European Union Strategy for Cooperation in the Indo-Pacific and the Role for India – Modern Diplomacy

With the dramatic collapse of communism in Southeast and Eastern Europe, the newly democratically elected governments had to face the harsh reality of being unable to properly run their countries based on a liberal democratic political system. Also, neither the governments nor their productive sector was able to cope with the rising private enterprise, which was based on supply and demand, fruitful competition, and quality of products. As a result, promoting the essence of democracy and free markets, fell into the hands of the U.S, which for years tried to find a way to make its presence in the region clear. The response of the U.S government after the fall of communism in 1989 and the dissolvement of the Soviet Union in 1991, was swift and methodical. With the signing of a series of legislative acts in the period of 1989-1995, known as the Support for East European Democracy (SEED) Act of 1989, and their implementation through the United States Agency for International Development, the U.S has managed to leave its footprint in the region and establish a network of democratic support to all the former Warsaw Pact country members, as well as the country members of the Council for Mutual Economic Assistance.

The SEED Act and Americas objectives in post-communist Eastern Europe

The Support for East European Democracy (SEED) Act of 1989, was part of a series of legislative acts that passed by Congress in the period 1989-1995. The laws were passed under the presidency of both George H.W Bush and Bill Clinton. The legislation was passed as a response to the growing demand for international help in post-communist countries. It is regarded by many as the most successful policy act towards Central and Eastern European countries. While initially the focus of this policy was targeted towards Hungary and Poland, with the growing request from other nation-states in the region, the U.S encompassed more countries such as Bulgaria, Czech Republic, Slovakia, Romania, Albania e.t.c, and later on, after the end of the Yugoslavia wars, it managed to include more countries from the former Socialist Federal Republic of Yugoslavia.

The primary goal of the SEED is to promote the establishment and enhancement of democratic institutions and help transit the economies of the respected countries that are part of this act, into a free market economy, that will allow any of those countries not only to overcome the centralized bureaucratic communist system but also to become more productive, reliable and trustworthy members of the greater Transatlantic community like their fellow Western democracies. At first, this legislation was focused on Poland and Hungary allowing the U.S to designate two private, nonprofit organizations such as the Polish-American Enterprise Fund and the Hungarian-American Enterprise Fund to promote the development of the Polish and Hungarian private sectors. With that being said, the initial thought of the American side was to not recreate a full-scale of the Marshall Plan, simply because the crushing budget deficits of those countries provoked little interest for the U.S. Instead through the SEED, the U.S government managed to establish different assistance programs, that over time, managed to assist more countries in Central and Eastern Europe and later on, in the Balkan region. These programs were focused on stabilization assistance, development assistance, technical assistance, and political conversion. Also, the aid that would come from the U.S would be directly focused on the agricultural sector, the private sector, educational and cultural programs, as well as scientific programs.

The core message that was expressed through the SEED was the fact that, although at the beginning, any sort of financial aid would be minimal, there would be a possibility of a change to this tactic, only if the fledgling democracies that were undergoing a massive transformation would agree to adopt the ways of Western Europe and the ways that the U.S was proposing for the. In other words, this meant that, if by any chance any of the countries that wished to benefit from the SEED Act, had to fulfill some pre-requirements. For the financial assistance to be implemented, the interested countries had to remove trade restrictions while fully liberalizing the investment and the capital of the country, including foreign investment, while allowing any interested U.S investors to export their profits from these countries. Also, there had to be an increased focus on the development of the capital financial markets that would allow privatization of any public assets. Throughout the years, the SEED Act, allowed the U.S to leave a footprint in the countries that got rid of communism and further help them through other independent agencies such as the United States Agency for International Development (USAID), which is responsible for administering foreign aid and development assistance. If we provide an analysis as to why the U.S is so keen on the development of the post-communist countries, we can identify the two main reasons as to why the U.S was and still is so interested in the democratic and free-market development of the region. The first reason was the fact that if the U.S would financially assist these countries, then it will manage to increase its economic transactions with more countries while also boosting its trading and the uninterrupted free flow of capital profits back to it. The second reason has to do with the geopolitical aspect of the SEED act and the role of the USAID.

If we examine this from a realistic point of view, the U.S has managed not only to increase its economic capital but also establish close diplomatic and military ties with the respected countries in an effort to counter any foreign interest coming from Russia or China. Also, this means that, once the U.S has assured the economic development and establishment of democratic institutions in the countries of Central and Eastern Europe, then their accession to the NATO and eventually their incorporation into the European Union, would allow the U.S to maintain close ties in the region and add to its already large military cooperation with third countries. Out of all the countries that the U.S has managed to assist, Romania is one of those interesting cases in Southeast Europe, and it has proven itself as a reliable strategic partner for the United States of America.

