U.S. Department of State

The graph shows Ukraine's democratic reform scores in 2004* (the gray shaded area) as compared to its democratic reform scores in 1999.  For example, since 1999, Ukraine made little, if any, progress in this sector.

*Actual 2005 scores not yet available.

Ukrainian Economic Reform

The "radar" or "spider web" graphs below illustrate Ukraine's economic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark line indicates how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country progress/.

The graph shows Ukraine's economic reform scores in 2004* (the gray shaded area) as compared to the average of Romania's and Bulgaria's economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2005 scores not yet available.

The graph shows Ukraine's economic reform scores in 2004* (the gray shaded area) as compared to its economic reform scores in 1999. For example, since 1999, Ukraine made progress in the economic sector in all areas except export share of GDP.

*Actual 2005 scores not yet available.

FY 2005 Country Program Performance

Democratic Reform

The trend of Ukraine's national and democratic development changed dramatically in 2004 and 2005. After a massive public protest against manipulation of early Presidential election rounds, the Ukrainian people chose Viktor Yushchenko and his reform-minded government in a runoff election deemed by the international community to be free and fair. Ukrainian civil society and the independent media had taken a brave stance against the corrupt practices of the previous administration of Leonid Kuchma. Following the election, civil society clearly demonstrated greater activism, and a much freer independent media landscape emerged. The Ukrainian Parliament, the Verkhovna Rada, also played a constructive role in resolving the political crisis created by the initial falsified election results; it counterbalanced the executive branch and resolved and ultimately legitimized the final election outcome. These events, as well as the new government's commitment to democratic reforms, positively shaped Ukraine's environment for democratic development and were reflected in Freedom House's Nations in Transit Democratization Rating which showed significant improvements in all areas except corruption.

Democratic challenges that continue to confront the government include: reducing corruption, which remains endemic to Ukraine's political and economic environment; ensuring free and fair March 2006 parliamentary elections; assuring effective governance; and sustaining progress on rule of law.

U.S. ASSISTANCE PRIORITIES

Key USG assistance priorities include supporting continued development of civil society; further strengthening democratic political parties as democratic institutions; assisting Ukraine's independent media to become stronger; improving access to better information about the U.S.; supporting national governance reform; assisting local governance/decentralization; combating corruption; supporting reform in the justice sector/rule of law; and helping the country to achieve free and fair Parliamentary elections in 2006.

PROGRAM PERFORMANCE

Ukrainian media outlets face much less government interference and owner pressure to follow a certain policy line than they did before the Orange Revolution. In 2005, improvements occurred in all areas of media development (freedom of speech, plurality of news sources, professionalism, business management, supporting institutions) as reported by the 2005 IREX Media Sustainability Index. The overall Media Sustainability ranking improved from 1.96 out of 4.0 in 2004 to 2.22 out of 4.0 in 2005. USG assistance programs eased administrative and legal pressures on various print and electronic outlets by providing free legal assistance and representation. USG media assistance also helped improve the quantity and quality of information available to the public and increased public awareness nationwide of key 2004 election issues. In the run-up to the elections, Media Development Fund grants provided training for journalists in campaign coverage and funded voters' information guides, public TV debates between candidates, and monitoring of freedom of speech issues during the campaign. Special Media Development Fund competitions focused in FY 2005 on regions which had been underrepresented in past competitions due to controlled media environments and unwillingness to work with the USG, likely out of fear of government retribution. During FY 2005, some 90 Media Development grants totaling $660K were issued. Overall, USG assistance helped develop a much more vibrant media landscape.

During 2005, USG funding enabled NGOs to broaden and deepen their influence, create new sources of funding, and share successful strategies with other organizations. Civic groups and coalitions became increasingly active during the 2004 elections, and more NGOs reported productive cooperation and support from government and business. Collectively these achievements contributed to an improved 2005 NGO Sustainability Index score of 3.55 in 2005 compared to 3.8 in 2004. A key USG-supported civil society partner also successfully championed important tax exemptions for NGOs and deductions for corporate charitable donations were reinstated in the 2005 Budget Law.

