USAID Chief's Farewell Chat

Christopher Crowley has headed the United States Agency for International Development's regional mission in Ukraine, Moldova and Belarus for the last six years.  His tour in Kyiv comes to an end in July.  Crowley's 30-year career in international development has included stints in Korea, Syria, Egypt and the Palestinian Territories.  Born in Wilmington, North Carolina in 1944, he joined USAID after spending a year working as an analyst in a Philadelphia bank.  His first posting was to war-torn Vietnam, where he served from 1971 to 1975.  Prior to arriving in Ukraine in 1999, he headed the USAID mission in the Palestinian Territories on the West Bank and Gaza Strip.  Crowley's next post will in Alma Aty heading the USAID's regional mission for Central Asia USAID has a declining annual budget of about $10 billion to support democratic reform worldwide.  Over the last decade, Ukraine has been one of the largest recipients of that aid, with the U.S.  government spending about $2 billion to assist Ukraine since independence. The Post sat down with Crowley in his office June 13. KP: What programs in Ukraine have worked and not worked since you took charge of the mission six years ago?      CC: Programs that have had clear positive outcome include land privatization promoting local self-government, budget reform, civil society development, small- and micro-enterprise support and improving health care.  The agency's attempts in 2001 to help reform the energy sector through the privatization of electricity generating companies were largely unsuccessful.  Attempts to improve corporate governance have had mixed results, since standards today remain very low.  And this is related to another disappointment.  When you look at our democracy and governance portfolio, there is a gap there: the rule of law.  Without fundamental reform of the judiciary, you are not likely to see improved standards of corporate governance and investment.  We have worked on the access to justice side - helping citizens learn what their rights are and find their way through the judicial system, but without an overall reform of the judiciary, you are not going to be able bring out rule of law. There has not previously been the political will to do this, so we have stayed away from it.  The new government says establishing rule of law is a high priority, so the activity pops over to the 'Who knows?' column and we'll see. If there is a serious intention to move forward, USAID stands ready to provide assistance.  We have done a lot of work trying to introduce accounting and auditing standards, but with mixed results.  A lot of people have learned how to be good accountants and they are working in business.  But the government still has not officially adopted international accounting standards, and most companies and state enterprises still maintain two sets of books, one according to international standards and the other for business as usual.  This is going to have to change before investments can be made and laws enforced. There are things going on too with the development of the securities market, non-bank financial institutions and the regulatory environment.  There are many games being played.  We provided assistance to the securities market and continue to support non-bank financial institutions, but it is still not clear who is regulating the regulators at this point, so we don't how that's going to go. KP: Did the work of the agency set the stage for the Orange Revolution? CC: The fundamental reasons for why Ukrainians reacted the way they did last fall were put in place over time.  It's work undertaken by USAID over the part of the natural development of history, I suppose, but it is also due to the fact that there were many organizations and people engaged in activities which led them to consider what is in their – and their country’s – best interests.  There was much speculation in media, in newspaper articles from Russia and Central Asia, claiming that USAID, the National Democratic Institute and the International Republican Institute conspired to foment revolution, but they reflected a misunderstanding of the situation. It was not only elections-related assistance that played a role in what transpired, although it did cast a broad light on the election process and what was going on Election Day.  But that was not what brought people out on the streets.  I believe the work that USAID and others have done – in small and micro-enterprise, land reform, civic society – over the last 10 years cumulatively led up to the events that transpired.  It might not have happened at all, but it did, and I think that a contributing factor was that many people had seen enough progress and benefits to themselves over the years not to allow government to take it all away. I believe that taken as a whole, the work undertaken by USAID over the years, such as hard-fought small business development and land titling, helped create conditions leading up to what we saw take place.  There is no question in my mind that Ukrainians themselves were responsible for the outcome and that they were motivated by what they saw was in their best interests over time. KP: When do you think Ukraine will go the way of the Baltic countries and stop-receiving U.S.-taxpayer funded assistance? CC: I was sitting down in Egypt when the Soviet Union collapsed and the U.S.  government started assistance programs in this part of the world.  I remember reading the comments of some supporting the aid who said that in three, four or five years the programs would end.  The line at the time was ‘democracy will take off’ and ‘capitalism will take root’ and ‘then we’re out of there.’ Well, it’s 2005 now and, of course, anyone in their right minds now knows that this was not possible. This part of the world had a whole different set of challenges, compared to some of the traditional third world areas almost all (USAID development specialists) worked in before arriving here.  Still, there has to be some point when it makes sense to begin phasing out assistance.  That point has been reached in central Eastern Europe will arrive here also. There always is discussion about when the appropriate time has come.  It may not be that all assistance to Ukraine is cut immediately.  There are different kinds of assistance that we'd be looking at.  One is economic assistance, programs focusing on the banking sector, securities market, agriculture sector, small and mid-sized business development.' Next are democracy and governance programs involving media, the legislature, and civil society programs.  Another includes social transition, which include health programs, including HIV prevention, pension reform, and health care reform. There is a discussion underway now about when the appropriate time would be to phase out assistance - not by country, but by sector.  You would presumably have an uneven phase-out period.  Under one scenario, this could happen in 5-6 years, under another in another eight years, or maybe more.... It is an ongoing discussion.  I believe assistance to Ukraine could be phased out within 10 or 15 years' time.  My guess is that the economic growth assistance would go first, then democracy and governance support, followed by health programs. KP: What changes have been made to the U.S.  assistance portfolio during your tenure in Kyiv? CC: I think in 1999 you found what may have been the tailing off of the first generation of USAID activity, which related much more to privatization and macro-economic reform.  Primarily, on the privatization side, USAID during the 1990s was involved in mass-privatization campaigns, with the initial elements of land privatization, as well as [with] the break-up of large collective farms, resulting in the issuance of land share certificates to individual farmers. From then on we began looking at the next steps appropriate for assistance, how to deepen progress made during the first four or five years of assistance.  One of our first steps was to devolve programs programmatically and geographically to the country's eastern oblasts, exposing different areas of the country to assistance efforts. Part of my own interest was to look at the kinds of things that we had been doing, the range concentration in various sectors, and to see where we should begin to focus our future efforts.  Keep in mind that for a number of reasons, largely outside the scope of Ukraine, assistance levels to Ukraine have decreased over the period.  This decline in funding levels led us to concentrate on those areas where we felt we could have the most impact, taking into account where we were in 1999 and 2000, and where we thought we needed to be. USAID assistance to the privatization process was one thing, but the development of small business was another story altogether.  Responding to former President Leonid Kuchma's call for land privatization in 1999, we also decided that this should be an area where we should concentrate our efforts, developing a land-titling program that continues today, helping put more than a million and half land titles in the hands of people. KP: What were your expectations when you arrived in Ukraine and your feelings now as you prepare to depart? CC: I knew very little about Ukraine before I got here and had to refresh my knowledge of geography, having spent so much time in other parts of the world. I didn't know what to expect when I first arrived.  It seemed to be a rather drab place at first, but nothing like people who had been here before had described it. Given the fact that Ukraine was also then at a low point, following the monetary crisis in 1998 and other problems of development, it wasn't clear to me whether I should be optimistic about what my tour was going to be like or not.  I would have to say that, all in all, Ukraine didn't impress me as an exciting place to be a development professional. When I look back now, I can see how far the country has come and how different it is, on the surface and below the surface.  It has been a very rewarding experience and I consider myself fortunate to have witnessed the most rapid-period of change that Ukraine has experienced since independence.