[House Hearing, 105 Congress] [From the U.S. Government Publishing Office]FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIATIONS FOR 1999 ======================================================================== HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FIFTH CONGRESS SECOND SESSION ________ SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS SONNY CALLAHAN, Alabama, Chairman JOHN EDWARD PORTER, Illinois NANCY PELOSI, California FRANK R. WOLF, Virginia SIDNEY R. YATES, Illinois RON PACKARD, California NITA M. LOWEY, New York JOE KNOLLENBERG, Michigan ESTEBAN EDWARD TORRES, California MICHAEL P. FORBES, New York MARCY KAPTUR, Ohio JACK KINGSTON, Georgia RODNEY P. FRELINGHUYSEN, New Jersey NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. Charles Flickner, William B. Inglee, and John Shank, Staff Assistants, Lori Maes, Administrative Aide ________ PART 2 Page Secretary of the Treasury........................................ 1 Security Assistance.............................................. 127 Secretary of State............................................... 297 ________ Printed for the use of the Committee on Appropriations ________ U.S. GOVERNMENT PRINTING OFFICE 49-109 WASHINGTON : 1998 ------------------------------------------------------------------------ For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 COMMITTEE ON APPROPRIATIONS BOB LIVINGSTON, Louisiana, Chairman JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois RALPH REGULA, Ohio LOUIS STOKES, Ohio JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota JOE SKEEN, New Mexico JULIAN C. DIXON, California FRANK R. WOLF, Virginia VIC FAZIO, California TOM DeLAY, Texas W. G. (BILL) HEFNER, North Carolina JIM KOLBE, Arizona STENY H. HOYER, Maryland RON PACKARD, California ALAN B. MOLLOHAN, West Virginia SONNY CALLAHAN, Alabama MARCY KAPTUR, Ohio JAMES T. WALSH, New York DAVID E. SKAGGS, Colorado CHARLES H. TAYLOR, North Carolina NANCY PELOSI, California DAVID L. HOBSON, Ohio PETER J. VISCLOSKY, Indiana ERNEST J. ISTOOK, Jr., Oklahoma ESTEBAN EDWARD TORRES, California HENRY BONILLA, Texas NITA M. LOWEY, New York JOE KNOLLENBERG, Michigan JOSE E. SERRANO, New York DAN MILLER, Florida ROSA L. DeLAURO, Connecticut JAY DICKEY, Arkansas JAMES P. MORAN, Virginia JACK KINGSTON, Georgia JOHN W. OLVER, Massachusetts MIKE PARKER, Mississippi ED PASTOR, Arizona RODNEY P. FRELINGHUYSEN, New Jersey CARRIE P. MEEK, Florida ROGER F. WICKER, Mississippi DAVID E. PRICE, North Carolina MICHAEL P. FORBES, New York CHET EDWARDS, Texas GEORGE R. NETHERCUTT, Jr., Washington ROBERT E. (BUD) CRAMER, Jr., Alabama MARK W. NEUMANN, Wisconsin RANDY ``DUKE'' CUNNINGHAM, California TODD TIAHRT, Kansas ZACH WAMP, Tennessee TOM LATHAM, Iowa ANNE M. NORTHUP, Kentucky ROBERT B. ADERHOLT, Alabama James W. Dyer, Clerk and Staff Director FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIATIONS FOR 1999 ---------- Wednesday, February 11, 1998. SECRETARY OF THE TREASURY WITNESSES HON. ROBERT E. RUBIN, SECRETARY OF THE TREASURY DAVID LIPTON, UNDERSECRETARY FOR INTERNATIONAL AFFAIRS, DEPARTMENT OF THE TREASURY Chairman Callahan's Opening Statement Mr. Callahan. Secretary Rubin, we are happy to have you before our committee this morning. I know you have been spending a lot of time on Capitol Hill lately explaining the needs not only of the International Monetary Fund but of your proposed budget for 1999, and I know you have met with the leadership, and I know you have met with other responsible Members of Congress, both House and Senate. But you are at the right place now because, before anything can take place that you are requesting, it has to take place at this committee level. We are apologetic that we do not have as many Members as you would like. As you know, there was a retreat, both the Democratic and Republican retreat, the first part of this week. Many of the Members are attending that, and rightfully so, but this hearing, especially as it involves the IMF issue, is something we felt we could not postpone. Because if indeed the Congress is going to act upon this request, we are not going to have time to wait an additional month before we begin the committee process. I don't know whether the Asian crisis will stall our Nation's economic growth cycle, but I do know that it has impacted one industry, at least, in my home congressional district. We have a pulp mill in Alabama that announced a 2- to 3-week layoff of the entire factory, a shutdown of the mill, simply because its primary customer was a company in Indonesia, and the Indonesians could not pay them for the pulp. So it has directly impacted my district. In addition to that, I represent a port, a major port, probably the best port in the entire United States, if not the world. Ms. Pelosi. Probably? Mr. Callahan. But, nevertheless, we ship a lot of products to and from our port that either begin in the Asian region or wind up in the Asian region, so it has very seriously impacted my district. You may know that the American people still do not understand the International Monetary Fund--they have no earthly idea what we are talking about. They most recently were made aware of the existence of such a fund in the Mexico crisis. They do not know the success of the Mexican bailout. They think that the $20 billion or so, maybe $30 billion we sent to Mexico was never repaid. They don't know the history of that or of the International Monetary Fund. You are receiving a lot of unfavorable publicity, or the IMF is, from a lot of prominent people who were formerly in responsible positions in the government who are indicating maybe the time has come to eliminate the International Monetary Fund. Those are problems we are going to have to face if indeed we present this to this subcommittee and to the full committee and to the U.S. House. I heard Secretary Albright in her presentation in Senate hearings yesterday indicating something to the effect that the International Monetary Fund was like a credit union. That is a very good analogy. I think you and the President, if you are going to be successful and if we are going to continue to participate in the International Monetary Fund, have to immediately describe this to the American people and describe its importance the impact it is going to have, rather than the national opinion, that all we are doing is bailing out a bunch of insurance companies and a bunch of banks. I know better than that, but most Americans do not, and someone is going to have to televise that message if indeed you are going to muster together the sufficient strength to add to the International Monetary Fund. Most people do not realize it is an international fund. They think that we, the United States, are putting up all of the money. They don't realize we are only a contributor to the International Monetary Fund. Nor do they realize the control we have over the International Monetary Fund. So someone has to get that message out, Mr. Secretary. I think that someone should be either you or the President or Madeleine Albright. But, at this point, the American people, in my limited capability of investigation, do not believe that the Congress should act favorably upon your request. Nor do they understand the need to impact or to contribute to the Asian monetary crisis because of the economic impact on the United States. So it is a very important thing that we are going to have to address in the not-too-distant future. But, before it can be, someone has to explain to the American people why we have to increase our quota another $14.5 billion. With respect to your budget, we are going to have to take a little bit more time on your appropriation request for 1999. There are some questions I will have that I will submit to you with respect to some of the increases you have requested, for example, the increase from $48 million to $300 million for the global environment facility. We are going to have to have answers with respect to the individual requests you have made for 1999. Your request for debt relief is $79 million, including $7 million for the enhanced structural adjustment facility. Last year, we appropriated $27 million, so that is a big increase. As you know, this subcommittee, and especially this Chairman, have not been too receptive to increases with matters that are perceived to be foreign aid. We are going to have to live within our limitations of monetary constraints; and, although there will be some agencies or institutions that receive additional monies, we are going to have to have real justification for these increases. At the end of the day, this committee will have to convince a skeptical House of Representatives of the merits of your International Monetary Fund and the multilateral development banks as well, about our ability to work together. We have, as you well know, a working relationship with the Democrats, not only on this panel but on the full committee and in the full House of Representatives, too. We try to stay out of your hair. We don't want to run your department. We don't want to run foreign affairs. But we do have an obligation to our constituents and to the American people to make absolutely certain that the money is being spent in the most frugal way possible. I know you are aware of it and I know all the members of our committee are aware of it, but, since our subcommittee last met, we have been blessed with the appointment of a new member to our panel. I think she is joining us for the first time. Miss Kaptur, we certainly welcome you to our committee and look forward to a continuing working relationship with your side of the aisle. With that, I will close. I will submit to you my formal statement. I have already asked you privately a couple questions with respect to some parochial concerns I have, and I hope you will be able to respond to them in the not-too-distant future. With that, I would recognize the gentlelady from California, Mrs. Pelosi. Ms. Pelosi's Opening Statement Ms. Pelosi. Thank you very much, Mr. Chairman. I am pleased to join you in welcoming Secretary Rubin to our committee on this the first of our hearings of the year. It is very appropriate Secretary Rubin lead off, because some of the first issues to come before the Congress will be from his department. First, though, Mr. Chairman, once again I want to commend you for your leadership and your courtesy in welcoming Representative Kaptur. I want the record to show we have a full complement of Democrats, including our Ranking Member on the committee, Mr. Obey, long-time chair of the subcommittee. Perhaps our conference ended earlier than yours. I am pleased that Representative Kaptur is with us, and I know she will make a valuable contribution---- Mr. Yates. Or in advance. Ms. Pelosi [continuing]. To the committee. An advance. Mr. Callahan. Let the record reflect that you started before we did. That is why. Ms. Pelosi. Okay. In whatever case, I am certain every member of this committee understands the importance of the testimony that Secretary Rubin is to present today. I associate myself with the remarks of our Chairman about the need for the administration to educate the public about why we are involved with the IMF to begin with and why it is in our national interest to support it. I think this understanding will lead to support. Certainly there are many questions, as we have discussed, leading up to this hearing. But, before we start, I want to say that, with all this attention focused on the IMF replenishment, we must also continue to recognize the importance of and need to provide for the U.S. contributions to various international financial institutions. Of the $1.7 billion requested, $502 million is to pay for U.S. arrears. With the support of Chairman Callahan last year, the Congress agreed to provide over $600 million in arrears, including all outstanding arrears for IDA. As you know, this has enabled the U.S. to regain the strong leadership position it needs at the World Bank to continue its pursuit of reform. The request for $502 million, if granted, would almost wipe out U.S. arrears to the international banks and significantly strengthen the U.S. position on a host of policy issues at other institutions in addition to the World Bank. This Administration, I think, deserves a great deal of credit for negotiating U.S. commitments to these programs down by 45 percent, saving the taxpayer $1 billion. That is a tribute to your leadership, Mr. Secretary. Arrears are requested, as our Chairman mentioned, in fiscal year 1999 for the Global Environmental Facility, the Inter- American Bank, Asian Development Bank and African Development Bank. I am certain that, in your testimony, you will give justification for the need for this funding. I support this funding, but I do, again, say it is important for the Administration to explain the importance of these institutions and the need for the increase. With respect to the IMF replenishment and the request for the New Arrangements to Borrow, the Administration has requested both of these items in the 1998 supplemental. I support the need for these items in the supplemental, but I have a number of concerns to discuss with the Secretary. The essence of these concerns centers around the kind of lasting changes and reforms that will be achieved through these bailouts. And, yes, Mr. Chairman, I agree that Secretary Albright explained it clearly. I don't think most Americans know that this is not money given away; it is a loan. And, we do get an asset in return for it, so it isn't an opportunity cost in our budget that is taking the place of other expenditures we might want to make domestically. In fact, the United States must respond to the Asian financial crisis by supporting multilateral institutions set up to deal with such situations. The establishment of these institutions was predicated on the fact our economies would have an impact on each other, and they do. And when the situation arises, as in the Asian crisis, the IMF as a multilateral way to proceed is preferable to a bilateral way to proceed, but we must act. Mr. Chairman, you pointed out very eloquently a demonstration of the adverse impact of the crisis on your own district. I believe support of the IMF is necessary, primarily because of the detrimental effects on the U.S. economy that might occur as a result of entire countries in Asia going into default. I see this in three ways: What kind of reforms? How can we prevent this from happening again? How can the IMF operate its own house in a way that has more transparency, addressing some governance issues? How can it function in a way that there is a better understanding in the public as to what it is, what its purpose is and what the borrowing country's attitude is? There are internal reforms that need to be taken at the IMF. Then there are reforms that might relate to the IMF and its relationship to the borrowing countries and the conditionality it places on them. So much of the IMF activity is based on conditionality. It begs the question to me, if you can have conditions placed on IMF lending that affect the economy, why would we not be able to include as conditions issues relating to wages and workers rights in those countries, which also are a part of the economy? There are other people, and I share their concern, who believe that issues relating to the environment and human rights should be taken into consideration as well. I am willing to grant that that might be something we can do in a third category, which is what we, as the U.S., can take the leadership on to compensate for the impact of IMF restructuring in a country. So it is threefold: one, the IMF internally; two, the IMF in relationship to the borrowing countries; and, three, what we as a superpower and a main supporter of the IMF can do bilaterally in order to--at the same time but separately and not part of any IMF legislation--to mitigate for some of the impact of IMF restructuring in a country, to promote the environment and to promote human rights. I would hope that the issue of workers' rights would permeate all three of these arenas. Again, the economic effects of the crisis in Asia and its impact on Japan and China clearly loom as potential impacts on the U.S. economy. The consequences could even be greater than just in the countries already impacted. The conditions of and the further aggressive pursuit of export-led growth policies of China and Japan could undermine economic growth in this country. The question then becomes, how will the U.S. respond, what steps are we going to take in the IMF, the World Trade Organization and other institutional bodies to prevent disruption of our own economic growth? I will explore them in my questions this morning. I look forward to hearing your testimony, Mr. Secretary. Once again, may I commend you for your hard work and your dedication. I believe the Administration and indeed the country are well served by your continued presence and good judgment, especially now in this time of the crisis in Asia. There have been many other times when your leadership has gotten us through. With that, I join my distinguished Chairman in welcoming you and look forward to your testimony. Mr. Callahan. I thank the gentlelady and would like to recognize the ranking Democrat on the full appropriations committee who serves as sort of the vice chairman of every appropriations committee, one of the hardest working Members of the entire U.S. Congress, the gentleman from Wisconsin, Mr. Obey. Mr. Obey. Thank you, Mr. Chairman. I hadn't intended to say anything, but since you have given me the opportunity, I certainly will. I appreciate that. Mr. Secretary, let me simply make an observation that I find very troubling. The Congress last year had three very important issues which it left unresolved when we irresponsibly walked out of town. Mr. Obey's Opening Statement The first issue was IMF funding, which is designed after all, in the last analysis, to protect our own economy from being affected by the collapse of Asian currencies. The second is the issue of U.N. arrearages, which is crucial at a time when we are trying to maximize a sense of unity on the part of the U.S. and our U.N. allies with respect to the Iraqi situation. And, third, the unrelated but nonetheless important issue of Mexico City policy and how it relates to the international family planning policy of the United States. In my view, last year, in an act of consummate recklessness, the Congress left town without dealing with the IMF and U.N. issues. That, in my view, has left us less able to effectively provide leadership at the United Nations. It has also enhanced the risk to the American economy by inaction on the IMF front. It seems to me that if Asian currencies were to resume their slide, if the Japanese government continues to follow its obtuse fiscal policy, that the result will be a flood of Asian goods into this country because of the cheapening of Asian imports into this country relative to U.S. goods because of the currency level changes. If that happens, once again, the persons who will be called upon to pay the economic price for the folly of financial elites and big boy investors and finance ministries in the various countries around the world, will be American workers, many of whom can't even afford to buy a single share of stock anywhere, in the United States or the Asian markets. Under those circumstances, I believe it is essential for this Congress to deal with the merits of each of those three issues, but not in the context of political blackmail, which creates artificial political linkages between the issues. I think we have an obligation to try to work out our differences on Mexico City. I think we have an obligation to deal with the U.N. arrearages. I think we have an obligation to deal with a number of the questions Mrs. Pelosi has raised with respect to how we provide support for the IMF in a way which will be conducive to reform of the international financial structure. But when I read in Congress Daily this morning that Representative Smith has indicated he has assurances that the House leadership will not support supplemental funding for the IMF unless the administration engages in an artificial deal on that issue and Mexico City, it seems to me that is a short route to chaos. Each of these issues deserves to be addressed on its merits. We have an obligation to try to respond to the legitimate concerns of persons such as Mr. Smith and others in the Congress on Mexico City but not as part of an overall political deal on Mexico City that would transform a political minority into a majority through political blackmail. These are big-league problems we are talking about, and it seems to me that if we don't deal with the issues like big leaguers then we shouldn't be dealing with them at all. It just seems to me that what we ought to be talking about is how we are going to provide assistance to the IMF in a discrete and effective way which not only meets the current economic crisis but does promote the kind of long-term change that we are talking about, and the way we deal with international financial issues. It seems to me we need to discuss the legitimate concerns that people have on Mexico City. But if this gets tangled up in one of these all-consuming three-legged deals, we are going to be sitting here all year fiddling while Rome burns. Obviously, I am concerned about what happens in Asia. My concern is not what happens to the Asian countries; my concern is what happens to the workers in this country if we don't meet our responsibilities on the IMF. So I would urge the administration to consider all of the concerns of those who have doubts about our IMF policy, those who have doubts about U.N. arrearages and those who have doubts about Mexico City. But I would urge the administration to deal with those issues the way they ought to be dealt with, separately, with dignity, on the merits, rather than as some kind of political sideshow that gets us involved in nothing but ships passing in the night for the next 6 months while the world economy goes to hell with American workers suffering the consequences. Thank you, Mr. Chairman. Mr. Callahan. Mr. Secretary, we will accept your statement in its entirety for the record and will invite you now to address the committee. educating the american public Secretary Rubin. Thank you very much, Mr. Chairman. Let me start by addressing a comment you made, if I may. That is the need to educate the American people. I think you are exactly right. I think we are in a new era. I saw it developing when I was still in the investment banking business, and I think we are now in a global economy and a global financial market. People say the words, but I don't think there is a broad- based understanding of what they mean. I think you capture it very well with that plant in your district, and I think Americans have benefited enormously from this globalization. But there are also risks, and there are problems. I think, as a Nation, our economic well-being is going to depend very much on how we learn to take advantage of the opportunities and manage the risks; and a lot of what I have to say deals with that. I think your subcommittee becomes extremely important because I think a lot depends on the work we do with these international financial institutions. It is during this period of, say, the last 10 or 15 years that the flow of capital into developing countries has increased to levels that one could not have imagined, say, 15 or 20 years ago; and that has, in turn, financed growth and financed investment and has resulted in developing countries absorbing something over 40 percent of our exports. But, on the other hand, it has also carried the kinds of risks with it that we have seen manifested first in Mexico and now, more broadly, in Asia. As I said a moment ago, I think all of us are going to be preoccupied--this committee, our administration, the administration to follow us--with the questions of how we as a nation provide leadership to the world in learning to deal with both taking advantage of the opportunities and managing the risks. We appreciate, Mr. Chairman, the spirit in which we worked with your committee last year. I think we accomplished a great deal in terms of providing effective leadership in the international financial institutions. We also worked to set priorities for the future, and that has been very helpful to us as we have moved forward to negotiate with and work with these institutions. As I think Congresswoman Pelosi mentioned, we cleared our arrears in the World Bank's IDA; and that clearly has greatly increased our ability to work effectively in that organization to promote views that the United States believes should be promoted by the World Bank. Mr. Yates. Would you please pull the mike closer? Secretary Rubin. Is that better? Mr. Yates. That is much better. Secretary Rubin. Too close? Mr. Yates. No, I want to get close to you. Mr. Rubin. Well, that is a different set of issues, which I think I will leave aside, if I may, Mr. Yates. I have got enough problems. Mr. Yates. I will withdraw that. reform Secretary Rubin. We have, as you know, negotiated a 40 percent reduction, as Congresswoman Pelosi said, in our commitments to multilateral development banks; and so, once we clear up the arrears, we will then be on an annual funding scale of about $1.2 billion, which is less than our commitment had previously been to IDA alone. On the basis of that $1.2 billion, we will have enormous leverage over institutions that, in the aggregate, lend roughly $45 billion a year. It is an enormously effective way for the United States to pursue its view of how developing countries should pursue reform and growth, which is all enormously, as I said a moment ago and Mr. Obey suggested, in our interests. At the same time, we have worked forcefully to reform these institutions. I think it would be fair to say the United States has been far and away the leading voice with respect to reform. We have provided leadership in reducing overhead and increasing transparency, created a far greater focus on corruption. We have worked with these institutions so that they have focused much more on promoting the private sector in developing countries and becoming more sensitive to environmental, labor and human rights concerns. The World Bank, as you know, is undergoing a major reorganization right now. The Asian and European Bank budgets have been frozen for several years; and the African Bank, with a great deal of discussion with the United States, has substantially cut its staff and, in our judgment, has engaged in a very serious reform program. We believe that the multilateral development banks are providing very good value for American dollars and better value than at any time in their history. arrears Having said that, the arrears are still something over $600 million. In addition, we have a $75 million shortfall on our pledge to the ESAF, the IMF's Enhanced Structural Adjustment Facility. Our 1999 budget includes $509 million toward these commitments. Our highest priority, having said that, is, as always, the current contribution; but these arrears that I just mentioned are critically important, too; and we feel very strongly they need to be satisfied. Let me touch, if I may, on a few items worthy of particular mention not because of priority but because I think their substance merits a few moments of discussion. gef The first is the Global Environmental Facility, which is referred to as the GEF. The GEF is really a unique instrument because it helps developing countries work on environmental problems that affect not just that country but, rather, have cross-border effects, very much including effects on our own country--for example, the state of the oceans or protecting the ozone layer. Our $300 million request for the GEF includes roughly $200 million for arrearages, and we think it is very important we pay our arrearages and that we become current in this very important institution, that is going to affect our health and our prosperity very centrally. african development fund Secondly, we are requesting $155 million for the African Development Fund. Over half of that request would go to pay arrears. The African Bank, as I mentioned a moment ago, has made very substantial reforms; and it is very importantly involved with us, the United States, as we look to focus more effectively on the continent that has lagged all the rest of the world with respect to economic growth, and that is Africa. We are requesting $5 million for Treasury technical assistance. I know that will sound like a minute number to this committee, and it is minute in the context of the budget, but it is a very important request. Treasury provides exceedingly professional technical assistance, and it is funded from outside of Treasury. It is a very difficult process to arrange. Fortunately, we have an effective process now with those who provide the funding for Central Europe and the former Soviet Union. But when you get away from that area, funding technical assistance is a very time-consuming process. In places like Asia, where there is a tremendous demand right now for our technical assistance with respect primarily to financial institutions and similar matters, we cannot get the funding quickly enough to get the technical assistance in place when it is needed and on a timely basis. So we have this $5 million request to enable us to mobilize and deploy those resources on a rapid basis. ida Finally, as always, we strongly support the World Bank's International Development Association, IDA. IDA, as you know, is far and away the largest organization in the world that deals--in the