Anticipating that the 2004 Presidential and 2006 Parliamentary elections would be pivotal for Ukraine's democratic development, the USG provided technical assistance to the drafters of new elections legislation and, following enactment of the law in 2004, provided training to 1,000 local and appeals court judges and over 100,000 election commissioners. USG assistance programs also facilitated production and distribution of 450,000 copies of training and instructional materials to more than 33,000 polling stations, 225 territorial election commissions, and the campaign headquarters of the 24 presidential candidates. With USG assistance, Ukrainian NGOs conducted extensive and highly successful non-partisan voter education activities and supported a number of election observation missions. All of these efforts proved pivotal to identifying massive election fraud during the first two rounds of the 2004 presidential election and ultimately contributed to a freer, fairer, and more democratic final revote. The presence of a broad elections monitoring effort, including a non-partisan NGO mission supported by USG funds, was a significant factor in detecting fraud and ensuring the eventual free and fair result in the final round. A nation-wide exit poll, funded by an Embassy Democracy Commission Small Grant in conjunction with other international donors, provided the most direct evidence of fraud in the second round of elections and became an important piece of evidence used in the legal process that overturned the disputed election results. Altogether, 85 Democracy Commission Small Grants Program grants were issued totaling $686,000. In FY05, following the election, USAID assistance focused on improving the framework for parliamentary and local elections slated for March 2006. A new parliamentary election law enacted in August reflected lessons learned during the 2004 elections and also reflected USG assistance efforts.

The USG's parliamentary strengthening project supported the efforts of the Verkhovna Rada in passing several pieces of legislation, including the elections law that introduced a proportional representation system and key legislation that helped Ukraine make significant progress on WTO accession. The Rada continues to improve its use of "Government Days" (during which government officials answer questions from MPs in open sessions with media representatives observing). For FY 2005, this initiative received an effectiveness rating by independent observers of 77.4 percent, a slight improvement over last year's score of 75.2 percent. The USG also assisted the Parliamentary Committee on Combating Organized Crime and Corruption in holding four public regional hearings. As a result, the committee drafted a paper on legislative measures needed to combat corruption, which is currently being prepared for legislative consideration.

Because of the previous administration's lack of commitment to reforms in this sector, previous USG programs focused on grass-roots activities. With FY 2005 funds, the USG provided advisory and technical support to assist the new Government of Ukraine in beginning to develop plans and relevant legislation for judicial reform, law enforcement structural reform and a comprehensive approach to combating corruption. With a new administration and a reinvigorated GOU commitment in place, the USG will also soon launch a multi-year, multi-million dollar rule of law/anti-corruption assistance project which should complement any Millennium Challenge Account threshold program that the GOU develops. In FY 2005, the USG also continued its grass-roots program helping to expand Ukraine's network of public advocacy centers to 13 new centers, resulting in nearly 3,000 legal consultations provided to disadvantaged citizens. Throughout FY 2005, the Democracy Commission Small Grants Program continued to strengthen rule of law in Ukraine. Democracy Commission grants supported the first meeting of the Ukrainian Helsinki Human Rights Union and is funding a network of NGOs whose grassroots tallies of police and prison abuse, corruption, and official misdeeds constitute a solid basis to push for further reform. Other projects throughout the year have addressed domestic violence prevention, gender equality issues, promoting the rights of ethnic minorities, and training of NGO activists and judges in matters of legal rights. In FY 2005, through funds provided by the Ukraine supplemental appropriation, the USG also began supporting the Ukrainian Testing Project. With a $220,000 grant, the USG is providing consulting expertise and training to the Ukrainian Ministry of Education as it works to implement the President Yushchenko's planned system of national testing to root out corruption in the university admissions process.

USG local government assistance continued to foster broad-based reform measures, resulting in improved municipal services and increased professional city management. To date, more than half of Ukraine's 450 cities have participated directly in one or more USG assistance projects. Other cities have been served by USG-supported regional municipal training centers, regional conferences and seminars, and mass dissemination of best practices. Results are exceeding targets: the Local Good Government Index showed that 50 percent of those polled had confidence in their local mayor and council, and believed both were "effective," versus last year's rating of 47 percent; the Specific Services Improved in Targeted Cities indicator increased from 74 cities in FY 2004 to 92 in FY05; and the Targeted Cities that Use Financial Analysis Models indicator increased from 173 in FY 2004 to 192 in FY 2005.

