NATO Enlargement: Report Is Responsive to Senate Requirements,	 
but Additional Information Could Be Useful (15-NOV-02,		 
GAO-03-255).							 
                                                                 
On November 21 and 22, 2002, the North Atlantic Treaty		 
Organization (NATO) will consider the admission of new members to
the alliance. To facilitate congressional deliberations on NATO  
enlargement, the United States Senate mandated in 1998 that GAO  
review and assess a report that Congress directed the President  
to provide on countries seeking membership in NATO. The President
submitted a classified report to Congress on August 26, 2002. To 
fulfill its mandate, GAO determined if the report met the	 
Senate's requirements and if the cost estimates were sound.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-255 					        
    ACCNO:   A05530						        
  TITLE:     NATO Enlargement: Report Is Responsive to Senate	      
Requirements, but Additional Information Could Be Useful	 
     DATE:   11/15/2002 
  SUBJECT:   Foreign governments				 
	     International organizations			 
	     National policies					 
	     Reporting requirements				 

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GAO-03-255

                                       A

Report to Congressional Committees

November 2002 NATO ENLARGEMENT Report Is Responsive to Senate
Requirements, but Additional Information Could Be Useful

GAO- 03- 255

Letter 1 Results in Brief 2 Background 3 Report Responded to Mandate, but
Additional Information Could Be

Useful 7 As a Preliminary Assessment, Cost Estimates Were Reasonable 9
Conclusions 11 Matter for Congressional Consideration 11 Agency Comments
11

Appendixes

Appendix I: Scope and Methodology 15

Appendix II: Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership 18 General
Information on Countries Seeking NATO Membership 18 Albania 21 Bulgaria 24
Estonia 27 Latvia 30 Lithuania 34 Former Yugoslav Republic of Macedonia 37
Romania 40 Slovakia 45 Slovenia 47

Appendix III: Independent Assessments of Progress toward Democracy 51
Analyses of Democracy 51 The European Union Assesses Implementation of Its
Political

Requirements 54

Appendix IV: Independent Assessments of Economic Development 57 Two
Studies Rate Economic Freedom 57 Rating of Economic Liberalization 59 The
European Union Assesses Development toward Market

Economies 61 Tables Table 1: General Information on Countries Seeking NATO

Membership 19

Table 2: Ethnic Distribution of the Populations of Countries Seeking NATO
Membership 20 Table 3: Freedom House Political Ratings, 2001- 2002 52
Table 4: Freedom House Nations in Transit Scores*

Democratization Scores, 2002 53 Table 5: Freedom House Nations in Transit
Scores* Rule of Law

Scores, 2002 54 Table 6: European Union Political Assessments, 2001 55
Table 7: Freedom House Nations in Transit Scores* Economic Liberalization,
2002 60

Table 8: European Union Economic Assessments, 2001 62 Figures Figure 1:
Countries Participating in NATO*s Membership Action

Plan and Current European NATO Members 6 Figure 2: Indexes of Economic
Freedom for NATO Members and

Countries Seeking NATO Membership 59

Letter

November 15, 2002 Congressional Committees: On November 21 and 22, 2002,
the North Atlantic Treaty Organization (NATO) will consider whether to
invite new members into the alliance from a list of nine countries seeking
NATO membership. 1 NATO wants new members to be democracies, have
harmonious relations with neighboring countries, modernize and restructure
their defense capabilities, protect

civil liberties and human and minority rights, and have an open market
economy. The admission of new members requires ratification by twothirds
of the United States Senate. The last time NATO considered adding new
members, Congress was concerned that the President did not provide
sufficient information in a time frame that facilitated congressional
deliberations on the countries invited to join NATO. As a result, the
Senate

mandated that the President provide Congress with information on countries
seeking to join the alliance* before NATO made any decision on enlarging
its membership. 2 In particular, the President was required to assess how
countries would further the principles of the North Atlantic Treaty,
contribute to North Atlantic security, and affect U. S. national security
interests. He also was required to evaluate countries* eligibility for
membership and estimate the military requirements and costs associated
with a country*s membership for both NATO and U. S. budgets.

The Senate mandated that we review and assess the President*s report. To
fulfill that mandate, we determined if (1) the report met the Senate*s
requirements and the information was accurate and current and (2) the
methodology for deriving cost estimates was sound. To assess the
President*s report, we developed an extensive array of documentary and
testimonial information from a broad spectrum of sources, including U. S.
government and military reports and analyses, government reports and
analyses of the countries seeking NATO membership, discussions with
aspirant country delegations to NATO, and

discussions with a broad range of research organizations and experts. We 1
The nine countries that will be considered for membership at NATO*s
November 2002 summit meeting are Albania, Bulgaria, Estonia, Latvia,
Lithuania, the Former Yugoslav Republic of Macedonia, Romania, Slovakia,
and Slovenia.

2 Resolution of Ratification to the Protocols to the North Atlantic Treaty
of 1949 on the Accession of Poland, Hungary, and the Czech Republic, 144
Cong. Rec. S4217- 20, 1998.

also conducted in- depth data gathering in three aspirant countries*
Bulgaria, Latvia, and Slovenia* that included meetings with several
government agencies and a variety of private- sector, nongovernmental, and
research organizations. See appendix I for a detailed description of the
scope and methodology.

The President submitted his report to Congress on August 26, 2002. In
presenting the results of our assessment, we have not discussed the
specific conclusions or information in the President*s report because that
report is classified. Results in Brief The President*s report responded to
all of the mandated requirements for

each of the nine countries seeking NATO membership. The information in the
President*s report was generally accurate and current. It was generally
consistent with the data we collected independently from a broad array of
U. S. government, NATO, and foreign government sources as well as research
and other nongovernmental organizations. The report*s discussion

of country eligibility for membership presented a detailed discussion of
defense, budgetary, information security, legal, and economic issues.
However, the discussion of countries* efforts to implement democratic
principles and reforms was limited. The report did not provide a full
understanding of the challenges facing these countries and their efforts
to address those challenges in areas such as civil liberties, judicial
independence, human rights, and minority rights. These issues represent
some of the key principles of the alliance. We are providing additional
information on these issues in appendix II to help Congress in its
deliberations on NATO enlargement.

We found that the report*s methodology for estimating potential cost
impacts, while preliminary, was reasonable. The report provided classified
cost estimates for the potential impact of a country*s membership on
NATO*s shared costs, NATO members* shares of those costs, and U. S.
defense and other budgets. The report based its estimate of the impact on
NATO*s shared costs on a prior methodology developed by NATO to estimate
the costs of adding the Czech Republic, Hungary, and Poland to

NATO* a methodology we found to be reasonable. To apply that methodology
to the nine countries seeking membership in 2002, however, the President*s
analysis made a number of adjustments, including for inflation, to make
the prior cost estimates for military requirements current. Both the
assumption and adjustments were generally reasonable.

In this report, we include a matter for congressional consideration.
Because NATO*s political goals for countries seeking membership focus on
developing democratic institutions and principles, we have included

material in this report that goes beyond the information contained in the
President*s report. If Congress finds this material useful during upcoming
deliberations on NATO enlargement, it may wish to request that future
reports contain more detailed information on these issues.

The National Security Council generally concurred with the contents of
this report.

Background The North Atlantic Treaty was signed on April 4, 1949, by 12
European and North American countries to provide collective defense
against the emerging threat that the Soviet Union posed to the democracies
of Western Europe. Since its inception, the alliance*s key objective has
been to achieve a lasting peace in the North Atlantic area that is based
on the common values of democracy, the rule of law, and individual
liberty. Article 10 of the treaty permits accession of additional European
states if they are in a position to further the treaty*s principles and
contribute to North Atlantic security. While members must unanimously
agree to any new country*s accession, the treaty contains no explicit
criteria that a country must meet

to join the alliance. NATO*s invitations to countries to join the alliance
are political decisions based on the unanimous agreement of members.

Since its inception, NATO has enlarged its membership four times as
changing political and strategic circumstances have warranted. The first
three occasions were linked to confrontation with the Communist bloc,
particularly the Soviet Union, and were taken to meet pressing strategic
and security needs. Turkey and Greece joined NATO in 1952 for strategic
reasons, permitting NATO to shore up its southern flank to forestall
Communist military action in Europe at the height of the Korean War. West
Germany joined the alliance in 1955 after agreeing to maintain extensive
NATO forces on its territory and to place its national army within NATO*s
integrated command structure. With Spain*s membership in 1982, NATO

gained better access to Spain*s air and naval bases, while the newly
democratized nation improved its chances of joining the European Economic
Community. A significantly different strategic environment marked the
fourth, and

latest, enlargement, when NATO*s goal was to extend stability eastward
into the political vacuum resulting from the Soviet Union*s collapse. In

1994, NATO committed to enlarging its membership to include the newly
democratic states of the former Communist bloc. As a result, Poland,
Hungary, and the Czech Republic joined the alliance in 1999, and several
more east and central European countries are seeking membership.

At the 1999 summit meeting in Washington, D. C., NATO promulgated, among
other things, the Membership Action Plan, to provide guidance and
counseling to other NATO aspirants to facilitate their preparations for
possible membership. The plan sets forth defense, budgetary, information
security, legal, political, and economic goals for countries to work
toward

to enhance their readiness for membership. Essentially, NATO wants
countries that are seeking to join the alliance to (1) be democracies that
are based on the rule of law; (2) have harmonious relations with
neighboring countries and settle international disputes peacefully; (3)
provide and protect civil liberties, human rights, and minority rights;
and (4) have an open market economy. In addition, NATO wants countries to
modernize and restructure their defense capabilities to be interoperable
with NATO and, hence, to be able to contribute to NATO operations. To
reach that goal, NATO would like countries to spend at least the
equivalent of 2 percent of their gross domestic product on defense
development. Countries also need to implement NATO requirements for
handling and securing NATO

classified information and to be free from legal barriers that would
prevent a country from deploying forces abroad or hosting foreign troops
on their territory. Each country participating in the Membership Action
Plan develops an annual plan of actions that it will pursue to achieve
those goals. NATO reviews the plans and progress implementing them and
provides annual feedback to each country. Representatives of NATO*s newest
members, as well as representatives of the countries currently seeking
NATO membership, generally agree that the program has provided

crucial guidance and is a major success in assisting countries*
preparations. As of September 2002, there were nine countries
participating in the Membership Action Plan* Albania, Bulgaria, Estonia,
Latvia, Lithuania, the Former Yugoslav Republic of Macedonia, 3 Romania,
Slovakia, and Slovenia* and at least one additional country, Croatia, was
poised to begin participation in the fall of 2002. The nine countries have
undergone three annual planning cycles and will submit their fourth annual
plan to NATO in 3 This is the country*s official name. The name is subject
to negotiations under United

Nations auspices between the republic and Greece, which has opposed its
northern neighbor*s use of the name *Macedonia.*

the fall of 2002. At its summit meeting in November 2002 in Prague, NATO
will decide which of these countries should be invited to join the
alliance in the next round of enlargement. Figure 1 shows the nine
countries participating in the Membership Action Plan and current European
NATO members.

Figure 1: Countries Participating in NATO*s Membership Action Plan and
Current European NATO Members

Note: The United States and Canada are also members of NATO.

Report Responded to The President*s report responded to all of the
Senate*s information

Mandate, but requirements for each of the nine countries seeking NATO
membership,

providing information that was generally accurate and current. Discussion
Additional Information

of countries* eligibility addressed their achievements toward the goals in
Could Be Useful

NATO*s Membership Action Plan; those goals include defense, budgetary,
information security, legal, economic, and political goals. Discussion of
most of these goals was generally detailed, but discussion of the
implementation of democratic principles and reforms was limited. The
Report Responded to

The President*s report responded to the five requirements in the Senate*s
the Mandate*s Requirements mandate and provided responses with regard to
each of the nine countries. The five requirements were to assess (1) how
countries would further the principles of the North Atlantic Treaty and
contribute to North Atlantic security, (2) how countries would affect U.
S. national security interests, (3) countries* eligibility for membership,
(4) the impact on NATO*s costs and members* shares of those costs, and (5)
the impact on U. S. defense and other budgets. No major events appear to
have been excluded. The information provided in the report was generally
accurate and current and generally consistent with the data we collected
independently from a broad

array of U. S. government, NATO, and foreign government sources as well as
research and other nongovernment organizations. The report*s cutoff date
for the timeliness of the information was July 15, 2002, and the time
frames for events, particularly recent ones, were usually identified. No
recent events have occurred to alter the general information provided in
the report.

First, to assess how countries would further the principles of the North
Atlantic Treaty and contribute to North Atlantic security, the President*s
report discussed countries* achievements in this area. For example, in
discussing countries* potential impacts on North Atlantic security, the
report described countries* contributions to regional peace* in
particular, the ways in which countries address controversial issues with
neighboring countries and their contributions to NATO operations. Second,
to address the implications of countries* membership for U. S. security,
the President*s report provided a detailed discussion of the contributions
that countries have made and continue to make to NATO operations in
Europe*s Balkan region* such as operations in Bosnia and Kosovo* and their
cooperation and assistance in the war on terrorism. To meet the two cost
requirements, the report provided estimates of the potential impact of
countries* membership on both NATO costs and U. S. budgets. Finally, the
bulk of the

report addressed country eligibility by discussing their accomplishments
in achieving the goals of NATO*s Membership Action Plan. As discussed in
the next section, the report provided information about each country*s
eligibility in relation to several of those issues, but there was limited
discussion of the implementation of democratic principles and reforms.

