Will parliamentary election bring a new dawn to Kosovo?
February 6, 2025
The last word: Why the best companies pivot
February 9, 2025
America’s retreat from USAID would harm the foundations of democracy in countries once occupied by, or under the influence of, the Soviet Union.
Ever since the Berlin Wall came crashing down more than three decades ago, Central and Eastern Europe has been a laboratory for the sometimes messy but necessary work of building open societies out of authoritarian rubble.
In this grand experiment, few institutions have played as pivotal a role as the United States Agency for International Development (USAID).
From fortifying independent media to bolstering civil society groups, the agency’s assistance accelerated the region’s transformation from single-party states to emerging democracies.
Yet in Washington, there are mutterings about slashing USAID’s budget—or even closing the agency down. Were either to happen, it would be both short-sighted and costly—not least for a region that has begun to prosper, but whose civil institutions often remain worryingly fragile.
From charities to chambers of commerce
USAID’s record in Central and Eastern Europe is substantial. After the revolutions of 1989, when newly installed democratic governments in Poland, Hungary, and Czechoslovakia struggled to build stable civic institutions, USAID stepped in.
It supported the development of new non-governmental organisations (NGOs) that became the bedrock of democratic accountability.
In Poland, for example, the agency funded the Democracy Network (DemNet) initiative in the 1990s, which trained local activists in advocacy and coalition-building. These groups in turn helped foster transparency in local government and eventually shaped national anti-corruption efforts.
Further south, in countries like Romania and Bulgaria, USAID assistance helped reform the judiciary and foster a culture of investigative journalism. Local media organisations received grants to purchase better equipment and training, enabling them to expose wrongdoing among public officials—a vital step in rooting out corruption in post-communist societies.
Meanwhile, budding entrepreneurs found a champion in American development programmes that sponsored business incubators and microfinance projects. In Slovakia, USAID’s SME (small and medium-sized enterprise) initiative offered both capital and managerial know-how to young companies, helping them survive beyond the typical start-up phase and eventually hire more employees.
A bulwark against malign influence
Three decades on, countries that are now members of the European Union no longer receive direct USAID funding.
Further east, however, in Moldova and Ukraine, in the Caucasus and Central Asia, and to the south in the Western Balkans, USAID finances programmes designed to make the all of emerging Europe and Central Asia interconnected, independent, and resistant to malign influences.
Russia’s assertive posture in the region, particularly in energy and media, has led to concerns that the Kremlin is keen to expand its influence by exploiting weak civic structures.
By sustaining local NGOs, training investigative journalists, and underwriting reforms in the judiciary, USAID helps shore up resilience against Russian meddling.
Pulling the plug on funding would risk creating a vacuum that autocratic powers could swiftly fill with their own soft-power overtures.
A modest price for a great return
Defunding USAID may look like a quick budgetary fix to some American lawmakers. Yet measured against the trillions the United States has spent globally on other, failed foreign ventures, the cost of these development programmes has been comparatively low—USAID accounts for just 0.2 per cent on the US federal budget.
This modest investment has brought tangible returns: stable democracies, aligned with Western institutions like NATO and the EU, are far likelier to cooperate on shared security concerns, from terrorism to cyber threats.
They are also likelier to open their markets to American companies, fostering transatlantic trade and boosting the image of the United States among local populations.
And while many of the region’s countries grow wealthier, pockets of genuine need remain. Rural areas across southeastern Europe suffer from weak infrastructure, subpar education, and a dearth of employment opportunities—breeding grounds for disenchantment and radical political views.
USAID programmes aimed at skill-building, community development, and youth empowerment have played a quiet but crucial role in mollifying social discontent.
More than money
In the end, it is not just about the dollars or euros. USAID’s willingness to collaborate closely with local organisations confers legitimacy and offers expertise that is tough to replicate purely through commercial ties or EU structural funds.
The intangible benefits of forging partnerships, transferring knowledge, and reinforcing the region’s bond with the West far outweigh the budget line-items that these programmes require.
If the agency’s coffers run dry, so too might the pipeline of new leaders and watchdogs prepared to defend what remains a delicate democracy in many of these post-communist countries.
A generation ago, Central and Eastern Europe seized a rare chance to break free of totalitarian rule. Those who care about the rest of emerging Europe’s prosperity and democratic vitality should remember that such progress is neither automatic nor guaranteed.
Defunding USAID now would risk bringing a halt to an unfinished revolution—one that remains vital not just to the region, but to the broader project of Western stability and unity.
Photo: USAID.
At Emerging Europe, we use an integrated approach centred around market intelligence to help organisations understand trends and strategically position themselves for success.
Learn how our solutions can help you thrive in the region:
Company and Services Overview | Strategic Advantage.