The Window on America network in Ukraine gives a broader Ukrainian audience open access to unbiased information about the U.S. In FY 2005, a total of $60,000 in USG funds were used to acquire furniture and equipment for new Window on America centers in Ivano-Frankivsk and Chernivtsi and for updating book and video collections at other centers. Usage of the Window on America resources is high; in one six month period the Window on America center in Ternopil (western Ukraine) had 813 visitors, hosted 14 programs, and was mentioned in local media eight times. The center in Sumy saw 2824 visitors and organized 39 programs. In FY05, $140K was spent to continue public access to information via the Library Electronic Access Program (LEAP); 92 LEAP centers serve at least 250,000 clients a year. Evidence exists that LEAP centers were an important source of news during Ukraine's Orange Revolution. One center in western Ukraine reported that patrons often gathered two or three to a machine during the elections to check Ukrainian Internet news sites. In FY 2005, the USG provided LEAP staff training aimed at bridging the country's perceived geographical divisions by bringingWestern Ukrainian librarians to the East and Eastern Ukrainian librarians to the West—many for the first time. USG funds are also helping Ukrainian librarians reach physically challenged populations. Public diplomacy programs throughout the year, including speakers programs, have supported the overall democratic transformation.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.

Please find below two important indicators in the area of Democratic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.

Performance Indicator: Political Rights Index. This indicator was drawn from Freedom House Annual Report Freedom in the World as modified by "Monitoring Country Progress in Central and Eastern Europe & Eurasia," USAID/E&E/PO, #9 April 2005 (1= most free, 7 = least free). Four different dimensions of political rights are analyzed each year in the Political Rights Index: electoral process, political pluralism and participation, functioning of government, and additional discretionary political rights issues. The Political Rights Index uses a seven-point scale, to facilitate comparisons to the Freedom House indices, with 7 indicating least free and 1 indicating most free. This ranking is based on 2004 data. Found online: www.usaid.gov/locations/europe_eurasia/country_progress/index.html.

This indicator did not change from the CY 2003 rank. Media-related programs are working to contribute to the sustainability and professionalism of Ukrainian media in the eastern and southern regions. Programs to build democracy contributed to the successful holding of free and fair elections after the Orange Revolution, and programs to strengthen NGOs and political parties will be even more effective in the current much more open political environment.

Performance Indicator: NGO Sustainability Index. Seven different dimensions of the NGO sector are analyzed each year in the NGO Sustainability Index: legal environment; organizational capacity; financial viability, advocacy; service provision; NGO infrastructure; and public image. The NGO Sustainability Index uses a seven-point scale, to facilitate comparisons to the Freedom House indices, with 7 indicating a low or poor level of development and 1 indicating a very advanced NGO sector. This ranking is based on 2004 data. Source: USAID. Found online: www.usaid.gov/locations/europe_eursia/dem_gov/ngoindex/2004/.

This indicator shows a slight improvement. The more open environment following civil society's success in forcing free elections in Ukraine, has allowed USG support to become even more effective. Civil society organizations in FY 2005 have become more active and professional in how they utilize USG assistance received through both USAID and the Democracy Commission Small Grants Program.

Economic Reform

Ukraine's economic performance in 2005 was mixed. Growth slowed due to a number of external factors, such as weaker international prices for Ukraine's primary exports and energy price increases, as well as internal factors including some government policies and practices that shook investor confidence. Among these problems was an unclear re-privatization program. In 2005, GDP growth fell, inflation rose, and investment dropped. Some successes were achieved in improving customs and tax compliance and in passing portions of the legislation needed to bring Ukraine's trade regime into compliance with WTO standards. However, many other long overdue economic reforms were not advanced. Prospects for reform before the March 2006 Parliamentary elections remain uncertain. The new Prime Minister and government have worked to restore business confidence but are stymied by the lack of a stable majority in Ukraine's parliament. Economic reforms requiring GOU focus include: corporate governance; strengthening the financial sector (particularly in the area of pension reform); increasing institutional reform (particularly the Securities and Exchange Commission); transparent privatization; further regulatory/tax reform; more anti-corruption measures; movement towards operational land markets; and the many remaining measures necessary for WTO and eventual EU accession. Despite the ups and downs of 2005, the current Government of Ukraine's basic commitment to economic reform is far deeper and consistent than that of previous governments.

U.S. ASSISTANCE PRIORITIES

Key U.S. assistance areas include fostering legal and regulatory reform; promoting financial sector reform, particularly of the legal framework which remains weak; strengthening bank supervision; strengthening the pension system; increasing integration into the global trading system; improving the business climate to facilitate SME growth; increasing access to capital; and accelerating agricultural growth.

