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   TACIS  (Technical  Assistance to the Commonwealth of  Independent  States
   and Georgia) is the European Community's particular effort to support the
   ongoing  process of economic reform and development in the 11  states  of
   the CIS and Georgia. It is the world's largest aid programme of its kind,
   with  initial funding in 1991 of ECU 400 million, and a further  ECU  450
   million committed in 1992.
   The  objective of the programme is to help individual states  to  develop
   effectively-functioning  market economies based on private ownership  and
   initiative,  and to encourage the development of  pluralistic  democratic
   TACIS  funding provides advice, know-how and practical experience.  Where
   possible,  programme effectiveness is maximised by combining  actions  in
   various  sectors. Recipient states are closely involved in the  decision-
   making and management of TACIS programmes for their own country.
   Recipient  States  under the TACIS programme are the 11  members  of  the
   Commonwealth of Independent States and Georgia:
    - Armenia
    - Azerbaijan
    - Belarus
    - Georgia
    - Kazakhstan
    - Kyrgystan
    - Moldova
    - Russia
    - Tajikistan
    - Turkmenistan
    - Ukraine
    - Uzbekistan
   The  TACIS  programme  was established after a meeting  of  the  European
   Council in December 1990. EC Member States agreed to help the authorities
   of  the former Soviet Union to bring about economic reform and  recovery,
   as well as a speedy integration into the world economy .
   On  15  July,  1991, Regulation (EEC, EURATOM)  No.2157/91  was  adopted,
   providing the legal basis for the TACIS Programme.
   Initial  Community funding approved for the 1991 financial year  was  ECU
   400 million.
   An  Indicative Programme defining the priority areas for  assistance  was
   approved  by the Member States in July and then signed by  EC  Commission
   Vice-President Andriessen and USSR Ambassador Voronin. The five  priority
   sectors were:
    - training
    - energy
    - transport
    - financial services
    - food distribution
   In  October and November 1991, Member States approved proposals  for  the
   five sectoral programmes, and the Commisssion took financing decsions  on
   these programmes.
   *     The  TACIS  Programme aims, through technical  assistance  and  the
         transfer  of  know-how,  to  help  create  the  infrastructure   to
         facilitate the development of a market economy and a civil  society
         in the CIS and Georgia.
   *     Funding is primarily available for
         - policy advice
         - institution building
         - design of legal or regulatory frameworks
         - training
   *     Financing may also be provided for equipment essential to the above
         tasks  (training materials, computers, etc). Capital goods are  not
         financed by TACIS.
   *     TACIS funds are given in grant form. They are not reimbursable.
   *     Isolated  single activities are not suitable for TACIS  programmes.
         Only   projects  making  a  structural  contribution  to   economic
         development and the promotion of a market economy are eligible  for
   *     TACIS  is a decentralised programme. Recipient states  are  closely
         involved in the preparation and execution of programme activities.
   The dissolution of the former Soviet Union necessitated an adjustment  to
   the  original  implementation mechanisms. During a  meeting  between  the
   Commission and the CIS states and Georgia in Moscow in February 1992  the
   following principles governing cooperation were agreed:
   *     The  Independent  States to implement the 1991 TACIS  programme  as
         originally agreed with authorities of the former Soviet Union.
   *     National  Coordinators for TACIS activity to be appointed  by  each
   *     Coordinating  Units  to be established in each recipient  State  as
         soon as possible.
   *     1992 TACIS Programme funds to be distributed based on an  objective
         and mutually agreed formula involving GNP, population, the state of
         reform and the ability to absorb assistance.
   *     Indicative Programmes focusing on priority sectors to be negotiated
         with each State.
         Within  the  Commission,  the  Directorate  General  for   External
         Relations   (DG  I)  is  responsible  for  the  implementation   of
         assistance  programmes,  and  for  the  coordination  of  technical
         assistance  efforts  undertaken  by the  Community  and  individual
         member States. The Commission is also represented in Moscow by  its
         Permanent   Delegation,  which  includes  a  Technical   Assistance
         A  Management  Committee  of  the  Member  States,  chaired  by   a
         representative of the Commission, examines and gives an opinion  on
         Financing Proposals and draft decisions.
         The  Commission  is  responsible  for  the  selection  of  projects
         financed by the TACIS Programme.
