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

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When the Soviet Union's communist empire collapsed in 1989, a mood of euphoria took hold in the West and in Eastern Europe. The West had won the ultimate victory--it had driven a silver stake through the heart of Communism. Its next planned step was to help the nations of Eastern Europe to reconstruct themselves as democratic, free-market states, and full partners in the First World Order. But that, as Janine Wedel reveals in this gripping volume, was before Western governments set their poorly conceived programs in motion. Collision and Collusion tells the bizarre and sometimes scandalous story of Western governments' attempts to aid the former Soviet block. He shows how by mid-decade, Western aid policies had often backfired, effectively discouraging market reforms and exasperating electorates who, remarkably, had voted back in the previously despised Communists. Collision and Collusion is the first book to explain where the Western dollars intended to aid Eastern Europe went, and why they did so little to help. Taking a hard look at the bureaucrats, politicians, and consultants who worked to set up Western economic and political systems in Eastern Europe, the book details the extraordinary costs of institutional ignorance, cultural misunderstanding, and unrealistic expectations.

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108. Between FY 1990 and FY 1993, the U.S. government spent $42 million on the Treasury technical assistance program. As of June 1, 1994, the department had 28 long-term resident advisers in Eastern Europe (interview with Treasury Department official Robert Banque, June 4, 1994). Between FY 1994 and FY 2000, the program received some $126.5 million in additional funding. An estimated 20 advisers were in residence in the region at any given time, according to G. Edwin Smith, III, director of the Treasury’s Office of Technical Assistance (letters of June 9, 2000, and July 10, 2000).

109. Interview with Salvatore Pappalardo, April 13, 1994.

110. Conversations with Wiesław Staszkiewicz (July 29, 1994 and August 2, 1994), Włodzimierz Borodziej (July 28, 1994), and Jacek Głowacki (July 29, 1994) of the Parliament’s Bureau of Research. The Frost Task Force provided similar assistance to parliaments throughout Central and Eastern Europe.

111. Conversations with Wiesław Staszkiewicz, July 29, 1994 and August 1, 1994.

112. Interview with Wiesław Staszkiewicz, June 17, 1998; and conversation with Enie Wesseldijk, executive secretary, International Institute for Democracy, Strasbourg, France, June 15, 1998. For an evaluation of programs assisting parliamentary development in Central and Eastern Europe, see International Institute for Democracy, Parliamentary Development Programmes: Evaluation and Beyond, Conference Report, Berlin, Germany, May 30-31, 1997.

113. Interview with Wiesław Staszkiewicz, June 17, 1998.

114. Ibid.

115. Interview with Salvatore Pappalardo, April 13, 1994.

116. A number of donor and recipient officials, as well as an OECD report on technical assistance, support this view. (OECD, Comparative Assessment of Key Technical Assistance to the Partners in Transition and Four New Independent States of the Former Soviet Union, Paris, France: OECD, 1994, pp. 6-7.)

CHAPTER THREE

    1. Václav Havel, publicity blurb for book jacket, John Keane, Democracy and Civil Society, London, United Kingdom: Verso, 1988.

    2. The definition of “civil society” and its appropriate empirical application has been the subject of much study and debate among scholars. See, for instance, Jean Cohen and Andrew Arato, Civil Society and Political Theory (Cambridge, MA: MIT Press, 1992); Ernest Gellner, Keynote Address, Conference entitled “The Anthropology of Politics in Eastern Europe,” Zaborów, Poland, October 1990; and Conditions of Liberty: Civil Society and its Rivals (New York, NY: Allen Lane/Penguin Press, 1994); John Hall, ed., Civil Society: Theory, History, Comparison (Cambridge, United Kingdom: Blackwell, 1995); John Keane, Democracy and Civil Society (London, United Kingdom: Verso, 1988); Adam B. Seligman, The Idea of Civil Society (Princeton, NJ: Princeton University Press, 1992); Keith Tester, Civil Society (London, United Kingdom: Routledge, 1992).

    3. For insightful analysis of American democracy promotion abroad, see Thomas Carothers, Aiding Democracy Abroad: The Learning Curve, Washington, D.C.: Carnegie Endowment for International Peace, 1999.