international financial institution world--that deals with the problems of developing countries. I think it is a tremendously constructive force; and, under its president, there is both a reform program with respect to how it operates and also, we think, a more effective focus on the kinds of things we think IDA should be focused on--health, children, education--the underpinnings, if you will, for a market-based economy. asia and the imf Mr. Chairman, let me comment briefly, if I may, about Asia and the IMF. There has been, as you know, a remarkable set of events in Asia which have been referred to by some as the first crisis of the 21st century. I said in my opening remarks that I think the kinds of issues we have seen in Asia and the kinds of issues that are going to be dealt with in this committee for a long time to come, as we all learn to deal with this new era, will critically affect our economic well-being. Financial instability, economic distress, depreciating currencies all very much affect our workers, our farmers, our businesses. Number one, these Asian countries are very large markets for our goods; and, number two, the depreciation their currencies affects the competitiveness of our goods in world markets and also here in the United States. Moreover, if the problems in Asia had spread to other developing countries around the world--and that had begun, as you may remember, at the beginning of this Asian crisis--and had those countries gotten enveloped in the same problem, then many more markets would have been affected. You would have had many more currencies depreciating and the effects on this country would have had the potential for being quite profound. As it is, even if the situation in Southeast Asia can heal and if the contagion does not occur, there will still be a palpable effect on our economy. I still think we will have solid growth and low inflation next year. However, there is always the possibility, though I think it is a relatively low probability, that the crisis could reignite, that the enormous risk contagion that had us so focused between Thanksgiving and Christmas could, in fact, take place. With all of the consequences that come from that, I think the leadership of the international financial institutions and the international community are very much catalyzed in many ways, by the United States. We were successful in preventing this thing from becoming what it could have become; but there is still some risk, although I think a low probability, that it could happen again. I think it is a risk we must not take. We are requesting the support for the funding as rapidly as possible for both the new arrangements to borrow and the IMF quota, so that if this low probability event should happen, the international community will have the capacity to deal with it rather than be left with an enormous crisis that could have profound effects on our economy without an effective mechanism for dealing with it. As far as the policies of the IMF themselves are concerned, the programs in these Asian countries have been very much focused on the problems that gave rise to the financial instability. That is to say, they have been focused on the structural issues in these countries that gave rise to these problems. I think they have been well constructed. I do not believe they are austerity programs. You can argue about how much macroeconomic content, that is to say fiscal policy and interest rate policy, they should have had, but these are certainly not traditional IMF austerity programs. Let me comment briefly, if I may, Mr. Chairman, on two concerns that have been raised with respect to these programs. First is the moral hazard question. The question is--well, the assertion is--that these programs, in effect, enable banks to come out whole from risky investments and that, in turn, creates perverse effects on behavior going forward. The principle is clear. Creditors and investors should bear the consequences of their investment. In Asia, vast numbers of investors and creditors have taken very large losses. You may have seen that Deutsche Bank reserved $777 million for losses anticipated in Asia. The Financial Times reported early last week, I think it was, that European banks are expected to have losses of up to $20 billion with respect to Asian loans. Having said that, there are some institutions that may come out better off than they would have been without these programs. That is a by-product--I have said many times, but I will say it again--we would not spend a nickel to protect a bank, but that is a by-product of programs whose purpose is financial stability and the rest, the recovery and reestablishment of economic well-being in these countries. The other issue is the issue Congresswoman Pelosi raised, which is the question of labor rights, human rights and the like, environmental protection. I don't think there is any question, if you look at these countries, at least there is no question in my mind. I come away with the view that when you look at the countries in Asia--effective human rights and labor rights regimes are very important with respect to having effective economies over time. So I think it is not just a social and moral issue. It is an economic issue. It still leaves us with the question of how much you can accomplish in these programs. It is my view, at least, as you go to implement and get sustained implementation of programs that are aimed at financial stability, which require wrenching changes in a very short period of time, there is a limit to how much you can accomplish--or attempt to accomplish--without greatly reducing the probability of success; and both the workers in those countries and the workers in our country are very much affected by whether or not we can achieve success. Moreover, success in this effort to reestablish financial stability and economic growth is, I think, essential for creating an environment conducive to pursuing human rights, worker rights and environmental protection, protecting objectives which we very much share with Congresswoman Pelosi. I think the challenge to all of us is the one you stated: how do we pursue these objectives while, at the same time, not vastly increasing the difficulty of reestablishing financial stability. As you know, we are working on this and trying to think the issues through in a very serious way. They are issues we are committed to as values and also because we believe they are essential to having effective economies over the long run. Final comment. I think the IMF is exceedingly well situated to be the central institution in this entire effort with respect to reestablishing financial stability. It has great expertise, and can internationalize the burden so it doesn't fall on the United States itself. It can require countries to do things, in terms of conditionality, that no bilateral provider of credit could. Having said that, there is clearly a need for great changes in the mechanisms and institutions that deal with the global economy and the global financial markets. The markets and the economy have developed very rapidly, and the institutions have not kept pace. Mr. Chairman, we have a process with the Federal Reserve Board right now which is very intensely focused on the architecture of the future. However, these are mind-bogglingly complex issues and it will take a substantial amount of time, in my judgment, to develop sound and sensible ideas, working with Congress and other nations around the world. We cannot, at least in my judgment, wait upon that process to be completed before we provide the funding for the IMF so that we will have the capacity to deal with what all of us hope will not happen, and what I think is a low-probability event, but will be a risk. In my judgment, we should not take the risk of either this crisis becoming far worse or a new crisis occurring elsewhere in the world. With that, we would be delighted--Under Secretary Lipton heads all international activities at the Treasury and would be delighted with me--to respond to any questions you may have. Mr. Callahan. Thank you, Mr. Secretary. [The statement of Mr. Rubin follows:] [Pages 13 - 16--The official Committee record contains additional material here.] mexico city language linkage to imf Mr. Callahan. First, let me respond to the issue of whether Mexico City language will be attached at some point in this process to emergency needs of the International Monetary Fund. Congressman Obey indicated we have a minority controlling a majority, and I most respectfully disagree with that, because the Mexico City issue is not going to be attached probably to our bill. If it comes through this committee with respect to the IMF, it is going to be attached by a majority of the Members voting on the floor of the U.S. House of Representatives. This issue is not going to go away. It is something other administrations have lived with, successfully, with respect to international policy in the past; and this issue is going to be attached to this bill in one shape or the other. So the administration must accept this fact, whether or not you agree with Mexico City language. This issue is going to be offered, in the least, as an amendment on the floor. History will tell you that the majority of the Members of Congress support Mexico City language. History will tell you that, on supplemental appropriations, it is always a temptation, especially in a crisis situation, that issues like this are attached to supplemental appropriation measures. So it is going to become an issue that the administration is going to have to negotiate, and you may as well accept that. While it is not going to be probably passed out of this subcommittee or even the full committee, when it gets to the floor it is going to be attached, so I think the administration is ultimately going to have to make a decision as to whether or not this international monetary crisis in Asia and the funding of International Monetary Fund is so necessary that it will stand in the way of the majority of the Members of Congress. But that is an issue that I am just telling you is going to come up. Congressman Obey mentioned this is the major league, but you have a lot of us minor league capability people playing in this ball game and, nevertheless, we are going to be a factor. I am pro-life, and I am not ashamed of that. I am right proud of that. That is my personal philosophy. I am going to vote for the Chris Smith amendment, even though I agree that maybe this is not the place for it. The attempts of the past have been unsuccessful in negotiating something through the Congress to tell the administration that we want Mexico City implemented. So it is going to be an issue. It is going to be attached, more than likely, if this is what the leadership decides; and whether the leadership decides or not, the attempt is going to be made, it is going to be attached to this issue. So you must prepare yourself to either accept that language or else come forward with some language that is acceptable to the Mexico City proponents of the legislation. With respect to IDA, Mr. Secretary, as you know, this committee and the Congress, a great majority of the Congress, were very concerned about the procurement arrangements that were negotiated by Chairman Wolfensohn; and we were told if indeed we were able to come forth with the necessary monies for IDA that the procurement would be revisited and the monies would not be spent unless the terminology of that agreement was changed. Have we arranged to repeal the procurement policies negotiated? Secretary Rubin. Yes, ITF has been terminated, and whatever is left in that--and I actually don't know the numbers. Whatever is left there is now fully available. As I understand it, roughly a billion dollars is fully available to American companies for competitive bids. Mr. Callahan. Very good. Mr. Frelinghuysen. Mr. Frelinghuysen. Thank you, Mr. Chairman. Good morning, Mr. Secretary, how are you? IMF wall street journal article In an article in the Wall Street Journal from your predecessor, Bill Simon, also co-written by former Secretary of State, George Schultz, and also by Walter Wriston, even though I support IMF funding, when those three people get together to write an article, I take a close look at what they are talking about. One of their premises is that, when the IMF intervenes, the government and its--and lenders are rescued but not the people. I have examined some of your testimony before other committees, and I would like you to address that issue. I think the public perception is--and Wriston and Simon and Schultz seem to follow pretty much along that public perception--that the people in these countries are totally devastated by what is occurring. Secretary Rubin. Three comments, if I may. One is that I know and enormously respect Bill Simon and George Schultz. I talked to George yesterday twice about the Asian crisis. But, on this issue, we disagree. You will see an ad in the New York Times with something like 150 signatories supporting the IMF, including a large number I think you would have equal respect for, so it may give you a little more comfort in terms of the company one keeps. I also noticed in the article you referred to he said we should get rid of the IMF after it deals with the Asian crisis. It was sort of recognizing this is the way we can deal with crisis. Mr. Frelinghuysen. I am not an advocate of doing away with the IMF, but when these three persons make a comment, I think somebody needs to rebut the claims. Secretary Rubin. I agree with you. Look, I think the answer is as follows: The problems that the people of these countries suffer--and they do suffer problems--are not a function of what the IMF has done. They are a function of financial instability, loss of confidence, collapse of economies and collapse of the currencies. The IMF is, if you will, the cure, not the problem. When the IMF comes in with its assistance but also conditionality, what that does over time, and though it does take time--these things do not happen quickly or easily, unfortunately--the countries get back on track, if it works. Then you start to see incomes go back up. Growth starts. Incomes go back up, and the people begin to reestablish their economic well-being. Conversely, I don't think there is any question that if the IMF--if the international community--was not effective and successful in doing what it is now doing in Asia and did in Mexico, then most likely you would have a default either of the sovereign debt or maybe systemic failure of the banking system in which you would have vastly greater economic duress and currency depreciation. It would last for a vastly greater period of time, and the people would suffer far worse. So I think you have two difficult outcomes, but I think one is far better than the other. I think you have seen that in Mexico now, with the economy growing at 7 or 8 percent--well, growing 7 percent last year, expecting to grow 5 percent this year, in dollar terms. Real wages have increased something like 30 percent since the bottom of the crisis, and in dollar terms, Mr. Yates. They are not back where you want them to be yet, but they are a heck of a lot--I think very, very substantially better off--than they would be if Mexico had defaulted, in which case I think you would have years and years of terrible economic hardship. Mr. Frelinghuysen. The other issue they raise is the IMF can lull nations into complacency as a self-appointed lender of last resort, a function never contemplated by its founders. Secretary Rubin. I actually agree. There was a column today in the Post--I think he got half of this about right. He didn't address a piece of it, but he addressed that piece. I don't think any country would choose to get into the mess or the morass that Mexico and these Asian countries have been in when they get into trouble. So I don't think that government officials are going to be lured into making bad policy decisions because they feel the IMF will bail them out; and, therefore, they feel they won't have to suffer the consequence. I think the tragedy is what you said. You got it right. The tragedy is that the countries do go through a difficult time no matter what, even if the recovery program is effective, before recovery takes hold. I think where there is an issue is, to the extent that bankers and investors are better off because of the programs than they otherwise would have been, that, unfortunately, can create the perverse impact--could at least conceptually create the perverse impact--of causing people to be less conscious of the risk than they should be. Mr. Frelinghuysen. Then you would agree with the third premise. Secretary Rubin. I would agree with that. I do think in Asia you had vast losses. So I think this would be a good lesson to the banking community, but I do think we need to change mechanisms and architecture to try to prevent that from happening to the greatest extent possible. Mr. Frelinghuysen. Is it fair to say, to use their own words, that there is a good chance that those who have lent money will get, at some point in time, bailed out? Secretary Rubin. No, my guess will be you will find most of the creditors in Asia--I will see if David agrees with this-- most of the creditors in Asia and the credit extended in Asia, where there are problems, will wind up taking losses. But I think some will benefit. I think most will wind up taking losses, and equity investors have gotten very large losses. opening up markets Mr. Frelinghuysen. The issue of opening up markets, I hate to to be provincial in this business, but I come from a State that represents a lot of pharmaceutical industries. The Chairman obviously has provincial interests as well. I have a letter in front of me from the Thai government that says that they require all Thai government agencies and semi-private industries to purchase only goods produced in Thailand. I thought part of what we were doing here is actually opening up markets--besides building sound financial practices that we wanted to open up markets. My question is, what guarantees do we have that these reforms, these markets, will open up? Secretary Rubin. Market opening is an objective we had when the President first walked into the Oval Office; and we accomplished a great deal, although there was an enormous amount left ahead. When IMF sets up the programs and we do play a substantial role in trying to help think through the content of these programs, what we try to do is to focus on the reforms that most directly relate to reestablishing financial stability. Because, as I said I think in reference to some other similar issues, it is a very difficult thing to do. You are asking countries or requiring countries to make wrenching changes, changes nobody has asked us to make, and I think we would have an extremely difficult time making wrenching changes in a very rapid period of time. I believe totally in opening markets abroad, and I believe in being very tough in opening markets. There are systemic things that we do do, and we could describe them if you like, in some of these programs that go to market opening. But I think if we try to accomplish a trade agenda, a United States trade agenda, through these programs, I think we then run into the problem of trying to do a whole other set of things which is going to make it much more difficult and therefore less likely to accomplish. Mr. Frelinghuysen. Speaking for myself, I think we ought to get something for our financial commitment. Secretary Rubin. Well, we do. Mr. Frelinghuysen. You have given us those assurances, but how do we actually have a guarantee? Secretary Rubin. No, no. I meant something different. What we get for what we are doing is, I think, in our dominant economic interest, which is to prevent--well, it doesn't necessarily prevent but does the best we can to prevent--these economies from continuing to be in free fall and therefore shrinking as markets, and from having depreciating currencies and undercutting the competitiveness of our goods around the world. That, in terms of our broadest economic interests, overwhelms everything else, and that is what we try to do. Now, we do try to do some market opening. David, do you want to add anything? Mr. Lipton. If I could just say---- Mr. Frelinghuysen. We have other partners in the IMF. What is their impact? I mean, are they as interested in opening these markets as we are? We are the major lender here, so to speak. Secretary Rubin. Well, we are about 18 percent. Mr. Frelinghuysen. Well, 18 percent. Well, that is the highest percentage of anybody. Mr. Lipton. Congressman, a couple of points. I think that because there are other members in the IMF, we understand that the IMF will pursue broad systemic opening of economies, trade policy and capital account policy. It is difficult for them to pursue particular industrial or sectoral issues for fear that each of the member countries would want its particular interests advanced. What we have seen in the Asian country cases is opening in trade, tariffs being reduced in Indonesia for fruit and nonfruit products. We have seen pledges of export subsidies being eliminated, import-licensing restrictions being eliminated in Korea. These are changes that we think are important for these countries to undertake to fix their economies, to signal the direction that the country will go in. But there is one undeniable problem in the short run, which is that these countries are in a foreign exchange crisis situation. There is a shortage of foreign exchange, which is why the currencies have been so depreciated. Mr. Frelinghuysen. I understand they need an immediate transfusion. I am just saying, what guarantee do we have in the final analysis that we are going to have these markets opened up? Secretary Rubin. I think as you are dealing with these systemic issues, the guarantee--I don't think I would use the word guarantee--but they have committed to these programs, and they get the money in tranches, Congressman, so that hopefully they get it in tranches so that if they don't do what they are supposed to do, then, of course, they don't get the next tranche. This will solve some of the problems. It won't solve all of the problems because if we try to put all of our particular interests into each of these things, as Dave Lipton said, other countries do the same, and you would have an overload of trade issues you couldn't accomplish, and then we wouldn't accomplish our overriding objective, which is the financial stability and the---- Mr. Frelinghuysen. And lastly, to conclude, to explain to the average citizen--and I will follow up with what the Speaker says, I think we need to do a better job of that using your bully pulpit. When a call is made for money, does the Treasury borrow the money, or do you create it by fiat? In other words, how is it literally done? Secretary Rubin. We have our little printing presses. Mr. Frelinghuysen. Well, I am sure that you do have the printing presses. Secretary Rubin. No, we use that for ourselves personally. No. I assume we borrow it. Mr. Frelinghuysen. You say here that we are not using taxpayer dollars. Secretary Rubin. Right. Well, we are not. It doesn't cost-- -- Mr. Frelinghuysen. But in reality, how do you--what is the calling mechanism? imf Mr. Lipton. It is a swap of the dollars which go from the U.S. to the IMF and the IMF provides us an SDR certificate. So it is an asset swap, and they, in essence, call the dollars when they need them in order to extend loans to countries that are borrowing. Secretary Rubin. Let me try. Well, we pay interest on the monies that we borrow, when dollars need to be put up. At the same time, we get interest from the IMF. Mr. Frelinghuysen. Do they come from the general fund of the Treasury, from borrowing, or the creation of inflationary-- -- Mr. Lipton. I don't know the answer to that. Secretary Rubin. Let us get back to you, Congressman, but I am sure the answer is they come from the general fund because that is only place dollars can come from, and since we are still in deficit--although only slightly in deficit--net dollars would have to come from borrowing. But as Dave Lipton said, there is no impact on the budget, for the reasons we have described, and so you are borrowing dollars, but then you are creating an asset of equal value when you get their claim back and the interest rates, roughly speaking, wash. So there is no cost to the taxpayers. Mr. Callahan. I would like to commend the gentleman from New Jersey for his knowledge of this issue. Without offending my great friend Mr. Obey from Wisconsin, he brought up the major leagues, so rather than plagiarize him, let me tell you that Rod Frelinghuysen has turned out to be the John Elway of this subcommittee, with all due respect to the problems that the gentleman from Wisconsin had with John Elway on specific issues. Mr. Obey. Well, if the chairman would yield, let me say I think the questions Mr. Frelinghuysen are asking are precisely the kinds of questions that we should be asking rather than looking for ways to blackmail each other on very important issues. Mr. Callahan. I certainly agree, and I am very appreciative of Rod Frelinghuysen for taking the time and the effort and the input that he has provided to me on this very, very complicated issue. The gentlelady from California. mexico city language Ms. Pelosi. Thank you very much, Mr. Chairman. I am going to follow your lead and not use my question period now. I am very glad you didn't bring the hourglass. I don't know what system we are using here, the flexible 5, it seems like. But I am not going to use mine. I am going to have you recognize the gentleman from Illinois, Mr. Yates. But I am going to follow your lead in making a comment about the Mexico City language. I do not believe that the poor women of the world should have to pay the price for crony capitalism, corruption and other poor business judgment anyplace in the world. I listened very carefully as the Secretary talked about how there is conditionality at the IMF, but we don't want to bog down this supplemental because we need to move quickly in order to get the money out there. So it seems ironic to me that while we might not be able to put conditions that directly relate to the economies and the health of the economies of these countries on the IMF supplemental, we are going to put a condition that poor women, throughout the world, will not be able to receive information about their reproductive freedom. I think that that gag rule has no place, anyplace, in this Congress, least of all on an IMF replenishment. I have said that with the greatest respect, of course, for my chairman, as you all know, and also for the maker of that motion on the floor of the House, whoever he or she may be, and if it is Mr. Smith, he is my friend, I hold him in high regard. But this is a fight that we have to make and that we have to come to terms on, and it is important for the American people to know that no U.S. taxpayer dollars are spent on abortions anyplace in the world. That is the law. And it is important for them to know that the Mexico City language isn't about abortion. What we are talking about is family planning and not having a gag rule on the spread of information about family planning. With all the respect in the world for my distinguished chairman, sometimes I, too, wish we had a unicameral Legislature, as long as the one house was the House of Representatives. It just doesn't happen to be the case. And while there may be--and I hope there is not--some level of success for the Mexico City language on the floor of the House, that isn't the end of the game. The legislation has to pass through the Senate and be signed by the President, and then two-thirds of this body has to sustain that position. So it is a very difficult issue. We are all trying to work closely together to address the concerns that people have, where there are real reasons for opposing the Mexico City language. But if these concerns are just an excuse for antichoice policies, they have no place in this debate because this isn't a choice issue, it is a family planning issue. If they try to disguise themselves as something other than what they are, I think everybody should point to the gross irresponsibility, which I hope the Republican leadership will not exercise, in saying that these two issues are tied in perpetuity, as I believe the language has been used. And with that, Mr. Chairman, I will save my questions for later about the moral hazard argument and why we should be bailing out the private sector. I think the American people are very tired of privatizing the gain and nationalizing the risk. I appreciate what the distinguished Secretary said about why that is nonetheless in our interest, but my questions will go along that path. With that, I yield back my time, Mr. Chairman. Mr. Callahan. The gentleman from Illinois, Mr. Yates. Mr. Yates. Thank you, Mr. Chairman. Mr. Secretary, welcome to our committee. We are glad to have you here, with your very capable assistant. imf Here I have a letter from one of my colleagues. ``Say no to the IMF because the IMF has ample funds without Congress. Dear colleague, the recent Asian financial crisis and the IMF bailout have combined to put pressure on Congress to approve billions of dollars for the IMF. The fact is the IMF has ample resources right now without any new congressional appropriation,'' and there are other paragraphs, but that is the kind of thing that we were getting. It itemizes what seem to be an enormous amount of resources available to IMF: $45 billion in liquid resources; $25 billion credit line through the general