PROGRAM PERFORMANCE

With the assistance of a U.S. Treasury adviser, the National Bank of Ukraine (NBU) implemented the "Risk Based Supervision" approach to corporate governance and effective regulation recommended in the Basel Core Principles of Bank Supervision. Accounting reform also made gains as 494 candidates were certified as Certified International Public Accountants (a 49 percent increase over last year), and CIPA training programs expanded into 20 cities. A USAID program assisted with the establishment of the Ukraine Association of Certified Accountants and Auditors—a new professional association with rigorous, certification-based membership requirements—which has grown to 421 members. USG assistance also increased access to credit in Ukraine with over 90,000 loans valued at more than $740 million. USG funding also supports an enterprise fund that has a successful record of investing in small and medium-sized enterprises in Ukraine; over the next few years this fund will transition to fully private funding. Despite these accomplishments, establishing a secure and stable financial sector remains one of the most significant economic reform challenges. To meet some of these challenges USAID will launch a new Capital Markets Project in FY 2006. It is expected that the new project will also help strengthen Ukraine's pension system.

In 2005, Ukraine made significant progress towards WTO accession, both in terms of market access agreements and in passing legislation reforming its trade regime to meet WTO standards. Two USG-funded advisers assisted legal drafting of WTO-compliant legislation and education of Parliament on the benefits of becoming a member of the WTO. The advisers also translated Ukrainian legislation to assist the WTO Working Party's evaluation of Ukraine's progress in accession. While issues remain to complete Ukraine's accession process, including the adoption of legislation and the completion of the remaining bilateral trade agreements, Ukraine has reached the stage where it could complete WTO accession in CY 2006.

In 2005, a USAID program provided assistance in the drafting and passing of the "Law on Credit Bureaus," which established information disclosure standards to financial institutions on the credit worthiness of private entities. The USG-funded Commercial Law Center advised various parliamentary committees on more than 10 key areas requiring legislation to reduce overall costs to the economy, reduce opportunities for corruption, and enable businesses to operate effectively. Another Commercial Law Center initiative will eliminate or amend more than 5,000 national- and regional-level regulations (over 50 percent of the total) that apply to businesses, thus enhancing the business climate. The Center also promoted a Permit System Law that the parliament adopted in FY 2005. The law establishes a universal mechanism for granting business permits and "one-stop shops" for permit-issuance. Where these one-stop-shops have been implemented, businesses report significant time and cost improvements for obtaining a permit and a reduction in corruption.

USG assistance to Ukraine's fruit and vegetable (F&V) industry contributed to increasing the value of F&V traded by $25 million in 2005; nationally, USG assistance contributed to a 25 percent increase in processed F&V and helped create over 1,000 new seasonal and full-time jobs. A USAID program for agricultural marketing activity significantly increased producers' access to market information, especially for real-time prices, and generated approximately $5.7 million in new sales in the sector. Although incomplete privatization remains an obstacle in developing an agricultural land market, agricultural land privatization has transferred over 60 percent of land into private hands. This fundamental change in ownership has effectively dissolved the legal and political basis for collectivized agriculture. USG efforts to facilitate legal titles for agricultural landowners - a key requirement for creation of a land market - are nearing the goal of 1.8 million land titles.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.

Please find below two important indicators in the area of Economic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.

Performance Indicator: Enterprise Reform Index. Source: European Bank for Reconstruction and Development. This ranking is based on 2004 data. (1-low to 4-high). Found online: www.esdb.cdie.org.

While programs to improve the business environment have begun to have an effect, sectoral problems, particularly corruption, remain serious constraints. In the longer term, the trend appears positive, but reforms will take time to have an effect.

Performance Indicator: Forex and Trade Liberalization Index. Source: European Bank for Reconstruction and Development. (1-low to 4-high).This ranking is based on 2004 data, found online: www.esdb.cdie.org.

USG programs and the passage of laws liberalizing Ukraine's trade regime had a positive effect on trade liberalization in Ukraine. Programs increasing access to credit may have also contributed to a positive trend on this indicator.

Social Reform and Humanitarian Assistance

Almost 30 percent of Ukraine's population still lives below the poverty line. Social and economic conditions and an overburdened, centralized health care system also contribute to rising rates of infectious diseases, especially HIV and tuberculosis (TB), as well as high abortion rates, alcoholism and substance abuse. National infant and maternal mortality rates (IMR and MMR) appear to be flat-lined or worsening. Human trafficking and rising numbers of children in institutions, on the streets, or in dysfunctional families are serious concerns. Unlike the previous administration, under the leadership of President Yushchenko, the new government has indicated increased commitment to addressing the HIV/AIDS epidemic and adopting evidence-based maternal and infant health care practices - both USG health priorities.

U.S. ASSISTANCE PRIORITIES

U.S. assistance priorities include: prevention and control of TB, prevention of trafficking in persons and victim protection, preventing HIV/AIDS transmission, reduction of high abortion rates and maternal mortality, and providing family-care options for orphans and vulnerable children.