Report Provided Limited The President*s report presented a detailed
discussion of the defense,

Discussion of Some budgetary, information security, legal, and economic
issues surrounding

Eligibility Issues each country*s eligibility for membership. The
information was accurate

and current. Discussion of defense issues, in particular, was extensive,
describing for each of the nine countries its achievements in terms of
five capability areas: (1) deployability and mobility; (2) sustainability
and logistics; (3) consultations, command, and control; (4) effective
engagement; and (5) survivability of forces and infrastructure. The
report*s discussion of budgetary issues focused on each of the nine
countries* commitments to defense spending as a percentage of its gross
domestic product, and the defense budget planning systems that each
country has implemented. Discussion of information security and legal
issues focused on the extent to which each country had met or achieved
NATO

requirements. For information security, the report assessed the extent to
which each of the nine countries had implemented NATO requirements for
personnel screening and the handling and storage of classified documents.
Regarding legal issues, the report assessed whether a country*s

constitution and/ or laws provided any barriers to the deployment of the
country*s troops abroad, or the hosting of foreign troops in- country, in
support of NATO operations. In the economic area, the report discussed the
status of each country*s economy. Although the information provided in the
report regarding the

implementation of democratic principles and reforms was accurate and
current, the discussion was limited. The report did not fully delineate
the challenges facing the nine countries seeking membership or what they
have been doing to address those challenges. The political goals addressed
in NATO*s Membership Action Plan cover a broad spectrum, ranging from the
implementation of democratic institutions, free and fair elections, the
rule of law, judicial independence, and civil liberties to peaceful
relations with

bordering countries, peaceful settlement of international disputes, and
protection of human rights and minority rights. However, the report*s
discussion of the challenges facing the nine countries in such areas as
civil liberties, judicial independence, human rights, and minority rights*
as well

as government efforts to address those challenges* was either limited or
absent.

The nine countries seeking membership in NATO have been transitioning over
the past decade from state- controlled communist systems to democracies
and market- based economies. The political goals of the Membership Action
Plan represent some of the key values of the alliance. Further, these
countries have been pursuing the goals set forth in NATO*s Membership
Action Plan by enacting new legislation, amending existing

laws, and developing new programs to address many of these goals,
especially within the past 2 years. Because of these considerations, we
have provided additional information on countries* implementation of
democratic principles and reforms in appendix II to help Congress in its

deliberations on NATO enlargement. We also provide the results of several
independent analyses of countries* progress toward implementing democracy
and open economies in appendixes III and IV, which we believe will be
useful in assessing countries* eligibility for NATO membership.

As a Preliminary The President*s report responded to the requirements for
estimates of

Assessment, Cost potential impacts of new members on both NATO and U. S.
costs. The

methodology in the President*s report for estimating potential cost
impacts, Estimates Were

while preliminary, was reasonable. Changes in some factors in the
Reasonable

methodology for estimating the impact on NATO*s shared costs could change
the resulting estimates. We have not included the actual cost estimates in
this report because those figures are classified in the President*s
report.

The report*s methodology for estimating the impact on NATO*s shared costs,
in particular, was a reasonable approach for a preliminary estimate. The
report based its assessment on a 1997 NATO methodology to determine the
impact of adding three new members* Poland, Hungary, and the Czech
Republic* on NATO*s commonly funded budgets. In prior work, we determined
that approach was reasonable for the 1997 analysis. 4 4 See U. S. General
Accounting Office, NATO Enlargement: Requirements and Costs for Commonly
Funded Budgets, GAO/ NSIAD- 98- 113 (Washington, D. C.: Mar. 6, 1998).

In applying that methodology to the current analysis, the report used the
same determination of NATO*s military requirements applied to the 1997
analysis. 5 Those military requirements fall into four categories: (1)
command and control, which reflects an extension of NATO*s communications
links to the new members; (2) air defense, which reflects

the integration of new members into NATO*s air defense systems; (3)
reinforcement reception facilities, which reflect upgrades to
infrastructure, particularly airfields, to receive NATO forces; and (4)
training and exercises. According to a U. S. Department of Defense
official, NATO will not determine specific military requirements for the
2002 round of enlargement until it offers invitations to individual
countries. Without

specific information on future NATO military requirements, it was
reasonable to base a cost estimate on NATO*s previous assumptions
regarding its military requirements. Estimates were provided for each
country in each of those categories of military requirements. In applying
the 1997 methodology, the report also used the 1997 NATO cost estimates
for the types of projects needed to meet those military requirements. 6
According to the U. S. Department of Defense analysts who performed the

analysis, the report updated the 1997 NATO methodology by assessing what
the current list of countries seeking NATO membership might need in terms
of NATO military funding for projects to meet NATO military requirements.
Assessments of what military upgrades each of these countries would need
were based on NATO and U. S. Department of Defense reports and analyses
that had determined that seven of the nine countries had already met some
of the requirements for air defense capabilities. The report then adjusted
the costs applied in the 1997 analysis to reflect U. S. dollars in 2002.
We found these adjustments to be generally reasonable for a preliminary
estimate. Once NATO has decided which countries to invite into the
alliance, however, NATO plans to analyze the cost impacts on the basis of
detailed country- specific assessments of each country*s current
infrastructure conditions and the upgrades needed to meet NATO military
requirements.

5 The fundamental principle on which those NATO military requirements were
based was NATO*s ability to fulfill Article V of the North Atlantic Treaty
in Poland, Hungary, and the Czech Republic Under Article V, members of
NATO agree that an armed attack against any member is considered to be an
attack against them all. NATO*s military commanders determined what
alliance capabilities were needed upon accession of the three new members
and also determined what military upgrades were needed.

6 NATO expresses costs in terms of the NATO accounting unit and
establishes the value of 1 NATO accounting unit on a quarterly basis in
terms of member countries* currencies.

Conclusions The President*s report responded to the Senate*s requirements.
However, the limited discussion of the implementation of democratic
principles and reforms in relation to countries* eligibility for NATO
membership did not reflect the challenges these countries face in making
the transition to democratic societies or the breadth of activities they
have engaged in to consummate that transition. Because the implementation
of democratic principles represents important NATO principles, broader
discussion of these issues could be useful for a full appreciation of the
conditions and achievements of the countries seeking NATO membership.

Matter for Because NATO*s political goals for countries seeking membership
focus on Congressional

developing democratic institutions and principles, we have included
material in this report that goes beyond the information contained in the
Consideration

President*s report. If Congress finds this material useful during upcoming
deliberations on NATO enlargement, it may wish to request that future
reports contain more detailed information on these issues.

Agency Comments We provided a draft of this report to the National
Security Council. In oral comments, the council generally concurred with
the contents of this report.

We are sending copies of this report to other interested congressional
committees, the Chairman of the National Security Council, the Secretary
of State, and the Secretary of Defense. We will also make copies available
to others upon request. In addition, this report will be available at no
cost on the GAO Web site at http:// www. gao. gov.

Please contact me at (202) 512- 8979 if you or your staff have any
questions about this report. Key contributors to this report were F. James
Shafer, Beverly Ann Bendekgey, Kelly Baumgartner, Monica Brym, Martin de

Alteriis, Berel Spivack, Ernie Jackson, Janey Cohen, and Lynn Cothern.
Joseph A. Christoff, Director International Affairs and Trade

List of Congressional Committees The Honorable Joseph R. Biden, Jr.
Chairman The Honorable Jesse A. Helms Ranking Minority Member Committee on
Foreign Relations United States Senate

The Honorable Carl Levin Chairman The Honorable John W. Warner Ranking
Minority Member Committee on Armed Services United States Senate

The Honorable Robert C. Byrd Chairman The Honorable Ted Stevens Ranking
Minority Member Committee on Appropriations United States Senate

The Honorable Henry J. Hyde Chairman The Honorable Tom Lantos Ranking
Minority Member Committee on International Relations House of
Representatives

The Honorable Bob Stump Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives

List of Congressional Committees (cont.) The Honorable C. W. Bill Young
Chairman The Honorable David R. Obey Ranking Minority Member Committee on
Appropriations House of Representatives

Appendi Appendi xes x I

Scope and Methodology To assess the President*s report, we determined if
each of the United States Senate*s information requirements listed in the
legislative mandate was addressed and if the information provided was
accurate and current. We also assessed the soundness of the methodology
for deriving cost

estimates. We did not independently assess foreign laws or regulations and
based our discussion of those laws and regulations, particularly the
information provided in appendix II, on secondary sources.

To assess whether the report met the Senate*s requirements, we met with
and obtained documentation from representatives of numerous organizations,
including the U. S. Department of Defense, the U. S. Department of State,
the U. S. Central Intelligence Agency, the Carnegie

Endowment for International Peace, the CATO Institute, the Center for
Defense Information, the Center for Strategic and International Studies,
the Council on Foreign Relations, The Heritage Foundation, the National
Defense University, the Office for Democratic Institutions and Human
Rights in the Organization for Security and Co- operation in Europe, the

RAND Corporation, and the Woodrow Wilson Center for International Studies.
We obtained extensive country- specific documentation from, and met at
length with, all nine candidate country delegations to the North Atlantic
Treaty Organization (NATO) in Brussels and several country delegations
visiting the United States.

We also collected extensive documentary evidence from the reports and
analyses of a broad range of organizations on the political, economic,
defense, budgetary, information security, and legal issues related to the
goals in NATO*s Membership Action Plan, including

 the U. S. State Department*s country background reports, country
commercial guides, and annual reports assessing human rights practices,
religious freedom, and trafficking in persons;

 defense reform assessments prepared by the U. S. Department of Defense;
 the elections analyses of the Organization for Security and Co-
operation in Europe;  country background reports of the Congressional
Research Service, the

U. S. Central Intelligence Agency, and the European Forum;

 the constitutions of countries seeking NATO membership, and assessments
in the East European Constitutional Review;

 the European Union*s annual regular progress reports on the political
and economic developments, and other preparations, of countries seeking
membership in the European Union as well as other reports and
documentation of the European Union, the European Parliament, and

the European Commission;  economic surveys of the Organization for
Economic Cooperation and Development;  the Fraser Institute*s annual
assessments of economic freedom;  Freedom House country ratings of
political rights and civil liberties and

its nations in transit country reports as well as reports from the
International Helsinki Federation for Human Rights, Human Rights Watch,
and Amnesty International;

 The Heritage Foundation*s index of economic freedom reports;  the
investment profiles of the European Bank for Reconstruction and
Development;

 the Open Society Institute*s reports on minority protection and judicial
independence;

 the International Press Institute*s world press freedom reviews; 
reports of the Regional Environmental Center for Central and Eastern

Europe;  evaluation reports of the Group of States Against Corruption; 
aspirant countries* third annual national plan under NATO*s Membership
Action Plan and related documentation; and

 aspirant country defense modernization and reconstruction plans and
planned defense expenditures.

We conducted in- depth data gathering in three aspirant countries*
Bulgaria, Latvia, and Slovenia* to check the validity of the information

gathered from these and other sources. While visiting the three countries,
we met with and obtained documentation from government officials in
defense, foreign affairs, economic, justice, and administrative
ministries; members of Parliament; and various nongovernmental groups,
research organizations, and media representatives. While we acquired some
updated information, we did not find discrepancies with the other
information gathered.

We assessed the President*s report by determining the extent to which it
addressed each of the mandated requirements. We assessed the accuracy of
the information in the report by determining if it was consistent with the
information in the sources we developed. We assessed the currency of the
information by determining whether any recent events identified in our
sources raised questions about the accuracy of any of the report*s main
findings.

To assess the methodology for deriving cost estimates regarding the impact
of a country*s membership on NATO*s shared costs, members* shares of those
costs, and U. S. defense and other budgets, we analyzed the methodology
used in producing the estimated costs as well as the data on potential
impacts for U. S. budgets. We examined the assumptions on which the
estimates were based, reviewed the U. S. Department of Defense*s and
NATO*s estimates for the 1999 round of enlargement, and interviewed the U.
S. Department of Defense officials responsible for developing the
estimates. We verified that the methodology the report said it used to
assess the potential impact on NATO*s shared costs was in fact applied,
but we did not independently verify the source data on which the cost
estimates were based. While our assessment of that methodology is based on
the approach selected, changes in some factors in the methodology

could change the resulting estimates. For example, a change in NATO*s
military requirements could lead to a higher or lower cost estimate. We
conducted our work between July 2001 and October 2002 in accordance with
generally accepted government auditing standards.

Additional Information on the Implementation of Democratic Principles and
Reforms in

Appendi x II

Countries Seeking NATO Membership Because the President*s discussion of
the implementation of democratic principles and reforms in relation to
countries* eligibility for NATO membership was limited, this appendix
provides additional information, by country, that we believe will be
useful in understanding the challenges and developments in the nine
countries seeking NATO membership and the actions their governments are
taking to achieve the goals of NATO*s Membership Action Plan. The
information provided is based on our review

of the numerous sources identified in appendix I. As the President*s
report and the information contained herein illustrate, the countries that
will be considered for membership at NATO*s summit meeting in Prague on
November 21 and 22, 2002, have been active in pursuing the goals set forth
in NATO*s Membership Action Plan. Countries have been enacting new
legislation, amending existing laws, restructuring and modernizing their
military forces and capabilities, and developing new programs, especially
within the past 1 to 2 years. As a result, many of those efforts are still
in the process of being enacted and/ or implemented, so there is little,
if any, implementation history to assess in terms of their impact or
benefits.