arrangements to borrow; $37 billion in gold reserves; blank billion in funds IMF can borrow from the private capital market. Let's suppose IMF were not in existence, Mr. Secretary. You have not indicated the possibilities of what will happen in the event that the Congress turns down the $18 billion. You have not indicated that, without IMF funds, how these countries are going to pull themselves out. Are there adequate resources in the private market in order to do this kind of a job for them? I would appreciate your giving those of us who support the IMF the arguments that are necessary to show that these are necessary. Secretary Rubin. Thank you, Mr. Yates. I think those are very important questions. Let me start with respect to the--I will go to the numbers in one second, but let me start, if I may, with respect to the question without the IMF, is there money in the private sector? The problem is in these kinds of crisis situations, this kind of capital does not exist in the private sector. In the first place, it has kind of an uncertain--there is kind of an uncertainty and a risk about it that would make it impossible to mobilize the amounts of money that are needed and needed very quickly for these countries. It just simply does not exist. It is not available. It could not happen. Secondly, the IMF, as mentioned in my testimony, imposes conditionality that is central, it is the central feature of these recovery programs, and private sector lenders, even if they exist--and they would not exist, but even if they existed--could not impose that kind of conditionality. So the answer is without the IMF, there would be no capital from any source. Mr. Yates. And what would happen to the countries then? default Secretary Rubin. I think what you would have is a default, and once you had a default, there would be no access to the international capital markets, and the countries' economies would go into gridlock and would continue to depreciate very substantially, as would their currencies. And unfortunately-- well, that in itself would be terrible for the people there and for the people here, for the reasons we discussed before. But in today's interconnected economy, the probability is, I think, quite high that it wouldn't be limited to one country. You saw that in Asia back at the end of last year where a problem in one country then created problems in a number of countries in the region. As you may well remember, between Thanksgiving and Christmas, as I said in my testimony, the concern was that that would spread out beyond Asia to other parts of the world. So it could become a global problem. Mr. Yates. In other words, there is no private funding available without public funding to start it? Secretary Rubin. There is no--you have said it very well. That is correct. I couldn't say it better, so I won't repeat it. That is correct. Mr. Yates. Well, I wish you would repeat it. reestablishing financial stability Secretary Rubin. There is no private funding available until the conditions have been reestablished that will make that an attractive thing for private creditors to do, and that isn't going to happen until there is some element of--some reasonable level of financial stability and confidence and reestablished, and that requires reform and requires this international financial institution funding to, in effect, provide breathing room to enable these countries to stretch out the short-term debt that is choking them. On the numbers, Mr. Yates, there is $45 billion right now of liquidity in the IMF, but about $30 billion of that is not usable. It is like a credit union. That is, I think, the right analogy. And just like a credit union, you have to have liquidity so that if your depositors want their cash, they can get it. And it has been estimated that roughly there is about $15 billion right now of usable money in the IMF. $37 billion of gold is simply the asset of the IMF that gives it the creditworthiness that enables us to put up our money, get back a claim of equal value because of the high creditworthiness of that claim. There is $25 billion, roughly--I have forgotten now whether it is $23 billion or $25 billion, it doesn't matter--$23 billion or $25 billion in the GAB, as you mentioned. But it is that $25 billion, plus the, say, $15 billion or thereabouts in the IMF, that is the only money available right now. And if we were to have--and we are all working as hard as we can to prevent this, and we have to believe--and I do believe--it is a low-probability event, but if it were to happen that this crisis were to reignite and then spread out and bring in other parts of the world, that is a woefully insufficient capacity to deal with the problems that we would face. Mr. Yates. You indicated in your testimony that the Deutsche Bank has lost about $700 million, I think. Secretary Rubin. Well, I don't know what their losses are but they reserved--they announced they reserved--$777 million against either projected or possible losses. Mr. Yates. Will the loans of the IMF be used to pay back the amounts that the banks, that the various banks, have lost in their investments? Secretary Rubin. Well, the loans from the IMF are being used for different purposes in different countries. In Korea, originally, some of the IMF money was used to repay banks and, therefore, those banks came out whole who might--who would not otherwise have come out whole. That is why I said that while there have been vast losses taken, there are some people who will come out whole who would not otherwise have come out whole, and that is a by-product of this process. Mr. Yates. Mr. Frelinghuysen raised that point, coming out of the Schultz-Simon article. Secretary Rubin. Yes, but I think that the problem with the Schultz-Simon article is that what it did not acknowledge is that while there will be some people who will come out whole, there are vast losses that are going to be taken, both by creditors, bank creditors, and investors of all sorts. But there will be some--there will be some bank creditors that will come out whole or at least close to whole, that would not otherwise have come out whole, and that is a problem that is inherent in the system that we have right now. Mr. Yates. We are taking the lead in trying to reestablish the financial stability of these countries. Are we being helped by other nations, and in what respects are we being helped by other nations? Secretary Rubin. Oh, yes, this has been an international effort. If you take a look at the IMF, we have 18 percent of the, if you will, the ``capital'' in the IMF, so other nations have 82 percent. And then if you look at the so-called second line of defense, contingent agreements that we have made to provide additional money, although so far we have not actually disbursed anything, in Korea we committed $5 billion, Japan committed $10 billion, Europe committed $8 billion. Mr. Lipton. That is correct. Secretary Rubin. And that was about it, I guess. Mr. Lipton. There were a couple of others. Secretary Rubin. And there were a couple of other smaller ones. So this has been an international effort. This is not like Mexico. This has been a real international effort. Mr. Yates. You are in the global economy and in global competition with the nations that are helping. Do you find that that interferes in any way with your cooperation in reestablishing the financial stability? Secretary Rubin. With the nations that we are helping? Mr. Yates. No, with the--of nations that are joining you in helping the IMF. Secretary Rubin. I am sorry. I got it. No, because they all have the same economic interests we have. These are their markets. If these countries keep depreciating, it hurts their workers just like it hurts our workers. Mr. Yates. Okay. All right. Thanks, Mr. Chairman. Mr. Callahan. Mr. Wolf. Mr. Wolf. Thank you, Mr. Chairman. I appreciate it, and I want to thank Mr. Kingston for deferring the time. I have another appointment coming up. east timor and indonesia Mr. Secretary, welcome. I have two questions. One with regard to East Timor, and Indonesia. Nowhere do you ever raise the issue of what is going on out there, and if the American taxpayer will be contributing money to the Indonesian Government to bail them out, which may very well be appropriate, you have never raised those issues. Now, they may have been raised privately, but I understand they are not even being raised privately. In East Timor, in the last year, more people have died. It is a reign of terror. Bishop Belo, the Catholic bishop, has received the Nobel Peace Prize. Wouldn't this be the opportunity to tell the Indonesian Government, please give the people of East Timor autonomy or independence, particularly since we are helping in a very critical issue like this? Secretary Rubin. Congressman Wolf, my understanding, and let me ask David to add to this, if he would, is that the East Timor issue has been raised aggressively by the State Department on a number of occasions with Indonesia. We have not raised it in the context of trying to work through this program. Look, I think you are right on East Timor. I think there is a serious problem, and I would identify with your concerns. On the other hand, if Indonesia goes into default, the Indonesian people are going to be--including the people of East Timor--vastly worse off than if we can reestablish--not we, but if the international community can help Indonesia reestablish financial stability, and that is itself proving to be a very difficult undertaking, as you know. Mr. Wolf. Well, I understand that, but the State Department really hasn't done very much, and the conditions are worse today than they were a year ago. I was out on the island. I mean, we saw young boys with their ears cut off, the atrocities, and the atrocities have continued. It would seem to me that with Treasury working with State, here is an opportunity to say to the Indonesian Government, we are coming to your assistance; we do expect--we are not linking these things necessarily, but we do expect progress, and we want something publicly said because the people of East Timor are suffering, and they have seen no improvement whatsoever. And I personally feel that if I am going to support something like this, I would like to see you speaking out both publicly as well as privately. There were reports several years ago that one American manufacturer was paying Michael Jordan more money for promotion of a particular product than they were all the salaries of all the Indonesian workers. There are some things like this, but in East Timor these people are dying. Forty-two, I think, have died since last year. There ought to be some linkage in the sense that you put pressure on the Indonesian Government to do the right thing and, in the process of doing it, I think will strengthen the Indonesian Government because businesses will see that they have made progress on a very sensitive issue, which has been recognized by the Nobel Peace Prize, by the Pope, by the American Catholic bishop, by Cardinals, and by people all over the world. Secretary Rubin. You know, I think you raise an interesting point--I may ask David to comment, if I may, Congressman, but let me just make one comment, if I may. I think that a case that we have to make more effectively, not just in Indonesia but elsewhere, is that human rights is actually good economics. I have come to feel rather strongly that when businesses look at countries in which to invest, they look at the political and social situations, and they are obviously concerned about political and social stability, and countries that have real human rights problems I think are less attractive, because people--there is a greater concern about the possibility, at some point at least, along the line of instability. I think that is an argument we need to make more effectively, and that is one of the things that we have been talking about how we can do it. As far as East Timor itself is concerned, I know the President--I think the President--yes, the President did raise that when he was in Vancouver with Soeharto. Do you have any other, David? Mr. Lipton. I didn't have any information beyond that point. Secretary Rubin. I know that he raised it with Soeharto. This was in Vancouver. Mr. Wolf. I think it is important to raise it again publicly as well as privately, since the IMF crises and the bailout and all these things have taken place. And I would respectfully urge you to publicly, either you or Mr. Summers, make a case to send a signal to the Indonesian Government and also to the people of East Timor that we do care. I am not saying there needs to be a direct linkage, that if you don't this, we won't do that, but the fact that we are doing this, we urge you to give them autonomy or independence. And I think you actually hold the key to the future of about 500,000 people. And there were 700,000 people on the island 20 years ago. Two hundred thousand have been killed; roughly 25 percent of their population killed; not just that they have lost the right to vote and they can't go out at nighttime, but killed. And so I think Treasury and State together holds the key to unlocking their future, which I think, as you say, would be good business for the Indonesian Government. And I publicly make a request, and I am not conditioning my vote, obviously, but this does help drive how I deal with this issue, and publicly, for State and you together to say, to say something. And I would ask you to do that. Secretary Rubin. Let me do this, Mr. Wolf. Without commenting right now, I would like to discuss this with the State Department people and see how--in the context of everything there, what is going on, how they feel this would relate to everything else we are trying to do in the environment and everything else. I think it is a very sensible suggestion. Whether it is something they--all of us together think we should do at this moment or not, I don't know. But we will get back to you as soon as I have talked to them. [The information follows:] East Timor The Administration monitors the overall situation in East Timor closely and has urged the Government of Indonesia to reduce force levels, curb human rights abuses, and improve human rights conditions there. The State Department continues its efforts to help bring about a resolution of the situation in East Timor and we strongly support the UN-facilitated initiative to reach a satisfactory settlement. We also welcome confidence-building measures being undertaken through the All-Inclusive East Timorese Dialogue in an effort to improve human rights, and promote peace and stability. The Administration supports proposals to give East Timorese greater control over their own affairs and accord recognition of their unique history and culture. The subject of East Timor has been raised at the highest levels, by President Clinton, Secretary Albright and other State Department officials. We will continue to press all sides to resolve this issue, which remains high on our bilateral agenda. Mr. Wolf. Yes, sir. sudan The other issue doesn't deal with IMF. It deals with Sudan, just a quick answer yes or no, and then I will move on. Please do not grant any waivers to the Sudanese Government. I know that Treasury is now looking at that issue. Some people want waivers on gum arabic extract, some people want waivers on other things. The administration did the right thing by putting sanctions on the Sudanese Government. If your waivers take away the sanctions, it would almost be like you got good credit for doing something right, and then by giving the waivers you would go the other way. There should be no waivers at all for the Sudanese Government. They were involved in the assassination attempt on Mubarak. Every major terrorist group has an operation in downtown Khartoum. You could have an international convention of terrorists in Khartoum, and nobody would have to come in from outside the country. There is slavery, whereby they enslave their own people, and so no waivers. And I would like you to tell me publicly, I mean, will you oppose granting any waivers to Sudan? Secretary Rubin. Let me do this, if I may, Mr. Wolf: We have discussed this, and, as you know, the State Department is very deeply involved with these issues as well. David, do you want to comment? Mr. Lipton. Well, first, one waiver that was granted was a very, very limited waiver for Citibank to be able to help finance the humanitarian efforts that are underway there. Mr. Wolf. I don't believe that that is valid, though, when you look at it. I think Citibank has really been funding the gum extract business, and I am really worried about this. And they hired high-powered lobbyists who come in. And what about the poor people in the south that are put in slavery? Mr. Lipton. We are very sensitive to the point that you are making. It is my understanding that trade finance has been cut off by the very restrictive nature of the waiver, and I can get information for you to see whether what has been done, in fact, is satisfactory. There were a set of, I believe, seven waivers granted for gum arabic trade that had commenced already with shipments underway. Mr. Wolf. That was moving forward, which is understandable. Mr. Lipton. Right. But there have been none granted since that point. There are a number of applications that have been put before the Treasury Department. Mr. Wolf. Yes. Mr. Lipton. And no action has been taken. Mr. Wolf. I would urge--one, when will you make a decision on that? Mr. Lipton. This is the Office of Foreign Assets Control that is in charge of this, and I am not sure what their timetable is for decision. Mr. Wolf. The poor people of Sudan, where there is slavery, and crucifixions both of Muslims and Christians, and animists, have not the money to hire the best law firms in Washington. So I know the other side has. I would ask you respectfully, as somebody who has been to Sudan three times in the south, please do not grant any waivers above what you have done, because it will basically wipe out the good that you have already done. We sent a letter commending the administration for its action. Do not grant waivers--in essence, that would make the sanctions meaningless. Please, grant absolutely, positively, categorically no waivers. Can you imagine, had their assassination attempt been successful on Mubarak, the impact on the Middle East? I mean, just do not grant any waivers which gives them economic ability to continue to do what they are doing. And I would appreciate it if you could kind of tell me when you make that decision, and I would hope, please, do not grant any. Secretary Rubin. Why don't we do this, David. We will meet with the people at OFAC. We have also--the State Department gets into this pretty heavily. Right? [The information follows:] [Pages 31 - 32--The official Committee record contains additional material here.] Mr. Lipton. Uh-huh. Mr. Callahan. The gentlelady from New York. Mr. Wolf. Thank you very much, Mr. Chairman. Secretary Rubin. And we will get back to you on this, Mr. Wolf. Mr. Wolf. Thank you, Mr. Secretary. And I want to thank you Mr. Kingston for deferring the time. Mrs. Lowey. Thank you, Mr. Chairman. I do want to thank Secretary Rubin for your leadership. Many of us sleep better at night knowing that you are in charge, and we appreciate all your hard work and your commitment. human rights Before I move to new areas of questioning, Mr. Secretary, I just wanted to associate myself with comments of several of my colleagues. First of all, with my colleague, Mr. Wolf, I feel very, very strongly that issues related to East Timor and Sudan should be a part of these negotiations. And, in fact, in your own words, where you are saying human rights is good economics, you said that human rights, worker rights, are important factors in a strong economy. The United States is strongly committed to the values, and they are key to successful economies in the long run. As you know, you and I have had many discussions, most recently concerning fast track. As someone who does believe in the global economy, who did want to support fast track, it was very disappointing to me that in the end, all those corporations that signed that ad today and included passing fast track as one of their priorities, and all of us in Congress and the administration who believe that our values are key and that we should take a role in advocating human rights and worker rights as leaders, could not put sufficient pressure on the part of the leadership of this Congress to give this administration the same fast track authority that the other Presidents had in the past. So I would just ask you, not only on this issue of the IMF, but all the other issues that you have been so involved in, if we really believe that human rights is good economics, then we have a responsibility, and all those corporations who signed that ad today, and I read every one of them, have a responsibility to say to the leadership, human rights is good economics, and that issues of worker rights and human rights in Sudan and East Timor are and should be part of this negotiation. So I ask you, again, to take some leadership in this area. Secretary Rubin. But Mr. Wolf distinguished, I think, Congresswoman Lowey, in a way that I think was very useful--his distinction, I think, related to my testimony. Mrs. Lowey. Right. Secretary Rubin. The question is, how do you accomplish these things? And what I said in my testimony, which I believe to be the correct case, is that as important as these issues are--I think they are very important to the economy, as well as for moral and social reasons--when you have to deal with a crisis and you have to accomplish wrenching changes in a very short period of time, I think if you try to accomplish these purposes in those programs, I think you are going to try to accomplish more than you can--are likely to be able to get done. And I think you are going to greatly reduce the chances of accomplishing your basic objective of reestablishing, achieving financial stability. So what I said in my testimony, I don't think you can link them in these negotiations, but I think what you need to do--I think you can certainly raise them in all kinds of ways, as the Congressman suggested, but I think if you try to link them as conditions, I think you really are very substantially reducing the chances of being successful. Mrs. Lowey. But, again, I would like to say in associating myself with the remarks of my colleague, I certainly respect your expertise and your wisdom on these issues. And I don't think anyone in the Congress is going to say we should be doing 1, 2, 3, 4, 5, but then again, the administration shouldn't be precluded from discussing these issues during a negotiation. Secretary Rubin. Oh, I agree with that. Mrs. Lowey. I believe this is what many of us have been advocating and would like clarified. Secretary Rubin. There is nothing which exists today that would be preclusive. Mrs. Lowey. Which is what I wanted to clarify. abortion linkage to imf Secondly, I did want to also associate myself with the comments of Mr. Obey and Ms. Pelosi in that I do respect my Chair and all those who have a prolife position on issues of abortion. But, again, zero funds in our bill goes to abortion, and I think it would be a real tragedy if we can't debate the issues concerning international family planning fully and thoroughly, and even having a vote in the Congress. But to link it to other issues doesn't do that issue justice and certainly, I think, is very damaging in holding these other issues hostage. So I would beg my colleagues here on this committee, who managed to avoid the linkage in holding up the foreign aid bill, and I would certainly urge those who have any kind of influence with the leadership in this Congress not to abide by what I also read in Congress Daily today, because I think there should be no linkage. And when you think about the importance of international family planning to the women of the world, it is absolutely outrageous that there should be any linkage. So I just wanted to mention those two points. health and education programs I would like to ask you questions in a few other areas, Mr. Secretary. I have been concerned about recent reports that the World Bank's commitment to health and education lending fell by almost 50 percent from 1996 and 1997. These were the numbers that were given to me. I certainly believe that devoting resources to health and education programs is absolutely critical to our effort. So I would be very appreciative if you have any information regarding that, or if you could address this matter with the World Bank, because their commitment to health and education, I think, is vital. Secretary Rubin. I agree with your general statement. I think it is an essential mission. Mr. Lipton. In fact, I think what you are alluding to and what is responsible for this is that the lending of IDA in Africa has been low the last 2 years and below what the World Bank had projected under the IDA-11 replenishment. This is something that we have been discussing with them. I can assure you that other donors are very eager to see them lending aggressively in Africa. The share of IDA lending that is devoted to health and education issues has been growing, but the total has been---- Mrs. Lowey. Right. Mr. Lipton [continuing]. Has been below projections. The problem we have is that one of the goals that the World Bank has is to be selective and to make sure that the programs that they are supporting with their money actually are put in place, that the countries are dedicated to reform. And so there is a bit of back and forth on that that I think is responsible for this. But the World Bank has assured us that they are going to work very hard to restore their operation level to what was intended in the IDA-11 pledging. Mrs. Lowey. I thank you. And, gentlemen, in the fiscal year 1998 foreign operations bill, we included the full administration request for IDA. And I would be interested in a response concerning the responsiveness of IDA to our concerns regarding child labor, the environment, and the need to reduce corruption. Have they been responsive to our request to focus on these areas as a response to our full funding of the program? Mr. Lipton. Yes, they have. I think there is a process on our part of trying not just to make sure that the institution is responsive, but to gather strong support from other member countries. I think this is an area where we are making progress, and more can be made. I think that, in particular, on the corruption side, both the IMF and the World Bank have made corruption a special focus in the last year. The issue has made its way into their operations, as well as into the rhetoric, into the speeches, and in the information that they provide publicly and to member countries. On child labor--and on labor issues more generally--I know that Jim Wolfensohn has taken a special interest in this subject. He has made a visit to the ILO. He has established special contacts between the World Bank and the ILO. There are a couple of in-country cases where the World Bank has begun to include child labor issues in negotiations. The other development banks have also taken this on seriously as well. I think it is an area where there is a lot more to be done and a lot more that we really have to do to press them to follow through. Micro Lending Mrs. Lowey. In another area, Mr. Secretary, I know that you and your Department have been focused, as many of us are, on the effectiveness of microcredit lending. Could you share with us what kind of coordination is currently taking place between the Treasury and AID to ensure that this money is targeted in the most effective way? Secretary Rubin. You are right in your general comment. I actually don't know the answer to your question, Congresswoman Lowey. I think I actually visited a couple of microlending sites abroad to see how it was working--well, when I was there anyway; it wasn't a special trip, but when I was there anyway-- to see how microlending works in very poor neighborhoods. It was very impressive, it really and truly was, particularly when the money was combined with technical assistance. I don't know how we are coordinating with AID. Do you know, Dave? Mr. Lipton. I mean, we follow the AID programs and speak to them, in particular, about the countries where we have an active interest and involvement. I would say that another very important area, and I am not sure that you might be aware of it, is that the MDBs themselves have stepped into the microcredit area; the IDB in a particularly strong way. They are now going to dedicate $500 million to small lending and microlending programs in Latin America. That is something that we have been supportive of and we hope will be successful. Mrs. Lowey. The reason I was interested in the coordination, I remember our last meeting with Jim Wolfensohn, and he is very interested in microcredit, microlending. In fact, he said it is really still less than 1 percent, a very small part, of their whole lending package. Everyone agrees it is very important. It has an important effect. There are still millions and millions of people who could use that help. So how USAID works with the World Bank to help the World Bank increase their investments in microcredit, I think, could be very helpful. Mr. Lipton. There have been collaborations between AID and the World Bank in cases where AID, in essence, does the pilot work and then the World Bank picks that up and follows through to develop a larger, more heavily funded program. I think that is a promising area for collaboration. IMF Mrs. Lowey. I thank you. And just lastly, Mr. Secretary, before--just to get back to the IMF for a moment, because we understand your case and you are very persuasive in making it, that this is crucial to the world economy. Could you perhaps elaborate on your statement that we have to change the mechanisms and architecture to prevent this from happening? How are we working to truly ensure that Indonesia will implement the critical reforms that we are demanding of them? Secretary Rubin. Oh, that is a slightly separate question. Mrs. Lowey. Okay. Secretary Rubin. Let me break it into two pieces, if I may. In terms of my comment about the architecture, I was really referring to the sorts of things that Mr. Frelinghuysen had raised from the George Schultz-Bill Simon article. Global Economy We have institutions that were created 50 years ago. I think they are vital to our national interests, but the global market, the global economy, in the meanwhile, has developed in the last, say, 10 years at a very rapid pace, and we need to find better mechanisms for dealing with these problems, especially to deal with the moral hazard questions that were raised in that article, although I think they are far less in Asia than they were in Mexico because of the losses that have been taken. And the Federal Reserve Board and Treasury are working together right now in a very intensive fashion, but these are mind-boggling, complicated issues. Just to develop, sort out analytically, what we think, how much we can accomplish relative to what we would like to accomplish, I don't know, and once we develop our thoughts, we obviously need to work with Congress and we need to work with nations around the world to get consensus. So this is not a short-run process, but it is a process we are pursing. I have a meeting this afternoon, as a matter of fact. David Lipton is providing the leadership at Treasury. Plus Alan Greenspan, Larry Summers and myself have been very deeply involved. On the question of Indonesia, their economic self-interest lies in economic reform, both to deal with the problems that gave rise to this instability and to reestablish confidence. But I think you put your finger on it. There are no guarantees in life, and I think the only way you get assurance is by a sustained commitment on their part to these programs, and that is what the world is watching right now. Mrs. Lowey. Well, I think I have taken enough of my flexible 5 minutes. But just in closing, I want to say we were talking about the concerns that our constituents have and we have about money going--and you mentioned this in your opening remarks--to bail out the banks and to bail out the investors. If we are so quick to cover those losses, how will they behave in the next situation? And certainly in terms of Deutsche Bank, we talked about their losses. I don't know if we discussed their profits. Secretary Rubin. No. This was a question of were they absorbing the consequences of their credit extension in Asia. Mrs. Lowey. Uh-huh. Secretary Rubin. And the question of nationalizing losses and privatizing gains, which I think is a very serious and totally appropriate, and a very important issue. That was the only point of my comment. Mrs. Lowey. Well, I thank you, Mr. Chairman. I thank you, Mr. Secretary. Mr. Callahan. Mr. Secretary, the committee is going to stand in recess for 3 minutes, and we will be back in exactly 3 minutes so Congressman Kingston can begin the questioning. Secretary Rubin. Good. [Recess.] Mr. Callahan. If we can keep our commitment, our 3 minutes has turned into 6 minutes, as usual. But if the committee will come to order. Mr. Kingston. Mr. Kingston. Thank you, Mr. Chairman. Mr. Secretary, let me start by complimenting the Department that you are running. You do a great job, and I think we are all proud, and you have a lot of bipartisan support here on the Hill. We have--a nuts-and-bolts kind of question right here. The assessment--the quotas are looked at and reviewed every 5 years, and the last quota increase was 1992. Secretary Rubin. Right. Mr. Kingston. Is that correct? Secretary Rubin. 