         The TACIS Unit within DG 1 undertakes the day-to-day running of the
         TACIS   Programme   in  Brussels.  It  is   responsible   for   the
         identification of projects suitable for assistance and for drafting
         Action Programmes in cooperation with the recipient States.
         The  Action Programmes define overall sector strategy and  identify
         the main actions to be supported. Action Programmes can be prepared
         on a sectoral, regional, and/or country-by-country basis.
         When  ready for implementation, action programmes are submitted  as
         Financing Proposals to the management committee and, if a  positive
         opinion  is given, signed as Financing Memoranda by the  Commission
         and each recipient State.
         A  National Coordinator is nominated by each Independent  State  to
         act  as an official interlocutor, annually  identifying  priorities
         for   infrastructural  assistance  and  presenting  them  to,   and
         consulting with, the Commission.
         National Coordinating Units have been established in each CIS State
         and in Georgia. The main role of the National Coordinating Units is
         the day-to-day management of the TACIS Programme in the  respective
         CIS  country  or Georgia. Originally the Programme  was  negotiated
         with  the all-Union government and coordinated by the  Coordinating
         Unit  in  Moscow, established for this purpose.  This Unit  is  now
         responsible for the Russian programme only.
    *    As far as possible, only integrated programmes for the  development
         of  specific  areas or regions are considered  suitable  for  TACIS
    *    Projects  must  be reflected within the Indicative  Programmes  and
         subsequent Action Programmes.
    *    However, Action Programmes may be considered on the basis of  ideas
         and  proposals  submitted within the framework  of  the  Indicative
         Programmes  by potential final recipients. Important  criteria  for
         inclusion are:
              - adherence to the text and spirit of the
                Indicative Programme.
              - integration and linkage of actions.
              - impact on the economic reform process.
              - transfer of market-related skills and know-how
              - ability to reduce transition-related social
              - multiplier capability
   Proposals  must  be  submitted  to  the  relevant  Coordinating  Unit  by
   applicants from CIS countries or Georgia. Applicants can be:
    - state or local government institutions
    - cooperative associations
    - a state or private enterprise
    - an educational or training institution
    - any qualified autonomous operator.
   Applicants therefore must be potential final recipients, not EC  economic
   operators  or  consultants (although the latter may of course  work  with
   final recipients).
   EC  or  Member State operators, consultants or  appropriate  institutions
   will normally be involved in the implementation of projects.
   The  lack of infrastructure and experience for the absorption of  foreign
   assistance   in  the  CIS  creates  unique  difficulties.  However,   the
   achievement  of  a  market economy in the  Newly  Independent  States  is
   impossible  without  the  active  participation  of  economic  operators,
   especially from the private sector. The Commission fully intends to  draw
   upon  the  expertise of EC economic operators within the context  of  the
   TACIS Programme.
   It is the function of the TACIS Programme to stimulate progress towards a
   market economy and a democratic society. In this way TACIS contributes to
   the  building  up of an economic environment  sufficiently  developed  to
   prove attractive to EC economic operators.
   The  role  of EC economic operators is not to submit  individual  project
   proposals,  but  to implement actions already defined and chosen  by  the
   Commission in close cooperation with the beneficiary states.
   To  demonstrate  interest,  EC operators can register  with  the  Central
   Consultancy Register of the Commission. This gives them the chance to  be
   considered  in  the  awarding  of  direct  contracts  or  for  restricted
                         TACIS 1991  -  FOCAL SECTORS
   The first Technical Assistance programme in 1991 focused on five sectors:
         - Energy                           ECU 115.0 million
         - Training                         ECU 103.0 million
         - Food distribution                ECU  74.0 million
         - Transport                        ECU  45.8 million
         - Financial services               ECU  37.5 million
   In addition, the Baltic States received ECU 15.0 million.
   The former Soviet Union is an important energy producer, but this  sector
   now  faces  serious  problems  relating to  the  safety  of  its  nuclear
   reactors,  the  future role of nuclear power,  and  considerable  wastage
   within  the  industry.  It is estimated that one third  of  total  energy
   production  is  wasted.  The situation is  compounded  by  declining  oil
   production and an increase in energy-related environmental problems.
   A  major  factor  in the waste of available  energy  is  inefficiency  in
   production,   transmission   and  utilisation  techniques.   Reform   and
   modernisation of the industry is crucial.