General Information on The following tables provide general background
information that could be

Countries Seeking helpful in understanding the issues discussed in this
appendix. Table 1

provides an overview of the applicant countries* population size, border
NATO Membership

countries, and the 2001 purchasing power parity gross national income per
capita as well as data for the United States and average data for NATO.
Table 2 provides information on the ethnic composition of each applicant
country.

Table 1: General Information on Countries Seeking NATO Membership 2001
purchasing power parity gross Population

national income per capita (U. S. Country (millions) Border countries

dollars)

Albania Greece, F. Y. R. of Macedonia, a 3.5 F. R. of Yugoslavia b $3, 880
Bulgaria

Greece, F. Y. R. of Macedonia, 7.7 F. R. of Yugoslavia, Romania, Turkey 5,
950

Estonia 1. 4 Latvia, Russia 10, 020 Latvia 2. 4 Belarus, Estonia,
Lithuania, Russia 7, 870 Lithuania 3. 8 Belarus, Latvia, Poland, Russia
7,610 F. Y. R. o f Albania, Bulgaria, Greece, Macedonia 2. 0 F. R. of
Yugoslavia 4,860

Romania Bulgaria, Hungary, Moldova, 21.7 F. R. of Yugoslavia, Ukraine 6,
980

Slovakia Austria, Czech Republic, Hungary, Poland, 5.4 Ukraine 11, 610

Slovenia 2.0 Austria, Croatia, Hungary, Italy 18, 160 NATO average -

N/ A all NATO 43.8 26, 034

NATO average - N/ A Europe 29.5 20, 577

United States 284.8 N/ A 34, 870 a The official name is the Former
Yugoslav Republic of Macedonia.

b The official name is the Federal Republic of Yugoslavia. Sources:
Population data are from the U. S. State Department, except F. Y. R. of
Macedonia data, which are from the U. S. Central Intelligence Agency; data
for Romania are from preliminary media reports of the results of the March
2002 census; data for the NATO average are GAO projections that are based

on the International Monetary Fund*s International Financial Statistics,
March 2002; and data for the United States are from the U. S. Census
Bureau 2001 estimate. Information on border countries is from the National
Geographic Society Map of Europe, 2000. Data on purchasing power parity
gross national income per capita are from the World Bank*s August 2002
World Development Indicators.

Table 2: Ethnic Distribution of the Populations of Countries Seeking NATO
Membership Ethnic composition

Percentage of Country Ethnic group population

Albania Albanian 95.0 Greek 3. 0 Other 2. 0 Bulgaria Bulgarian 83.0

Tur k i s h 8. 5 Roma 2.6 Other 5. 9 Estonia Estonian 65.0

Russian 28.0 Ukrainian 2. 5 Byelorussian 1.4 Finnish 0.9 Other 2. 2 Latvia
Latvian 55.8

Russian 32.3 Byelorussian 3.9 Ukrainian 2. 9 Polish 2. 2 Other 2.9
Lithuania Lithuanian 80.6

Russian 8.7 Polish 7. 0 Byelorussian 1.6 Ukrainian 1. 1 F. Y. R. of
Macedonia Macedonian 66.6

Albanian 22.7 Tur k i s h 4. 0 Roma 2.2 Serbian 2. 1 Other 2. 4 Romania
Romanian 89.0

Hungarian 7. 1 German 0.5

(Continued From Previous Page)

Ethnic composition Percentage of Country Ethnic group population

Other 2. 5 Slovakia Slovakian 85.8

Hungarian 9. 7 Roma 1.7 Czech 0. 8 Ruthenian 0. 4 Ukrainian 0. 2 Other 1.
4 Slovenia Slovenian 87.8

Croatian 2. 8 Serbian 2. 4 Bosniak 1. 4 Hungarian 0. 4 Macedonian 0.2
Montenegrin 0.2 Albanian 0.2 Italian 0. 2 Other 4. 4 Note: Percentages may
not add to 100 due to rounding. Sources: U. S. State Department Country
Background Reports. Data for F. Y. R. of Macedonia are from the U. S.
Central Intelligence Agency because U. S. State Department data were
unavailable.

Albania Located in the southwest Balkan region of Europe, Albania has a
population of 3.5 million people. It shares a border with one NATO

member* Greece, one country aspiring to NATO membership* the Former
Yugoslav Republic of Macedonia, and a third country* the Federal Republic
of Yugoslavia. After experiencing a financial collapse in 1997 that
triggered armed insurgencies, Albania adopted a new constitution in 1998
and since then has been consolidating democratic institutions and
processes.

Civil Liberties The Albanian constitution and related legislation provide
for the protection of individual liberties, such as freedom of expression,
religion, the media,

association, and movement, and the government generally respects those

rights. The sources we reviewed, however, indicate that although Albania
provides for freedom of the media, some concerns have been raised about
the use of libel as a crime against journalists and about physical attacks
on journalists. To help address concerns about media freedom, the

government passed the Law on Public and Private Radio and Television in
September 1998 to guarantee editorial independence and prevent censorship.
Democracy and the Rule of

The government has made progress in providing for free and fair elections
Law

since the political unrest of 1997. Albania passed a new electoral law in
May 2000 that (1) established a Central Election Commission as the main
institution to oversee and verify elections and (2) adopted more efficient
voter registration provisions. The Organization for Security and
Cooperation in Europe reported that the 2000 electoral law generally
*provides a sound basis for democratic elections,* and that the 2000 local
and 2001 parliamentary elections demonstrated progress toward meeting the
standards of democratic elections. 7 The organization also noted several
irregularities, however, in the 2001 elections, including improper
handling of ballot boxes and perceived

political pressure on the Central Election Commission. The organization
has issued recommendations to further improve laws governing elections,
and the leaders of the two main political parties agreed in April 2002 to
establish a bipartisan committee to develop proposals for electoral
reform.

Human Rights Respect for human rights in Albania also has gradually
improved since the 1997 insurgencies. Albania adopted a new constitution
in 1998 that (1)

provides protection for a broad set of human rights and (2) establishes a
national ombudsman to both defend public rights and freedoms and to
enforce the public*s right to information. Albania also has signed a
number of international human rights conventions. While the Albanian
government notes that the new constitution represents progress in
strengthening human rights protections, it recognizes that many laws
regarding human rights still need revision.

7 The Organization for Security and Co- operation in Europe is a regional
security organization with 55 participating member countries from Europe,
Central Asia, and North America. It is active in such efforts as conflict
prevention, crisis management, and postconflict rehabilitation.

According to the sources we reviewed, there are two key concerns regarding
the enforcement of human rights protections in Albania. First, police
misconduct is considered to be a serious problem. Police are poorly paid
and untrained and are reported to have used excessive force and torture.
To address these problems, the government began implementing a 1999 law to
reorganize the police at all levels and developed an education

program for the police and the public. Second, Albania is a country of
origin and transit for trafficking in human beings, and there are reports
that the police were often directly or indirectly involved in the
trafficking. The government states that one of its main priorities is the
fight against trafficking in human beings, and it has developed a national
strategy for pursuing that goal. For example, parliament passed changes to
the Criminal Code in 2001 that made trafficking in human beings a criminal
offense. In

2001, the government also established a regional center for
antitrafficking efforts to research the problem and to undertake police
operations against trafficking rings. The U. S. State Department reported
in its Trafficking in Persons Report for 2002 that Albania was not yet in
full compliance with the U. S. minimum standards for eliminating
trafficking in human beings but that Albania was making a significant
effort to achieve compliance. 8 Minority Rights The constitution protects
minority rights and Albanian legislation provides

a legal framework for ensuring that ethnic minorities enjoy the same
rights as Albanians. However, according to the U. S. State Department, the
Roma and the Egyptians are among the most neglected ethnic minority groups
in the country. The Roma, in particular, face discrimination in housing,
employment, education, and political participation. 9 To help address
these

issues, Albania became a member in 2001 of the Council of Europe Framework
Convention for the Protection of National Minorities.

8 As part of its responsibilities under the Victims of Trafficking and
Violence Protection Act of 2000, the U. S. State Department reports
annually on the extent to which governments around the world comply with
U. S. minimum standards for the elimination of trafficking. Those
standards comprise the minimum actions that governments should engage in
to eliminate severe trafficking in human beings.

9 While the handling of minority issues varies among the countries, issues
concerning the Roma population, in particular, cut across the borders of
almost all of the countries seeking NATO membership. The Roma populations
of central and eastern Europe are generally reported to have suffered from
widespread discrimination in employment, education, health care, housing,
social welfare, and the criminal justice system. Addressing their needs is

likely to be a long- term effort for the respective governments.

Destruction of Arms and Albania is addressing a serious need for the
destruction of arms that were

Land Mines left in weapons depots throughout the country. According to
Albanian

government officials, Albania stockpiled during the Cold War more than
130,000 tons of ammunition in 16 hazardous ammunition sites and over 150
storage facilities and produced more than 1.6 million antipersonnel land
mines. During the 1997 internal crisis, looters seized hundreds of
thousands of arms and ammunition, only some of which have been returned.
According to a NATO official, Albania needs to improve its ammunition
storage management to address issues of security, safety, and

accountability. The government has recently been trying to address this
serious stockpile issue. For example, in 2000 the government ratified the
Ottawa Convention on the prohibition of the use, stockpiling, production,
and transfer of antipersonnel land mines and their destruction. That
convention requires Albania*s disposal of its more than 1.6 million
antipersonnel land mines by 2004. The Albanian parliament also has
approved a new law that provides

for the collection of weapons stolen during the 1997 armed insurgencies;
the government has established a special police unit to handle the
collection process. In 2001, Albania developed defense restructuring and
modernization plans that also provide for the collection and destruction
of these arms and mines. By September 2001, approximately 117, 000 small
arms and light weapons had been destroyed and, according to the
government, only five hazardous ammunition storage sites remained.

Bulgaria Located on the Black Sea in the southeastern region of the
Balkans, Bulgaria is home to about 7.7 million people. It borders two NATO

members* Greece and Turkey* and two countries aspiring to NATO membership*
the Former Yugoslav Republic of Macedonia and Romania* as well as the
Federal Republic of Yugoslavia. Bulgaria experienced a period of social
and economic unrest when it emerged from communism. The country was slow
to undertake reforms until 1997 when a newly

elected government accelerated economic reforms, helping to stabilize the
country. The government elected in 2001 has remained committed to the
implementation of political, economic, and defense reforms.

Civil Liberties The Bulgarian constitution guarantees civil liberties such
as freedom of expression, the media, religion, association, and movement
as well as protection of privacy. However, the sources we reviewed
indicate that

some of these constitutional guarantees may be limited in practice,
including the guarantees of freedom of the media and protection of
privacy. For example, in 2001 the International Helsinki Federation for
Human Rights 10 reported that limits on freedom of the media could derive
from the possibility of criminal prosecution and punishment for insult and
libel. The federation also reported assaults against journalists and
continuing undue governmental influence over the media, especially the
electronic media. In addition, the U. S. State Department and other
sources indicate that the government exerts influence through official
channels such as the National Radio and Television Council, which is a
quasi- governmental body responsible for overseeing the national media and
regulating private broadcasts. The U. S. State Department further reports
that the government also uses less direct means of influence such as the
diversion of advertising revenue away from media outlets that criticize
government policies.

The government has embarked on a number of efforts to address these
issues. For example, in 2000 the government adopted the Access to Public
Information Act to establish broader public access to government
information. In 2001, the government passed a new law that established an
Electronic Media Council, whose members will be chosen by Parliament and
the President, to regulate programming and issue licenses for the
electronic media. Some questions remain, however, about the effectiveness
of the implementation of these measures. For example, the International
Helsinki Federation for Human Rights reported in 2001 that organizations
or persons seeking access to government information continue to meet with
resistance from state bodies, such as the Ministry of Education, the
Ministry of Justice, the Chief Prosecutor*s Office, and the Directorate of
Religious Affairs. Further, implementation of the new Electronic Media

Council has been slow. In addition to concerns about limitations on
freedom of the media, concerns have been expressed about the effectiveness
of the constitutional protection for privacy. The U. S. State Department
indicates that the Bulgarian government continues to infringe upon those
rights. The sources

10 The International Helsinki Federation for Human Rights is a self-
governing group of nongovernmental, not- for- profit organizations that
works to protect human rights throughout Europe, North America, and the
central Asian republics formed from the territories of the former Soviet
Union. A specific goal of the organization is the monitoring of compliance
with human rights provisions of the Helsinki Final Act, an international
agreement signed by 35 countries in 1975 that links peace and security
with respect for human rights.

we reviewed indicate that government security agencies* such as the
National Intelligence Service, the National Bodyguard Service, and the
Ministry of Interior*s National Security Service* act without sufficient
judicial oversight. For example, the International Helsinki Federation for
Human Rights reported in 2001 that while the courts had issued more than
10,000 authorizations for wiretapping in 2000 at the request of the
Ministry of Interior, a mere 2 to 3 percent were actually used in criminal
proceedings. Further, the U. S. State Department reported in 2002 that
although the extent of the Ministry of Interior*s discretionary power to
authorize telephone wiretaps and electronic listening devices without

judicial review is unknown, concerns remained that government security
agencies acted without sufficient oversight. In response to such concerns,
a parliamentary commission charged with oversight of the *public order*
agencies held hearings in 2002 on the issue of sufficient oversight.