    4. These figures consist of funding to Poland, Hungary, Czechoslovakia, Romania, Bulgaria, and Albania, as well as to regional projects. (U.S. Department of State, “U.S. Assistance for Central and East Europe: Obligations FY 1990, 1991,” SEED Act Implementation Report: Fiscal Year 1991, Washington, D.C.: U.S. Department of State, January 31, 1992, p. 71.)

    5. U.S. Department of State, SEED Act Implementation Report: Fiscal Year 1999, Washington, D.C.: U.S. Department of State, March 2000, tables.

    6. The average value of the ECU during 1994 was approximately 1.1886. (See International Financial Statistics Yearbook 1999, Washington, D.C.: International Monetary Fund, 1999, p. 925.)

    7. For further information, see Krzysztof J. Ners and Ingrid T. Buxell, Assistance to Transition Survey 1995, Warsaw, Poland: Institute for EastWest Studies, Pecat, 1995, pp. 81-84.

    8. The average value of the ECU during 1991-1997 was approximately 1.2305. (See International Financial Statistics Yearbook 1999, Washington, D.C.: International Monetary Fund, 1999, p. 925.)

    9. Evaluation Unit of Common Service for External Relations of the European Commission, “Table 2: Phare Programmes in Favor of Civil Society Development 1991-97,” Evaluation of the Phare Partnership Programme: Final Report, prepared by Local and Regional Development Planning for the Evaluation Unit of Common Service for External Relations of the European Commission, November 1998, pp. 31-32.

  10. U.S. Department of State, SEED Act Implementation Report, Fiscal Year 1999, Washington, D.C.: U.S. Department of State, March 2000, tables. This figure consists of funding to Poland, Hungary, Czechoslovakia, Romania, Bulgaria, and Albania. See appendix 1, table 3.

  11. U.S. Department of State, U.S. Government Assistance to and Cooperative Activities with the New Independent States of the Former Soviet Union, FY 1999 Annual Report, Washington, D.C.: U.S. Department of State, prepared by the Office of the Coordinator of U.S. Assistance to the NIS, January 2000, tables.

  12. The program focuses on the following eight areas: (1) parliamentary practice and procedures; (2) transparency of public administration and management; (3) development of NGOs and representatives structures; (4) independent media: (5) civic education; (6) promoting and monitoring human rights; (7) civilian monitoring of security structures; and (8) minority rights. The category of democracy promotion excludes funding for education and training, administrative reform, and social development and employment. (ISA Consult, Final Report: Evaluation of PHARE and TACIS Democracy Programme [1992-1997], Prepared by ISA Consult, European Institute at Sussex University, and GJW Europe, November 1997, pp. 10-11.)

  13. Kevin F. F. Quigley, For Democracy’s Sake: Foundations and Democracy Assistance in Central Europe, Washington, D.C.: Woodrow Wilson Center Press, 1997, p. 1 and appendix, table 1.

  14. The 24 foundations in nearly each nation of the former Soviet world are usually called either the Soros Foundation or the Open Society Institute, although sometimes a different name is used, such as the Stefan Batory Foundation in Poland and the International Renaissance Foundation in Ukraine. (Kim Lane Scheppele, “The Soros Empire,” American and German Cultural Policies in Eastern Europe: Assessing Developments in the 1990s, Washington, D.C.: American Institute for Contemporary German Studies, October 1999, pp. 28-29.) Soros network programs, which are directed from the Open Society Institutes (OSI) either in New York or Budapest, sponsor activities on specific topics such as higher education or media. With regard to short-term initiatives, some notable enterprises have consisted of the creation of the Central European University (CEU), currently based primarily in Budapest and Warsaw, and the International Science Foundation set up to provide grants to Russian scientists when state subsidies crumbled. (Ibid., pp. 30-34.)

For detailed information about the history, operations, and style of Soros’s philanthropy in Central and Eastern Europe and the former Soviet Union, see Ibid., pp. 27-39; and Kevin F. F. Quigley, For Democracy’s Sake: Foundations and Democracy Assistance in Central Europe, Washington, D.C.: Woodrow Wilson Center Press, 1997, chapter 7: “George Soros: Leader of the Band,” pp. 87-102.

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