Janine Wedel - Collision and Collusion - The Strange Case of Western Aid to Eastern Europe

Further, the degree to which Central European NGOs conducted public outreach also changed somewhat. Wygnański has noted that, “at the beginning people were very much in need since social policy was such a disaster. Now more and more associations and foundations are being organized to help or support others.”101 An example of this is Polish Humanitarian Action, which sent convoys of relief supplies to war-torn former Yugoslavia and Chechnya. Although the organizing principle of such groups largely remained abiding relationships, people also had more access to, and were more trusting of, information provided by the media, independently of their personal contacts. The Polish media provided much information about NGOs: From 1993 to 1999, more than 19,000 articles on the subject appeared in the press. Polish Humanitarian Action, for example, received considerable attention. Wygnański relates that now, “They [Polish Humanitarian Action] don’t have to look for people; people look for them.”102

An important change in the aid process over time was the ways in which Western aid-funded organizations changed the rules of the game by introducing new processes and procedures. Jay Austin, a senior attorney and co-director of the Environmental Program for Central and Eastern Europe at the Washington-based Environmental Law Institute, with support from USAID and American foundations, worked with environmental and legal organizations in Central and Eastern Europe. “By coming in with our own set of rules,” he notes, “we’re in essence elevating the set of people that have skills appropriate to those goals, even if those aren’t the right goals.… You create a process. Elevating a class of English-speaking people who can absorb enough buzzwords from an RFP [Request for Proposals] in order to put together something that looks like a Western budget may or may not be the kind of people that we’d like to most encourage in the environmental sector.” In subtly changing the rules, donors also changed the politics.103

Aid profoundly shaped the kinds of standards that were set for management, accountability, disbursing monies, and transparency. By the mid-1990s, many NGOs were publishing their findings and their sources of funding. The Polish FIP even ran a campaign in the summer of 1998 under the slogan “Be transparent: publish an annual report,” to encourage NGOs to disclose their financial and program activities.104

Aid-funded exchange and training eventually played an important and positive role in setting standards of transparency and teaching management skills. Aid offered many training opportunities, which gave Central European NGOs exposure that they could use on their own terms. Even if the source of funds was or became local government, many NGO leaders and participants were trained under Western funding.

People-to-people contact was especially important. Part of the operations of many Western NGOs involved long-term, ongoing relationships and intensive exchange over a host of issues. Unlike the short-term, fly-in, fly-out consultants bearing advice, this continuous people-to-people exchange appears to have had a significant cumulative impact on the operations and positive work of NGOs.

Another important change was that donors, through their funding decisions, in time encouraged, sometimes successfully, collaboration among groups and governments in the East. The Regional Environmental Center and the Environmental Partnership developed considerable cooperative networks and projects in the East under the eye of Western donors.105 The Soros-created Stefan Batory Foundation funded Polish NGOs to work together with Central European, Balkan, Ukrainian, Russian, Baltic, and Central Asian NGOs on projects ranging from ecology and cultural events to the development of special education programs and the training of local government officials.106 And the United States, Poland, and Ukraine launched a trilateral initiative to facilitate cooperation between Poland and Ukraine, especially the sharing of expertise acquired in Poland’s reform experience with its eastern neighbor.107

In Central Europe, as the new century approached, the days of simple acceptance or simple rejection of “the West” had long faded. Citizens actively debated the desired place of Western models. Aid-funded training provided to NGOs had been organized around American values, even when “training the trainers” was conducted by Central Europeans (who often had been trained by Americans). Much of the language used in conjunction with nonprofit organizations was American, even in cases in which Central European words would have sufficed. For example, the Polish NGO community spoke about “wolontariusze” (volunteers), while an indigenous word, ochotnicy, could have served just as well. By 1998, Polish NGOs had spurned the idea that they should simply adopt Western practices and vocabularies and had begun to discuss just how they should fit American NGO designs into the Polish context. NGOs were, as Wygnański relates, engaged in “debate about how to build the NGO sector in Poland and how to find language and symbols for the sector in the Polish framework.”108 “The whole question,” he says, “is whether there has been a transfer of knowledge and skills. The first challenge is whether we can survive on our own without Western funding. The second is if we can be helpful in transferring our experiences and be used as a bridging vehicle between East and West.”109

What would have been the alternative to the early years of donor misadventure? The assumption often underlying this question, common in the donor community, was that there were no alternatives, that any alternatives were undesirable or untenable, or that, in any event, one had to choose just a few partners. This assumption was used to justify the donors’ concentration on a few elite groups and players. But there almost always were alternatives to the particular elite groups and brokers who had been especially adept at cultivating Western contacts and partners and who had received the bulk of the rewards. These alternatives—other individuals and groups—were often no less, and sometimes even more, talented than those that had been selected. The problem was not that donors had selected the wrong people, but that the funding of almost any group affected internal politics, the intricacies of which outsiders usually did not comprehend.

Finding the less vocal people was not easy. Given the prior isolation of donors and recipients, it was a process that had to take time. Still, the challenge was in enlisting the expertise of people sufficiently intuitive, informed, and committed to donor efforts in the new environment and in designing aid to foster these efforts. Nowhere would this be the case more than in Russia—and nowhere with more dire consequences.

CHAPTER FOUR

A Few Good Reformers: The Chubais Clan, Harvard, and “Economic” Aid*

The story … begins … when an idealistic, but pragmatic “St. Petersburg mafia” of young economists led by Mr. [Anatoly] Chubais … infiltrated the power structure in Moscow.… It is the story of how a modest amount of funding from the United States Agency for International Development enabled a handful of bright kids from Harvard and a few dozen middle-aged pros from Wall Street to help the Russian privatization agency begin to build the regulatory framework and trading infrastructure necessary to develop the new securities market.

—Briefing paper prepared for USAID by the “Harvard Project,” the chief conduit of U.S. economic aid to Russia1

THE DISSOLUTION OF THE SOVIET UNION in December 1991 and the end of the Cold War paved the way for the aid story to move east. The West began a repeat performance of its efforts in Central and Eastern Europe: International lending institutions and the foreign aid community pressed for economic reform and the privatization of state-owned resources; donors promised billions of dollars in aid to the former Soviet republics. Many aid programs set up in Central and Eastern Europe were transported to Russia and the other former republics; a host of Western consultants moved with them. By 1994, aid to Russia was in full swing.2