PROGRAM PERFORMANCE

Prevent and Control Infectious Diseases: In FY05, coverage of the internationally recognized TB treatment, Directly Observed Treatment Short Course Strategy (DOTS), in one of our focus regions increased from 80 to 100 percent. This region has maintained TB cure rates of 68 to 70 percent and improved case detection rates from 52 to 62 percent. As a result, USAID was able to hand over DOTS-based TB control activities to the regional administration -- a significant sustainability achievement. Regional TB case-detection rates also improved from 40 to 52 percent. Treatment success and detection rates, however, are still falling short of global targets due to continued high levels of multi-drug resistant TB (MDR-TB), difficulty in treating HIV/TB co-infected patients, and insufficient follow-up care. Therefore, USG-funded programs are implementing a two-fold approach to move closer to global TB control targets. First, the essential DOTS-based TB management is being expanded to cover approximately 40 percent of Ukraine's population. Second, programs are conducting MDR-TB and TB/HIV co-infection surveys in the Donetsk region to lay a solid foundation for policy dialogue, effective strategies, and treatment protocols.

With USG assistance through the USAID Maternal and Infant Health project, maternal mortality was eliminated, and normal deliveries increased by about 3-4 times in all project sites in FY05. At all project sites, hypothermia among newborns was virtually eliminated (at the various project sites, hypothermia had ranged from 23 to 90 percent of all newborns prior to the provision of USG assistance), and the number of newborn children requiring primary resuscitation decreased 3 times on average. With support from the USG, the Ministry of Health issued a new health directive founded on international, evidence-based principles for inpatient care of mothers and newborns. The project was so successful that the GOU requested that it be rolled-out nationally.

This year the network of organizations contributing to anti-trafficking efforts increased by 35 NGOs to about 60 organizations throughout Ukraine, partly as a result of a USG-funded anti-trafficking project. More than 285 trafficking victims were identified and supported predominately due to NGO intervention. To protect vulnerable children, USG assistance helped the GOU launch a new Orphans and Vulnerable Children project in line with the Hague Convention, which aims to: 1) promote family preservation, 2) facilitate domestic adoption, and 3) establish permanent family type homes and a foster care system. This year 18 regional and local child welfare service providers from five pilot regions were awarded grants to develop a continuum of family-based care in their communities. As a result, local action plans were collaboratively developed by each of the five pilot sites in order to protect vulnerable families, and place homeless children with families in their communities.

In FY 2005, USG assistance helped to more than double the coverage of information and services to high-risk HIV/AIDS target populations from 12 percent to approximately 25 percent. USG programs continue to support adaptation of the WHO/USG Preventing Mother to Child Transmission (PMTCT) Generic Training Package. By the end of 2005 the number of health facilities offering PMTCT had increased by 14; the number of women who had attended PMTCT sites for a new pregnancy was approximately 8,000; and 317 additional doctors and midwives had been trained in Voluntary Counseling and Testing (VCT) service provision. This year, as a result of USG training and assistance, four oblasts agreed to one-year project implementation plans to employ the PMTCT strategy and approach. More local authorities and communities are coming to understand the need to integrate services for HIV-affected families and children into the continuum of services provided to other vulnerable groups. Finally, a more tolerant attitude towards people living with HIV/AIDS is beginning to emerge, partly due to USG efforts which have included hundreds of trainings, informational distributions, media events, and television and radio programs.

The U.S. Government was also the first to start an HIV/AIDS prevention program in the Ukrainian Military. During fiscal years 04 and 05, the Ministry of Defense received $350,000 from the Naval Health Research Center in San Diego to fund prevention efforts and the establishment of four HIV/AIDS counseling/testing centers in Kiev, Odessa, Sevastopol and Lviv. The Embassy's Office of Defense Cooperation views this program as a successful and effective use of funds.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.

Please find below two important indicators in the area of Social Reform and Humanitarian Assistance. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.

Performance Indicator: New HIV infections reported per 100,000. Number of new persons newly identified as HIV seropositive during the calendar year. Source: World Health Organization. Found online: data.euro.who.int/hfadb/.

HIV/AIDS programs are beginning to show some positive results, but they have yet to be introduced nationwide. The Government of Ukraine has barely begun its overall approach to HIV/AIDS. Despite closer public and government attention, HIV/AIDS infections continue to increase. Major efforts will be needed over a multi-year period to combat this disease.