The case of Romania

The bilateral ties between Romania and the U.S were always more or less on warm status, but both countries built a strong bilateral relationship after the Romanian Revolution of 1989. The U.S was focused on the legal and fair transition of power in Romania. In 1990, right after the end of the revolution, Secretary of State James Baker expressed the concern of the U.S towards the unfair discriminatory treatment of opposition parties in the May elections in Romania and made it clear that the U.S would not support an undemocratic Romanian government. The Romanians quickly realized that if they wanted any support from the U.S they would have to incorporate more Western democratic values in their country. As a result, in 1992, Romania conducted fair parliamentary and presidential elections. Encouraged by the fair democratic results, Deputy Secretary of State Lawrence Eagleburger visited Romania in 1992. It was a symbolic visit because it allowed the Romanians to demonstrate their commitment to fully implement Western democratic values in their country. The same year, both countries signed a bilateral investment treaty (BIT), and one year later, in 1993, Romania returned to the status of Most Favored Nation (MFN). These agreements allowed Romania to completely transition its economy, allowing for American investment in energy, manufacturing, telecommunications services, consumer products sectors, and information technology.

With that being said, it was clear that Romania was managing step by step to take substantive steps toward institutionalizing political democracy and economic pluralism, the sole requirement of the SEED act. Besides that, the USAID had a critical role in Romania. In a span of 17 years, until Romanias graduation from the program in 2008, the socio-economic profile of the country has changed for the better. The USAID has managed to fund and establish various NGOs that focus on the rapid decrease of children in orphanages and improving the condition in the remaining institutions for these kids. Also, the civic organizations in Romania, have managed to establish sustainable partnerships with the public and private sector and improve transparency and fairness in both sectors. Last but not least, the private businesses in Romania have managed to become an established feature of Romanias civil society by gaining sustainable funds from the USAID that are directly invested in the tourism, agriculture, food processing, and the industrial sector that allow Romania to flourish as a stable economic power in Southeast Europe.

Apart from the socio-economic factors, the U.S has contributed to the enhancement of the military treaties between itself and Romania. On March 29, 2004, Romania joined NATO and established itself as a reliable ally of the U.S in Southeast Europe. A year after that, in 2005, Romania and the United States signed the Defense Cooperation Agreement, the framework for any future military engagements of both countries. With Romania joining NATO, the U.S managed to gain a foothold in Southeast Europe, close to Russia, and demonstrated its capabilities in creating and sustaining reliable military alliances, helping Romania avoid any influence from the East, while protecting its national interests in the region. With Romania joining NATO, the road towards a future integration in the EU was clearer. With the help of the U.S, Romania managed to meet the requirements for an EU integration. Some of those requirements were focused on reforms that would help Romania become more Western, such as the acknowledgment of respect for human rights, the commitment to personal freedom of expression, having a functioning free-market economy e.t.c. Romania joined the European Union on January 1st, 2007 and according to the European Commission, the country is set to join the Eurozone sometime in 2024. Some may argue that Romania has to be thankful to the U.S for the tremendous progress that has been made, and this will not be far from the truth, since until today both countries enjoy strong military and economic ties.

Democratization or Americanization of Romania?

However, there are always some voices from within Romania that see this whole progress with skepticism. Some argue that although Romania is a democracy, it does not have a democratic society. There are reports of high levels of corruption and nepotism in the public sector. According to Transparency International, Romania is the fourth most corrupt country in the EU, after Hungary, Greece, and Bulgaria. Besides that, the standard of living in the country has not changed significantly since the end of communism, and there is a strong demographic collapse that is connected with the so-called brain drain of the country, with high levels of labor export towards Western Europe. There is some criticism towards the U.S, that points to the fact that the changes in Romania have benefited the American side more than the Romanian one, and there is a feeling that Romania is still stuck in the past.

Although any sort of criticism should be reviewed thoroughly, one can argue that the U.S is not to be solely blamed. After all, the aid that was sent to Romania and the efforts of the U.S to westernize the country were always focused on the national and economic interests of the United States. It is safe to say that the U.S was applying a realistic aspect in its policy towards Romania, realizing the strategic geopolitical position of the country and the important economic outcomes that would come if Romania became a close ally of the United States. The alliance between the two countries and their ties are relatively strong even today, and although there are corruption problems in the country, Romania seems to have benefited more than any other post-communist country regarding aid from the United States. In a way, the policy of the U.S towards Romania was a success as both countries remain close allies, and Romania is enjoying a better socio-economic and political situation within its borders.

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European Union Strategy for Cooperation in the Indo-Pacific and the Role for India - Modern Diplomacy