Democracy and the Rule of The Bulgarian constitution and the Law on the
Judicial System provide the

Law judiciary with the legal and institutional basis for independence.
Sources

we reviewed, however, indicate that the judiciary is plagued with serious
administrative problems, such as complicated funding procedures that lack
transparency, inadequate training for judges, poor administration, and

corruption. The Bulgarian government has recently developed a detailed
Strategy and Implementation Program for the reform of the judiciary, and
government sources indicate that implementation of the program has begun.
The program covers a 5- year period with short-, medium-, and longterm
priorities for developing European standards in justice, including
constitutional and statutory changes, budgetary improvements, specialized
courts, criteria for the selection of magistrates, disciplinary measures
for

magistrates, a national institute for vocational training of magistrates,
and the provision of information technologies and software for the
judiciary. Human Rights The Bulgarian government provides for and
generally respects the human

rights of its citizens and has ratified most human rights conventions.
According to the sources we reviewed, however, Bulgaria*s human rights
record is considered poor in certain areas. The primary concerns, in
addition to the trafficking issues discussed in the President*s report,
include police brutality and misconduct and child abuse. The Bulgarian
government has been addressing human rights problems. For example,

within the National Police Service, a Human Rights Commission was
established in 2000 to serve as the central authority responsible for the
(1) review of human rights violations, (2) incorporation of human rights
into

police training, and (3) review of police regulations for compliance with
signed international conventions on human rights. In addition, the
Bulgarian government has reinforced the institutional framework for the
protection of children by creating in January 2001 a new government
agency, known as the State Agency for Child Protection, to improve
coordination and implementation of policies at the national and regional
level and to provide guidance to and control of municipal service on child
protection activities. This agency is in the early stages of
implementation and lacks adequate personnel and financial resources. A
National Advisory

Council for Child Protection was created at the same time to serve as a
consultative body on child protection activities and is composed of
members from eight government departments and associate members from
several nongovernmental organizations and two international

organizations. Minority Rights The Bulgarian constitution and related
legislation prohibit discrimination;

Bulgaria also has ratified major international agreements aimed at
protecting minority rights. Sources we reviewed indicate, however, that
enforcement and implementation of provisions to protect minority rights
have provided only minimal protection, particularly for the Roma
population. Problematic areas include the absence of a systematic
mechanism for monitoring discrimination and incomplete incorporation of
treaty commitments on minority rights into legislation. To address
minority issues in the country, the government established the National
Council on Ethnic and Demographic Issues in 1999, but implementation of
the council*s efforts has been slow.

A serious concern regarding minority rights is that the Roma population,
in particular, suffers from widespread discrimination in employment,
education, health care, housing, social welfare, and the criminal justice
system. To address the ongoing difficulties facing the Roma population,
the government created a framework program for Roma integration in 1999,
but implementation of that effort has been slow. According to the U. S.
State Department, the only progress has been the hiring of a number of
Roma representatives in various local, regional, and national government
institutions.

Estonia With a population of 1.4 million, Estonia is the smallest of the
aspirant countries. Located on the Baltic Sea, Estonia shares a border
with another

country seeking NATO membership* Latvia* and with Russia. Estonia regained
its independence in 1991 and held its first elections in 1992. About 28
percent of Estonia*s population is composed of ethnic Russians. Democracy
and the Rule of

The Estonian constitution and related legislation provide the legal and
Law

institutional framework to ensure democratic institutions and the rule of
law as well as the independence of the judiciary. The sources we reviewed,
however, raised some concerns about the effectiveness of public

administration and the civil service as well as the judiciary*s ability to
effectively implement the rule of law. Estonia has made progress in
modernizing its public administration and the

civil service, and both operate satisfactorily. Transparency and
coordination in civil service procedures, however, remain problematic. For
example, the European Union indicates that the lack of transparency in
recruitment and promotion threatens the impartiality of civil servants.
According to Freedom House, 11 the Estonian government began substantial
reform of the civil service system in 1996. In April 2001, the government
approved a new reform program to further develop and improve the civil
service system. The government also has acknowledged that more remains to
be done to improve the recruitment, promotion, salary, training, and
appraisal systems.

A lack of experienced judges, insufficient training of judges, and a large
backlog of cases are considered to weaken the effective implementation of
the rule of law. The government is trying to address these issues with
ongoing reform of the court system and improvements in the training of
judges. In February 2001, for example, the government adopted a training
strategy that is expected to enhance judicial training.

Human Rights The Estonian constitution guarantees the protection of human
rights, and the government generally respects those rights for its
citizens and for the large ethnic Russian noncitizen community (about 13
percent of the total population are stateless). The Organization for
Security and Co- operation in Europe found in December 2001 that Estonia
was in full compliance with

11 Freedom House is a nongovernmental organization that conducts research
and promotes human rights, democracy, free market economics, the rule of
law, independent media, and U. S. engagement in international affairs.

its recommendations on human rights and, as a result, closed its Estonian
office. Estonia also has ratified most of the major international
conventions in the field of human rights, although it has not ratified the
United Nations Convention on the Status of Stateless Persons.

The government has employed several measures to enforce the protection of
human rights. For example, in June 1999, the Legal Chancellor Act went
into effect, combining the role of the Legal Chancellor* who has the power
to ensure that the state maintains compliance with the constitution* with
the responsibilities of an ombudsman to handle complaints by private
citizens against state institutions on issues such as human rights and
minority rights. Further, all residents* whether or not they hold Estonian
citizenship* may now file complaints about alleged violations of human or
constitutional rights directly with Estonia*s Supreme Court, bypassing the

local and regional courts. Concerns have been raised, however, with regard
to trafficking in human beings, police brutality, and poor prison
conditions. According to the U. S. State Department, Estonia is a country
of origin for trafficking in human

beings. The government is addressing the trafficking problem through such
activities as (1) a police awareness program, (2) joint efforts with
Nordic countries on an antitrafficking campaign, and (3) work with an
international organization on a public information campaign. Although

there is no specific antitrafficking law in Estonia, the International
Helsinki Federation for Human Rights reported in 2002 that the new penal
code adopted in June 2001 criminalizes trafficking in women, and the U. S.
State

Department determined that enforcement officials could fight trafficking
with criminal laws against activities such as pandering, kidnapping, and
inducing minors to engage in crime, extortion, and involuntary
prostitution. The U. S. State Department also found in 2002 that Estonia
was not in full

compliance with the U. S. minimum standards for fighting trafficking, but
it was making a significant effort to become so.

To address concerns about police brutality, the U. S. State Department
reports that Estonian officials are working to develop, strengthen, and
professionalize the police force. Prison conditions, overcrowding of
prisons and detention centers, ill- treatment of prisoners, and a lack of

training and funding also have been serious problems. To address those
problems, the government adopted in March 2000 a 3- year development plan
for reforming the prison system. In December 2000, the Imprisonment Act
came into force to bring about some needed improvements. While some
improvements have occurred* for example, the U. S. State

Department indicates that work and study opportunities for prisoners have
since increased slightly* the European Union reported in 2001 that
continued efforts were required to improve the serious problems that

remain in prison conditions. Minority Rights The constitution prohibits
discrimination against minorities, and the Law

on Cultural Autonomy provides for the protection of cultures belonging to
minority groups of Estonian citizens. Ethnic Russians comprise about 28
percent of the Estonian population, and sources we reviewed indicate that
the protection of this minority group is overall satisfactory. The
government also has addressed concerns about minority rights by creating a
roundtable of national minorities in 1993 to participate in the
formulation of policies affecting minority populations and more recently
through a government- approved minority integration program for 2000 to
2007. The European Union indicates this program has started and is
partially funded by foreign assistance.

Although some officials in the United Nations, the Russian government, and
local ethnic Russian communities have criticized the language requirements
for both citizenship and employment, Estonia has amended

its laws on citizenship and employment to bring the minimum language
requirements into conformity with accepted international standards. The U.
S. State Department indicates, however, that language training centers
available in the country lack qualified teachers, financial resources, and
training materials.

Latvia Located on the Baltic Sea, Latvia has a population of 2.4 million.
It shares borders with two other countries seeking NATO membership*
Estonia and

Lithuania* as well as with Russia. Latvia regained its independence in
1991 and held its first elections in 1993. About 30 percent of Latvia*s
population is composed of ethnic Russians.

Border Relations While Latvia enjoys good relations with its Baltic and
Nordic neighbors, it has yet to resolve border demarcation issues with
Russia, Belarus, and Lithuania. Latvia has ratified a border agreement
with Russia, but the

Russian parliament has yet to ratify the agreement. Latvia and Belarus
have signed and ratified a border agreement, but the technical details
remain to be implemented. According to Latvian officials, Latvia has
completed its

technical demarcation of the border, but Belarus has not had sufficient
funding to complete its border demarcation. Latvia and the European Union
have now provided Belarus with funding to finish its border

demarcation, which the Latvian government hopes will be completed by the
end of 2002. Latvia and Lithuania have signed a maritime border agreement
to settle issues regarding oil exploration and fishing rights in the
Baltic Sea. While Lithuania has ratified the agreement, Latvia has not yet

done so. Civil Liberties The Latvian constitution provides for the
protection of individual liberties

such as freedom of expression, the media, religion, and association, and
the government generally respects those rights. Both Latvian and Russian
language media sources operate in the country. The sources we reviewed
indicate some concern, however, that Latvia may restrict media freedom
through legislative restrictions on language content. For example, the Law
on Radio and Television requires that no more than 25 percent of private
broadcasts can be in a language other than Latvian. According to a Latvian
expert on human rights issues, this legislation is a violation of freedom
of expression in the media. The owner of a Russian language media outlet
is challenging the law to bring it before the Constitutional Court.

Human Rights The Latvian government provides for and generally respects
the human rights of its citizens and has ratified many major international
human rights accords. The sources we reviewed, however, raised concerns
about inefficiency in the judicial system, police brutality, and
trafficking in human beings. First, the protection of human rights is
considered to be impaired by inefficiency in the judicial system, which
has a large backlog of court cases and, as a result, long pretrial
detention periods often lasting over 1 year. Detention centers, as well as
the prisons, are overcrowded and in poor condition. The causes of these
problems are considered to be

insufficient funding, training, and equipment for judges and bailiffs as
well as an insufficient number of judges. The European Union noted in
2001, however, that the Latvian government is committed to strengthening
the judicial system and is undertaking reforms to improve its efficiency.
For instance, the government is considering draft legislation to modernize
the law on criminal procedure and is introducing alternative sentencing
options to reduce the backlog.

Second, there are reports of police misconduct in connection with suspects
and detainees. The government acknowledges that police brutality exists,

but feels that the number of incidents is not above the norm. In 2000, the
government amended the Law on the Constitutional Court to allow
individuals to file complaints directly to that court regarding violations
of their rights.

Third, Latvia is a country of origin and transit for trafficking in human
beings, which the government acknowledges. The U. S. State Department
reported in 2002 that Latvia does not fully comply with minimum U. S.
standards for eliminating trafficking, but the government is undertaking

efforts to reach full compliance. While Latvia does not have a law
defining trafficking in human beings as a crime, the government has
introduced legislation to make this an offense. Judicial Independence
While the Latvian constitution provides for an independent judiciary,
there

is widespread concern that, in practice, the executive branch exerts
influence over the judiciary. The European Union noted in 2001 that the
Ministry of Justice has considerable control over judicial administration,
financing, and career paths. The government acknowledges that the
executive branch consolidates and writes the courts* budget but indicates
that the courts are involved in this process. The Ministry of Justice is
preparing new laws on judicial powers, court administration, and the

establishment of a separate judicial council to oversee the courts.
Minority Rights Latvia has adopted measures to improve the protection of
minority rights

and has fulfilled recommendations on the protection of minority rights
promulgated by the Organization for Security and Co- operation in Europe.
As a result, the organization closed its monitoring mission in Latvia in
December 2001.

The international community, however, has had concerns over perceived
inadequate protection of ethnic minorities in Latvia, particularly with
regard to ethnic Russians who represent about 30 percent of the
population. The Latvian government has taken steps in three key areas to
alleviate domestic and international concerns about the protection of

minority rights. First, the Latvian government is addressing minority
rights through a program for integration of society in Latvia that covers
civic participation; political, social, and regional integration; and
education, language, and culture. The program established an Integration
Foundation to oversee the collection and allocation of funding for
projects to support

the participation of ethnic minorities in civil society, social and
regional

integration, economic development, and information campaigns. The European
Union noted in 2001 that the program and related authorized funds
represent considerable progress in promoting social integration.

Second, the government abolished a controversial election law requiring
candidates for local and parliamentary elections to prove their
proficiency in the Latvian language to be eligible to run in an election.
The international community had criticized this requirement and the
European Court of Human Rights rendered a verdict in 2002 against the
Latvian government for having removed the name of a candidate from the
election lists because the candidate did not meet the requirement. The
European Court concluded that Latvia infringed on the candidate*s right to
stand in elections and awarded monetary damages to the defendant. The
government subsequently abolished the law in May 2002.

Third, Latvia has been working to improve the naturalization process. This
process has been criticized for lack of information on procedures and high
naturalization fees. There are an estimated 520,000 noncitizens in Latvia,
mainly elderly ethnic Russians who speak limited Latvian; approximately
51,000 persons have received citizenship since 1995. The government
changed legislation in 2002 to lower the naturalization fee for low-
income

groups and to exempt graduates of minority secondary schools from the
language proficiency naturalization test. It also created a professional
naturalization board* which sources consider competent* to administer and
score the naturalization exam. The board conducted a naturalization
information campaign throughout the country in the Latvian and Russian
languages between November 2001 and February 2002. It started a second

information campaign in coordination with the British embassy in July
2002. The number of noncitizens passing the naturalization exam has
increased.

