) and increased public-private citizen collaboration. As a result, $220,000 in public/private funds was raised for the Meehan Family Health and Training Center. Another innovation was a community high blood pressure control program, serving approximately 400 people, of whom 70 percent have now reach their lower blood pressure goal.
  
  
• A Women's Wellness Center (WWC) in Kutaisi provided preventive services focusing on women's reproductive health needs. In FY 2002, the PHC and WWC served over 10,000 patients, offering integrated primary health care as well as reproductive health and family planning services.
  
  
• The Infection Control Partnership improved nonsocomial infection surveillance and control, and improved referral and microbiology data reporting systems. There had been minimal reporting on nonsocomial infections during the past ten years. Now, at targeted facilities, reporting has increased by 70%. During FY 2002, 90 health professionals were trained in evidence-based infection control and epidemiology. Also, reporting on microbiological data, including data on antibiotic resistance increased by 25%. The Georgian partners were instrumental in the partnership's receipt of a $400,000 grant from the U.S. Department of Health and Human Services.
  
  
• The Health Care Management Partnership improved healthcare management education and developed a Master of Health Administration (MHA) curriculum with the intention of introducing a two-year postgraduate MHA program in Georgia, with over 200 people enrolling in FY 2002. Due to the training, 12% of trainees received grants from the Government of Georgia and other donors to implement practical programs in their facilities, and 10% were promoted to leadership positions.
  
  
• In FY 2002 the Blood Bank Partnership received 2,527 voluntary blood donations. About 3,000 blood units were dispatched to hospitals and clinics.

U.S. Department of State -Georgian Institute of Public Affairs (GIPA): The U.S. Embassy Public Affairs Section (PAS) continued to support GIPA in FY 2002. GIPA consists of three schools: the School of Public Administration, the School of Journalism and Media Management, and the School of Local Government. The School of Public Administration continues to cooperate with the National Association of Public Administration (NAPA), the National Association of Schools of Public Affairs and Administration (NASPAA), and the University of Georgia - Athens. This school held several three-month training sessions for representatives of the Ministry of Defense, Internal Armenia and Ministry of Justice. In FY 2002, the School of Journalism and Media Management, supported by the International Center for Journalists through a grant from ECA and the Open Society Institute, graduated its first class of 20 students and accepted its first class of masters degree-level journalism students. The first group of 26 students in the School of Local Government also started in FY 2002, and this program will be taught solely in Georgian: in FY 2002 it published a textbook in Georgian on principles of local governance.

U.S. Department of State - University Partnerships

• Caucasus School of Business (CSB) -PAS continued to support a three-year university partnership grant between two Georgian higher education institutions and their U.S. partner, Georgia State University. In FY 2002, CSB awarded ten bachelors' and six masters' degrees in business administration. Enrollment significantly increased in FY 2002, with 125 students enrolled in CSB master's degree programs and 70 in its bachelor's degree programs.

• The partnership between the Tbilisi State Medical University, Tbilisi State Pedagogical University and the University of Scranton resulted in the publication of the first Georgian language textbook on Special Education. The text, titled Education, Rehabilitation and Treatment of Children with Disabilities is designed for use by teachers and rehabilitation specialists and is the first Georgian language textbook of this type. The partners have also launched an academic journal, Education and Rehabilitation of Children with Disabilities and have obtained private funds to launch a demonstration site for inclusive education at a Tbilisi school.

U.S. Department of State - Georgian "American Academy" Model School Project: This project supports professional training for a core group of teachers at the American Academy in Tbilisi, a model school in the Republic of Georgia based on the best practices and principles of American education. In FY 2002, the first year that the school was open to students, five Georgian teachers completed academic year programs at two leading U.S. graduate schools of education. Five more teachers are enrolled in U.S. programs for the 2002-2003 academic year, receiving teacher training at the Harvard Graduate School of Education, Simmons College, and the Phillips Exeter Academy, and 53 students were admitted into the academy. To date, the Academy has received three years of FSA funding through the Bureau of Educational and Cultural Affairs. Over a four-year project period, FSA-funded grants will sponsor a year of training for the 20 Georgian teachers who staff the Academy, helping build it into a four-year school. FY 2002 saw the successful "graduation" of the first class of 55 ninth-graders and the acceptance of a second class into the American Academy. The Academy is an example of both U.S. assistance to Georgia and the investment of the Georgian business community in the future of Georgia.

U.S. Department of State - Georgian Foundation for Strategic and International Studies (GFSIS): In FY 2002, the PAS and ECA continued to support the RAND Corporation with FSA funding to support GFSIS, an American-style think-tank. The main objective of the project is to strengthen Georgia's capacity for research and analysis concerning its major foreign policy and national security issues. In June 2002, GFSIS graduated its first class of 17 mid-level Georgian bureaucrats trained in policy analysis. Each of the graduates was given a promotion in his/her office as a result of the training. Graduates are currently working as staff aides to the Speaker and Deputy Speaker of Parliament, department heads in the Ministries of Foreign Affairs and Intelligence, and as lead correspondents for one of Georgia's most popular newspapers.

U.S. Department of State - Georgian National Security Council Reform Project: At the end of FY 2002, PAS initiated a new three-year FSA-funded program to help reform the Georgian National Security Council. At the request of the Georgian National Security Advisor Tedo Japaridze, this partnership project with RAND Corporation will train six new security council analysts in modern research and policy analysis techniques in the first year of the program, as well as teach them to prepare policy recommendations for senior Georgian Government representatives.