1992 was the last one, yes. Mr. Kingston. And then it was reviewed again, but not increased, but then in 1982 or 1983 it was increased again, correct? Secretary Rubin. 1983, I think, wasn't it, David? Mr. Lipton. Yes, 1983. Mr. Kingston. How much of this is---- Secretary Rubin. Yes, 1983. It is not actually every 5 years. It is--I don't know. How often? Mr. Lipton. It is based on need. Secretary Rubin. Yes, it is sort of a need-based thing, and it is negotiated and debated and stuff like that. Mr. Kingston. Okay. How much of this is triggered by the crisis versus the 5 years? You are saying it is the need more than the time? Mr. Lipton. The process of discussion had begun probably about a year before the crisis began. Secretary Rubin. But the urgency is a function of the amount that was used much more quickly or committed at least much more quickly than expected. Mr. Kingston. Okay. Secretary Rubin. And the danger that the crisis could reignite. Special Drawn Account Mr. Kingston. Okay. Of the $14 billion now, that, I was thinking, was an assessment, but that is actually the amount of the special drawn account? Is that--would that be correct? Mr. Lipton. That is the increase in our quota. Mr. Kingston. For the special drawn account? Mr. Lipton. We have roughly $36 billion. It goes up by $14 billion. Mr. Kingston. Okay. That would be, though, the special drawn account, correct? Secretary Rubin. You know what you can think of it---- Mr. Kingston. Let me tell you where I am going, is how much of it in hard dollars is backed by gold? And the reason why that is important is because we hear so often it is very safe because it has great collateral, and that collateral is gold. Mr. Lipton. The pool of resources right now is about $197 billion. With everybody's new contribution, it would go up into the $280 billion range. The IMF presently has about $40 billion worth of gold. Of course, all of the other money, when it is put forward, is not all spent. Some of it is on loan to countries, and the countries repay. There is a very good repayment record at the Fund. So what stands behind this is all of the assets of the Fund, including the outstanding loans, the unused resources, and the gold. Mr. Kingston. So it is--I think it is a relatively safe loan, but it is not fully collateralized; is that correct? Secretary Rubin. The way to think of it, if I could, is that--and remember, it is the Congressional Budget Office that makes this judgment, not the Treasury Department. But I think you have got it right--it is a very high-quality borrower, but it is not technically, no, it is not technically fully a collateralized loan. Needs Assessment Mr. Kingston. Okay. The other thing is: The needs assessment, do you ever reduce the quota? And the reason why I am asking that is because we are always saying, well, this really isn't going to cost the taxpayers. It is not a budget outlay and so forth. However, it is almost like the purchase of land that you are never going to sell or perhaps it is an arrangement that you are never going to back out of. Or am I wrong on that? Mr. Lipton. Well, it is---- Mr. Kingston. Because, even though the $14 billion isn't going away, it is no longer liquid. Mr. Lipton. Your question is a good one. The size of the quota pool has gone up, in essence, because the size of the world economy has gone up, and the IMF membership within the world economy has expanded as Russia and other countries have joined in, and so there has been--just by that happenstance-- there has been an ever-expanding need for resources. The IMF resources right now actually are a far smaller fraction of world GNP or world trade than they were 10 or 20 years ago. So while there has been this expanding need, the IMF has, in a sense, made do with a smaller amount of financial resources relative to its membership's economic activity. Mr. Kingston. There are about 180 countries? Mr. Lipton. 182. Mr. Kingston. Now, what binds those countries, besides profit, to American lenders? Are they philosophically pro- American? Do they vote with us at the U.N.? Will they be with us should we get into something with Iraq? And is that something that--Mr. Frelinghuysen mentioned the need for pharmacies to have lower tariffs and so forth, but in another sense we do have this global picture. Are we lending money inadvertently to our enemies just because some of our lenders are making profits on it? Secretary Rubin. No. This is not driven at all by U.S. lenders, by our lenders' profits. I think what binds people together here is a common interest in the health of the global economy and a perception, I think a correct perception, that if the global economy suffers, we will all suffer. The chairman mentioned a company in his district that laid everybody off for 2 weeks. I think there is a common perception around the world that if developing countries do well then they are very large new export markets for us, and if they do badly, that those markets shrink. They have the kinds of effects the chairman mentioned, and their currencies depreciate, which then reduces the competitiveness of our goods. It is that interest. It is that economic interest that binds people together here, not any of the other interests which in many cases may be at variance with each other. global economy Mr. Kingston. Okay. Another question: We are, as you opened up, a global economy. But if you look back historically, a country like Great Britain, the English empire, was certainly run on a global economy often doing business with nonempire nations and so forth. How did the monetary system work pre-IMF? Because I know there were--you know, there is criticism where people could hoard gold or undervalue currencies of another nation on purpose and mess with each other economically, which is a tool the IMF kind of neutralizes. But is--what is the pre- IMF picture? What did it look like? Secretary Rubin. Can I just make one comment and let David answer, because David can answer much better than I can. You didn't have, in the year that you are talking about, the kinds of global financial institutions, the global capital flows, the instantaneous transmission of truly vast amounts. Mr. Kingston. But you would within an English empire; not globally, but within certain nations, you would still have a highly integrated economic---- Secretary Rubin. You had certain elements of economic integration, but you didn't have markets that could transmit billions, tens of billions, hundreds of billions, of dollars worth of trades within seconds because of technology. But, David. Mr. Kingston. And I would say, Mr. Secretary, that is a significant difference, too. So I am acknowledging that is huge. Mr. Lipton. Congressman, I think the genesis of the IMF is exactly the difficulties that arose in the 1930s. The world had been on a gold standard for quite a few decades, and it served well for a period of rapid growth for Europe and for the United States. But the gold standard, which was in essence a system of fixed exchange rates, broke down, and in the midst of worldwide depression, there were country defaults and deep recessions that were the result of these defaults and the inability of countries to reestablish creditworthiness. After World War II, the idea of the IMF was exactly to prevent that kind of thing from recurring. And when we talk today about how default might happen in the absence of some sort of system like we have or some sort of approach like the one we have today, default in Asia could lead to a protracted slowdown, protracted problems that would spread around the world, it is exactly the history before the creation of the IMF that informs that judgment. Mr. Kingston. Is that why all three of these Nations got in trouble simultaneously? Mr. Lipton. I think they had common problems. There had been common approaches to the way they managed their economies, and so it was, in a sense, logical that when the problems in one country were exposed, investors looked for similar weaknesses in other places. So it was in part because of the common management of the economy. Mr. Kingston. How absurd were the loans or the lending practices, the financial practices, and was IMF present in these countries 2 or 3 years ago and standing by quietly, as opposed to stepping forward and, you know, saying in 1994, hey, you are heading for disaster, you better change? Secretary Rubin. I think you had two sets of lenders that need to be looked at in the context of that question. You had the international lenders, and I think what happened there over the last 5 or 6 years is that, as good times continued, risks became--the weighting of risk--got to be less and less, and, in effect, markets went to excess, as they I think almost inevitably do. So credit was being extended with less attention to risk than should have been the case. In the three countries, you had banks making decisions on a noncommercial basis because of their ties with the government. It varied from country to country, but the governments were, in effect, directing credit or commercial enterprises that had special links with banks. And it was that combination of the excess of capital from the outside, and these faulty financial systems on the inside, that was very central to what happened. In terms of the IMF's presence, IMF does an annual review with each country. They were certainly focused on a lot of the issues, although I don't think anybody expected the combustion that occurred. That was the crisis. Mr. Lipton. Just to mention, in the case of the first country that came into crisis this last year, Thailand, the IMF had, in its consultation discussions with Thailand, identified the very same problems that came to spark this crisis and had suggested to Thailand that they take up these kinds of concerns. I think it was difficult, in a whole region that was growing at 8 percent and had been growing very rapidly for decades, for policymakers to understand the risks that they faced and come to grips with the kinds of changes that were necessary. Mr. Kingston. Thank you, Mr. Chairman. Mr. Callahan. Mr. Torres. north american development bank Mr. Torres. Thank you, Mr. Chairman. Mr. Secretary, welcome; Under Secretary Lipton as well. Mr. Secretary, we have had ongoing discussions pertaining to the North American Development Bank. As you know, last year's funding completed the capitalization of the bank required in the agreement between Mexico and the United States. I am pleased to note the progress made on border project financing over the last year in particularly. However, there is one outstanding issue regarding the bank that simply must be resolved, that is a domestic window issue. As you are aware, our staffs have been talking about this issue at some length. Can you give me your commitment that the two of us can meet later on at some point to resolve this question? Secretary Rubin. Absolutely, Mr. Torres. I would be delighted to. We have met a number of times already, and I think it would be fair to say, after a period during which the appropriate attention was not paid to the bank, it was your energy--it was about a year ago, maybe, I have forgotten exactly when it was-- that got us refocused, and I think we have come a long way in that period. But I know there are issues that you feel are still unresolved. I would be delighted to meet with you. Mr. Torres. Thank you. microcredit My colleague, Mrs. Lowey, has already commented on the issue, but I would like to do follow-up on microcredit. First, I want to thank you and the President for the enthusiasm you share for microcredit. The microcredit summit that was held over a year ago launched a plan to reach 100 million of the world's poorest families with credit and other business and financial services by the year 2005. My understanding is that the World Bank and the other regional development banks are developing their institutional plans of action to achieve the summit's goal. I have a couple of questions. First, is the Treasury developing its own institutional action plan on microcredit? That is one question. And if I may just give you the second one, is there anything that you can do at this year's annual meeting of the World Bank and the IMF to further educate the finance ministers of the world about microcredit? I would think that particularly important issues would be the need to reach the poorest, especially women; the development of sustainable institutions; and the importance of assuring that governments don't administer the loans themselves. So if you could please give me some answers pertaining to those issues. Secretary Rubin. On the question of microcredit, we have been very intensely focused at the Treasury, not just internationally, but domestically and through the CDFI Fund we have launched a domestic program for inner cities and other distressed areas. I think it is an extremely promising area. We have also been working with the World Bank--working with them to help them energize their programs. But we agree with your views with respect to that. I am just trying to remember when this was. Sometime--and I don't remember when it was--G-7 finance ministers meetings, we meet four times a year or something, we had a discussion of developing countries and the like, and I discussed there, with them, our views with respect to microenterprise lending, because we share the views you just expressed. I usually speak at the annual World Bank meeting. In fact, I always do. I think that is something I very readily should include in my remarks. So I will do that. Mr. Torres. I would prevail upon you to be almost succinct with the finance ministers. They seem to somewhat drag their heels on this question. Secretary Rubin. Finance ministers differ from finance minister to finance minister. We happen to be very interested and very focused on and believe deeply in these kinds of issues. Others are sort of--well, people have different orientations. fund for the special operations of the idb Mr. Torres. Perhaps something related to this, I want to make mention of the importance of the Fund for Special Operations of the Inter-American Development Bank. Full participation by the U.S. in the FSO is an important step towards overcoming the poverty and exclusion that have marked so many countries in Latin America and the Caribbean. So I would urge, Mr. Secretary, for you to work hard with us to provide the full $21 million contribution to the FSO that has been requested for fiscal year 1999. This amount would clear our U.S. arrearages and fulfill our commitment to FSO under its current eighth Replenishment. It is also important that you continue to work with the leadership of the IDB to come to an agreement for meeting future needs for concessional lending to the poorest countries, ultimately, without any new appropriations from donor countries. So I want to thank you, Mr. Secretary, and maybe you can comment on that. Secretary Rubin. As I understand it, David, that is where we are. If we can get our arrears paid, it is our view, I believe, the IDB can conduct the FSO activities without further donor contributions. Mr. Lipton. We are looking at ways to mobilize the resources that presently exist within the IDB that could make the resources of the FSO much more ample in supporting IDB activities in the FSO borrowing countries. Mr. Torres. As you are well aware today, there has been ample interest on the IMF issue. I think all of my colleagues have spoken about that question. I have some questions I would like to engage with, but I know we are limited in time today, so I am going to forgo those. Mr. Chairman, I ask unanimous consent that I might address the questions in writing to the Secretary. Mr. Callahan. Without objection, all members of the committee will have the same right to submit questions to the Secretary. Mr. Torres. Thank you, sir. Thank you, Mr. Secretary. Mr. Callahan. Thank you for your patience, Ms. Kaptur. Ms. Kaptur. Thank you, Mr. Chairman. Thank you for recognizing me. It is a pleasure to serve on this very esteemed committee. And I want to say to Ranking Member Pelosi, it is an honor to serve with you. And, Mr. Secretary, like the other members, I welcome you. It certainly is a distinct pleasure for us to have someone of your extensive experience in the private sector, but now also in the public sector, in the area of finance. Secretary Rubin. Thank you. Ms. Kaptur. I have enjoyed listening to you. While you are here, I have to take the opportunity to ask you how Wall Street is doing. I used to be on the Banking Committee. I kind of miss that. Secretary Rubin. I think they are doing well. Sometimes I wonder how I would have done if I had stayed there. Ms. Kaptur. I never thought I would live to see the day it would go over 8,000; maybe you did. This is unusual, a lot of returns there. Would you agree with me, we are living at a time when the banks--I am talking about our own domestic banks now that may lend internationally--have actually been doing quite well? I got to Congress in the early eighties, and we watched the history of these institutions and their profit levels. Would you agree with me that over the last couple years they had some of their highest profit levels in recent history? Secretary Rubin. The banks have done very well, and one reason we as an economy have done well is that the banks, after the problems in the early nineties, have strengthened balance sheets, have been able to lend and as a consequence have been able to promote growth in the economy. imf crises Ms. Kaptur. I think so, too. That leads me into some of the issues you have testified on today, certainly on the IMF. And let me say, as a Member of the Congress, a new member of this subcommittee, someone who has been interested in our international involvements and who has been helped and who gets hurt in all these, let me say that as I read your testimony and as I have been thinking about this IMF replenishment, I think, for me as one member, the issue really isn't just the money but, rather, the policy that underlies the current set of structures we have set in place to deal with the global economy you reference several times in your testimony. In my own view, the Mexican peso situation that I term a bailout--I am sure you have another expression for it--helped to encourage the present crisis that we face in the Asian markets. I think it encouraged additional speculation; I think it encouraged greater risk-taking on the part of private institutions that felt they could then come to government, which they are, to be bailed out again. Now I understand how tender this is, so don't--do not misunderstand that, but if we look back at the Mexican situation--and I realize that was a government bailout, as opposed to private companies, it was a different kind of situation there. But if we look at Mexico's external public debt today, compared prior to the peso bailout, and especially if you compare it back to the 1980's, all you have are greater and greater debt levels. Even though Mexico technically has paid back the United States, we have merely built the house of cards higher. I am interested in supporting a system for the 21st century that gets speculators and investors to assume their own risk, and therefore I have some caution about supporting the administration carte blanche in what you are asking for here. I personally, for example, would favor a system that would provide the kind of funding that you are looking for, on the private side, by fees on the international financial transactions that occur on a daily basis. I guess it is over $2 trillion a day that is moving there around the world. And I think what is troubling to me, as a long-tenured Member of this Congress, is we never get to that question. Whether it was Mexico the first time or the second time or the third time--now it is Asia; it will be someplace else a few years from now--we never get to the fundamental reform question on post-World War II structure. I think what is going to happen in the Congress this session is, we are going to face that debate, and you don't want to face that debate until after the replenishment. But I think if you look at the current politics, you are going to find you are enveloped in it prior to the vote. And I would only ask that you give some thought to what the structure might look like. I know you have given a great deal of thought to it yourself; it isn't reflected in your testimony. But I think a lot of members are looking for that reformed structure prior to the vote. So I just wanted to---- Secretary Rubin. Can I respond to a bit of that? Ms. Kaptur. Please. Secretary Rubin. Let me try to take a few of the pieces. I think that had we not had the Mexican support program, which is what we characterize it as, I think what you would have had is a Mexico that would have almost surely gone into default and I think today what you would have is a Mexico in deep economic distress, with all the consequences that would have had. So while the support program was a far from a perfect solution, it was vastly better than the alternative, which is not to have done it. I share the moral hazard concern, and I think I have said that several times already. I think we have to find ways of dealing with it more effectively than we have, but I don't believe that the fact that banks were protected in the Mexican situation affected how they react in Asia. I know a lot of the people; I speak to them a lot; I have a pretty good sense of how they function. I think the conceptual problem is what you say it is. I don't think the fact they were protected in Mexico affected the behavior in Asia. I think what affected the behavior in Asia was too many good years. And the markets almost always go to excess in---- Ms. Kaptur. You would not agree there was a lot of speculative investing in those markets? Secretary Rubin. Absolutely. I think there was a lot of speculative investment in these markets and a lot of other markets, and I think there always is after you had a good period of time. I don't think in most of the cases in Asia that the predominant pressure on the currencies came from the withdrawal, however speculative, of investors. I think most of it came from the residents of these countries either trying to convert their currencies into hard currency or corporations who were seeking to hedge their currencies, or the exporters who did not want to repatriate their hard currency. On the question of new architecture, I think it is vitally important to the interest of our country that this be developed. I do not think we should take the risk of waiting to do legislation, because I think it is going to take a long time. We have spent a lot of time on this. You mentioned the Tobin tax, the tax on transactions. There are a lot of suggestions around there, a whole bunch of ideas we have. The G-10 has done a pretty serious piece of paper on this to begin their study. This is going to take a long time if we come up with serious proposals that will have the kinds of effects we hope in some measure to achieve. And you may be right politically; I don't know. What I do know is, if we don't get the replenishment quickly, then we will be taking a risk that, while we are working on this--and I think this will take a long time to get done--we will take the risk of a crisis we won't be able to handle. Ms. Kaptur. There are some writers who contend, and thinkers who contend, and even if I read your testimony very carefully, you talk about this additional funding to deal with future crises. Secretary Rubin. This crisis, if it were to reignite, or future crises. Ms. Kaptur. That is right, and there are those who are arguing we don't need the replenishment right now. I am not saying I agree with that, but it is obviously out there, and others will use those arguments. economic environment The other major point I wanted to make, and I only have one other one, and that deals with how you propose to inoculate the United States market against the flood of imports that have been coming in here but are likely to be exacerbated in this year, even with this happening, the trade situation. This, again, gets back to the paradigm we have been using since World War II, now leading to a point we have overcapacity and production in the world market, with the export-led development, where the United States becomes the residual importer because Japan will not open markets in a lot of other places, and it is causing a terrific crack inside the politics of this country, because of the people that have had to pay the price of that. Now that is going to happen more this year, and the--some of the militia groups in this country--and I don't mean to excuse any of their behavior, but I am sure if there are any researchers out there looking at who they are, they are disaffected white males whose incomes didn't go up and many of whom lost their jobs. Somebody has to pay attention to this. And we are about to have another wave. Now there is something wrong with the paradigm that creates these large levels of debt, continuing even in Mexico, and forces these trade deficits down the throats of the American people. We have got to reform this architecture. And I hear you saying you don't want to do it until after, but somehow in this debate we have to inoculate against those who are again going to have to pay the price. Secretary Rubin. If I may, Congresswoman, I think it is a somewhat different set of issues. In this period during which, as you say, we have had very heavy imports and exports, we have a fairly good-sized trade deficit, but we have 4.7 percent unemployment. The economy has created