Nevertheless, the Latvian government indicates that the 1998 Law on
Education requires that by 2004, 75 percent of state- funded secondary
education must be taught in the Latvian language. The government indicates
that this law provides a sufficient basis for ethnic minority

education because it balances the goal of minority integration into
society with sufficient opportunity for learning about respective ethnic
cultures. Further, the Ministry of Education states that it has developed
four model

programs that are based on the proportion of classes held in ethnic
minority languages versus the Latvian language.

Lithuania With 3.8 million people, Lithuania has the largest population of
the three applicant countries located on the Baltic Sea. Lithuania shares
a border

with a NATO member* Poland* and with another country seeking NATO
membership* Latvia. Lithuania also borders the Kaliningrad Region of the
Russian Federation, which became separated from Russia when Lithuania and
Latvia regained their independence. 12 Lithuania regained its independence
in 1990, but the independence proclamation was not generally recognized
until 1991. The first elections were held in 1992. Border Relations The
sources we reviewed indicate that Lithuania maintains good relations

with its neighbors. According to the Lithuanian government, the situation
of Kaliningrad on Lithuania*s border poses no military or political
implications for Lithuania*s pursuit of NATO membership. First, the
transport of Russian troops and arms between Russia and Kaliningrad has
been carried out in complete accord with the transportation agreements
signed by the two countries. Second, since 1995 a number of
intergovernmental agreements have been undertaken to address relations
with Kaliningrad and Russia. For example, a 1999 intergovernmental
agreement on cooperation between regional and local authorities of
Lithuania and Kaliningrad led to the establishment in 2000 of a bilateral
Lithuanian- Kaliningrad Region Cooperation Council to support cooperative
efforts on the environment, border control, cross- border cooperation,
culture, and health care.

The key issue for Russia is the ease or freedom with which residents of
Kaliningrad will be able to travel to and from Russia once Lithuania joins
the European Union. The European Union requires its member countries to
maintain strict border controls, and unless the requirements are changed,
residents of Kaliningrad would have to obtain visas to travel between
Kaliningrad and the rest of Russia. According to media reports, the
European Union and Russia reached agreement on November 11, 2002, to allow
Russians traveling to and from Kaliningrad to use a special multipleentry
travel document, which is expected to go into effect in 2003. 12
Kaliningrad covers about 15,000 square kilometers and has just under 1
million people.

Corruption Corruption and bribery in Lithuania are serious concerns.
According to the European Union, the government reported that corruption
occurs mainly in the field of public procurement and customs, with the
most frequent type

of corruption being administrative corruption within the government.
Freedom House concluded in 2001 that corruption is one of the major
obstacles to business development in Lithuania.

The government has recently made progress in the fight against corruption
by pursuing several anticorruption measures. First, the Special
Investigation Service* the agency established in 1997 to coordinate
anticorruption efforts* strengthened its capabilities by (1) improving its
organizational structure and (2) providing specialized training and
adopting a code of honor for its officers. The European Union reports that
the service has achieved considerable results in fighting corruption in
Lithuania*s budgetary, municipal, and financial institutions as well as
among civil servants working in privatization, customs, law enforcement,
and other areas.

In addition, the government has developed a number of anticorruption
measures, including adoption in September 2001 of a comprehensive
*National Anti- Corruption Strategy,* which is a long- term project that
specified the government*s main directions and priorities in the fight
against corruption. Planned implementation of that strategy over a 7- year
period affects most areas of public administration, focusing on prevention
and investigation of corruption, enforcement of anticorruption laws, and
raising public awareness. Lithuania also, among other things, established
a new unit within the Customs Department to investigate violations made by
customs officials and has been participating in international
anticorruption

organizations such as the Council of Europe Group of States Against
Corruption. The European Union reported in 2001, however, that further
progress is needed in certain areas such as strengthening public
administration and ensuring the transparency of administrative procedures
to reduce administrative corruption.

Human Rights The Lithuanian constitution provides for the protection of
human rights for its citizens, and the government generally respects those
rights. While the

sources we reviewed raised several concerns about human rights, the
government has been working to address each problem. The concerns raised
include police brutality, poor prison conditions, violence and
discrimination against women, child abuse, and trafficking in human

beings. The Lithuanian government has been addressing these and related
human rights issues through such efforts as (1) improving safeguards that
can prevent the ill- treatment of persons detained by the police; (2)
reconstructing correction facilities and improving the poor* and
lifethreatening* conditions of prisons; (3) ratifying the United Nations
Convention on the Elimination of All Forms of Discrimination Against
Women; and (4) establishing a Children*s Rights Ombudsman in 2000 to
control the implementation of relevant laws, oversee local children*s
rights protection services, and investigate complaints. While
institutional mechanisms for coping with discrimination and violence
against women are developing slowly, the Children*s Rights Ombudsman has
generated some improvements in dealing with child abuse.

According to the U. S. State Department, Lithuania is a country of origin,
transit, and destination for trafficking in human beings. To fight that
trafficking, Lithuania established an organized crime investigation
service in 1997 in the police department. The government also has
developed an antitrafficking program for 2002- 04; an interministerial
commission is to be established to coordinate implementation of that
program. In 2002, the U. S. State Department determined that Lithuania
fully complied with U. S. minimum standards for fighting trafficking. That
determination means that

a government has criminalized trafficking in human beings, successfully
prosecuted the offense, and provided a wide range of protective services
to victims.

Judicial Independence The constitution guarantees the independence of the
judiciary, including the independence of judges and the separation of
powers. The sources we

reviewed, however, indicate that executive involvement in the court*s
budget process and the poor working conditions of the courts remain
constraints on judicial independence. In 1999, a Constitutional Court
ruling mandated restructuring of the judiciary to reduce the executive*s
undue influence over judges. According to the Open Society Institute, 13
executive involvement in the budgeting process of the courts and the
allocation of funds remains significant, and the budget process is
insufficiently transparent. The conditions of the courts may also affect
judicial independence because the courts are underfunded, working
conditions are

13 The Open Society Institute is a private foundation that develops and
implements a range of programs in civil society, education, the media,
public health, and human and women*s rights as well as social, legal, and
economic reform.

poor, and caseloads are heavy due to a lack of qualified judges. And in
2001, the Constitutional Court ruled that a parliamentary decision to
significantly reduce judges* salaries was unconstitutional because it
could threaten the financial independence of the judges. While some
progress has occurred, the European Union noted in 2001 that

Lithuania needed to (1) adopt a new Law on Courts to remove executive
influence from both the budget process and the administration of the
judiciary, (2) provide adequate budgetary resources and managerial
competence, (3) further improve the court system in areas such as working

conditions for staff, and (4) improve the qualifications of specialized
judges and prosecutors through additional training. Adoption of a new Law
on Courts is a serious concern because the judicial system remains in a
state of flux without a new law, enabling continued executive influence in
the

budget process and other areas of court administration. Pending adoption
of a new Law on Courts, the Department of Courts, under the Ministry of
Justice, performs some administrative tasks regarding the management of
the courts.

Minority Rights Minority ethnic groups comprise about 20 percent of the
Lithuanian population. Our sources indicate that the protection of
minorities is

satisfactory overall. Lithuania also has signed and ratified major
international treaties addressing racial and ethnic discrimination and the
rights of minorities, including the Framework Convention on Protection of
National Minorities. Concerns were expressed, however, that the Roma
population* although a relatively small community of about 3,000 people*
faces serious problems in education, housing, and health. The Lithuanian
government has established a public center for the Roma in Vilnius, the
capital city, and a new Roma Integration Program 2000- 2004 to

help the Roma integrate into Lithuanian society. Former Yugoslav The
Former Yugoslav Republic of Macedonia (Macedonia) is a landlocked Republic
of Macedonia

country of 2 million people. Situated on the southern part of the Balkan
peninsula, it borders one NATO member* Greece* and two other countries
seeking NATO membership* Albania and Bulgaria* as well as the Federal
Republic of Yugoslavia. Macedonia declared its independence from the
former Republic of Yugoslavia in late 1991. In early 2001, ethnic Albanian
rebels within Macedonia* the National Liberation Army* attacked Macedonian
police outposts, leading to a 6- month armed conflict

between ethnic Albanian guerillas and Macedonian security forces. The
conflict ended with the signing of the Ohrid Framework Agreement on August
13, 2001, by Macedonia*s four main political parties, two of which were
ethnic Albanian parties. NATO forces were brought in to oversee the peace
plan and to disarm the Albanian liberation forces. A NATO force remains
deployed in Macedonia to provide security for international civilian
monitors of the peace agreement.

Democracy and the Rule of The constitution guarantees the principles of
democracy, including free and

Law fair elections. Although the sources we reviewed indicate that the
effective

implementation of democratic institutions has been difficult in Macedonia,
the interim government has taken several steps to implement the political
provisions of the Ohrid Framework Agreement. These steps include the
ratification of 15 constitutional amendments that call for political
reforms and the adoption of an amnesty law for former ethnic Albanian
rebels that covers crimes for high treason, armed rebellion, mutiny, and
conspiracy against the state. Currently, the interim government is slowly
implementing the statutory reforms required for the full implementation of
the agreement.

Although implementation of the agreement*s political reforms has been
slow, the Organization for Security and Co- operation in Europe concluded
that the parliamentary elections of September 15, 2002* an integral
component of the Ohrid Framework Agreement* were largely free of ethnic
violence and generally in line with international standards. The
organization stated that this election represents a significant
improvement over recent elections and a major contribution toward
restoring a sustainable political process in the country. The new election
system adopted earlier in 2002 was highlighted by the organization*s
international observation mission as a major contributor to a successful
September 2002 election process. As of September 16, 2002, unofficial
election results indicated that Macedonia*s Social Democrats received
nearly two- thirds of the vote and the interim government coalition of two
nationalist parties* one Albanian, the other Macedonian* was not
reelected. According to media reports, the Albanian parties were satisfied
with the high voter

turnout and the general conduct of the elections, which experienced few
irregularities. The issue that is pending is how the new government will
be formed and if the Social Democrats will share power with the new
Albanian party led by a former Albanian rebel leader.

Human Rights The constitution provides for a broad set of human rights.
The human rights situation in Macedonia, however, deteriorated
significantly during

the internal conflict in 2001; the government was unable to provide
protection against human rights violations and violated those rights in
some instances. According to the sources we reviewed, although the
internal conflict has ended, serious concerns remain with regard to police
misconduct and violence as well as trafficking in human beings.

Police misconduct was a serious problem during the conflict and still
remains a concern. During the conflict, police and security forces
violated citizens* constitutional rights, particularly with regard to
ethnic Albanians. According to the International Helsinki Federation for
Human Rights, there is no adequate legal recourse in Macedonia for
unlawful or irregular police activities. In addition, unofficial
paramilitary organizations that exist under the control of the Minister of
the Interior are of serious concern to the government and the
international community. Trafficking in human beings is a serious problem.
Macedonia is a country of

transit and destination for such trafficking. To address the trafficking
problem, the government adopted a new law in 2002 that criminalizes
trafficking in human beings and actions associated with that trafficking.
According to the U. S. State Department, the new law has resulted in a
number of arrests. The U. S. State Department also notes that the
government has devoted a significant amount of resources to
antitrafficking programs, such as that of an interministerial working
group devoted to legal reform and to the creation of a special police unit
dedicated to antitrafficking efforts.

According to the U. S. State Department, the Macedonian government offers
limited support for victims of domestic violence and relies heavily on
international donor aid to maintain that limited support. In addition,

sources indicate that lingering patriarchal social attitudes limit women*s
participation in the economy, the government, and political life. Women*s
participation in politics is disproportionately low. In Muslim
communities, women are deprived of their electoral rights due to the
practice of *family

vote* through which men vote on behalf of the women in their family.
Efforts to address these issues are hampered by insufficient monitoring
procedures and a lack of public awareness, particularly with regard to
domestic violence.

Minority Rights The constitution protects the right of minorities to
preserve and express their cultural, religious, and linguistic identities,
including the right to

primary and secondary education in the minority language. Sources we
reviewed, however, indicate that societal discrimination against
minorities* including Roma, Albanians, Turks, and Serbs* remains a
problem. Turks and Roma complain of governmental, societal, and cultural
discrimination, but the most explosive source of ethnic tension is the

country*s large Albanian minority. The problem of discrimination against
minorities was addressed by the August 13, 2001, Ohrid Framework
Agreement, which contains broad constitutional and legislative reforms

focused on greater minority rights and increased minority participation in
the domestic police force and other governmental institutions. However,
according to the New York University School of Law, which monitors
constitutional issues in Eastern Europe and the former Soviet Union,
implementation of the reforms in the Ohrid Framework Agreement has been
slow.

Romania With nearly 22 million people, Romania is the most populous of the
nine countries aspiring to NATO membership. Situated on the Black Sea,
Romania is also bordered by one NATO member* Hungary* as well as

Moldova, Ukraine, and the Federal Republic of Yugoslavia. Bulgaria, on
Romania*s southern border, is also seeking membership in NATO. While
Romania was slow to implement reforms after it adopted its new
constitution in 1991, the government elected in November 2000 has been
aggressively pursuing the adoption and implementation of political,

economic, and defense reforms. Border Relations Romania has worked to
establish harmonious and constructive

relationships with other countries on a bilateral, trilateral, and
regional basis. The sources we reviewed indicate that Romania has
concluded numerous treaties on political, economic, and security issues.
Romania also has participated in several regional organizations and
activities, such as two committees that address regional cooperation in
defense matters* the South Eastern Europe Defense Ministerial Coordination
Committee and the Political- Military Steering Committee of the
Multinational Peace Force South Eastern Europe, both of which it is
chairing for 2001 to 2003. Romania also participates in the South Eastern
Europe Cooperation Process, a subregional group aimed at implementing
measures to (1) strengthen stability, security, and good neighborly
relations; (2) intensify

multilateral economic, commercial, and cultural cooperation; and (3)
combat organized crime, terrorism, and trafficking in drugs and arms.

