Foreign Assistance:

International Efforts to Aid Russia's Transition Have Had Mixed Results

GAO-01-8: Published: Nov 1, 2000. Publicly Released: Nov 1, 2000.

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Harold J. Johnson, Jr
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Since the breakup of the Soviet Union in 1991, organizations and donors have provided Russia with tens of billions of dollars in economic assistance to helping it transition to a market economy within a democratic state. This transition presents opportunities and challenges to the Russians and to those providing economic assistance. This report focuses on the assistance given to Russia by the International Monetary Fund, the World Bank's International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development, the 1992 Freedom Support Act, and the European Union's Technical Assistance to the Commonwealth of Independent States program. GAO found that the success of the assistance programs has been mixed. Although there have been several individual successes, such as small business development, GAO's interviews with the financial institutions revealed that overall program goals are not being met. GAO identified three obstacles toward attaining program objectives: (1) difficult conditions in Russia, (2) limitations in how programs were designed and implemented, and (3) the interdependent nature of Russia's transition needs. The financial institutions and donors, along with the Russian government, are reevaluating the design of their programs. GAO also notes several lessons learned that can improve the future success of these programs.

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