something like 14.5 million new jobs over the last 5 years. There are many observers all across the political spectrum who say the economic environment in the last 5 years has been the best we have had in this country in decades. I think the actual system is working pretty well for this country right now. Having said that, there are dislocated people. There are people who haven't kept pace. I think the President said in the State of the Union, if we are going to maintain our social fabric, we have to focus on programs for dislocated people who are affected adversely by trade. So I think you are right in that, but I think the international trading system has worked well for the country, and, unfortunately, I do think our trade deficit will go up because of the problems in Asia, and there is no way to inoculate the country against that. gdp Ms. Kaptur. With all due respect, won't that knock off about an additional point off of our GDP growth for this year, looking at the best projections you can look at? Secretary Rubin. Most private sector estimates are around half a point or three quarters of a point. Look, there is a serious problem out there. Ms. Kaptur. Adding to that the point that the current trade deficit adds, which is an additional point, so you are between 1 and a half and 2 points off the GDP because of accumulated trade deficit. Secretary Rubin. I believe if you didn't have the free trading system we have today, I think you would have much higher inflation and much higher interest rates, and I think that would have--at least I think--a more substantial adverse impact on the economy than the effect of the current trade deficit. Ours is not an economy that lacks demand. As I said, if you had said 5 years ago we could have unemployment under 6 percent and very low inflation, almost every economist in the country would have told you that that is not achievable, and instead of having it under 6 percent, we have 4.7 percent. I think you raise an exceedingly important question, which is, how do we deal with people who are dislocated in our economy of very rapid change? And we have done a lot less than we ought to in dealing with that. I think imports will go up in this period. Something very substantial has happened in the world economy. But I think the answer in that is to get the countries growing again. Ms. Kaptur. I don't want to abuse my time. I will say, if this year we are going to have that kind of an impact inside this economy, the answer, to me, is not sufficient that that is just going to happen and let it happen, because the current trade deficit knocks a point off of our GDP, affecting incomes of people who are working harder for less in my district and across this country. And I know the administration wants to increase the middle class, not decrease it. This is an opportune time in dealing with it in the architecture of the agreement you bring to us. I thank the Chairman. Mr. Callahan. Thank you. Mr. Obey. Mr. Obey. Mr. Secretary, when you indicated that 5 or 6 years ago if anyone had asserted we could have unemployment this low and still have low inflation--and I did assert that 5 or 6 years ago--when you say that most of the economists would have disagreed with this, that is true, they did. That is why I think the old farmer in my district is right, who observed once, did you know if you took every economist in the world and laid them end to end, that it would probably be a good thing. Secretary Rubin. There is that, Mr. Obey. Mr. Obey. Let me also say, as you know, in our caucus the other day, someone referred to you as the greatest Secretary of the Treasury in the history of the country. I understand after that he got an agitated call from Alexander Hamilton. I will let the record show, I think you are a pretty doggone good Secretary of the Treasury, one of the best in history, but I think Hamilton would rank right up there. Secretary Rubin. I think Hamilton's ranking is very, very safe by a very large margin. mexico city policy linkage to imf Mr. Obey. Let me say, I am not a compulsive free trader. I do believe in an open trading system, but I am not a compulsive free trader. I think there ought to be certain rules established as part of the deal on retreat. But I am a committed internationalist, and I am one because I think it is necessary if we are to defend and promote our national interests in international affairs, militarily, economically, and politically. I want to go back to a remark I made earlier when I was talking about the efforts of a political minority to impose their will on this issue, when I was talking about Mexico City policy. The way our system of government works, at least last time I looked at the Constitution, it says that if you have an idea and you want it to become law, you have to get a majority of the House, you have to get a majority in the Senate, and it has to be signed by the President. And if the president vetoes it, then you have to have a two-thirds majority in the House, a two-thirds majority in the Senate, to overcome that Presidential veto. Now the last time I looked, the folks who are insisting on holding their breath and turning blue on Mexico City until they get what they want, trying to hold up everything else until they get what they want in Mexico City, they have a majority in the House, they do not have a majority in the Senate, they do not have the support of the President, and they most certainly do not have two-thirds of the vote in either the House or the Senate. So in my view, that is a definition of a political minority, based on the way our Government works. Now there is nothing wrong with being in the minority. I have been in the minority on issues all my life, regardless of which party is in control. But let me say that what I find illegitimate is a group of politicians trying to use this international crisis to force the Senate and the President to comply with their views on an unrelated issue, or else they are willing to let the House tumble down. Now the American people don't know a whole lot about the IMF or international finance, they are too busy making a living to have the luxury of having the time to learn about that stuff, but I think the average American does know that when we are dealing with international economic issues that affect the interests of the United States, they want those issues to be dealt with on their merits in a way which protects our economic interest. They know that there is something wrong with the idea of dragging in somebody's position on family planning into that kind of a discussion; they know that that kind of linkage is, with all due respect, a little bit whacko. Now we have had a lot of intelligent questions asked this morning about the IMF issue by Mr. Frelinghuysen, Ms. Kaptur, Ms. Pelosi, and others. They are asking the kind of questions that need to be asked before we reach a consensus on what we ought to do on the IMF. But what bothers me is when I read in Congress Daily this morning a quote by Mr. Smith on this unrelated Mexico City issue, and he is quoted as saying the following: Smith said he had discussed a continued impasse with the administration officials but has made no progress and predicted, quote, an absolute train wreck if his language is not accepted. Well, two years ago that is the kind of thinking that shut down this Government, and now, instead, you apparently have some Members who are willing to shut down this Government's ability to deal with a very serious world economic problem, a problem which could cost us, if it is not handled right, according to some estimates, half a million jobs in this country. That kind of ``my way or no way'' approach to the world is reckless, and it is irresponsible. That does not mean that the people who feel strongly about Mexico City, as Mr. Smith does, are all wrong on the issue of Mexico City; I don't happen to think they are. But I want to see the IMF issue decided in a way that protects our economy and protects our workers from the flood of artificially priced goods that could enter this country at depressed prices if we don't let a decent relationship exist and a realistic relationship exist between currencies worldwide. I think we ought to bring up Mexico City issues and debate them on their merits, up or down, and I think whether the administration likes it or not, it is going to have to work out a compromise with Mr. Smith on the issue, and Mr. Smith, whether he likes it or not, has to work out a compromise with the administration. Nobody ever gets 100 percent of what they want in this business. I happen to believe, for instance, that we shouldn't put a dime into United Nations population planning so long as they continue to work with the coercive abortion system in China, but I am not willing to run a risk that lots of my constituents are going to lose their jobs because the international economic system goes haywire because Congress is busy playing blackmail on unrelated issues. I am willing to take my chances up or down on trying to get the kind of policy I think we ought to have on the U.N. and on Mexico City. But you have to be prepared to have other imperatives impose themselves on your own set of priorities if you are a responsible member of this body, and that is why I object to this false linkage that is being attempted. I want IMF dealt with up or down, because I think the administration is going to have to agree to some kind of economic conditionality in order to get what they need here for the IMF. I do not happen to believe we can wait to do that until we have a new perfect world order and a new financial system, because I don't think you are going to be able to get those understandings worked out in time. But I do hope that we can get a clear understanding from the administration about what it intends to do to move forward to establish a new international understanding about new rules of the game for dealing with IMF and other institutions that are supposed to help arrange the world in a rational way. And I do hope that we can have a debate up or down on the kind of conduct that the U.N. is going to have to change in terms of its ridiculous administrative waste if we are going to get U.N. arrearages dealt with. But, I mean, groups on all sides have enough merit to their case on each of the three issues to take the issues on the merits. When they lose the country, and certainly when they lose me, is when they try to bring in all kinds of unrelated issues together and we engage in a game of institutional blackmail. I don't want a repeat of two years ago, when we had a train wreck because people felt that their own opinions were more important than the national interest. That is the point I would like to make. The only question I have of you is this. We talk about what kind of conditions we want to impose on Indonesia on human rights and all this other stuff. I am not even convinced Indonesia will exist as a country a year from now, I think they are such a basket case that you could have incredible unraveling there. japan My concern is Japan, because I think Japan bears a very large share of the responsibility for this mess. If somebody wants to call us Japan bashing, my reaction is, baloney, Japan is bashing the rest of the world right now because it refuses to conduct itself in an adult way as a major economic player. What bothers me is that Japan for years has refused to operate its own economy in a rational way. You have had huge surpluses of capital developed. That money has been invested all over the world. That has helped lead to an overcapacity in world markets in a number of areas. And if Japan does not recognize the need to open up its own economy, both in terms of what goods it allows into its country and in terms of its own fiscal policy and tax policy, to stimulate additional economic growth, they are going to be exporting their unemployment to the rest of Asia and to us. And I firmly believe if this country runs a $350 billion trade deficit, you are going to see the most awful protectionist reaction in this country since the twenties. That, to me, is the fundamental economic threat we face, along with the potential unraveling of Russia, Brazil, India, and other countries, if this thing really gets out of control. I guess my question is, how can we in the Congress and how can the major world trading partners convince Japan it has to grow up and recognize that it has to be a modern player on the economic scene now that it is a fully developed economy? Secretary Rubin. Mr. Obey, I think with respect to Japan, you raise a question that is exceedingly important. We have addressed it in many ways, some public, some not public. I think a Japan that was growing again and whose growth was led by domestic demand, not export driven, would be able to absorb imports from Asia which would help these countries grow again. It would be able to provide bank capital to Asia, which would again help, and it would have a confidence around itself that could then radiate out into Asia. And I think the most important thing Japan can do to help itself, Asia, and the rest of the world is to begin again to have a robust rate of domestic demand-led growth, and that is a point of view that we have expressed very strongly in many fora, some private, some public. It is a set of objectives that the Prime Minister of Japan set forth for the country early last year, but, certainly, to date, at least, that objective has not been met. So I think I would agree--I will agree with your observation stated my way. I think if I could make one other--I think it is something we need to continue to do, and I think the Members of Congress can determine for themselves whether speaking to this issue strikes them as being another--another useful method of attempting to have an effect on whether or not Japan meets its own objectives it set forth at the beginning of last year. I do think that your other issue, the other question you raise, is a very important question. You have three issues that are enormously important: U.N. arrears at a time when we are dealing with Iraq, the IMF at a time when there is at least the risk--I believe low probability, but the risk of something we must have the capacity to deal with in the interest of our own economy Mexico City, which people care a great deal about on both sides of the issue. Mr. Chairman, I don't have anything to do with decisions you all make in terms of how you do things. It does seem to me there is a lot to be said for debating those issues and deciding them each on their own merits, rather than conflating them, at least as it relates to Mexico City and the other two. Mr. Obey. Thank you, Mr. Chairman. Mr. Callahan. Mr. Secretary, I have all afternoon. I thought I had to leave earlier, but now my plans have changed. I know your schedule is more stretched than mine, but there are a number of questions the panel has asked to submit to you. But to the committee, let me tell you, the Chair has been most generous in the allocation of time by not gaveling anyone down because this is an important issue, and I want you to have the opportunity. But as we go into the second round of questioning---- Ms. Pelosi. We are still in the first. Mr. Callahan. We are still on the first. Who has not yet gone? Ms. Pelosi. You and I. Mr. Callahan. I know, but we cannot take 15 minutes apiece. So I am willing to allow you to use your 5 minutes, or 15 minutes, your usual 5 minutes, which is 15 minutes, but at the same time we must recognize that the Secretary does have other obligations, and I am going to once again reserve the right to submit questions to them and reserve the right for a brief closing statement. But we will go to Ms. Pelosi for her questions as brief as she can possibly be, and then we are going to try to get through our second round of one question from each member of the panel. Ms. Pelosi. imf crises Ms. Pelosi. Thank you very much, Mr. Chairman. And, also, thank you for your responsiveness to the concerns of Members about not having enough time to ask questions by having the hearing start earlier, as well as giving us time to ask follow- up questions regarding our concerns. It still isn't enough time because the IMF has dominated the discussions, and I know many Members have budget-related questions they want to ask. Listening to my colleagues discuss the full array of issues that have been brought up which are very important, it is unfortunate to see that funding for microlending, for which the administration has taken great leadership, and I commend the First Lady for her interest in showcasing this issue as well, comes drip, drip, drip, while the failout will be a flood of funds. As we know, the countries experiencing this crisis have different problems, and there are different reasons why the IMF needs to lend to these countries. I certainly would put South Korea in a different category than I would put Indonesia, for example, in terms of what conditions I would like to see placed on the loans. I have some suggestions in that department, but first I would like to make a couple of observations about other subjects. I have been asking this every year, and every chance I get I ask it, I hope that you will put the issue of AIDS on the agenda of G-7 meetings because it has an economic impact in the developing world. It is my understanding that the economies of the developing world are on the agenda of the G-7, and I hope global AIDS would appear at some point on the agenda of the heads of state as well. The concerns about the environment are real. You know what a dominant role capital plays in the economy, and the environment is impacted very directly. That is why so many of our constituents are concerned about how the IMF goes forward. The IMF has to have some sensitivity and accountability for the environment. Now, particularly regarding the environment, I want to ask you a budget question. Could you tell me or get for me the number of employees at the Treasury Department who are working on the multilateral development banks? Secretary Rubin. They work under David. Mr. Lipton. I don't know the number. Secretary Rubin. Twenty. Ms. Pelosi. How many staff persons with environmental training are now working within Treasury on the MDB? Mr. Lipton. Three. Ms. Pelosi. You have three environmentally-trained employees? Mr. Lipton. Who work for my colleague. Secretary Rubin. I didn't know the answer to the question. Apparently there are three full time. Ms. Pelosi. These are singularly working on the MDBs, they have no other responsibility. There are three in the Treasury Department for all the MDB's working on environmental issues, and they have formal environmental training; is that what you are telling me? They are not economists. I ask the question because I have serious concerns about the enforcement in the field, if you will pardon the expression, Mr. Chairman, of the Pelosi amendment. I know that the intentions of the Administration are good in this department. I am not convinced with some people leaving the department that there has been an addition of people commensurate with the need to enforce the terms of the Pelosi amendment, which calls, as you know, for environmental assessments on any project before our executive directors at the banks can tend to support a project. So I put that out there, and, again, I express an interest in the IMF being sensitive to these issues, which I know is a separate issue. Are you concerned about the defaults on loans to the Asian Development Bank or the World Bank because of the Asian crisis? Secretary Rubin. Oh, defaults on loans that the World Bank and Asian Bank themselves have extended? Ms. Pelosi. Yes. Secretary Rubin. In the context of this crisis? Ms. Pelosi. Yes, the ability of them to be paid. Secretary Rubin. I don't think it is very likely they are going to suffer defaults. Mr. Lipton. We want to distinguish between sovereign loans, loans the World Bank makes to governments, and loans the institutions like IFC make that are of a private nature. There are some concerns at the IFC about greater risks now to some of their loans, and that is something they are looking over. Secretary Rubin. But I don't think the sovereigns are---- Mr. Lipton. Not with respect to first category. Ms. Pelosi. The Exim, or you are not into that? Mr. Lipton. I don't follow this closely, but I know Exim from time to time does experience defaults, and I think they are concerned about a couple of loans in Asia. Mr. Harmon has been to Asia in essence to get a better sense of what the risks are that Exim faces at this moment and what the prospects are for further support for U.S. exports to the region. Ms. Pelosi. Thank you. We have talked about this crisis, and it is a mystery to me how it took everybody by surprise, with all of the expertise that we have on this. Maybe it didn't take people by surprise, but it appears to have; at least we feel as if we have been sideswiped by it because of the magnitude of the need for the bailout. Books that are copyrighted 1997 are talking about economic opportunities in Asia. What else could go wrong? You have talked about what could go right if Japan did some things. Is it possible that the Chinese would devalue the yuan? If so, what impact would that have? Secretary Rubin. Let me say, Congresswoman Pelosi, I think that with enough expertise, you can try to identify problems in economies, and as David Lipton said with respect to Thailand, the IMF, and United States Treasury for that matter, were very much on top of the problems. I think, though, I would distinguish in identifying problems that could give rise to trouble and a crisis. I at least think, after I spent a lot of years doing this for a living before I came into this world I am in today, I don't think you can predict crises. I think you can identify problems, but crises are a result of a whole bunch of things happening at the same time and then combusting, for whatever set of reasons. In terms of countries going forward, the IMF on a regular basis, as you know, does surveillance, and we are very much involved with this, and I think there are a number of countries that have issues they need to deal with. I think I just as soon not discuss them in a public forum. You raised a question of the Chinese exchange rate. China has committed itself publicly and privately to maintaining the exchange rate. Ms. Pelosi. For how long? Secretary Rubin. I don't know if they put a time frame on it, have they David? But they certainly have persuaded us of the sincerity of their commitment and the grounding of their commitment and their own view of their own economic interest. But clearly it is very much in the world's interest that that happen, and one of the concerns one could have is if you had a widening of this crisis, which all of us think is a low- probability event, but a widening of the crisis, and many other developing countries got involved, that obviously creates additional pressures on their exchange rate. I think that is another of very many reasons why it is so important to avoid the possibility you just raised. Ms. Pelosi. And it would have what kind of impact if they did devalue? Secretary Rubin. That would be a significant event. Ms. Pelosi. Okay. Do we have an if plan? Secretary Rubin. Our best if plan--truly, our best if plan is to work---- Ms. Pelosi. Is to bail. Secretary Rubin. No, it is to work with countries around the world on the vulnerabilities they have and try through the IMF and through the World Bank and directly, bilaterally, to work with countries to repair the problems they have; at the same time get an IMF capacity that is sufficient to deal with the crisis if, in fact, it develops. Ms. Pelosi. I appreciate that. One quick question, and I have a couple observations, and I am being as brief as I can be, Mr. Chairman. Getting back to the moral hazard issue, because I see the issue in terms of contagion, how this might spread and affect our workers, are we, once again, nationalizing the risk and privatizing the gain? Regarding conditionality, what is the threshold to get in on those conditions in terms of workers' rights, the environment and other things? The contagion issue is, I think, an overwhelming one that argues to diminish the importance of the moral hazard argument because even if these banks and financial institutions do benefit, punishing them doesn't help us at all because of the contagion issue. But I would like to know in your professional and maybe in your former life, do you think any of these financial institutions make investment decisions based on the IMF standing back there? Secretary Rubin. No, I really don't, Congresswoman Pelosi. I still think the moral hazard issue is very important. I take considerable comfort from the fact that such large losses have incurred in Asia because I think that is helpful, but I sat around an awful lot of tables making an awful lot of decisions, and I never once heard someone say we ought to value the risk less highly because the IMF is there. Ms. Pelosi. I appreciate that. Secretary Rubin. We have to deal with the problem, but I do not believe the IMF's activities materially affect that decision-making. Ms. Pelosi. You probably don't know what exacta is. Secretary Rubin. Jai-alai. Ms. Pelosi. At the horse races. You know what that is, don't you, Mr. Chairman? Mr. Callahan. Yes, I do. Ms. Pelosi. If you win an exacta, the IRS is right behind you in line because they are going to collect on your winnings. However, if you have a pocketful of losing tickets in your pocket, you can somehow soften your tax blow by having--saying, well, I won this, but I lost all this money, so let's discuss it. In the reverse of that, we are talking about the losses, Deutsche Bank, not having an $800 million loss as you said, but preparing for that possibility. What about all the gains that all these companies have made, is anybody talking about that? What is this, in the context of what? Secretary Rubin. They are in the business to make money. I think the question is the one you raised before. If they are going to make their money, shouldn't they also take their losses? And the answer is yes, and to some pretty fair measure that is the way the system has worked. To some extent they have been protected. That is an undesirable by-product of these efforts to create financial stability. It is a by-product which should be resolved or reduced as much as possible. Ms. Pelosi. I appreciate that answer. Mr. Chairman, in conclusion, I would like to express some of the concerns that have been expressed to me by Members in the House, both Democrats and Republicans, and they are not going to be new to you, Mr. Secretary, because you have been very open in listening to our concerns. I was particularly pleased last week when Prime Minister Tony Blair was here and we had a chance to talk to him about the subject, and he placed a very strong emphasis on transparency at the IMF. On that score he was in agreement with many Members of the House of Representatives because increasing transparency of IMF activities, I think, is something we should see as we go forward with this. Members also want to establish a new Deputy Assistant Secretary of Treasury, whose sole responsibility would be to monitor IMF reforms and to report on social consequences of lending by multilateral organizations; provide for release of IMF funds in several tranches, I don't know if that is possible, depending on the effectiveness of the IMF in meeting concerns about labor rights and the environment; ensure a safety net is provided to address social consequences of austerity measures imposed by the IMF on South Korea--as I said, people see that as a little bit of a separate issue; broaden the IMF conditionality to include specific labor rights and environmental protections; and then in terms of Indonesia, supporting Mr. Wolf and my colleague, Congresswoman Lowey, a clear and forceful statement from the Administration concerning East Timor, emphasizing the Indonesian Government should begin discussions--and that isn't even a big deal--begin discussions through Bishop Belo and Gusmao; and the unconditional release of Indonesian labor leader Muchtor Pakpahan. I imagine this is in the works because it is so very obvious. With that, Mr. Chairman---- Mr. Callahan. The gentlelady has not only consumed her time, but mine as well. Ms. Pelosi. The Chairman is very generous. Thank you, Mr. Secretary. Mr. Callahan. She brought up mutual gambling, so we will enter the quinella stage, which is something that comes in first and second. We are going to allow each panelist to offer one question first and give you a second to answer. Secretary Rubin. I remember quinellas from jai-alai, and it was legal, I might add, if you were over a certain age. Ms. Pelosi. In certain countries. Secretary Rubin. Where I lived. Mr. Frelinghuysen. This question falls into the lessons learned category. Ms. Pelosi sort of touched on it. Who was minding the store that allowed this Asian crisis to develop? I commend you for racing over there on a number of occasions to basically support the global market and making sure that the countries get through this cash crisis, but in reality, when something like this occurs as it did in Mexico, there ought to be some lessons learned. I assume you sent the message to the IMF and to whoever does their forecasting and judging of these various situations that this sort of situation can never happen again. I just wondered if you could make a general comment about the lessons learned from this crisis, maybe it is not over; what lessons we have learned and what we can anticipate in terms of reforms. Secretary Rubin. I think it is an