Two remarkable events stand out. First, there was the historic invitation, extended at the Prague NATO Summit in November, to seven countries (Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia) whose territory previously had formed part of the Warsaw Pact to become members. After the parliaments of the current members have taken the necessary steps to ratify the enlargement, the seven will take their seats as full-fledged members, alongside the pre-1989 NATO countries and the three new, former communist countries that joined in 1999 -- the Czech Republic, Hungary, and Poland. Second, at the European Union's December Summit in Copenhagen, eight SEED-recipient countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia) were formally invited to join the EU and now are expected to achieve full membership in 2004. In addition, the EU promised Bulgaria and Romania consideration for entry in 2007, if they continue to make the necessary reforms.

The enlargement of NATO and the EU to include most of the formerly communist countries of Central and Eastern Europe represents a giant step toward fulfilling the vision of the United States through the past three Administrations of a Europe whole, free, and at peace. Although many difficult challenges remain, especially in Southeastern Europe, an important corner has been turned, and the road to further progress is clearly marked. Success always has many fathers, and the positive developments in Central and Eastern Europe are no exception. Nevertheless, the government and people of the United States have every reason to be proud of the important part they have played through the SEED Act in inspiring and contributing materially to that success.

As bilateral SEED programs have phased out in the eight "graduate" countries (i.e., the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia), the continuing needs of SEED recipients in Southeastern Europe have been thrown into even sharper relief. The program's current focus therefore is on the four states arising from former Yugoslavia (except for Slovenia) and Kosovo, as well as Albania, Bulgaria, and Romania. With the diminishing SEED resources available, we will continue to pursue our goals for these countries and the region of peace, stability, integration into the rest of Europe, and the emergence of market democracies that support the United States in fight against global terrorism. Within those broad goals, our strategic priorities are to promote the integration of the Southeastern European states into NATO and the European Union, strongly encourage and support European efforts to lead that process, create stability so that the international military presence can be reduced and ultimately withdrawn, fight global terrorism and organized crime in the region, and promote conditions that support private-sector-led economic growth.

Turning to developments in the SEED countries during Fiscal Year 2002, four of the five states arising from the dissolution of the former Yugoslavia -- Bosnia and Herzegovina, Croatia, Macedonia, and Serbia-Montenegro, as well as Kosovo -- experienced steady, if at times slow progress in their efforts to achieve democratic and free market reforms. All are still struggling in the task of building democratic institutions and to overcome the effects of their communist past, the destruction and dislocations of the Balkan wars of the 1990s and their aftermath, inter-ethnic tensions, and poverty. The good news is that all now have democratically elected governments and are learning the difficult lessons of democratic governance. All seek eventual membership in Euro-Atlantic security and economic organizations and have a growing understanding of what will be required for them to join.

The SEED program has played an essential role in this turn of events. First of all, by its very existence and continued presence in the region, SEED demonstrates United States commitment to the successful development of the area, and the other countries covered by the SEED Act. Its importance as a symbol of U.S. engagement, and the support that that practical involvement continues to leverage from other donors, is difficult to overestimate. On the practical level, SEED assistance zeroes in on the areas that largely will determine the success or failure of these countries' democratic transitions -- better laws and more effective judiciaries, reduced crime and corruption, effective programs against trafficking in humans and support for the victims, healthier inter-ethnic relations between majority and minority populations, market economies that work, free and vigorous media, and vibrant civil societies characterized by energetic non-governmental organizations, to name only a few. The State Department counts on the U.S. Agency for International Development, and numerous other U.S. Government departments and agencies, for the implementation of SEED programs, as well as for their technical expertise.

To summarize very briefly and selectively, SEED support in Fiscal Year 2002 helped Albania move forward in key areas and contributed to the consolidation of democracy and market reforms in Bulgaria and Romania. Peace and stability were strengthened in Bosnia, Kosovo, and Macedonia. Although Slovakia was no longer a recipient of bilateral SEED assistance, SEED regional programs contributed importantly to the country's successful elections, by backing get-out-the-vote and voter education campaigns in particular and civil society organizations in general. The three Baltic States, also "graduates" from bilateral SEED assistance, also benefited from a variety of regional programs to strengthen the rule of law, civil society, the environment, inter-ethnic relations, and anti-tuberculosis and HIV/AIDS activities, as well as to foster regional cooperation. In all eight of the "graduate" countries, the Embassy Democracy Commissions had modest funding for small grants programs to strengthen civil society through support for non-governmental organizations. SEED regional funds have supported such important multi-country initiatives as those of the Stability Pact and Southern European Cooperative Initiative (SECI). The report that follows spells out how SEED funds were used and what was achieved in all 15 SEED-eligible countries and Kosovo.

SEED unquestionably has played an important role in the dramatic progress that has been achieved in Central and Eastern Europe since 1989. Although many problems remain and the desire for U.S. support and an American presence in the area has not abated, we are starting to plan for additional "graduations." As the amount of SEED funds available and the area in which our bilateral programs are active continue to shrink, the Congress, the Administration, and indeed the American people can take satisfaction in the fact that this assistance program is doing what it set out to do. With several more years of a reasonable level of funding, one should be able to say that it has been a job well done.

Thomas C. Adams
Acting Coordinator of U.S.
Assistance to Europe and Eurasia