   Accordingly, in 1991, TACIS committed a total of ECU 115.0 million to the
   energy sector, broken down as follows:
   *     Nuclear Safety:               ECU 53.0 million
   Funds  were allocated for the safety improvement of the region's  nuclear
   reactors;  for training programmes; and for the strengthening of  nuclear
   safety regulation.
   *     Energy Saving:                ECU 20.0 million
   Ecu  10.0 million to finance several energy centres, which will form  the
   basis of a CIS-wide network.
   ECU 10.0 million to fund trial energy-saving projects.
   *     Oil, Gas and Electicity:      ECU 34.0 million
   Financing for the improvement of oil and gas production, improved gas and
   electricity network utilisation, the upgrading of thermal power stations,
   and the market-oriented restructuring of industry organisations.
   The  isolation  of the former Soviet Union has resulted in  ignorance  of
   market  mechanisms  and modern economics among  enterprise  managers  and
   public  administrators.  Business  skills are lacking;  there  is  little
   understanding  of  essential economic concepts  and  techniques.  Policy-
   makers  faced with the enormous task of economic restructuring  lack  the
   knowledge to carry out their role effectively.
   Recognising  the urgent need for training as part of the reform  process,
   TACIS committed ECU 103.0 million to this sector in its 1991 Programme.
   *     Management:                   ECU 54.0 million
   Funds  for the improvement of management institutions, the  restructuring
   of enterprises and regional economies, and the development of  individual
   managers' capabilities.
   *     Economics:                    ECU 25.0 million
   Support  for economic and legislative reform; training and  education  in
   market   economics;   economic   research   and    information-gathering;
   institution building.
   *     Statistics:                   ECU 8.0 million
   Advisory  services for statistics offices; training of  statisticians  in
   statistical techniques of a market economy.
   *     Customs:                      ECU 7.0 million
   Training  of  customs  officers; reorganisation  and  computerisation  of
   customs offices; drafting of new customs legislation.
   *     Information                   ECU 1.0 million
   To  provide  information  on  opportunities  under  the  EC's   Technical
   Assistance Programme, the Community's aims and activities, and  relations
   with the CIS.
   *     Translation and Terminology   ECU 3.0 million
   For  the  development  of a  Russian/Community  terminology  system,  the
   translation of Community legislation and the training of translators  and
   The  lack  of physical and management infrastructures  have  resulted  in
   serious losses at nearly every link in the food distribution  chain.  The
   TACIS  Programme in this sector is aimed at reducing post-harvest  losses
   of  perishable  foodstuffs and building an  effective  food  distribution
   The  programme  strategy is structured to address immediate  needs  while
   helping in the longer-term transition to a free-market private enterprise
   system.  Projects  are spread across a number of states, but there  is  a
   notable  concentration  on  problems in big cities  like  Moscow  and  St
   ECU 74.0 million was earmarked for assistance in this sector.
   TACIS/page 8
   This sector is hampered by severe institutional and technical  efficiency
   problems, which combine to slow down the market-oriented restructuring of
   the  Independent  States  in  general  and  the  transport  industry   in
   particular. Decentralisation has led to a lack of coordination  resulting
   in bottlenecks, lost shipments etc.
   The  objective of the TACIS 91 Programme in this sector was to assist  in
   the more efficient use of existing capacity, through:
    - removal of bottlenecks
    - promotion of multi-modal traffic
    - organisation of market-oriented transport companies
    - safety standard improvements
   ECU 45.8 million was allocated for these activities.
   For decades, most economic functions in the former USSR were carried  out
   by  central  planning authorities.There is now a great need to  fill  the
   vacuum  and  promote  a sound structure  for  modern  financial  services
   performed by an independent financial sector.
   The  TACIS  91 programme allocated ECU 37.5 million for  reform  in  this
   *     Central Banking               ECU 4.0 million
   *     Other Banking Activities      ECU 12.1 million
   *     Bank training                 ECU 9.0 million
   *     Financial Markets             ECU 2.7 million
   *     Insurance                     ECU 3.7 million
   *     Accountancy and Auditing      ECU 3.5 million
   Political events in the Baltic Republics and the coup d'etat in the  USSR
   caused  delays to the 1991 TACIS Programme. However, Community funds  are
   now  fully committed. From over 1200 project proposals received by  early
   October, 350 have been selected. Most of these projects have now  entered
   the implementation stage.