extremely important question. Let me try to adhere to the 1-minute rule, but it is hard because it is a very important question. The rating agencies, the two private sector rating agencies that dominate the world market, both kept their very high ratings for South Korea until after the crisis was well underway and then lowered the ratings, as you know. I think there is an inherent unpredictability about crises we have to accept as reality, you know. Having said that, I think the question you raised is the right question. We need better disclosure. We need more transparency in these countries. We need better ways of having that disclosure affect investor decisions, and we have a lot of thoughts in this area we will be developing over time to become part of the architectural changes I was talking about. Mr. Callahan. Maybe Mr. Yates can--I don't know, Mr. Secretary, whether you compare with Alexander Hamilton or not, I assume you do. I didn't serve with Alexander Hamilton. Mr. Yates. I did. holocaust survivors Mr. Secretary, I take seriously your justification for appropriations, and it is for the supplemental and for the 1999 budget request. I don't remember any questions being addressed to you today about the budget, so I will ask one that is tangentially a part of the budget, and that is when you were last here, I asked you about the restitution procedures for the Holocaust survivors, and the reply I received from your office was really much less than satisfactory, and I wondered whether I can get greater cooperation from your office for this. I think what is happening in New York now with Secretary Morganthau trying to help a couple people get some of their confiscated art back, and there is also the question of real estate, there is a question of other assets. I know Stu Eizenstadt is in this, and I know that--who is the former 7- foot chairman? Secretary Rubin. Paul Volcker. Mr. Yates. Paul Volcker, Chairman of the Fed, he is in there somewhere, but they still aren't getting anything. I noticed the $280 million fund of the Government in Switzerland has been paying 4,000 out of 19,000 surviving claims, giving them a first installment of $400. So, to me, 50 years later, it seems that there ought to be a greater activity. I don't know how deep you are in this, and I don't want to take you out of the mire that is Indonesia and Korea, but I would appreciate knowing whether there is anybody in your Department who works on this. Secretary Rubin. As you said, Stu Eizenstadt takes the lead for the United States Government. We have been actively involved. Mr. Lipton. We have someone who is following this for Treasury. As you mentioned, there are several initiatives important in this. You mentioned the Swiss fund. The Germans have created a fund to help Eastern European survivors. Paul Volcker is working on auditing the dormant accounts in 100 Swiss banks. The Treasury has convinced the 10 country claimants to the tripartite agreement from the 1940s to relinquish their claims on remaining funds that were never claimed there, and that are going to be transferred to a fund for survivors as well. So there are a number of things that are going on. Mr. Yates. Who is doing it, David? Mr. Lipton. Stu Eizenstadt is---- Mr. Yates. Is he out of Treasury or Commerce? Mr. Lipton. He is the main person coordinating--he has been coordinating---- Mr. Yates. Who is doing it in Treasury? Mr. Lipton. Under me, there is one gentleman following this for us. Mr. Yates. If I want to get in touch with somebody at Treasury, I will get in touch with you? Mr. Lipton. Yes, please. Mr. Callahan. Mr. Kingston. linkage Mr. Kingston. I am going to say a quick statement before my question. You know, linkage is only okay around here if you like what is being linked, and just as some Members of Congress push for environmental linkage and worker linkage, there are others who feel very strongly about the rights of the unborn. I would really recommend, if you are not doing it, to advise the administration to have a proactive task force to already be pulling folks into the same room and start talking about this, because for every hard-core believer on one side of the issue, as you know, there is another one on the exact opposite side. My question, though, is a good politician in a speech always tries to ``wif'' them, what is in it for me. As Ms. Pelosi and Mr. Callahan talk in these strange words, that is the only one I know. But the question is what is in it for me, for the American worker who is displaced or in a dead-end job that may be moving overseas? Why should his efforts in tax dollars be on loan or even at risk to countries who may be taking his job, and what is it directly that we could put on a bumper sticker to motivate him to say, I understand it is a good deal? Secretary Rubin. I think unfortunately--it is a good question. We have spent a fair bit of time thinking about this. I think it is difficult to put very complex issues on bumper stickers, which is one of the reasons I think there is so little public understanding of this. On a broader scale, I think American workers have had an enormous interest in seeing the countries do well again, that we not have instead some kind of terribly greater crisis than we have for the reasons we have already discussed. I think in terms of the displaced worker you are talking about, what we have done in the administration is a little bit different. What we have done in the administration is to promote a whole bunch of programs that are designed to deal with displaced workers in an economy of rapid change because we are going to have an economy of rapid change, more technology than these things, but these things as well. Having said that, the displaced worker will have a better chance of having access to jobs and having access to that which that worker needs to get back into the economy, in a good economy rather than a bad economy. That is where the worker's self-interest tries to connect to what we do. How you put that on a bumper sticker, I don't know. Mr. Callahan. Mrs. Lowey. Mrs. Lowey. Thank you, Mr. Chairman, and I want to make a brief response to my good friend Mr. Kingston that what we were trying to do is make the point that although it is acknowledged that there is some connection, some linkage, between worker rights, human rights, and the IMF, there doesn't seem to be any appropriate linkage. They are entirely different issues between IMF, the United Nations, and abortion. And while I do think that your recommendation that we all sit down is very appropriate, I just wanted to make that distinction, because the point we were making is each of these issues should be debated, thoroughly, fully, with due respect to everyone's personal views, and I do respect everyone's personal views. gef Just a brief question, with a 1- or 2-second response. I personally appreciate the administration's commitment to the global environmental facility, GEF. Your request for $300 million, understanding 200 goes to arrearages. Perhaps briefly for my colleagues, could you give us some example of how our investment in GEF does help combat the competitive disadvantage of American companies with environmental laws in other nations, how it does put our companies at an advantage and that is why investment is good for our business here? Mr. Lipton. We think GEF is good for America and American business generally because it is going to promote better environmental understanding and better environmental practices around the world, and it has already been put to good use in Poland, in Africa, in Latin America, to try to improve environmental practices, even where the benefits don't strictly, only, go to the people in those countries, but, say, because of improvements in air quality or because of decreases in gases that would harm the ozone, that these things start to be taken into account. But I think that the work of the GEF is also going to improve environmental understanding and, in time, I think environmental standards and laws in the countries, as they come to see the logic, the inherent logic, of taking care of the environment. I think while it might be a slightly longer-term process, in that sense, it addresses a question you raised about American business. Mrs. Lowey. Thank you very much, and thank you, Mr. Secretary. Mr. Callahan. Mr. Obey. U.S. Workers Mr. Obey. Mr. Chairman, I guess I would just observe in response to Mr. Kingston's question that here is what I think workers have at stake. If we cannot manage to stabilize these Asian currencies at a reasonable level with U.S. currencies, and if as a result those currencies drop by a very large amount, what that does is artificially deflate the cost of goods which those countries can export to the United States, and that makes it very much more difficult for American workers whose products are in competition with those goods to stay employed. So I think that is why we need a stabilization effort. Mr. Secretary, I don't have a question. I have a request of you. I have about six companies in my district who have just closed up shop over the last year. In Ashland, two weeks ago, I had a major U.S. company shut down a paper mill. When the mayor and the Governor asked the company for consideration in the form of keeping the equipment, the old paper machines, in that plant because they felt they might have a buyer or two for it which could help keep the plant open and avoid the loss of almost 300 jobs, the mayor was told that that was nonnegotiable, that the equipment was simply going to be yanked out of the plant, and cannibalized for spare parts elsewhere. I would simply observe corporations, justifiably so in my view, get a very large assist from society when they are able to write off depreciation costs for equipment, and plants as well. I don't ask Treasury to necessarily agree with what it is I am trying to do, but I would appreciate it if you would tell me to whom I can go in your agency to get technical help in drafting legislation which would expand plant closing legislation, so that if a company does close its doors in a community, and if it refuses to negotiate with the Governor and with the local municipality about the possible retention of equipment in those empty plants to save some jobs locally, that those companies would be ineligible to participate in any depreciation benefits for the next 10 years anywhere in the country. Mr. Yates. All roads lead to David. Secretary Rubin. No, not this road. Mr. Obey. I would simply appreciate the help of Treasury in drafting that kind of a piece of legislation so it would at least make structure sense, even if Treasury itself does not agree with policy. Secretary Rubin. We will be happy to do that, and Don Lubick is our new assistant--well, he has not been as of this morning yet, but Don Lubick is the right person to speak to. linkage factor Mr. Callahan. Mr. Secretary, Mr. Frelinghuysen, as I mentioned, has done more work and research, is probably more knowledgeable at least than anyone on our side of the aisle, and I am going to have to rely upon him heavily during this process to get me the answers we are both going to need if indeed we are going to assist in this endeavor. I would like for your office to be very responsive to his questions, to meet with him when he calls, in a timely fashion, so we can have the answers as we go through this process. Let me just address, in closing, the linkage factor, Mr. Secretary. Whether we like it or not, whether it is right or wrong, this is not the first time in history that linkage of an issue has been used. I can recall during the Persian Gulf crisis when the only way we could go into the Persian Gulf and the use of Egyptian air space and assistance was to forgive debt. There were some in the House at that time, including Mr. Rostenkowski, who decided if we are going to forgive Egyptian debt, we are going to forgive Polish debt. That was linkage in a time of crisis. Certainly you can't compare this crisis to the crisis in the Persian Gulf at that time. This is not the first time in history linkage has been used by Members of the Congress, it is not going to be the last time, but it is going to be an issue, and I admonish you to take this message to the President. You all have got to decide, number one, I don't think we have the votes to pass the IMF moneys, the new arrangements to borrow, unless we have the support of those people that form the coalition of Mexico City. Maybe we do. Maybe you know something I don't know. But without that, we are not going to possibly have the votes. That is something to think about, so you might tell the administration, and tell the President, that he must be thinking about the seriousness of this issue. Is the Asian crisis a crisis or not? Is it such a crisis that you are going to have to accept some Mexico City compromise or not? You all are going to have to make that decision, but the decision is going to have to be made before we can muster together the votes in the House. It is as simple as that. Right or wrong, David, that is not the issue at this point. The issue is can we muster together a sufficient number of votes in the House of Representatives to provide you with the moneys you say you need to eliminate this crisis that ultimately is going to impact us. So our message is, number one: you have got to establish some vehicle to explain to the American people what the IMF is. You have got to tell them why. You have got to give the Kingston answer to that. You have got to convince the American people so Members of Congress can feel safe in an election year voting for this. That is number one. You have to convey and amplify the justification for the IMF strategy. Number two, you have got to recognize the linkage is a reality that is going to be there, whether anybody likes it or not. new arrangements to borrow My one question is, Mr. Secretary, that the proposed new arrangements to borrow are modeled after the old general arrangement to borrow, which was created in 1962, and the committee agreed to expand the GAB by $23 billion in 1983. It is my understanding this year it has already been appropriated, but it has not been utilized. Why don't you use the old arrangement, rather than to come to us with a new arrangement? Secretary Rubin. The reason for the new one, Mr. Chairman, is we were able to get a substantial additional--I think it is fourteen additional countries to get involved in the burden sharing, so we thought that was a very strong step forward, and Congress has rightly urged---- Mr. Callahan. Is it possible then maybe we can rescind the old arrangement? Secretary Rubin. No. They are two separate questions. One is the capacity of the international financial institution to deal with the issues. At the present time we have roughly $15 billion of what is the real capacity in the IMF, we have the roughly $23 billion in the GAB, and we are requesting the NAB and the quota. I thought you were asking a different question which we had talked about. Mr. Callahan. I am asking, since the $23 billion out of the GAB has not been utilized, why do you need new authority? Secretary Rubin. Because all of this is being done in the event, as I have said before and I will say it again, is a low- probability event, at least right now, but nevertheless, if it happened, a very serious event, which is that the crisis we are hopefully working our way through, although it has a long way to go and a lot of uncertainties, will reignite and envelope countries around the world. If that were to happen, we need to have a capacity that is at least reasonably commensurate with the problem we have to deal with, that will take both the existing IMF, the GAB, the NAB and the resources we would get from the quota. Mr. Callahan. Once again, there are a lot of questions the Members are going to have to have you respond to. Secretary Rubin. We would be delighted to. Mr. Callahan. Under the new order, we will give the Ranking Democrat on the panel the opportunity to close. Ms. Pelosi. No, Mr. Chairman, you will have the last word, that is for sure, today and in the end. However, I did want to ask one question. First, though, I want to say, Mr. Secretary, that while we are asking about questions that are problems to us, I want to commend you and the administration for some progress in the last year on African debt relief, your commitment to GEF, and to the environmental issues. Following up on last year's testimony, in fact, in our questions there, the Treasury has been very supportive on extending the inspection mechanism to the IFC and MIGA. The U.S. Executive Director of the World Bank has been very supportive in thwarting a tax from developing countries on the current Inspection Panel. Treasury has been very helpful in pressing the bank to make a country assistance strategy publicly available, and I appreciate that. I commend you once again, as I did in my opening statement, on the reforms to the MDBs and the savings that they represent to the American taxpayer and the opportunity it provides for the U.S. And just in closing on the IMF, I understand what you said about how we watch financial situations, and I certainly don't think anybody has to answer for what is possible, because almost anything might be there are so many variables, but the predictable is more of our responsibility. I think we owe those answers to the American people about how we can be better prepared in the future to predict what could happen and what the impact might have on American workers, because while we are all saying the contagion factor argues for the bailout, nonetheless we would rather not be in this position to begin with. Secretary Rubin. Prevention has to be a very central focus as we go forward. Ms. Pelosi. I thank you again for your testimony and for your leadership and extend that thanks to Secretary Lipton as well. Thank you, Mr. Chairman. Last word. Mr. Callahan. The meeting is adjourned. [Questions and answers for the record follow:] [Pages 63 - 125--The official Committee record contains additional material here.] Wednesday, February 25, 1998. SECURITY ASSISTANCE WITNESSES JOHN HOLUM, ACTING UNDER SECRETARY OF STATE FOR ARMS CONTROL AND INTERNATIONAL SECURITY AFFAIRS WALTER B. SLOCOMBE, UNDER SECRETARY OF DEFENSE FOR POLICY Chairman Callahan's Opening Statement Mr. Callahan. The subcommittee will come to order. First of all, I would like to welcome both Secretary Holum and Slocombe here this morning and thank you for taking time out of your busy schedule to appear before the subcommittee. I am going to give each of you a copy of my opening statement and, thus, not put you through the boring reading of such a statement. But, overall, the security assistance portion of the 1999 budget appears to reflect a shifting of resources away from security assistance to other foreign affairs, such as export enhancement, support for Russia and the newly independent states and multilateral assistance. And, while the President's overall budget for foreign operations represents an increase of about 9 percent over last year's level, security assistance rises only about 2 percent: Specifically, military assistance which is reduced; IMET, which remains steady; and the Economic Support Fund, Peacekeeping and other nonproliferation accounts each receive increases. And on balance the President's security assistance request represents the status quo and that is not all bad. In this regard, the budget does not recognize one of this year's most important developments. And that is the request by Israel to begin to readjust the Economic Support Fund that we have been providing them for a great number of years. I know the Prime Minister has not yet submitted to us his formal plan of action to reduce the Economic Support Fund. Nevertheless, we did discuss with the Finance Minister the reality of this becoming effective in this budget. I know that you did not know the particulars and, thus, you could not do that. But that is going to be a favorable factor. I commend the Israeli Government for their bold step in that direction by recognizing the success of our economic support for Israel. That is why we have been contributing all these years is to bring their economic status to the point where it is today. They are in great economic condition in Israel. I have not made it a secret that I do not necessarily agree with the wisdom of a percentage of what one country gets going to another country. I think that is not a good policy. I think some Administration some day has got to take the initiative to recognize that and, if you have one country who has needs greater than an other country, then we ought to consider with available funds the money for the country with the most needs, not based upon what another country gets. But I have been talking about this for a great number of years and have not heard a peep out of the Administration with respect to wanting to change that policy. But it is a policy that should be looked at. And I applaud the Israelis once again for coming forward with the initiative to say that the billions of dollars we have contributed over the last couple of decades has worked. And that they are going to begin to reduce their economic support needs and we are going to be taking this into consideration when we put together our budget. But, in your defense since you do not know what, I do not imagine, what they are proposing then you could not include that in your recommendations. I want to call your attention also to KEDO and the growing debt. I guess you both know this is something that I was unaware of until the debt was probably $25 million. I complained at this point that I did not think we ought to be borrowing money against pledges that other countries have given us. And now, that debt is at $47 million and now you are requesting more money for KEDO. We probably have contributed 50 percent of the cash that has been sent to that program and that was not the intent of the program. There has got to be some major change in direction there and we have to stop borrowing money. I notice in the budget request that you requested a $5 million increase for KEDO basing it on the increased price of heavy fuel oil. And, yet, every indication I get from the Wall Street Journal and other publications is that the price of crude oil is going down. You know, maybe it costs more in Korea, I do not know, but we are going to have to look at that. And I do not want to put any restrictions on the Administration about prohibiting them from borrowing additional money but I am growing more and more concerned that that debt is going up. I know you have pledges from countries to pay this off, but that is not sufficient. They ought to be putting the money up if, indeed, they agreed to do it, just like we have put up what we agreed to put up. So, that is going to be a concern I think of this committee and certainly is going to be my concern. So, with that I am going to yield now to Mr. Yates and, at the same time, provide each of you with copies of my opening statement. [The information follows:] [Pages 129 - 131--The official Committee record contains additional material here.] Mr. Callahan. Mr. Yates. Mr. Yates' Opening Statement Mr. Yates. Thank you, Mr. Chairman. I want to welcome Under Secretary Slocombe, and I want to welcome Under Secretary Holum this morning. I, too, have a long statement which I do not propose to read and we can put that into the record later on. I want only to say that the United States is the only country in the world that is in a position to provide effective leadership on issues of global economy and the issues of our independent world, in this world in which we live in today. And it is my belief that if we are going to continue to effectively exercise our role in international affairs, we are going to have to fully participate on a long-term basis in that by demanding that those nations that receive our security assistance abide by internationally recognized standards in the area of labor, civil and human rights, and to assist the United States to help us to enforce international conventions on the production of chemical and biological weapons of mass destruction. I will have other questions as the hearing proceeds and I look forward to a constructive discussion, not only with the witnesses but, with my good friend, the Chairman, Sonny Callahan. Thank you, Mr. Chairman. [Mr. Yates' written statement follows:] [Pages 133 - 135--The official Committee record contains additional material here.] Mr. Callahan. Once again, Secretary Holum, we appreciate your coming, especially at this time of crisis in your family, but we understand that you are going back home immediately after that. So, we appreciate the extra effort you have made to be here with us today and we will get you out of here just as quickly as we can. Mr. Holum's Opening Statement Mr. Holum. Thank you, Mr. Chairman. I will take the cue that you and Mr. Yates have set and keep my remarks brief. I have a longer statement for insertion into the record. A year ago Secretary Albright and Assistant Secretary McNamara and Under Secretary Slocombe appealed to the members of this committee for a bipartisan approach in providing resources for protecting America's vital security and geopolitical interests. Through your leadership, Mr. Chairman, and the committee's support, we have worked together successfully over the past year to advance American interests and sustain American leadership. During that time there has been important progress. Europe remains peaceful, free and undivided as the Cold War recedes further into history; peace and security and prosperity are taking firmer root in Bosnia; security cooperation in Asia is on the rise, after slowly being transformed by new leaders and fresh thought; and the rule in the Western Hemisphere is interdependence, democracy and cooperation. I think we have also undertaken to adapt and strengthen key alliances, major bilateral relationships and regional organizations to these new realities. Taken as a whole, these efforts are paying dividends. America is prosperous at home and is leading the world into a promising 21st Century. Yet, while we thrive at home, we should not become complacent or ignore the challenges beyond our borders. Regional conflicts, the proliferation of weapons of mass destruction, persistent attempts to undermine or overthrow legally constituted governments, the ongoing crisis in Iraq should serve to remind us that tyrants and terrorists endure and that threats to democracy, justice and stability persist. If Americans are to be secure in such a world, if our way of life is to continue to prosper, if the freedom we treasure is to remain as a beacon for others, then we must be willing to dedicate our resources to protecting and enhancing America's national interests. And, so, I am here this morning to ask once again for your support. In Europe, expanding NATO and cultivating peace in Bosnia are two elements necessary for a secure and undivided Europe. Our security assistance request focuses on assisting our friends in Central Europe and the Former Soviet Union through programs such as the Partner For Peace, low-cost Central European Defense Loans, and Military Education and Training. In the Middle East, we seek to continue our work for a comprehensive and lasting peace where both Israel and her Arab neighbors are secure enough to take risks for peace and can, together, reap its benefits. Accordingly, I ask the committee to support military and economic assistance for Israel and Egypt, while also backing our proposals for a Middle East and North African Development Bank, and for providing assistance to the Palestinian people and to Jordan, where King Hussein has been an unshakable and courageous supporter of peace. In Asia our budget request supports U.S. interests in fortifying our core alliances, maintaining our forward deployment of troops, continuing implementation with our partners of the Agreed Framework, which is dismantling North Korea's dangerous nuclear program, and working with ASEAN and other regional leaders to encourage a return to representative government in Cambodia. Latin America continues to make great strides. Today except for one lonely exception, every government in the hemisphere is freely elected. Central America is without conflict for the first time in decades and Peru and Ecuador are making significant progress to end their border dispute. However, the region still faces many challenges. Our budget request supports continuing market-based economic reforms, strengthening democracy and the rule of law, building regional cooperation on defense and security matters, and working with the region's militaries to develop sound military strategies and doctrines. In Haiti, the challenges of shaping democratic institutions and a market economy have been especially difficult. Unemployment, hunger, poverty and adequate education and poor health all continue to hold Haiti back. Our request reflects increased assistance to help our neighbor in the Caribbean join the rest of the region on the path to prosperity and stability. In Africa, a new era is emerging. Today many old conflicts are being settled, countries are beginning to modernize, centralized economies are giving way to open markets and civil societies are beginning to flourish. However, we need to stay engaged to achieve the peace within reach in Angola, to consolidate peace in Liberia, to nurture a thus far elusive peace in Sudan and Somalia, to encourage justice and reconciliation in the face of conflict and violence in the Great Lakes region and to cultivate the African Crisis Response Initiative so that African militaries