For over a decade, the United States Agency for International Development (USAID) assisted the efforts of the Government and people of Hungary in its transformation to a democratic society, market-oriented and private sector-led economy integrated into key international systems and Western institutions.

Background

U.S. assistance to Hungary was authorized in the Support for Eastern European Democracy (SEED) Act of 1989 to mount a rapid response to the new situation in Central and Eastern Europe. Initially, USAID worked in collaboration with other U.S. agencies to provide assistance to Hungary and other countries in the region from Washington. After the rush of delivery of initial assistance, an office was opened in Hungary in 1991 to respond to country-specific circumstances.

Bilateral Assistance (1991-1998)

Between 1991-1998, USAID provided over $240 million in direct assistance to Hungary with a focus on three areas:

1. Economic restructuring programs aimed at privatization, financial sector reform and energy efficiency.
2. Democratic governance programs aimed at establishing democratic institutions, supporting a more active and responsive civil society, and assisting local governments to become more effective, transparent and responsive to citizen interests.
3. Quality of life programs targeted at vulnerable populations through employment, housing and health activities.

Post-presence Assistance (2000-present)

Since the close of the bilateral Mission in 1999, Hungary has benefited directly or indirectly from more than $4.3 million in regional programs managed out of USAID’s Regional Services Center based in Budapest. This includes programs that focus on remaining challenges such as the integration of the Roma population and the sustainability of civil society organizations and partnerships that share Hungary’s transition experience throughout the region.

Highlights of Accomplishments

• USAID assistance was critical in reforming the banking sector through the restructuring of the Hungarian Banking and Capital Markets Supervision Agency, bank privatization and the establishment of the first independent credit rating agency.
• USAID played a key role in Hungary’s rapid and successful energy privatization by helping to create the stable regulatory environment that attracted international investors.
• In cooperation with the U.S. Embassy, the Department of Commerce, and the American Chamber of Commerce in Hungary, the U.S.-Eastern Hungary Partnership Foundation built local capacity and facilitated over $400 million in foreign investment that was planned to create 9,000 jobs in Eastern Hungary.
• USAID provided critical support to develop the non-profit sector and non-governmental organizations. Today, numerous NGOs based in Hungary bear witness to a sustained legacy of previous USAID assistance through their continuing development activities within Hungary and the region. Many organizations supported through the DemNet program have successfully transitioned from almost exclusive USAID funding to other support — including grants from the European Union.