   Some examples:
    *    A   project   providing  policy  makers  with  advice   on   reform
         implementation has been launched, covering all 12 newly independent
         states. With a budget of ECU 9 million, this is the largest  single
         project within the 91 Programme.
    *    The biggest Russian Bank, the Savings Bank, is being provided  with
         expert  advice  to help it restructure into a modern  savings  bank
         dealing with private clients, SMEs and local authorities.
    *    TACIS is co-financing, with the EBRD, an International Finance  and
         Banking School to provide specialised vocational training programme
         for up to 4000 trainees per year.
    *    Several projects in the transport sector:
              - reorganisation of the port of St Petersburg
              - modernisation of the Russian air traffic control system
              - renovation of the St Petersburg-Moscow railway
                          TACIS 1992 -  FOCAL SECTORS
   Indicative  Programmes for 1992 have been agreed and signed with each  of
   the  CIS  countries and Georgia. These form the  framework  for  specific
   sectors  and  projects  to  be identified  within  each  State's  "Action
   Programme".  These programmes involve activity sometimes lasting  several
   The 1992 Programme builds on the 1991 programme, but aims to increase the
   efficiency  of  its  Technical Assistance through  sectoral  or  regional
   The focal sectors for cooperation are:
    - Human Resources
    - Food Production and Distribution
    - Networks: Energy, Transport, Telecommunications
    - Enterprise Support Services
    - Nuclear Safety
   In  addition, some funding has been set aside for a regional  Inter-State
   programme related to:
    -    policy  advice  to  governments,  parliaments  and  other  relevant
         institutions  on matters concerning inter-state economic  relations
         and money, tax reform, budgetary procedures and techniques.
    -    programmes  of common interest to several states,  e.g.  ecological
         projects,    joint    projects    in    energy,    transport     or
   Technical  Assistance in this field will support sustainable  adaptations
   to  vocational, professional and tertiary training. Policy guidance  will
   be  made available for issues relating to legislative  and  institutional
   reform and to transitional employment and budgetary upheavals.
   There  will be assistance for retraining for the unemployed;  educational
   institutions will receive guidance in adjusting academic and course  work
   to  meet  new  labour  requirements. Advisory  services  related  to  job
   creation, social security, health and education are also envisaged.
   TACIS  funding  in  this sector will  support  institutional  and  policy
   reform,   and   assistance  programmes  in   several   related   sectors:
   agricultural production, agro-industry, storage, transport, the wholesale
   market and the retail area.
   An   integrated  Master  Plan  will  chart  optimal  future   agriculture
   activities in various countries. Opportunities for increased productivity
   will   be  emphasised,  though  not  at  the  expense  of   environmental
   Measures  to  improve  management  systems  will  be  included,  as  will
   organisational, legal and regulatory frameworks in energy, transport  and
   Expert  assistance  will be provided for the design  of  energy  policies
   which will combine production with efficiency. Support will be given  for
   the restructuring and modernisation of major energy users.
   Advisory   programmes   will  contribute  to  improvements   in   airport
   management, air traffic control training, public transport reorganisation
   and port management.
   Actions in this sector will include:
    -    the  development of policy, legal and institutional  mechanisms  to
         support   the  creation  and  growth  of  small  and   medium-sized
    -    creation or restructuring of financial institutions.
    -    privatisation.
    -    advice for the conversion of the defence industry.
    -    development of policies to attract and regulate foreign investment.
   There  is  serious  concern about the design and  conditions  of  nuclear
   installations  operating  in the CIS, and an  acceptance  that  immediate
   action is required to improve the situation.
   Projects  will aim to improve operating safety and strengthen  regulatory
   powers of the authorities involved, through
    -    improved knowledge of specific safety factors
    -    improved operational safety of some reactors
    -    technical and analytical studies on possible improvements
    -    identification  of safety problems associated with all  aspects  of
         the nuclear fuel cycle
    -    promotion  of a common European approach to regulatory and  control
         aspects of nuclear safety
   ECU 100.0 million has been earmarked for this activity.
   Moreover,  the Community, through TACIS, will cooperate with  the  United
   States,  Japan  and the Russian Federation to sponsor  the  International
   Science  and Technology Centre (ISTC). The Centre will act as a  clearing
   house  for  redirecting former Soviet military scientists  and  engineers
   away from such activities towards those with peaceful objectives.
   TACIS has dedicated ECU 20.0 million to the co-financing of the ISTC.
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