can better respond to humanitarian and peacekeeping crises on the continent. We will continue to champion a cause that I know is of great concern to many on this committee and in the Congress. Through the President's Demining 2010 Initiative we are committed to ensuring that civilians in every country, on every continent are secure from the threat of land mines by the end of the next decade. Mr. Chairman, many of our programs and concerns are addressed to particular countries or parts of the world but there are threats, such as land mines, that defy borders and regions and can best be considered in global terms. The proliferation of weapons of mass destruction, delivery systems and advanced conventional weapons now pose the principal direct threat to the security of the United States, our forces and our allies and friends. The arms control and nonproliferation efforts remain a key part of our foreign policy strategy to keep America safe. We are engaged in strenuous efforts to limit and reduce destabilizing forces, curb the spread of weapons of mass destruction, and build confidence through transparency and verification of arms control compliance. In Iraq our work is focused on containing Saddam Hussein's desire for nuclear, chemical and biological weapons. We must also ensure that no other nation takes Iraq's place as a menace to peace and stability. The United States is determined to take these threats head on and we request your assistance in providing us the necessary resources. Working bilaterally through the science centers in Russian and Ukraine, though export control programs and the Nonproliferation and Disarmament Fund, and multilaterally through the IAEA, KEDO and the CTBT Preparatory Commission, we seek to stem the unrestrained flow of sensitive materials and technology that risks the well-being of the American people and our friends and allies, both now and in the future. The funding of our security assistance budget has a quantifiable impact. It protects American lives, it allows all Americans to thrive and prosper in a stable, peaceful, and open international system. U.S. security depends on restrengthening our alliances, resolving regional conflicts, limiting the proliferation of destabilizing weapons and assisting democratic forces in emerging or threatened democracies. We are fortunate to have both the will and the resources to fulfill our goals. And the work of this committee has enhanced American leadership around the world. Mr. Chairman, I wish to thank the members of the committee for this opportunity and I will do my best to answer your questions. [Mr. Holum's written statement follows:] [Pages 139 - 159--The official Committee record contains additional material here.] Mr. Callahan. Thank you, Mr. Secretary. Mr. Slocombe. Mr. Slocombe's Opening Statement Mr. Slocombe. Mr. Chairman, this is, if I remember correctly, the fourth time that I have had the honor and the pleasure of appearing before this subcommittee with respect to the security assistance appropriations. I want to begin by once again expressing the Department of Defense's appreciation for the leadership that this subcommittee and you, in particular, Mr. Chairman, have shown in support for the security assistance program. Like the rest of this bill it is not a particularly popular program, but it provides essential instruments by which we protect our national interests worldwide and advance our national security. As in the past, I will focus my discussion primarily on the parts of the account which are either administered by the Department of Defense or are of special interest to the Department of Defense. But I want to make the point that the overall appropriation for foreign operations is an important part of our national security effort. In the Department of Defense we focused, obviously, on the military component of protecting national security but the broad non-military instruments which are provided for in this bill are also critical and in almost all cases preferable. The security assistance budget, in particular, provides us with the tools with which we can stay engaged in the world and help to shape events in regions vital to American interests. Let me just identify a few parts, in particular, that I want to call the subcommittee's special attention to. Let me begin with the International Military Education and Training Program, IMET. This is perhaps our most cost-effective security assistance program. It fosters military to military relations and promotes military professionalism, both of which are key to our ability to quickly and effectively conduct joint operations with friendly countries and to contribute to the ability of those countries to defend themselves. In addition to the regular IMET which provides military training, the expanded International Military Education and Training Program addresses issues of military justice, respect for human rights, effective defense resource management and improved civil/military relations. All of the courses provided under this program contribute to our objectives of building democracy and broadening respect for American values in such areas as Central America, Africa, and the newly independent states. Recognizing that the recommendations are controversial, I want to be clear that the Department of Defense supports the funding request for IMET for Indonesia and Pakistan. Both of these countries are of critical importance in their development in the coming years; in Indonesia, in particular, with the Asian financial crisis. There are also countries in which for better or for worse the military plays a key role in the politics and in the development of and stability of those countries. It is in our interests that the rising generation of officers in those countries be trained in the United States rather than in other programs. Across the world, graduates of both the regular and the expanded IMET programs frequently rise to positions of significant responsibility in their home countries. This is a factor that can be of considerable importance in building positive government-to-government and military-to-military relationships. For this reason and for the broader purposes I outlined before, the Commanders-in-Chief of the Unified Commands have consistently identified IMET as a key tool for carrying out their mission of building solid military relationships with the countries in the regions of which they are responsible. Under Secretary Holum has mentioned the requests for support for our allies and friends in Europe. This is significantly the first year in a very long time that there is not a request for security assistance funding for Greece and Turkey reflecting the developments that have taken place in those countries. Reflecting the changes since the end of the Cold War, we are requesting funding of both grant funding and support for loans for countries in Central and Eastern Europe. This funding supports NATO's Partner for Peace program and is critical to helping ensure that Poland, the Czech Republic and Hungary can be ready to accept the military burdens of NATO membership. It also helps keep the door open to countries that are not yet invited or that have no particular interest in joining NATO but in whose stability, independence and freedom we have a strong national interest. The bulk of the money in the security assistance program, of course, goes to the Middle East. We support those requests. I understand the great attention that the subcommittee has devoted to this issue and your concerns that you identified, Mr. Chairman, in your opening statement. I want to make particular reference to the funding which is provided for Jordan. We are requesting in the Fiscal Year 1999 budget $45 million in FMF for Jordan to support the squadron of 16 F-16 aircraft for which Congress has appropriated funds in recent years. I simply want to make the point that that program is on schedule and within the budgetary constraints which were established when we came up and made the extraordinary request which the subcommittee supported some years ago. There is also funding in the so-called NADR account which I can never remember what it stands for. It is nonproliferation anti-terrorism, demining and related programs. One part of that supports the State Department funded demining program which is an important aspect of President Clinton's Demining 2010 Initiative. The accomplishments of this program and the related programs conducted through the Department of Defense have had a striking impact on dealing with the very serious problem of land mines left over from conflicts in the Third World. There is funding also requested for enhanced peacekeeping authority for the Africa Crisis Response Initiative and for other programs that are of concern to the Department of Defense. I also want to make reference to the funding request for KEDO. The problems which you identify in the financial support for KEDO are real and need to be dealt with and I fully endorse your proposition that other countries should be making expanded contributions to this program and that they should pay the amounts that have been pledged so that KEDO does not have to go into the market and borrow money, and also so that with more regular financing they are able to buy the heavy fuel oil on a more regular basis. One reason the costs are high is that they tend to have to buy in the spot market which drives the price up. However, all that said, the Agreed Framework is a very important element of our security posture in Northeast Asia. As you know, the two areas where we focus on the so-called major regional contingencies, the major theater of wars, are the possibility of renewed aggression in the Korean Peninsula and the possibility of renewed aggression by Saddam Hussein. In the Korean case, the problems will be vastly increased if the North Korean regime were able to continue to produce nuclear material at the Yongeyon facility which has been closed down as a result of the Agreed Framework and continued support for the KEDO effort which is an integral part of the Agreed Framework is extremely important to our security in that region. There are a number of other issues that I am sure the subcommittee will want to ask about, but for you and Mr. Holum, Mr. Yates set a distinguished example in brevity, so I will stop now. [Mr. Slocombe's written statement follows:] [Pages 163 - 170--The official Committee record contains additional material here.] middle east development bank Mr. Callahan. Well, thank you, Mr. Secretary. First, let us talk about the Middle East Development Bank. I do not know why the Administration keeps coming up here with a request for monies to fund the Middle East Development Bank since there is no Middle East Development Bank participation by the United States and I assume that you just put that in there to give us something to cut. [Laughter.] I do not know whether that is the case or not but if, indeed, that is the case here, your wishes are going to be granted. [Laughter.] You know, this committee is not supportive of that Bank or the expansion of development banks. I think we provide financing capabilities for the Middle East, all countries in the Middle East, and certainly some of them are financially able to support themselves. So, I do not think we are going to make any contributions to that. This goes all the way back to Secretary Warren Christopher. I can recall in my first committee hearing with Secretary Christopher request I instructed him not to buy any green eye- shades which is a connotation that people who work in banks wear green eye-shades. I know they do not any more but I would not expect that you ought to go out and spend any money on green eye-shades for employees of the new bank. I have already expressed my concern about KEDO and I want to encourage you, Mr. Secretary, that before you borrow any more money you come back before this committee. We are not going to put it in bill language requiring you to do that, but I do not think this debt ought to grow substantially more in size without this committee at least being aware of what is going to be perceived some day as an obligation of the United States. And I know that we are not signing the note, or we are co- signing the note but we are putting up collateral of an agreement that the other countries are not coming forth with, with respect to cash monies. And you know the economic problems in the Far East and they have got all these problems and we are having to enhance the International Monetary Fund to go in and bail them out and then we are borrowing money and signing our names to it and saying, well, they are going to give us some money. Anyway, I think you get the gist of it. And we are going to have to request, respectfully, that before you borrow any more money for this program that you come back to this committee to at least inform us of your intent rather than letting this thing grow to $200, $300 million and then coming in here like they do with everything else saying, this is an arrearage and we owe this money and we have got to pay our debts. We do not want to get in that position. So, with that I am going to yield to my colleague, Mr. Yates. Mr. Yates. Thank you, Mr. Chairman. Gentlemen, last week we were on the verge, we, the United States was on the verge of a strike against Iraq, and Saddam Hussein. You are State and Defense and you connect the foreign operations program with the Administration. Are you lonesome? Does the White House consult with you? Why is it that you are not more persuasive with some of our Arab neighbors in persuading them to permit us to use bases and other things, as well? Mr. Slocombe. In each case when we ask for what we needed, we got it. We did not ask for what we did not need. But when we asked, we were given the various clearances and information that we required. Mr. Yates. Is that true of landing rights in Saudi Arabia or did you not want that? Mr. Slocombe. We, of course, operate hundreds of airplanes, combat airplanes out of Saudi Arabia on a daily basis. Mr. Yates. I know. Mr. Slocombe. On a continuing basis. Mr. Yates. But none would be permitted to strike. Mr. Slocombe. I do not want an open session to discuss in detail what arrangements we have with a particular country. Mr. Yates. I see, all right, I respect that. Mr. Slocombe. I do want to make the point that---- Mr. Callahan. I guess the question that Congressman Yates is asking is do they consult with you? I mean do we use our economic support and our military financial support, do they consult with you or do they just ignore you and go do on their own whatever they think is necessary? I think he is asking the question about consultation, do they include you? Mr. Slocombe. They being? Mr. Callahan. They being the President or whoever makes the decision, the Secretary of State. Mr. Slocombe. As to where we spend the money or---- Mr. Callahan. Well, are they saying to you, we need the assistance of Saudi Arabia, we need the assistance of other nations that we provide military financing for. Do they consult with you and say, are these---- Mr. Slocombe. There is very close consultation between the State Department and the Defense Department, both in constructing these budgets---- Mr. Callahan. I am sorry. Mr. Yates. No, you are absolutely right. Mr. Slocombe [continuing]. Both in constructing these budgets which, of course, is a long-term matter which is done as a part of the general budget preparation, and also in terms of coordinating in the case of a crisis like this. There have been literally virtually daily meetings of the so-called principals committee, which is the Secretary of State and Secretary of Defense, National Security Advisor, the Chairman and Joint Chiefs of Staff, the Director of Central Intelligence, going over such issues as making the necessary appeals, the necessary requests, getting countries to help. Some two dozen countries have contributed forces or pledged to contribute forces that are on the way to the region. Mr. Yates. Can you list those for the record, please, or is that classified? Mr. Slocombe. Again, I can list some, certainly. The best thing to do is to list the ones that are already there that I am sure are already there. The British have a carrier and a couple of other ships, several fighter aircraft which are in Saudi Arabia on a continuing basis and they have augmented that capability. But when Secretary Cohen was at Al-Jabar Air Field in Kuwait there were British planes on the air strip. There is an Australian SAS, which is Special Air Services Detachment, which has arrived in Kuwait. Its mission would be to help participate in the combat search and rescue, to rescue downed pilots. Mr. Yates. This is the British Empire then that is joining with Tony Blair. Mr. Slocombe. The British are a good ally. Mr. Yates. Okay. Mr. Slocombe. The Argentines---- Mr. Yates. Who else can we say the same for? Mr. Slocombe. All of the NATO countries---- Mr. Callahan. Australia. Mr. Yates. Australia. [Laughter.] nato Mr. Slocombe. Who are good allies. I thought you meant who else was contributing. All of the NATO countries have cooperated in one way or another (even Iceland) with the single exception of Greece, which has its own relationship to the Middle East, and Luxembourg which has a rather modest military capability. We have been in discussions with a number of other countries outside Europe, although there is no question that we have received the strongest backing from the European countries. Mr. Yates. I have a feeling that you must be feeling kind of lonesome. I mean we, the United States must be feeling kind of lonesome after the coalition that President Bush built when we went into the Gulf War. Of course, this is not as massive or as majestic an engagement as the Gulf War. And presumably a surgical air strike is a smaller mission, something that you use and then you are through with. Although I do not know that will suffice in the case of Saddam Hussein. And I wonder where is your influence? Where is the influence as the Chairman was asking you, where is the influence of this program in persuading people? Does it have any or do you not use it? Mr. Slocombe. It does have substantial influence and one way in which, for example, we build our relationships with the Arab countries who, obviously, do not get any--the countries in the Arabian Peninsula in the Gulf, obviously, do not get any foreign assistance money--is through our foreign military sales program, through our training programs, most of which are paid for. So, that these programs are an important part of the way in which we build relationships. The IMET program, in particular, is a matter of building long-term relationships and it is striking how often when we go out and visit these countries and their people come here the senior officers have participated in American training programs. That means that they speak English, it means that they have the knowledge of the United States, it means that they have friends in the United States. Mr. Yates. Good. How much cooperation are you getting from Egypt? Mr. Slocombe. The Egyptians have provided over-flight and clearance rights, which is obviously essential. We have not asked them, because for the reasons you state, we do not think that for the kinds of operations we had in mind there was any meaningful contribution that the Egyptians could make. And I will not beat around the bush, it would have been difficult for the Egyptians to agree. We do not, being sensible, ask people for things that we do not need when we know it would be difficult for them to do it. The fact is that---- Mr. Yates. The Arab League, in this case, is sacrosanct, is it not? Mr. Slocombe. I am not sure I understand what you mean by that. Mr. Yates. Well, I mean the unity of the Arab League in that they do not want to attack another Arab nation. Mr. Slocombe. Well, nobody wants to attack Iraq and they are---- Mr. Yates. Well, I used the wrong word. Mr. Slocombe. Their problem is that they have to deal, even countries that are not in any sense democratic, with the opinion of the mass of their population. They are not eager to be seen as joining in an attack on another Arab country. However, and I want to repeat this, we got basing rights in a number of Gulf countries, we got rights to fly aircraft over their air space, we have got the various kinds of support and participation that we actually need. We will have to be ready to launch a very, very substantial strike if it turns out--if there had not been an agreement we would have done it--and if it turns out that he is not, Saddam Hussein is not going to do what the agreement requires, we will do it. We have that capability today. Mr. Yates. The one question that seems to be predominant among my constituents is, assume you make your strike, what happens after that? You have a massive strike. I do not know whether you are able to eliminate the biological and chemial weapons as a result of that strike. What happens after that? You are not going to occupy Iraq, are you? Mr. Slocombe. From the President on down, the Administration has been candid in saying there is no way that any military strike can eliminate all of Iraq's weapons of mass destruction program. That six weeks of bombing during Desert Storm did not and obviously a more limited, though large attack, would not. What we would be able to do and what the strike which is planned would do is deal a very, very heavy blow to that program and, in particular, to its, central nervous system and its ability to deliver the weapons. It would not permanently eliminate it. Mr. Yates. That would assume you know their location then and inspectors can go there. Mr. Slocombe. Again, I do not want to go beyond what I just said in terms of what the target plan is in an open hearing. But, no, by definition we do not know the location of all of the elements of his program because that is what the dispute about inspections and UNSCOM access is. We do know where key parts of the program are and in particular we know a lot about what he would have to do if he wanted to go from a potential program, which he may have retained limited--certainly has retained the capability to have a program--and he may have retained limited amounts of stocks and so on. But to have a large-scale program that would be militarily significant we know a lot more about where the facilities that would be necessary to support that kind of a program are and they are much more susceptible to targeting. Mr. Yates. Thank you, Mr. Chairman. I have taken enough time. Mr. Callahan. Mr. Wolf. Mr. Wolf. Thank you, Mr. Chairman. indonesia/east timor I have a question with regard to Indonesia and East Timor. I want to give you a brochure, if you take a look at it, showing the Indonesia military torturing people on East Timor. I was in East Timor last January and we saw young men who had their ears cut off and terrible atrocities. There was also a report that the U.S. Green Berets continue to train Indonesian Kopassus, their so-called Special Forces and U.S. Marines are training Indonesian Marines and the Kopassus forces have been implicated. Why can we not just--particularly since I heard on the radio today that President Clinton has spoken to the President of Indonesia twice in the last several weeks with regard to the IMF--why cannot we just tell them both through our military and State Department, draw down the forces on East Timor and allow the people there to have relative freedom. Why cannot we do that? And I am worried that our military effort is in essence resulting in more violations. And I would ask you to look at that brochure and to get back to me if you would on your comments and thoughts with regard to that. Could you tell me that? Mr. Slocombe. There is, of course, no military assistance program for Indonesia. And the United States has consistently made clear that we object in the strongest possible terms to human rights abuses by the Indonesian regime. We have tried to work with them to put a stop to those abuses and it has not-- they have, by no means, entirely stopped. I think it is something that the Indonesian military is aware that it is a problem that they need to address. Just telling them to do it does not make them stop. imf Mr. Wolf. No. But we are bailing them out on the IMF. The rupiah has dropped about 80 percent in the last several months. We are giving them assistance. I understand former Vice President Mondale is going out there this weekend. Is there not the mechanism though--this would be good for Indonesia. This would actually help Indonesia. One, the forces that are on the island are taking a lot of money. Secondly, I think that from a publicity point of view, PR, it would be good for the Indonesian government and help strengthen them if they were to draw down the forces on East Timor and just allow the people to have relative autonomy, but, certainly, not pulling people out in the middle of the night. We were told that at 1 or 2 o'clock in the morning, military was coming in and hauling young kids out and moms and dads not seeing them again. And our government has a good relationship, our military. When I met with their military they like our military. And we have a good relationship. We should use that relationship to make things change for the better on East Timor. More than just speak out once or twice about it. Bishop Belo, the Catholic Bishop, got the Nobel Peace Prize, and a year has gone by and more killing and it continues to take place. Mr. Slocombe. We have repeatedly raised these issues with the Indonesian government and with the Indonesian military and I think that in part the issue is how best to influence a regime like that. One approach is to say that these--and they are genuinely shocking and inexcusable--that they are so bad that we should have nothing to do with the regime or the government or the military, even though in many other areas we have common interests with Indonesia and we certainly have an interest which is a hard-headed domestic economic interest---- Mr. Wolf. I agree. Mr. Slocombe [continuing]. Of not seeing Indonesia collapse economically. Mr. Wolf. I completely agree with that. Mr. Slocombe. And the question having to do, for example, with whether or not to provide IMF funding for Indonesia, is the question of what is the best way to build the kind of relationship with the Indonesian military where when you convey a message like this, which I completely agree with is the message, it is listened to? Mr. Wolf. I think we can talk, I would like you to comment on that and also I think the answer is for the Secretary of State to publicly speak out. I think Indonesia is a friend. We want them to prosper, we want their economy to do well. We also want the 550,000 people on East Timor to be able to live in freedom and have relative autonomy. I think by doing that and drawing the forces down you actually help Indonesia. So, the recommendations is as a friend you come along side and say, you are out of control, this is not a good idea, stop it. And I think--but we never hear any comments. And, you know, Web Hubbell was hired by people connected to the Riady family and went out to East Timor after he left the Justice Department. So, there is a feeling that this Administration is not willing to publicly speak out on these issues. So, if you could, you know, get back to me. I do not want to take too much time on that, but if you could comment on both that I would appreciate it. The other thing is that on the $5 million with regard to the Ethiopia and the countries surrounding Sudan, have you actually expended that money? Last year, you were helping Uganda, Ethiopia, Eritrea, what is the status of that effort? Mr. Slocombe. I will have to get you the precise numbers but I know at least part of it has been expended, yes. [The information follows:] For FY97, $4.75 million was allocated to the Front Line States program. Of the $4.75 million, Ethiopia receive $1 million; Eritrea received $1.75 million; and Uganda received $2 million. Ethiopia is using the funds to support their C-130 program. So far, Ethiopia has obligated $862,000 of $1 million allocated. Eritrea has not obligated any of $1.75 million allocated. Uganda has obligated $476,000 of $2 million allocated which transported their FY96 equipment from the U.S. to Kampala. For FY98, $5 million has been allocated to the Front Line States program. To date, State Department has not made actual country allocations. In response to your question if we are doing enough, program funding is sufficient. For FY99, $5 million has been requested for the Front Line States program. Mr. Wolf. Part of it. Do you know how much of it? Mr. Slocombe. I do not have the exact figures. General Davison. We do not have that at our fingertips but the expenditures involve the training assistance of their cadres on demining, and those kinds of things that are going on. Mr. Wolf. Are we doing enough? The assassination attempt on President Mubarak came from people who are back inside of Sudan now. Are we doing enough to help with that? Mr. Slocombe. I think the problem is not money, is not dollar limited. It is not an easy problem to deal with the threat that Saddam poses to his neighbors. And I understand your point that it ought not to be dollar-limited and I think it is not dollar-limited. Mr. Wolf. Okay. If you could come back and tell me how much has been expended and what---- Mr. Slocombe. Let me make sure I understand the question. There is a certain amount that is allocated for the front-line states, and how much of it is actually been expended? Mr. Wolf. Right. And is that level enough and should we be doing more? Mr. Slocombe. That