Performance Indicator: Under 5 Mortality. Ratings are based on a scale from 1 to 5, with 5 representing the best score. Source: USAID "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005), drawing from World Bank, World Development Indicators 2004 (2004); UNICEF, Social Monitor 2004 (2004). This ranking is based on 2004 data. Found online: www.usaid.gov/locations/europe_eurasia/country_progress/index.html.

Ukraine's health system continues to suffer from years of budgetary and policy neglect. The Government of Ukraine is increasingly focusing on this problem, and USG-funded activities have demonstrated the way forward. Nonetheless, it will take more time before such efforts bear fruit.

Security, Regional Stability and Law Enforcement

Ukraine has been both a source and a transit country for weapons and destabilizing criminal activity. Since the inauguration of a new government in early 2005, bilateral cooperation on the entire range of non-proliferation issues became substantially stronger. Work continued on elimination of strategic weapons and related infrastructure through the year. USG programs in Ukraine in FY2005 began to focus more attention on other weapons of mass destruction (WMD) threats, such as that from biological and radiological sources. Ukraine and the U.S. signed a Biological Threat Reduction Initiative Agreement (BTRIA) in August, 2005. Meanwhile, the Ukrainian military continued its transformation to a more modern, smaller force while shedding Soviet-era structures and functions. The transformation has been exceptionally evident under the new Minister of Defense, as Ukraine continues to pursue the goal of eventual NATO membership, perhaps in this decade. Ukraine and NATO launched an Intensified Dialogue on Membership Aspirations in 2005. Ukraine continued its role as a contributor of peacekeeping forces in a number of regions. Following upon a campaign promise by President Yushchenko, Ukraine in December 2005 completed the withdrawal of its 1600-person contingent from Iraq but maintained a training headquarters staff presence there. Although Ukraine's nuclear safety record is vastly improved, work continues on dealing with the consequences of the Chernobyl disaster. Efforts to construct a new containment structure to replace the deteriorating sarcophagus at the destroyed Chernobyl reactor took a step forward as tendering began in 2005. The contract award is expected in the spring of 2006. Previous Ukrainian administrations did not place a high emphasis on reforming the law enforcement community or the judiciary; as a result, many vestiges of the Soviet "legal" system remain stubbornly in place. In late 2004, the Orange Revolution changed the underlying dynamic between Ukrainian citizens and their government and created possibilities for strengthening the rule of law in Ukraine. Cooperation with law enforcement agencies increased both on combating specific problems, like trafficking in persons and fighting corruption.

U.S. ASSISTANCE PRIORITIES

In FY 2005, USG security-related assistance worked to dismantle Ukraine's remaining WMD systems and prevent proliferation of these weapons, their delivery systems, and related equipment and expertise to rogue states. USG-funded nuclear safety assistance addressed safety and security issues at nuclear plants throughout Ukraine, and the USG pledged additional funds for the successful reconstruction of a new Chernobyl shelter. In addition, the USG provided significant assistance in enhancing physical security of facilities that store radioactive material and radiological sources. U.S. Defense Department (DoD) continued efforts to eliminate Ukraine's remaining strategic bombers and its WMD infrastructure, and the USG remains committed to the safe and secure elimination of 163 SS-24 loaded missile cases in Pavlohrad. Moreover, DoD committed up to $22 million in assistance to enhance Ukrainian State Border Guards and State Customs Service capabilities to deter, detect and interdict illicit trafficking of WMD and associated materials. DoD also agreed to provide up $15 million in assistance to enhance biosecurity and biosafety throughout Ukraine. The USG helped Ukraine enhance interoperability with NATO forces by providing the Ukrainian Government with $2.976 million in Foreign Military Financing (FMF) and $1.8 million in International Military Education and Training (IMET). Helping Ukraine form a NATO-compatible Joint Rapid Reaction Force and an all-professional Noncommissioned Officers Corps was also a priority. In law enforcement, the USG worked to strengthen Ukraine's institutional capacity to stop human trafficking and to strengthen export controls and border security, and provided technical assistance to the GOU in its efforts to reform law enforcement structures. The USG helped Ukraine establish an effective financial intelligence unit to combat money-laundering, thus permitting the removal of Ukraine from the Financial Action Task Force (FATF) non-cooperating country list and facilitating Ukrainian entry into the Egmont group. The USG also supported Ukraine's efforts to develop a more balanced criminal justice system and move away from the Soviet-era model characterized by a dominant procuracy to a Euro-Atlantic model with an independent judiciary, a strong yet principled prosecution, and an empowered and able defense bar.