Recently, however, some tensions have arisen with Moldova, one of the
countries Romania borders. Romania was the first country to recognize the
independence of the Republic of Moldova, a country with which it shares a
heritage of language, culture, and traditions. The two countries had a
good relationship during the 1990s. According to a January 2002 assessment
in

Jane*s Intelligence Review, and recent media reports, Moldova*s election
in 2000 of a traditional communist as president has created tensions with
Romania due to Molodovan policies and political positions reminiscent of
the Soviet era. Another neighboring country, Hungary, adopted a Status Law
passed by the Hungarian Parliament in June 2001, which gave ethnic
Hungarians in other countries the right to work in Hungary for 3 months
each year as well as health, transportation, and education benefits. That
law strained Hungary*s relationship with some neighbors* in particular,
Romania and Slovakia* because Hungary appeared to be trying to spread its
political jurisdiction to the citizens of other countries and, in doing
so, discriminating against nonHungarians in those countries. However,
Romania and Hungary have since concluded a Memorandum of Understanding
addressing the issue, thereby muting tensions between them.

Civil Liberties Romania has been generally successful in providing for and
protecting civil liberties. The sources we reviewed indicate that the
constitution and laws

generally protect civil liberties and that the government generally
respects those protections. Romania enjoys a diverse media sector, with 15
national daily newspapers and many more local papers* most of which are
private* as well as more than 70 private television channels and more than
150 private radio stations, according to the European Union. Nevertheless,
certain legal provisions have raised concerns about possible

limits to freedom of expression and the media as well as freedom of
religion. While the constitution provides for freedom of expression and
the media, it prohibits *defamation of the country* and *offense to
authority.* Because libel and slander are criminal offenses that can bring
prison sentences, there is some concern that such legal provisions may be
used to

intimidate the media. For example, Human Rights Watch 14 reported in 2002
that these kinds of constitutional curbs on free expression in Romania
were used by authorities to interfere with journalists* work. The European
Union noted in 2001 that no progress had been made during the previous
year in addressing its own concerns about such legal provisions in
Romania.

Religious freedom is also constitutionally protected and generally
respected by the government, but religious groups must register with the
state to be recognized as a religion. Recognition as a religion enables
religious groups to teach religion in public schools, receive funds to
build churches, pay clergy salaries with state funds, subsidize clergy*s
housing with state funds, broadcast religious programming, and enjoy tax-
exempt status. While about 86 percent of Romanians are adherents of the

Romanian Orthodox Church, the government officially recognizes 15
religions. New minority religious groups have reported, however, some
impediments to registration.

Human Rights The sources we reviewed indicate that the constitution
guarantees human rights and that the government generally respects those
rights. Several

serious problems remain, however, including (1) police brutality toward
detainees and prisoners; (2) generally harsh and overcrowded prison
conditions; (3) weak enforcement of constitutional protections against
discrimination, especially for women and the Roma population; (4)
trafficking in human beings as a country of origin and transit; (5)
violence against women; and (6) issues concerning institutionalized
children. For example, the European Union reported in 2001 that cases of
inhuman and degrading treatment by the police continued to be reported by
human rights organizations, that prisons were extremely overcrowded, and
that prison conditions overall were often extremely poor. A particular
problem cited was the excessive length of pretrial detention periods that
could last as long as half of a prison sentence.

Many government actions* most of them relatively recent, however* are
under way to address these problems. For example, the government adopted
the operating procedures for an ombudsman office in 1997 to protect
citizens against abusive or random acts by public officials and has

14 Human Rights Watch is an international nongovernmental organization
that monitors the protection of civil liberties and human rights around
the world.

ratified major international human rights conventions. According to the
European Union, government efforts to address problems in prison
conditions have led to some improvements.

Further, the U. S. State Department noted in 2002 that Romania was making
a significant effort to eliminate trafficking in human beings, although
the country was not yet in full compliance with the U. S. minimum
standards for doing so. In 2001, the European Union also concluded that
there was some progress in addressing the needs and care of
institutionalized children, but more was needed. The Romanian government
included provisions to address both the trafficking and adoption issues in
its April 2002 action plan for preparation for NATO membership.

Judicial Independence The sources we reviewed indicate that the
constitution and related legislation generally provide for an independent
judiciary. These sources

also indicate, however, that the judiciary is not sufficiently independent
from the executive branch or political influence and that it suffers from
endemic corruption. The government has been implementing reforms to
address these issues, but because the reforms are generally recent there
has been little, if any, opportunity as yet for their implementation.

Executive responsibilities over the judicial branch, in particular, are
considered intrusive and the most serious threat to judicial independence.
The Ministry of Justice (1) controls the judicial branch*s budget process;
(2) is involved in the appointment, evaluation, promotion, and
disciplining of judges* particularly through its (nonvoting) chairmanship
of the Superior Council of the Magistracy, which makes those decisions;
and (3) is responsible for the training of judges. Because of the role of
the Ministry of Justice, some concern also has been expressed about the
potential for political influence over the judiciary.

According to the sources we reviewed, the current Romanian government is
addressing these concerns about judicial independence by pursuing policy
and organizational changes such as (1) enhancing judicial independence
through statutory changes that strengthen the role of the Superior Council
of the Magistracy and make it an autonomous public institution; (2)
adopting a new Code of Conduct for Magistrates that has been distributed
to all courts of appeal and prosecutors* offices; (3) creating the legal
framework to establish specialized courts for cases involving minors as
well as labor, commercial, fiscal, and administrative issues; (4)
providing professional training for judges and court clerks; and

(5) amending the Criminal Procedure Code to address weaknesses in the
state prosecution system. The government also is trying to consolidate the
status of judges by, among other things, providing them with appropriate
wages and social protection as well as both initial and lifelong training.
And

in its efforts to fight corruption, the government is developing a pilot
project for the random assignment of court cases to help prevent judicial
corruption.

Minority Rights The constitution protects the rights of national
minorities and calls on the state to create an environment in which
minority groups can preserve,

develop, and express their identity without discrimination. The
constitution and electoral laws allow recognized ethnic minorities one
representative in the Chamber of Deputies (one of the two houses of
Parliament) if the minority*s political organization obtains at least 5
percent of the average number of valid votes needed to elect a deputy
outright. Organizations representing 18 minority groups elected deputies
under this provision in 2000. The constitution and electoral law, however,
provide the Roma minority population with one guaranteed seat in
parliament, while the Hungarian minority population has obtained
parliamentary representation through the normal election process.

Nevertheless, concerns have been raised about the effectiveness of
Romania*s achievements in protecting minority rights. The sources we
reviewed indicate that while Romania provides institutional protections
for minorities, respect for minority rights in practice and the
effectiveness of the implementation of related programs, is mixed or weak.
The sources we reviewed also indicate that Romania*s Roma population

endures significant hardships and remains subject to widespread
discrimination. The European Union reported in 2001 that (1) instances of
police harassment have been documented against individuals and even entire
Roma communities; (2) the Roma face difficulties in gaining access

to schools, medical care, and social assistance; (3) the Roma are often
banned from public places; and (4) despite its illegality, a number of job
advertisements explicitly exclude Roma applicants. Roma are particularly
vulnerable to the effects of the generally poor economic conditions in

Romania. Romania launched a series of new initiatives in 2000 to address
concerns about the protection of minority rights and the problems that the
Roma face. In the fall of 2000, Romania adopted an ordinance on the
prevention

and punishment of all forms of discrimination that creates a National
Council to Prevent and Combat Discrimination. In April 2001, the
government adopted a long- term initiative called the National Strategy
for Improving the Condition of Roma. A law passed that same month on
public administration also allows the use of minority languages in
communications with public authorities when the minority population is
more than 20 percent of the local community. Because these are recent
initiatives* both the National Council and the new Strategy (a 10- year
program) were scheduled for implementation some time in 2002* there has
been limited, if any, opportunity for implementation. There also is
concern that the Roma may not benefit from the language provisions because
they do not comprise more than 20 percent of the population in any
location. Social Justice The government has been working to address some
important social justice

issues. For example, recent laws have been passed to address poverty and
the restitution of property. Starting in January 2002, a family*s income
was to be supplemented with government grants to provide a minimum income
guarantee. The Real Estate Restitution Law went into effect in 2001,
setting out the basic principles and procedures for the restitution of
properties forcibly taken by the communist government and addressing
weaknesses in prior legal provisions.

Slovakia With a population of 5.4 million people, Slovakia borders the
three most recent members of NATO* Poland, the Czech Republic, and
Hungary* and

also shares borders with Austria to the west and Ukraine to the east. Once
part of the former Czechoslovakia, Slovakia became an independent state in
1993.

Democracy and the Rule of The international community, and NATO in
particular, watched the most

Law recent parliamentary election in Slovakia with great interest and
concern because the party leading in the polls* the Movement for a
Democratic Slovakia* had failed to show commitment to democracy and the
rule of

law when it was last in power. Slovakia held that election September 20
and 21, 2002. Although the Movement for a Democratic Slovakia party did
win a plurality with 19.5 percent of the votes, it could not find partners
to

form a coalition government. 15 As a result, Slovakia*s President asked
the leader of the Slovak Democratic and Christian Union party to form the
next coalition government. U. S. and European officials have expressed

satisfaction with the results. Human Rights The Slovak constitution
provides for the protection of human rights and the

government generally respects those rights. In addition, Slovakia*s legal
system complies with international human rights standards. In 2001, the
constitution was amended to establish the legal basis for an ombudsman
office to protect fundamental human rights in cases where governmental
administrative units violate the legal system or the rule of law.
Parliament

elected the first ombudsman in March 2002. Nevertheless, concerns have
been raised about poor police treatment of persons detained for trial,
about long pretrial detention of the accused due to a large backlog of
court cases, and about trafficking in human beings. The sources we
reviewed reported ill- treatment of detainees* especially ethnic Roma* at
the hands of the police. The European Union noted in 2001 that there is an
urgent need to improve police recruitment and establish an effective
system to handle complaints against the police. A backlog of court cases
leading to long pretrial detention periods is

another human rights concern, according to Freedom House. For example, the
European Court of Human Rights ruled in 2000 that the detention period of
an individual in a mental hospital violated the right to a speedy trial.
And the European Union reported in 2001 that some court proceedings have
exceeded the 3- year statute of limitations. The government has initiated
a judicial reform plan, which includes an amendment to the Civil
Procedures Act aimed at reducing the length of judicial proceedings by
broadening the mandate of district courts and by limiting appeals to
regional courts. 15 Turnout for the parliamentary elections was 70.1
percent. The Movement for a Democratic

Slovakia party won 19.5 percent of the vote (36 out of 150 legislative
seats); Prime Minister Mikulas Dzurinda*s Slovak Democratic and Christian
Union party placed second with 15.1 percent (28 seats in parliament);
Robert Fico*s Smer (Direction) party finished third with 13.5 percent (25
seats); the ethnic Hungarian Coalition Party received 11. 2 percent (20
seats); the Christian Democratic Movement received 8.3 percent (15 seats);
the Alliance for New Citizens received 8.0 percent (15 seats); and the
unreformed Communist Party received 6.3 percent of the vote (11 seats).
(Total may not add to 100 percent due to rounding).

Slovakia also is a country of origin and transit for trafficking in human
beings. Although the government established a special branch in 2001 in
the Office for the Fight Against Organized Crime to combat organized crime
and trafficking in human beings, the European Union concluded in 2001 that
the government had made only limited progress in fighting trafficking in
human beings.

Judicial Independence Slovakia*s constitution provides for an independent
judiciary, but there are concerns about executive influence over the
judicial system through administrative, personnel, and budget oversight.
To address these concerns, a constitutional amendment was passed in 2001
establishing an independent Judicial Council to carry out administrative
functions for the

judiciary. This amendment also expands the scope of the Constitutional
Court by providing greater access to the court by individuals and allowing
the court to award damages to individuals whose rights are violated.

Minority Rights The constitution provides for the protection of minority
rights and the government generally respects those rights. Slovak
legislation also

provides a legal framework that ensures that ethnic minorities enjoy the
same rights as ethnic Slovak citizens. Nevertheless, serious problems
regarding societal discrimination against the Roma have been reported.
Roma suffer from poverty, violence, and abuse as well as social
discrimination in housing, health care, social services, public

administration, education, and employment. To address the Roma situation,
the government adopted a Roma strategy in 2000 that funds programs in
housing, infrastructure, education and training, employment, and health at
the local and national levels. Slovenia A country of 2 million people,
Slovenia was once part of the former

Republic of Yugoslavia. It shares borders with two NATO members* Italy to
the west and Hungary to the east* as well as with Croatia to the south and
Austria to the north. Slovenia declared its independence in June 1991,
adopted its own constitution in December 1991, and held its first free
elections as an independent country a year later.