U.S. Department of Defense (DoD) - State Partnership Program (SPP): The National Guard of the State of Georgia (U.S.A.) is partnered with the country of Georgia to develop a long-term institutional relationship. This allows more Americans to become directly involved in helping Georgia with the transition to a democratic society with a Western-style military. Some 25 percent of all Joint Contact Team Program events are organized under the SPP. (Please see Security, Regional Stability and Law Enforcement Programs section above for additional details.)

Cross-Sectoral Programs:

Peace Corps Small Project Assistance (SPA) Program: Four grants were awarded in the area of education and youth development. Education activities focused on improvement to school libraries, classroom facilities and language resource centers. Youth development activity combined instruction in leadership and life skills training for at-risk youth with support for a local soccer club.

Eurasia Foundation: In FY 2002, the Eurasia Foundation awarded 49 grants totaling approximately $1.1 million to NGOs in Georgia through open door and targeted competitions. Grants were targeted at NGOs working to make improvements in civil society, private enterprise, public administration and policy, and other areas. Seven grants were also awarded to support the work of watchdog groups. With the goal of improving bank management and introducing new financial products and services, the Foundation awarded a grant to the Banking and Finance Academy of Georgia to introduce a commercial banking certification program, comprising 20 five-day courses, for 40 to 50 bank personnel. Examples of other small grants in FY 2002 include support to the 60 Minutes Union of Journalists to establish an investigative journalism school; the Georgia Radio Network to create a regional information radio service; and the Freight Forwarders Association of Georgia to develop a new, internationally-accredited training course for freight forwarders.

The Foundation has also undertaken a number of regional initiatives and grants in the Caucasus countries to build cross border cooperation. Under the South Caucasus Cooperation Program (SCCP) - initiated to facilitate greater contact and cooperation among leading organizations in Armenia, Georgia, and Azerbaijan, and to help to overcome the political and economic obstacles to regional integration - the Foundation awarded 68 grants in FY 2002 totaling over $1 million to fund projects in the areas of civil society, public administration and policy, and private enterprise development. The Foundation is also working with the Carnegie Corporation of New York to create a network of resource centers - one each in Baku, Tbilisi, and Yerevan - to strengthen efforts by social scientists researching topics relevant to contemporary public policy formation. An example of the Foundation's regional grant making activities in FY 2002 was a grant made to a partnership between the three national associations of professional accountants and auditors in Armenia, Azerbaijan, and Georgia to encourage the harmonization of national accounting systems and financial reporting practices with international standards.

Programs Promoting the Objectives of the Silk Road Strategy Act (SRSA) of 1999

In 2002, a number of U.S. Government-funded assistance programs contributed to the objectives outlined in the Silk Road Strategy Act - promoting reconciliation and recovery from regional conflicts; fostering economic growth and development; promoting infrastructure development; increasing border control capabilities; and promoting democracy, tolerance, and the development of civil society. Please see the above section for numerous examples of programs that contributed to one or more of these objectives.

Preview of FY 2003 Programs

In FY 2003, U.S. Government-supported democracy programs will continue to focus on developing a solid base of resources, both human and physical, for Georgia's future, especially looking toward the 2003 Parliamentary elections. Anti-corruption measures, the formation of civil society, and the budgetary reform will remain priorities.

In the security area, the Georgia Train and Equip Program will remain a cornerstone of U.S. anti-terror and military reform efforts. Emphasis will remain on a focused assistance effort to address weapons proliferation and national security concerns through export control and border security programs, as well as continuing to monitor Russian equipment and ammunition withdrawals. Also, in FY 2003 BSLE will deliver a fourth Mi-8 helicopter and an An-28 light transport aircraft to the GBG. The design and construction of barracks and utility infrastructure for the GBG aviation section will begin in FY 2003. A study will be conducted on the placement and use of a large coastal radar traffic management system. An export control course for GBG and GCD is scheduled in Tbilisi during FY 2003. The GCD computer networking for tracking and collecting revenue will be completed during FY 2003.

In the area of law enforcement assistance, some sections of the ACTTA forensic lab project will come online as renovations are completed and equipment procured. Support for the Resident Legal Advisor (RLA) will be continued, and the U.S. Government will assist in the reform of the Georgian Police structure as called for by the Power Ministries Reform Commission.

Economic reform programs will concentrate on improving transparency and on tax and revenue enhancement, while also helping the Ministry of Finance meet International Monetary Fund (IMF) conditions. USDA will begin implementation of a marketing assistance program in Georgia in FY 2003, whose mission will be to achieve economic development through agricultural and human capital development - to assist Georgian farmers and agribusinesses in producing, marketing and exporting food and related products. New programs that USAID plans to begin in FY 2003 include the following:

• The Georgia Economic Growth Initiative will concentrate on demand-driven policy reform to enhance transparency and sector-specific interventions to improve the operating environment for business competitiveness.
  
  
• The Georgia Microfinance Stabilization and Enhancement program will focus on enhancing the operational and financial stability of microfinance institutions in Georgia.
  
  
• In the energy sphere, USAID will begin a Georgia Energy Security Initiative to improve the performance of the energy sector and consolidate policy, regulatory and institutional gains that resulted from previous support to this vital sector.

Exchange programs will focus on such fields as religious tolerance, economic development, pipeline issues, and trafficking in persons, in order to continue developing an indigenous knowledge base. Specific intensified attention will be given to youth and alumni of previous programs.

In FY 2003, the Georgia Border Security and Law Enforcement (GBSLE) Program will continue to support the Georgian Customs Service's efforts to reform and modernize by supporting infrastructure improvements, the delivery of training and equipment, and computer-related enhancements; and the Border Guard's and Coast Guard's efforts to maintain control of Georgia's coastline and borders by expanding the communication system, performing renovations to buildings and facilities essential to the GBG's and GCS's operations, procuring critical spares, equipment, and services related to the aviation and marine programs, and supporting the forensics lab project.