PROGRAM PERFORMANCE

During 2004, Ukraine continued to deal with the legacy of its nuclear past by working on eliminating strategic nuclear arms (strategic bombers, air-launched cruise missiles, SS-24 intercontinental ballistic missiles) and WMD infrastructure. In addition to support for these Cooperative Threat Reduction dismantlement activities, the DoD launched new Cooperative Threat Reduction initiatives: the WMD Proliferation Prevention Initiative Program (WMD-PPI), whose Ukraine-Moldova land border and Black/Azov Sea maritime projects are designed to bolster Ukraine's capabilities to prevent proliferation of WMD or related materials across its borders; and the Biological Weapons Proliferation Prevention Program, based on the Biological Threat Reduction Implementation Agreement signed in August 2005, which will allow bilateral/multilateral biosecurity and biosafety cooperation.

The U.S. Department of Energy (DOE) signed the Second Line of Defense Agreement with the Government of Ukraine for installation of radiation detection equipment to minimize illicit trafficking of radioactive and nuclear materials. DOE also signed an agreement with the Ministry of Emergencies of Ukraine to enhance physical security of Ukraine's Radon facilities that store radioactive material and radiological sources. In addition, DOE is also negotiating an agreement with the State Nuclear Regulatory Committee of Ukraine (SNRCU) to enhance security of radiological sources, which are under the control of various other Ukrainian agencies and state enterprises. DOE continues providing assistance for physical security upgrades at oncology clinics, research institutes, and state enterprises for the secure storage of radiological sources. Major assistance accomplishments included helping the Government of Ukraine to consolidate nine radioactive isotope thermo-electro generators as well as completing a major private storage facility in Kiev region. DOE is working with the Kiev Institute of Nuclear Research to convert the existing highly enriched uranium core in the research reactor to a low enriched uranium core. The Department of State's Nonproliferation Disarmament Fund is assisting SNRCU in establishing a state system for registering, controlling, and accounting for radiological sources in Ukraine. DOE is actively working with the International Atomic Energy Agency and the Sevastopol University for Nuclear Energy and Industry for disposition of the highly enriched uranium material. DOE is also assisting Kharkiv Institute for Physics and Technology in developing an alternative sub-critical assembly that would meet the institute's research objectives using low enriched uranium fuel. To help prevent the proliferation of WMD expertise, the USG funded civilian research undertaken by Ukrainian scientists through the multilateral Science and Technology Center of Ukraine (STCU), through the U.S. Civilian Research and Development Foundation (CRDF) and DOE's Initiatives for Proliferation Prevention (IPP). The STCU began to implement a strategic plan to sustain funding through public-private industrial partnerships. Under the IPP Program, several Ukrainian institutes and U.S. companies have established joint collaboration to employ Ukrainian scientists. The USG-funded Export Control and Related Border Security (EXBS) Assistance Program has assisted Ukraine in developing and strengthening its export control system in an overall effort to halt the proliferation of WMD, their delivery systems, and other destabilizing weapons. Through the EXBS Program, the USG has also provided equipment and training for the Border Guard and Customs Service, helping to bolster enforcement and detection capabilities at borders and ports of entry.

Given that now Ukraine's nuclear energy sector generates approximately 50 percent of country's electricity, the USG's nuclear safety program, which supports critical improvements in nuclear safety at all of Ukraine's nuclear power plants, is playing an increasingly important role. Over the past five years, the USG's assistance program has helped Ukraine increase the capacity of its plants by almost twenty percent, while at the same time the number of reportable events has decreased threefold. The USG is continuing to provide nuclear safety assistance, including the improvement of emergency operating instructions and safety analyses. In addition, vital upgrades for sabotage protection are being implemented at the Zaporizhzhya Nuclear Power Plant, thus improving nuclear reactor security. Finally, the Ukraine Nuclear Fuel Qualification Project has successfully completed training of Ukrainian specialists and accomplished a major milestone of installing six fuel test assemblies in Ukraine's South Ukraine Nuclear Power Plant. The USG is the largest single country donor to the multilateral fund for the stabilization of the existing Chernobyl sarcophagus and reconstruction of the new Chernobyl Shelter. The USG pledged an additional $45 million in 2005, bringing its Shelter Fund contribution to $203 million, and played a critical role in rallying support to raise additional needed funds from other donors to ensure successful completion of the Shelter. In addition, the Nuclear Regulatory Commission (NRC) provided support to the SNRCU response center.