Border Relations Slovenia*s relations with its neighbors are generally
harmonious and cooperative. Border definition issues and issues related to
the succession

to the former Republic of Yugoslavia are generally being addressed through
cooperative efforts. There has recently been heightened tension, however,
between Slovenia and Croatia. While Slovenia and Croatia had reached
agreements on border and other issues resulting from their independence,
Croatia has yet to ratify agreement on borders between the two countries.
According to recent media reports, Croatia cannot gain parliamentary
support to ratify the border agreement and wants new negotiations, which
Slovenia has refused. There is also some dispute over Croatia*s recent
requirement that oil transported overland through Croatia must be moved
through strictly defined routes. According to media reports, Slovenia has

been attempting to address the oil transport issue bilaterally, but it
also has considered filing a complaint with the World Trade Organization
to resolve the issue.

Civil Liberties Slovenia has been successful in protecting civil
liberties. The sources we reviewed indicate that the constitutional
guarantees of freedom of thought, speech, public association, the media,
religion, and equality are generally respected by the government. The
media are diverse and enjoy full freedom, with both publicly and privately
owned media in existence. Some sources note, however, that insulting a
public official is prohibited. According to an official at the Ministry of
Justice, while there have been some cases of individuals suing the media
for insulting public officials,

public officials have won in only a few cases and not much has been
awarded to those winners. The legal issue in these cases is that the law
does not define *insult.*

Human Rights The sources we reviewed indicate that Slovenia*s constitution
broadly protects human rights and freedoms, and guarantees the rights of
the disabled. The government respects those human rights guarantees and
has

an Ombudsman for Human Rights. According to government officials, Slovenia
also is very active internationally in facilitating the protection of
human rights through the efforts of such groups as the Council of Europe,
the United Nations, and an informal group of states known as the Human
Security Network, which combines efforts to promote humanitarian and
security issues. Some concerns have been expressed, however, about (1) the
abuse of persons in custody, (2) trafficking in human beings, and (3) the
legal definition of torture. The sources we reviewed raised some concerns
about excessive police force against persons in custody. In its 2001
Annual Report, Slovenia*s

Ombudsman for Human Rights reported that the prisons and detention centers
were overcrowded, and that persons detained (but not yet convicted) were
subjected to more severe conditions than convicted prisoners.

Slovenia is both a transit and destination country for trafficking in
human beings. The 2002 U. S. State Department*s Trafficking in Persons
Report found that Slovenia is making significant efforts to achieve
compliance

with minimum U. S. standards for fighting trafficking, but that the
country does not yet fully comply with those standards. The report notes
that Slovenia lacks a law specifically prohibiting trafficking. Although
persons can be prosecuted under related offenses, prosecutors find it
difficult to get convictions under those related laws. The report also
notes that the government has made progress in monitoring its borders and
consequently has reduced illegal migration considerably. The government
has named a National Coordinator for Trafficking in Persons and has formed
an interagency working group that adopted a national strategy to combat
trafficking.

Concern also has been raised about Slovenia*s ability to prosecute persons
accused of torture. The United Nations Committee Against Torture has
recommended revision of Slovenia*s statutory definition of torture because
it was not considered to be broad enough to prevent people guilty of
torture from escaping punishment. Minority Rights Slovenia*s constitution
protects minority rights and the government

generally respects those rights. The European Union notes that Slovenia
has ratified major international instruments in the field of protection
for minorities, and it has established a Government Office for National
Minorities to monitor implementation of legislation protecting minority
rights and to fund minority language media and culture.

Nevertheless, Slovenia*s constitution guarantees minority rights to
Hungarians and Italians, thereby guaranteeing each group representation in
the parliament as well as rights to bilingual government administration
and bilingual education. In contrast, however, the constitution recognizes
that the Roma community exists and stipulates that their rights should be
regulated by separate law, a law which, according to a Ministry of Justice
official, has now been passed. No other ethnic minorities are specified
for similar kinds of constitutional protections. Slovenian government
officials explained that the constitutional guarantees to Hungarians and
Italians

originated in 1974 under the former Republic of Yugoslavia and were
carried over to the new Slovenian constitution, which was adopted in 1991.

Independent Assessments of Progress toward

Appendi x III

Democracy NATO*s political goals for countries seeking membership focus on
developing democratic institutions and principles. This appendix provides
the results of two different analyses of democracy compiled by Freedom
House 16 and an assessment by the European Union for seven of the nine
countries seeking NATO membership that are also candidates for membership
in the European Union. (Albania and the Former Yugoslav Republic of
Macedonia are not yet official candidates for membership in the European
Union.) We are providing the results of these independent

assessments, but we did not evaluate the methodologies for producing these
results or the application of the methodologies.

Analyses of Democracy Freedom House produces two different analyses of
development toward democracy in countries. One analysis measures
democratic freedom in

over 200 countries and territories, while the other measures progress
toward democracy in those countries transitioning from communist systems.

Measures of Democratic Freedom House publishes an annual assessment of the
state of democratic

Freedom freedom in 192 countries and 17 territories around the world. That

assessment is based on ratings for political rights and civil liberties in
each country or territory. Determination of a country*s status as *free,*
*partially free,* or *not free* is based on the average of ratings for
political rights and civil liberties. Countries whose average rating is
between 1 and 2.5 are generally considered *free.* Countries whose average
rating is between 3 and 5.5 are considered to be *partially free,* while
*not free* applies to

countries whose ratings average between 5.5 and 7. Table 3 provides the
2001 to 2002 political ratings for the nine countries seeking NATO
membership and the three most recent NATO members. As the table shows,
seven of the NATO candidate countries enjoy ratings of *free,* while two
of them were rated as *partly free.* 16 Freedom House is a nongovernmental
organization that conducts research and promotes human rights, democracy,
free market economics, the rule of law, independent media, and

U. S. engagement in international affairs.

Table 3: Freedom House Political Ratings, 2001- 2002 Rating Countries
seeking NATO membership Political rights Civil liberties Status

Albania 3 4 Partly free Bulgaria 1 3 Free Estonia 1 2 Free Latvia 1 2 Free
Lithuania 1 2 Free F. Y. R. of Macedonia 4 4 Partly free Romania 2 2 Free
Slovakia 1 2 Free Slovenia 1 2 Free

NATO*S newest members (1999)

Czech Republic 1 2 Free

Hungary 1 2 Free

Poland 1 2 Free

Note: Countries whose average rating is between 1 and 2.5 are generally
considered *free,* while *partly free* applies to countries whose average
rating is between 3 and 5.5.

Source: Freedom House, Freedom in the World 2001- 2002.

Measures of Progress Freedom House also publishes a separate assessment of
progress toward toward Democracy

democracy in the 27 countries of central and eastern Europe and the former
republics of the Soviet Union. Nations in Transit 2002, the current
report, provides measures of the progress and setbacks in political reform
in the 27 countries and scores countries* developments in democratization
and the rule of law. On the basis of these scores, countries are divided
into three categories: (1) consolidated democracies; (2) transitional
governments; or (3) consolidated autocracies. The score for
democratization is an average derived from ratings in four areas:
political process, civil society, independent media, and governance and
public administration. The score for the rule of law is also an average,
derived from ratings in two areas: constitutional, legislative, and
judicial

framework and corruption. Tables 4 and 5 provide the results of these
analyses for each of the nine countries seeking NATO membership and the
three most recent NATO members. On the basis of these analyses, Freedom
House considers six of the NATO candidate countries to be consolidated

democracies (Bulgaria, Estonia, Latvia, Lithuania, Slovenia, and Slovakia)
and three to be transitional governments (Albania, the Former Yugoslav
Republic of Macedonia, and Romania).

Table 4: Freedom House Nations in Transit Scores* Democratization Scores,
2002 Component ratings

Governance and Countries seeking

Democratization Political

Civil Independent

public NATO membership score process a society b media c

administration d

Albania 3. 94 3. 75 3. 75 4. 00 4. 25 Bulgaria 3.00 2.00 3.25 3. 25 3.50
Estonia 1. 94 1. 75 2. 00 1. 75 2. 25 Latvia 1. 94 1. 75 2. 00 1. 75 2. 25
Lithuania 1. 88 1. 75 1. 50 1. 75 2. 50 F. Y. R. of Macedonia 4. 13 4. 50
4. 00 3. 75 4. 25 Romania 3. 31 3. 00 3. 00 3. 50 3. 75 Slovakia 1.94 1.75
1.75 2. 00 2.25 Slovenia 1.81 1.75 1.50 1. 75 2.25

NATO*s newest members (1999)

Czech Republic 2.13 2.00 1.75 2. 50 2.25 Hungary 1. 94 1. 25 1. 25 2. 25
3. 00 Poland 1.50 1.25 1.25 1. 50 2.00

Note: The scores and ratings are on a scale of 1 to 7, with 1 representing
the highest and 7 the lowest level of progress. a The rating for political
process examines national executive and legislative elections, the
development

of multiparty systems, and popular participation in the political process.
b The rating for civil society assesses the growth of nongovernmental
organizations, their organizational

capacity and financial sustainability, and the legal and political
environment in which they function; the development of free trade unions;
and interest group participation in the policy process. c The rating for
independent media addresses the legal framework for and present state of
press

freedom, including libel laws, harassment of journalists, editorial
independence, the emergence of a financially viable private press, and
Internet access for private citizens. d The rating for governance and
public administration considers the authority of legislative bodies;

decentralization of power; the responsibilities, election, and management
of local government bodies; and legislative and executive transparency.

Source: Freedom House Nations in Transit 2002 report.

Table 5: Freedom House Nations in Transit Scores* Rule of Law Scores, 2002
Component ratings Countries

Constitutional, seeking NATO legislative, and membership Rule of law
scores

judicial framework a Corruption b

Albania 4. 88 4. 50 5. 25 Bulgaria 4.00 3.50 4.50 Estonia 2. 13 1. 75 2.
50 Latvia 2. 88 2. 00 3. 75 Lithuania 2. 88 2. 00 3. 75 F. Y. R. o f 5.13
4.75 5.50 Macedonia Romania 4. 50 4. 25 4. 75

Slovakia 2.63 2.00 3.25 Slovenia 1.88 1.75 2.00

NATO*s newest members (1999)

Czech Republic 3.13 2.50 3.75 Hungary 2. 50 2. 00 3. 00 Poland 1.88 1.50
2.25 Note: The scores and ratings are on a scale of 1 to 7, with 1
representing the highest and 7 the lowest level of progress. a The rating
for constitutional, legislative, and judicial framework highlights
constitutional reform, human

rights protection, criminal code reform, the judiciary and judicial
independence, and the status of ethnic minority rights. b The rating for
corruption looks at perceptions of corruption in the civil service, the
business interests of top policy- makers, laws on financial disclosure and
conflict of interest, and anticorruption initiatives.

Source: Freedom House Nations in Transit 2002 report.

The European Union The European Union assesses candidate countries in
terms of their

Assesses implementation of the union*s political requirements that
countries must

have achieved stability of institutions guaranteeing democracy, the rule
of Implementation of Its

law, human rights, and respect for and protection of minorities. Table 6
Political Requirements

provides the European Union*s 2001 political assessment for seven of the
nine countries seeking NATO membership, including its assessment of what
progress had occurred since the previous report and what kinds of

improvements were still needed. 17 (Albania and the Former Yugoslav
Republic of Macedonia are not assessed because they are not yet official
candidates for membership in the European Union.) As the table shows, all
seven countries have fulfilled the European Union*s political
requirements, but the European Union has identified areas in which each
country must continue to improve.

Table 6: European Union Political Assessments, 2001 Political assessment,
2001 Year political

criteria Country

fulfilled Progress made Improvements needed

Albania N/ A Not currently a candidate for the European Union. Bulgaria
1997 Bulgaria continues to fulfill the European Union*s political

The country needs to focus on requirements. The country has achieved
stability of implementation of the legal framework for institutions
guaranteeing democracy and the rule of law. the civil service to ensure
establishment of Parliament continues to operate smoothly and the legal

a professional and impartial civil service. framework for the civil
service is largely satisfactory. A strategy for reform of the judiciary
has been adopted. Estonia 1997 Estonia continues to fulfill the European
Union*s political

The lack of transparency in recruitment requirements. The country has
achieved stability in and promotion in the civil service is institutions
guaranteeing democracy and the rule of law. problematic. Parliament
continues to function properly and the civil service and administrative
procedures are satisfactory. Reform of the court system and training of
judges continues. Latvia 1997 Latvia continues to fulfill the European
Union*s political

Limited progress has been made in reform requirements. The country has
achieved stability of of the judiciary. institutions guaranteeing
democracy and the rule of law. Parliament continues to function properly.
The need for reform of the judiciary has been endorsed at the highest
political level.

Lithuania 1997 Lithuania continues to fulfill the European Union*s
political Sustained efforts are required to further requirements. Progress
has been made in reforming the advance the process of reforming and public
administration and the judiciary, the legal system

reorganizing the public administration. has improved, and the capacity to
fight corruption has been

Regarding the judicial system, the new strengthened. Reform of the
judicial system continues.

Law on Courts needs to be adopted. F. Y. R. o f N/ A Not currently a
candidate for the European Union. Macedonia 17 Improvements that were
still needed as of the issuance of the European Union*s report

may have been partially or fully addressed since then.

(Continued From Previous Page)

Political assessment, 2001 Year political

criteria Country

fulfilled Progress made Improvements needed

Romania 1997 Romania continues to fulfill the European Union*s political
Additional judicial reforms are necessary,

requirements. The country has achieved stability in including measures to
further guarantee institutions guaranteeing democracy and the rule of law.
the independence of the judiciary and to Functioning of the Parliament has
improved, and

develop a human resource policy for considerable progress has been made in
reforming the

judges and court staff. judiciary. Slovakia 1999 Slovakia continues to
fulfill the European Union*s political

Key judicial reforms are still pending requirements. The country has
achieved stability of adoption and a gap remains between institutions
guaranteeing democracy and the rule of law. policy formulation and
implementation. Independence of the judiciary has been strengthened, and
progress has been made regarding minority issues.

Slovenia 1997 Slovenia continues to fulfill the European Union*s political
The laws on Civil Servants and Public requirements. The country has
achieved stability of Agencies need to be adopted as an institutions
guaranteeing democracy and the rule of law. important part of the
framework legislation

The judiciary continues to have a high degree of for public administration
reform.

independence. Sources: European Union 2001 Regular Reports for Bulgaria,
Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia.

Independent Assessments of Economic

Appendi x IV

Development One of the goals of NATO*s Membership Action Plan is the
commitment to promoting stability through economic liberty. This appendix
provides information on two studies that produce numerical measures of
economic freedom* the Fraser Institute*s Economic Freedom of the World
index and The Heritage Foundation and The Wall Street Journal*s Index of
Economic Freedom. A third study by Freedom House provides numerical
measures of

economic liberalization. This appendix also provides information on the
European Union*s assessments of development toward a free- market economy
in countries seeking NATO membership that are also preparing for
membership in the European Union. We are providing the results of these
independent assessments, but we did not evaluate the methodologies for
producing these results or the application of the methodologies.

Two Studies Rate Currently there are two studies that produce numerical
measures of

Economic Freedom economic freedom* the Fraser Institute*s 2002 Economic
Freedom of the

World index, which covers 123 countries for the year 2000, and The
Heritage Foundation and The Wall Street Journal*s 2002 Index of Economic
Freedom, which covers 156 countries for the year beginning July 2000. 18
Both indexes are revised annually and are based on numerous measures or
indicators that are grouped together into areas of economic freedom. To
measure economic freedom, the 2002 Fraser Index studied 21 factors* some
of which include multiple components* that fall into five categories: 19
(1) size of government expenditures, taxes, and enterprises; (2) legal
structure and security of property rights; (3) sound money; (4) freedom to
trade with foreigners; and (5) regulation of credit, labor, and business.
Each country*s overall score for economic freedom is based on the average
of its scores in each of these five areas. Scores range from 0 to 10, with
10 indicating the highest degree of economic freedom.

18 The Fraser Institute is an independent Canadian economic and social
research and educational organization that works to raise the level of
understanding about economic and social policy. The Heritage Foundation is
a research and educational institute that promotes conservative public
policies that are based on the principles of free enterprise, limited

government, individual freedom, traditional American values, and a strong
national defense. 19 For the Fraser Institute, the key ingredients of
economic freedom are personal choice, voluntary exchange, freedom to
compete, and protection of person and property.

To measure economic freedom, the 2002 Heritage/ The Wall Street Journal
index studied 50 independent economic variables that fall into 10 broad
categories, or factors, of economic freedom: 20 (1) trade policy, (2)
fiscal burden of government, (3) government intervention in the economy,
(4) monetary policy, (5) capital flows and foreign investment, (6) banking
and finance, (7) wages and prices, (8) property rights, (9) regulation,
and (10)

black market activity. Each country*s overall score for economic freedom
is based on the average of its scores in each of these 10 areas. The index
scores countries from 1 to 5, with 1 indicating an assessment of *most
free.* We transformed this ranking so that the higher number implies more
economic freedom.

Figure 2 presents the ratings of countries under both the Fraser index and
the Heritage/ The Wall Street Journal index for each of the nine countries
seeking NATO membership and each of NATO*s current members. As the figure
indicates, the closer a country*s location toward the upper right of

the graph, the higher the combined rating of economic freedom. For
example, the two indexes together give the United States, followed by the
United Kingdom, the highest score for economic freedom. In constructing
figure 2, we transformed the Heritage/ The Wall Street Journal ratings so
that 0 refers to the least economic freedom and 4 to the most economic

freedom. The Fraser index rates countries from 0 (least economic freedom)
to 10 (most economic freedom). Since none of the countries scored less
than 4.7, we truncated the horizontal axis between 0 and 5.

20 The Heritage/ The Wall Street Journal index defines economic freedom as
the absence of government coercion or constraint on the production,
distribution, or consumption of goods and services beyond the extent
necessary for citizens to protect and maintain liberty.

Figure 2: Indexes of Economic Freedom for NATO Members and Countries
Seeking NATO Membership

a The Fraser Institute did not rate the Former Yugoslav Republic of
Macedonia.

Rating of Economic Freedom House publishes an assessment of progress
toward economic

Liberalization liberalization in the 27 countries of central and eastern
Europe and the

former republics of the Soviet Union. Nations in Transit 2002, the current
report, provides measures of the progress and setbacks in economic reform
in the 27 countries. The report scores economic liberalization on the
basis of an average of ratings for privatization, macroeconomic policy,
and microeconomic policy. On the basis of these scores, countries are

divided into three categories: consolidated market economies, transitional
economies, and consolidated statist economies. Table 7 provides the scores

and ratings for each of the nine countries seeking NATO membership and the
three most recent NATO members. As the table shows, six of the countries
seeking membership are categorized as consolidated market economies and
three are categorized as transitional economies.

Table 7: Freedom House Nations in Transit Scores* Economic Liberalization,
2002 Economic assessments Component ratings Countries

Economic seeking NATO liberalization

Macroeconomic Microeconomic membership Classification

score Privatization a policy b policy c

Albania Transitional economy 3. 75 3. 25 4. 00 4. 00

Bulgaria Consolidated market economy 3. 25 3. 00 3. 00 3. 75

Estonia Consolidated market economy 1. 92 1. 75 2. 00 2. 00

Latvia Consolidated market economy 2. 33 2. 50 2. 25 2. 25

Lithuania Consolidated market economy 2. 42 2. 25 2. 75 2. 25

F. Y. R. o f Transitional Macedonia economy 4. 67 4. 25 4. 75 5. 00

Romania Transitional economy 3. 92 3. 75 3. 75 4. 25

Slovakia Consolidated market economy 2. 33 2. 00 2. 50 2. 50

Slovenia Consolidated market economy 2. 17 2. 50 2. 00 2. 00

NATO*s newest members (1999)

Czech Republic Consolidated market economy 2. 08 1. 75 2. 25 2. 25

Hungary Consolidated market economy 2. 00 1. 50 2. 50 2. 00

Poland Consolidated market economy 1. 92 2. 25 2. 00 1. 50

Note: The scores and ratings are on a scale of 1 to 7, with 1 representing
the highest and 7 the lowest level of progress. a The privatization rating
considers the legal framework for privatization and the present state of
the

privatization process. b The macroeconomic policy rating covers tax
reform, fiscal and monetary policy, and banking reform.

c The microeconomic policy rating examines property rights, price
liberalization, the ability to operate a business, international trade and
foreign investment, and the energy sector.

Source: Freedom House Nations in Transit 2002 report.

The European Union The European Union annually assesses the extent to
which countries

Assesses Development preparing for membership in the European Union meet
the requirements

for accession. Part of that assessment involves a determination of the
toward Market

extent to which the economy is (1) a functioning market- based economy 21
Economies and (2) has the capacity to cope with the competitive pressures
and market forces within the European Union. 22 Table 8 provides the
European Union*s 2001 economic assessment for seven of the nine countries
seeking NATO membership. (Albania and the Former Yugoslav Republic of
Macedonia are not assessed because they are not yet official candidates
for membership in the European Union.) As the table shows, five of the
seven countries that

are candidates for membership in the European Union have already been
assessed as having a functioning market economy, one is close to being a
functioning market economy, and one is making progress toward a market
economy.

21 The European Union defines a functioning market economy to have
liberalized prices and trade, an enforceable legal system in place,
macroeconomic stability and consensus about economic policy, a well-
developed financial sector, and the absence of any significant barriers to
market entry and exit.

22 The European Union*s measure for the ability of a market economy to
cope with competitive pressures and market forces within the union
includes the existence of a market economy, a stable macroeconomic
framework, a sufficient amount of human and physical capital, and
efficient state enterprises with access to outside finance.

Table 8: European Union Economic Assessments, 2001 Year determined to have
a functioning Country market economy European Union economic assessment,
2001

Albania N/ A Not a current candidate for the European Union. Bulgaria N/ A
The European Union determined that Bulgaria is close to being a
functioning market economy.

Bulgaria should be able to cope with the competitive pressure and market
forces within the union in the medium term, a if it continues implementing
reform and intensifies the reform effort to remove persistent
difficulties, such as high inflation and high unemployment. Estonia 1997
Estonia was assessed in 1997 as having a functioning market economy. In
2001, the European

Union concluded that Estonia should be able to cope with the competitive
pressure and market forces within the union in the near term if it
continues with and fully implements its reform program.

Latvia 1999 Latvia was assessed in 1999 as having a functioning market
economy. In 2001, the European Union concluded that Latvia should be able
to cope with the competitive pressure and market forces within the union
in the near term if it continues to make further substantial efforts in
maintaining the pace of, and completing, its structural reforms. Lithuania
2000 Lithuania was assessed in 2000 as having a functioning market
economy. In 2001, the European Union concluded that Lithuania should be
able to cope with the competitive pressure

and market forces within the union in the near term if it continues to
make further substantial efforts to continue with the vigorous
implementation of its structural reform program.

F. Y. R. o f N/ A Not a current candidate for the European Union.
Macedonia Romania N/ A The European Union determined that Romania has made
progress toward establishing a

functioning market economy, although it would not, in the medium term, be
able to cope with the competitive pressure and market forces within the
union. The European Union also determined that Romania has taken measures
that would allow it to develop its future capacity, provided it continues
with economic reform.

Slovakia 2000 Slovakia was assessed in 2000 as having a functioning market
economy. In 2001, the European Union determined that Slovakia should be
able to cope with the competitive pressure and market forces within the
union in the near term if it makes further substantial efforts in medium-
term fiscal consolidation and in developing and fully implementing its

structural reform program. Slovenia 1997 Slovenia was assessed in 1997 as
having a functioning market economy. In 2001, the

European Union determined that Slovenia should be able to cope with the
competitive pressure and market forces within the union in the near term
if it implements the remaining reforms needed to increase competition in
domestic markets.

a The European Union does not provide a definition in its regular reports
for *near term* and *medium term.* Sources: European Union 2001 Regular
Reports for Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and
Slovenia.

(320066)

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a

GAO United States General Accounting Office

The President*s report responded to the mandated requirements with
information that was generally accurate and current. The report provided a
detailed discussion of each country*s eligibility in terms of defense,
budgetary, information security, legal, and economic issues. However, the
discussion of each country*s efforts to implement democratic principles
and reforms was limited. That discussion did not reflect the challenges
these countries face in the transition to democratic societies* or their
efforts to address those challenges* in areas such as civil liberties,
judicial independence, human rights, and minority rights. These are
important principles of the alliance and a fuller discussion could be
useful. GAO provides additional information on these issues in appendix II
to help Congress in its deliberations on NATO enlargement. The figure
below shows current NATO members and the nine countries that will be
considered for membership in November 2002.

The National Security Council generally concurred with the contents of
this report.

European NATO Members and Countries Seeking NATO Membership

NATO ENLARGEMENT

Report Is Responsive to Senate Requirements, but Additional Information
Could Be Useful

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 255 To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Joseph Christoff, 202- 512- 8979. Highlights of GAO-
03- 255, a report to

Senate and House Committees on Armed Services and Appropriations, the
Senate Committee on Foreign Relations, and the House Committee on
International Relations.

November 2002

On November 21 and 22, 2002, the North Atlantic Treaty Organization (NATO)
will consider the admission of new members to the alliance. To facilitate
congressional deliberations on NATO enlargement, the United States Senate
mandated in 1998 that GAO review and assess a report that Congress
directed the President to provide on countries seeking membership in NATO.
The President submitted a classified report to Congress on August 26,
2002. To fulfill its mandate, GAO determined if the report met the
Senate*s requirements and if the cost estimates were sound.

GAO is not recommending executive action. Because NATO*s political goals
for countries seeking membership focus on developing democratic
institutions and principles, GAO has included material in this report that
goes beyond the information contained in the President*s report. If
Congress finds this material useful during upcoming deliberations on NATO
enlargement, it may wish to request that future reports contain more
detailed information on these issues.

Page i GAO- 03- 255 NATO Enlargement

Contents

Contents Page ii GAO- 03- 255 NATO Enlargement

Page 1 GAO- 03- 255 NATO Enlargement United States General Accounting
Office

Washington, D. C. 20548 Page 1 GAO- 03- 255 NATO Enlargement

A

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Appendix I

Appendix I Scope and Methodology

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Appendix I Scope and Methodology

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Appendix II

Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix II Additional Information on the Implementation of Democratic
Principles and Reforms in Countries Seeking NATO Membership

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Appendix III

Appendix III Independent Assessments of Progress toward Democracy

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Appendix III Independent Assessments of Progress toward Democracy

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Appendix III Independent Assessments of Progress toward Democracy

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Appendix III Independent Assessments of Progress toward Democracy

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Appendix III Independent Assessments of Progress toward Democracy

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Appendix IV

Appendix IV Independent Assessments of Economic Development

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Appendix IV Independent Assessments of Economic Development

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Appendix IV Independent Assessments of Economic Development

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Appendix IV Independent Assessments of Economic Development

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Appendix IV Independent Assessments of Economic Development

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