USG assistance has contributed to Ukraine's increasing capacity to promote regional stability through its growing involvement in peacekeeping activities. Ukraine was among the largest contributors of troops to Operation Iraqi Freedom (OIF), contributing over 1,600 troops. The Ukrainian military has approximately 1,700 soldiers deployed in 12 peacekeeping missions in Sierra Leone, Kosovo, Lebanon, U.S. Central Command in Florida, and in various United Nations observer groups deployed around the world. In FY 2005, Ukraine used Foreign Military Financing (FMF) funds to continue projects for developing a professional non-commissioned officer (NCO) corps and for improving their defense planning system. Work continued on programs to develop a modern cost-effective simulation training capability for tactical unit staffs and a communication system to achieve the interoperability of Ukraine's Joint Rapid Reaction Forces.

To foster long-term reform of the Ukrainian military education system, the USG provided Ukraine with $1.8 million in International Military Education and Training (IMET) funds to train 66 military and defense-associated personnel. The Regional Defense Counter Terrorism Fellowship Program (CTFP) is a Department of Defense Program that provides education and training to our Ukrainian partners in the war on terror. Ukraine used $17,500 in CTFP funding to train two military counter-terrorism personnel.

The State Department's Bureau of International Narcotics and Law Enforcement program agreement on law enforcement assistance with the GOU was deferred until the new government took office in 2005 so that U.S. and Ukrainian priorities to promote a criminal justice system in Ukraine that meets Euro-Atlantic standards could be harmonized. In cooperation with the Ukrainian Supreme Court, the USG supported country-wide education of judges on the role of an independent judiciary as well as skill training for defense attorneys to start to counter-balance the Soviet legacy of the predominance of the prosecutor. The first Western-based law enforcement class was incorporated into the State Border Guard Service's training centers' curriculum as part of the process of demilitarizing its Border Guard Service and bringing Ukrainian practice into accord with EU norms. USG funds supported advanced investigation and maritime anti-narcotics training courses within Ukrainian structures in order to build a Ukrainian capacity to train its own, increasingly specialized, anti-narcotics law enforcement officers. A Resident Legal Advisor's Office was established at the U.S. Embassy to support the GOU's commitment to draft a reformed Criminal Procedure Code compliant with Council of Europe norms, reduce public corruption by improving the professionalism and accountability of the Office of the General Procuracy (OGP), and bolstering the OGP's ability to prosecute serious crimes, such as trafficking in persons (TIP) and money laundering. In response to the Ministry of Interior's creation of an anti-TIP department, the USG provided $250,000 dollars worth of vehicles, computers, and other technical equipment to jump start the new 500-person department. In addition, the USG facilitated the cooperation of officers from the new department with Southeast European Cooperative Center for Combating Transnational Crime (SECI Center) regional efforts against TIP. Finally, the GOU and USG agreed to dramatically increase out year funding on technical assistance to the law enforcement and criminal justice field to help Ukraine combat corruption and transform its law enforcement and judiciary structures to comport fully with EU norms.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.

Please find below two important indicators in the area of Security, Regional Stability and Law Enforcement. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.

Performance Indicator: Global Trafficking in Persons Report country rankings. Tier 1 countries are those whose governments fully comply with the minimum standards of the Trafficking Victims Protection Act of 2000. Tier 2 countries are those whose governments do not fully comply with the Act's minimum standards but are making significant efforts to bring themselves into compliance with those standards. Tier 3 countries are those countries whose governments do not fully comply with the minimum standards and are not making significant efforts to do so. This ranking is based on 2004 data. Source: U.S. State Department Global Trafficking in Persons Annual Report. Found online: www.state.gov/j/tip/rls/tiprpt/.

Ukraine's treatment of victims of trafficking is improving as are border enforcement efforts. However, the scope of the problem of trafficking remains large.

Performance Indicator: Constitutional, Legislative, and Judicial Framework Rating. Highlights constitutional reform, human rights protections, criminal code reform, judicial independence, the status of ethnic minority rights, guarantees of equality before the law, treatment of suspects and prisoners, and compliance with judicial decisions. (7-point scale: 1 is the highest, 7 is the lowest). This ranking is based on 2004 data. Source: Freedom House, Nations in Transit. Found online: www.freedomhouse.org/research/nattransit.htm.

The Ukrainian Government has welcomed USG assistance to improve the conditions and structure of the judicial system. The Ukrainian Government has focused on making the judiciary more effective and balanced and less subject to corruption. USG efforts complement other donor efforts in the same field, for example EU initiatives that seek to improve Ukraine's long-term eligibility for EU membership.

Click for FY 2005 Funds Budgeted for U.S. Government Assistance to Ukraine [PDF format]