is a readily determinable question but even in this type of stuff I am pretty sure I do not have the answer. bosnia Mr. Wolf. The last thing is just a comment. You do not have to even comment on it. In December we went to Bosnia--it was my sixth trip there--to kind of spend some time with a National Guard unit from my district and also with the troops up in Tuzla. They are doing an amazing job but they are stretched so much. The average man or woman that we spoke to had been in Somalia, Haiti, Desert Storm---- Mr. Slocombe. Is this civil affairs unit? Mr. Wolf. No. Some had been back in Bosnia for the second time and many were telling me that the impact on their families was very, very difficult. I believe that the divorce rate was very, very high. They were telling me stories, whereby, they would listen at the telephone where somebody was talking to a loved one back home and the difficulties. And I really believe that they are stretched so thin and have been gone so long that this is something that I think that the military really is going to have to address. And it is just not enough to say that, you know, they are doing a great job, as they are, but I think the personal impact on their families is so great that I think there is going to be great pain. Mr. Slocombe. There are particular high-demand, low-supply units. Some of them in the reserves, some of them in the active forces. But this is a particularly serious problem. And I know that Secretary Cohen and General Sheldon are very conscious of it as are the service Chiefs. It tends to take time to fix because you have got to create more units of the relevant kind. Mr. Wolf. Thank you, Mr. Chairman. Mr. Callahan. Mrs. Lowey? Mrs. Lowey. Thank you, Mr. Chairman. imet Welcome, Mr. Secretaries. Before I get back to the Middle East, I would just like to follow-up on my colleague, Mr. Wolf's question regarding IMET. What has puzzled me and I would appreciate your comment and some of us are thinking of legislation in that regard, is why we would allow countries to purchase IMET training, military assistance, if, in fact, we have had a compelling reason to prohibit them from being part of our grant program? Would you respond to that, please? And I am specifically referring to our Fiscal Year 1998 Foreign Operations Report which suggests the development of global guidelines to screen IMET participants for human rights abuses. So, if they cannot be part of our grant program, it seems to me a problem if we can allow them to purchase this assistance? Mr. Slocombe. First of all, everybody who participates in any of our military training programs, IMET and other kinds, will now be subject to the process which was established in a cable which went out in December which has been reported to the subcommittee where the host government is required to make inquiries about human rights abuses, other kinds of drugs, crimes, corruption, that kind of thing. And then the embassy in the sending country also has to follow-up and make its own inquiries and keep records. So, that that issue applies to both purchased IMET and to grant IMET. We are certainly aware of the concerns of the committee and that Indonesia has purchased in Fiscal Year 1997 a total of 12 courses at the Defense Institute for Security Assistance Management, the international defense management course, the advanced language instructor course, the one basic officer's training course and one international hydrographic management and engineering program course. It has been the position of the Department of Defense-- those were all in Fiscal Year 1997--it has been the position of the Department of Defense that in the absence of a specific provision in the statute the restrictions on grant IMET do not apply or are not understood to apply to purchased IMET. However, we are conscious of the subcommittee's concern in that respect. I believe that it is in the interest of the United States that programs of these kind should be made available to countries that are prepared to put their own funding into paying for them. And it is in our interest to have those programs continued. I think there is a difference and a legitimate difference between the relationship that you are prepared to pay for a foreign country to have and the situation where they are using their own funds. That is the rationale for the decision. Mrs. Lowey. I will not pursue this now, but at some other opportunity I would appreciate some additional information because it has been brought to my attention that a lot of the screening is ad hoc, it is inadequate, it is certainly not thorough. And I would appreciate the opportunity to talk with you further about it. middle east Back to the Middle East because certainly that has been the focus of this Congress and this Administration in the last month or so. I would like to say personally that I think that the Administration was firm, kept on target and it has ended for the time being in a satisfactory way. Many of us have been very concerned about the flow of new technologies, many from the United States, that have entered the arsenal of Arab States in the region. In fact, often before Israel even buys the same systems. We have always felt, as the important ally in the region and a solid democracy in the region, it was very important for Israel to maintain its military security. I wonder if you could discuss with us Israeli Finance Minister Neeman's recent proposal? What is your reaction to it? Keeping Israel's military expertise in balance is very important to the stability of the region. Could you discuss it with us? Mr. Slocombe. We are certainly committed to maintaining Israel's qualitative edge. And in addition to the very substantial funding, which dwarfs that which goes to any other country in the world, which is provided through this program, we have, as I am sure you know, a number of other cooperative programs to support Israel's security. That includes importantly the very substantial funding for the Israeli aero-tactical missile defense program, which is a cooperative program we do because we receive benefits as well. It is not a part of the funding which is in this program. Mrs. Lowey. Could you comment on the acceleration of that program in light of what is happening in terms of proliferation in that region? Mr. Slocombe. The Israelis are proceeding with the program. They would like funding for an additional battery. And that is one of the subjects which we are discussing with them as a part of our continuing discussion on their long-range programs. We also provide support for the nautilus--was the popular name for it--which is an anti-katyusha system, which is outside this program. There is, as you know, very close cooperation on intelligence and other issues. So, I think we give a very strong priority to maintaining Israel's qualitative edge. We also believe that it is in our interests and, indeed, in an important sense, in Israel's, that the moderate Arab states be able to provide for their own defense. And, so, we provide substantial, we have substantial sales programs with those countries. proliferation of military technology Mrs. Lowey. Another area that I personally and many of us have been concerned about is the proliferation of military technology into the region by countries such as China and Russia. I know the Administration had some successful negotiations with China. Has China honored its commitment on proliferation? Can you give us some accounting? And what are we doing to ensure that the proliferation of nuclear technology is not actually happening? And, in fact, that it has been completely shut down, certainly with Iran, and also with the entire region. Mr. Holum. Well, we are pursuing relations with China, discussions with China, on a whole range of proliferation concerns. These concerns are central to our relationship with both China and Russia. Since October 1984, we have no evidence that China has violated its agreement not to provide MTCR-class missiles to any country. There are some concerns that they may have a slightly less restrictive evaluation of what the specifics of the coverage are but---- Mrs. Lowey. How do we evaluate their description of their coverage? Mr. Holum. Those are issues we continue to pursue with them. And it is not that we had an agreement in 1994 on missile technology so that we can forget about it. It is something that we followup on on a regular basis. Whenever there is an export or any indication through intelligence or other sources that something worrisome is going into the Middle East or to any other region, we followup on it. We go directly to senior officials in their government and ask for an explanation. Mrs. Lowey. What about with Russia? There have been articles in the New York Times, my colleague just mentioned it, about the Russian technology being transferred to Iran which seems to be sent with the express approval of the Russian security agencies? Mr. Holum. If you are referring to the missile---- Mrs. Lowey. Right. Mr. Holum [continuing]. Which has been the focus, let me start by saying that that specific issue has had more attention at every level of our Government with the Russians than any other issue I am aware of in the last five years. It has been raised repeatedly and routinely. Ambassador Wisner, as you know, has been the special representative of the President to engage with Mr. Koptev, the head of the space agency in Russia. There have been some significant developments. On January 22nd, the Russian Government issued an executive order signed by Prime Minister Chernomyrdin that specifically limits and controls exports, not only of relevant technologies, which would be covered by the Russian membership in the missile technology control regime, but also any other assistance to a missile program that might be helpful, the so-called catch-all provision that we have been pushing. There have also been--and I cannot go into detail for you in an open session--but there have been some indications since then of actual practical impact on the ground of all these representations. We still have a lot more to do. We are still working. It will be a major item of conversation during the Gore/Chernomyrdin discussions on March 9th and 10th because the Russians still have to live up to the undertakings that they have made in our discussions. We also have to keep in mind that a great deal of technology has already gone. It is unclear whether there was actually Russian Government acceptance of the transactions but some technology has gone in the past to Iran and has allowed for greater progress, as George Tenet, the CIA Director, has testified, than he had earlier expected in their missile program. But these new Russian programs are vitally important now and can substantially delay Iranian capability to mount an offensive missile capability. middle east Mrs. Lowey. And just lastly, if I can go back to the question before. I know the Chairman welcomed the proposal by Neeman, which followed up on Prime Minister Netanyahu's commitment to eventually wean away the economic assistance. I think this committee understands the complexity of that area of the world and the importance of bolstering the security assistance to Israel, be it from this budget of the security budget, through Nautilus or through Arrow, could you comment on this? Mr. Holum. The chairman, I think, summed it up exactly correctly both in understanding that we do not have all the details yet, but also welcoming what the Israeli Government is proposing. We certainly do welcome the proposal. It is, in fact, as the Chairman said, a direct reflection of the success of the economic part of our relationship with Israel over the years that they are now in a position to phase down the economic portion of the aid package. As I understand the plan, this would be phased down over a period of years, 10 to 12 years, and during the same time frame they would like to have the military assistance part grow. That is something that we will look at very closely in consultation with the Israelis and also obviously in consultation with this committee. Mrs. Lowey. Well, thank you, and I would just like to reiterate again that as the peace process moves forward we hope, although with a great deal of difficulty, the security of that region depends a great deal on the strength of the Israeli military and I have felt in a time like this that our support for increases in that budget are absolutely defensible. I thank you very much. I think I have taken enough time, Mr. Chairman. Mr. Callahan. Mr. Knollenberg. Mr. Knollenberg. Thank you, Mr. Chairman. Welcome this morning, gentlemen. kedo I want to go back to KEDO. KEDO has become more significant lately because of the financial crisis in that area of the world. And as both you gentlemen know very well, part of the agreement was to provide for two light water reactors. The fact that is troubling to me and I think maybe to members of this committee is the fact that, under the terms of that agreement, the North Koreans did not have to dismantle the plutonium producing capacity at that site until both nuclear reactors are running. Now, that is what the word---- Mr. Slocombe. They have to keep it shut down. Mr. Knollenberg. Pardon? Mr. Slocombe. They cannot operate it. They do not now operate it. Mr. Knollenberg. I have been impressed by briefings where that is a little questionable, too. Mr. Slocombe. With respect, sir, there are IAE inspectors who live at Yongeyon. In fact, there is no question that the facility is shut down. Mr. Knollenberg. Let me go a step further then. In light of the problem we are having right now, the fact that South Korea's President-Elect and he may be the president by this time--has stated that Japan and the U.S. must contribute more to KEDO. He states that South Korea cannot afford to contribute its share, and he is under IMF pressure as well. And, so, the concern is that who, if South Korea cannot, is going to pick up the slack here to ensure that this agreement does not topple, because if it does topple, I know they mentioned already the chaos it would create. My concern is, who then is going to pick up the slack? And then secondly, is there not some kind of possible non-nuclear solution to this problem, because North Korea still has the capacity to produce plutonium and plutonium, of course, is the danger here. But they have not reached that point in the course of that agreement where they have to stop producing plutonium in other parts of the country. So, is there any non-nuclear solution that could be possible and then what is going to do, and who is going to pay for it? Mr. Holum. They do--again, let me go back to what Secretary Slocombe said--they do, under the terms of the agreement, have the plutonium reactor shut down. In fact, the fuel has been removed from the reactor. And 97 percent of the fuel rods, there were roughly 8,000 fuel rods that were in that reactor, have been canned under our supervision. So, that reactor is not operating. My understanding is that it is deteriorating, it is rusting. It is not being maintained or tended. I would have to confirm that but they are not allowed to produce anything in that reactor. Mr. Knollenberg. Well, they may be not allowed to, but is there any plutonium being produced? Do you know that? If the reactor is not yet dismantled, could they not produce it? Mr. Holum. If they have reloaded the fuel or somehow gotten access to the fuel rods, but those are canned and they are under supervision by U.S. personnel who are engaged in the canning operation, who have been on site at the facility. Mr. Knollenberg. Can you say that North Korea is not pursuing any kind of nuclear build-up? Mr. Slocombe. You cannot prove what you do not know. We know that---- Mr. Knollenberg. That we do not know is what bothers the hell out of me. Mr. Slocombe. We know that they had at Yongeyon the capacity to produce, I forget the exact numbers, but it was on the order of, plutonium for on the order of half a dozen Hiroshima-style nuclear weapons every year. That has been shut down. There is no question that it has been shut down. There may be a question of whether the reactor has sufficiently deteriorated that it would not be practical to start it up again. I do not think we can claim that for sure. But there is no question but that the production has been shut down and, therefore, the plutonium separations plant which is adjacent to the reactor, is not separating plutonium. And the plutonium which is embedded in the spent fuel rods which were removed, and if you remember, generated a crisis, is in these canned rods and it is a part of the agreement that at a stage those rods will be exported out of Korea, out of North Korea so they will not be there, not be available. We cannot say authoritatively what is going on that we do not know about but the program which was the focus of concern which appears to be, as far as we know, is where they were producing the material for which they could make nuclear weapons has been closed down, is closed down and has been closed down since the agreement was signed in what, 1994 or 1995? Mr. Knollenberg. Another question. Are you done? Mr. Slocombe. Well, you are entitled to an answer to your question about who is going to pay for the light water reactor. Mr. Knollenberg. That is the next question. Mr. Holum. I can go back to that. There is no secret of the fact that the Koreans and the Japanese have been interested in having the United States undertake at least a symbolic or token commitment to the cost of constructing the two light water reactors, and the cost will be roughly $5.2 billion. There is also no secret to the fact that we have said ``no'' to that and the Congress has made clear that that is our answer and that is what we have said. We also are operating on the understanding that both the ROK and Japan expect to undertake most of the funding costs of those two reactors and they have reconfirmed their commitment to KEDO. In terms of the---- Mr. Knollenberg. Is that a recent announcement that they have made? Is that a reiteration of their previous position? Mr. Holum. Keep in mind that the financial crisis is, we hope, short-term, and will have a short-term impact. The sequence of development here obviously is that the cost that is being incurred now, as the Chairman referred to earlier, is for heavy fuel oil deliveries. We have undertaken, to take the primary responsibility for funding that and raising funds for that. The ROK and Japan have the lead in building the reactors. Our part is first and it continues until the first reactor is completed. They held the groundbreaking in August for the first reactor. The Japanese have put up the funds for that, have loaned the funds for that initial work. They need to have a contract negotiated between KEDO and the Korean Electric Company, which will be in charge of building the reactors, the primary contractor. But that funding cost will obviously ramp up dramatically as construction proceeds. This will take us into the middle of the next decade before the first reactor is completed. So, the current financial crisis is unlikely to have any significant impact on their ability to fund the long-term, time consuming part of this process, which is the construction of the actual reactors. That is just beginning. Mr. Slocombe. It is also relevant that most of the costs, not all, but most of the costs would be incurred in Japan or Korea. So, this, unlike some other issues, is not a question of getting foreign exchange. imf Mr. Knollenberg. This is an off the wall question but I must ask it. Is there any way that in this whole IMF structure--I know that it is not entirely your bailiwick, but it is connected--is there any way that if some agreement is reached and we do construct an IMF-funding agreement that has something that is passable by this Congress, I do not know what that is going to be but whatever it is, is there any chance that there might be some linkage in there to a bailout of the KEDO program? Is there any talk of that? I know speculation has occurred in the newspapers, but I am just asking if you have any comment about the potential for some drive to bring that about? Mr. Slocombe. I think the interest the Department of Defense does have in the Asian financial crisis and in the IMF bailout, if you want to use that term, is that we have as a country a huge interest in stability in the region. And North Korea is going through an economic, maybe it is an economic death throes. It is certainly an economic crisis. And one of the important reasons why the success of the Korean economic recovery program, which is actually going quite well, is so important is that if it works, as we expect it will, it will allow Korea to recover economically and, therefore, be able to fund the KEDO project. As far as I know, there has not been any direct discussion of a linkage of that kind. But I think the linkage is very much there. Mr. Knollenberg. Thanks, to both of you. Thank you, Mr. Chairman. Mr. Callahan. Thank you, Mr. Knollenberg. Mr. Obey, I thought out of respect for your seniority and for your---- Mr. Obey. I appreciate that. Mr. Callahan. And your age. [Laughter.] Mr. Torres. Mr. Torres. Thank you, Mr. Chairman. Thank you, Mr. Obey, for yielding. colombia Secretary Holum, I wanted to ask you what is the present status of the provisions that were covered in the Fiscal Year 1998 foreign operations bill to provide three Black Hawk Helicopters to Colombia? Mr. Holum. I would like to get back to the committee with the specific details on that. But let me say, in general, that the financial plan for our narcotics efforts indicates that we do intend to comply with that Congressional requirement. At the same time, as you know, there is substantial doubt by General McCaffrey, for example, that those are number one, necessary; and number two, weigh as heavily as the amount they would cost in the scale of priorities for the overall anti-narcotics effort. Obviously, Colombia plays a central part in our efforts but there is some doubt about both the inflexibility associated with earmarking and about the priorities attached. But the plan indicates we intend to comply. I would like to get back though with more detail. Mr. Torres. You mean not in a public hearing, as such? Mr. Holum. No. I just would like to give you a more detailed description in writing of where we are on that. Mr. Torres. Could you possibly elaborate on how this particular provision affects other countries? Mr. Holum. Well, just the---- Mr. Torres. You are taking money from the general pot to-- -- Mr. Holum. Yes. We have an overall total available and if we devote--I cannot remember the total cost--$36 million or something to--which is a pretty big chunk out of the total. Mr. Torres. Bolivia would be a country in question here. We have an interdiction program there. Is this not taking money out of that program to cede to Colombia? Mr. Holum. That is the sort of thing I would have to get back to you about. How we will assemble the necessary funds to pay for the Blackhawks. Mr. Torres. Thank you. imet Secretary Slocombe, you mentioned in your statement regarding the IMET issues that the program is designed to address issues of military justice, respect for international recognized human rights, effective defense resource management and improved civil/military relations. You go on to cite that this is important in meeting objectives of developing democracy and American values and you cite such countries as Central America, Africa, and the newly independent states. I do not want to nit-pick this, but is there any reason why you do not mention Latin America as a region? Mr. Slocombe. No. Mr. Torres. I wanted to ask you in line with that then, the November 1997---- Mr. Slocombe. It would apply just as much to Latin America. The proposition applies just as much to Latin America. Mr. Torres. The November 1997 Department of Defense Inspector General's Report on the School of the Americas detailed serious systemic flaws in the evaluation and the oversight of the school's curriculum. Why is this still true, given the intense controversy over the school? What will be the procedures in the future for reviewing curriculum at the School of the Americas? Another question, will a regular external review be instituted? Is there a list of the evaluation criteria used at the school to ensure that no teaching materials violate human rights and democratic standards as we would like to see done? Could you provide an answer for me? Mr. Slocombe. It is certainly the case that there is a regular evaluation procedure and that one of the focuses of the oversight of the school is to ensure the standards you meet are met but I would like to take the questions and answer them in detail. [The information follows:] [Pages 187 - 192--The official Committee record contains additional material here.] Mr. Torres. If I sent those in writing to you, would you respond? Mr. Slocombe. Yes. Mr. Torres. Another question not related necessarily to the school but it might be. At any given time I understand that there are 150 to 200 U.S. military advisors in Colombia and Mexico. Is this the case and, if so, what are they doing there in such large numbers? Mr. Slocombe. There are a number of American military people in Colombia, almost all involved in the anti-drug effort and a significantly smaller number in Mexico. I do not have in my head or in these materials the particular numbers. We can get you the exact numbers of who is where and who is doing what. But the answer is that most of the American military personnel who are in Colombia at any given time will be involved in the radars which are operated and other aspects of the counter drug effort. Mr. Torres. In Mexico? Mr. Slocombe. Well, in Mexico they are mostly involved in the counter drug effort. But they are relatively few American military personnel in Mexico at any one time, far fewer than in Colombia. And then there are also periodic training activities, exercises which we have as we have in a lot of other countries. So, there would be spikes where the numbers would go up but I can get you the sort of steady state numbers. chiapas Mr. Torres. And perhaps you could be more specific, do we have any American troops in Chiapas? Mr. Slocombe. I have absolutely no reason to believe that there are any American military personnel in Chiapas. Mr. Torres. That is a succinct answer. You do not reasonably believe. Mr. Slocombe. Well, I mean there are a 1.3 million American military personnel in the world. There are few American military people in Mexico, very few. I have no reason to believe that any of them are in Chiapas on any continuing basis. Whether one has ever been to Chiapas, I assume the answer would be, yes. But let me, again, let me check and get you the exact answer but I would be surprised if the answer is other than, no. [The information follows:] There are approximately 172 unformed personnel in Colombia and 31 uniformed personnel in Mexico. These numbers include those permanently assigned to the Military Group, the Defense Attache's Office, the Embassy's Marine Security Guard, and personnel in country on temporary assignment dedicated to counternarcotics efforts. The level of military personnel in country can fluctuate from month to month depending on the current mission. There are no U.S. uniformed personnel in Chiapas. Mr. Torres. Thank you. That is all I have, Mr. Chairman. school of the americas Mr. Callahan. I might on the School of the Americas tell you that we dispatched our subcommittee staff people to the School of the Americas to make absolutely certain that there is no educational opportunity afforded for anything other than what this committee has instructed. If the gentleman feels we should send the committee staff back down there to make absolutely certain that this is not the case, it is my understanding that they are not violating the instructions of this committee and if the gentleman suspects there is some need to re-check that, I would be happy to dispatch the staff. I have been one of the supporters of the School of the Americas and I am going to continue to support them but they are not going to be permitted to violate the wishes and the instructions of this committee with respect to their curriculum. Mr. Torres. Well, thank you, Mr. Chairman. Mr. Slocombe. If I could, Mr. Chairman, as the subcommittee will be aware--I do not know the exact date--but recently the various certifications which were required have been made and one of them is that the instruction training provided by the School is fully consistent with American training and doctrine, particularly with respect to the observance of human rights. Mr. Callahan. Mr. Frelinghuysen. Mr. Frelinghuysen. Thank you, Mr. Chairman. persian gulf crises I would like to get back, gentlemen, to some of the questions that Mr. Yates raised and the Chair raised. The nature of our business is that we are collectors of, in many ways, of public perceptions. And the public perception in my district is that we have a lot of fair-weather friends and this Persian Gulf crisis I think has showed that to be fairly accurate. This is a committee that deals with a budget. There is nothing more important in this budget pie than the security aspect. All of what we spend money on here in terms of environmental, health, humanitarian, economic is linked to the security aspect. Why, after all these vast expenditures for good public purposes, across the world, could we not have counted with more reliability on our allies? Mr. Slocombe. There is no question that we would always like it if our allies were more responsive and quicker to say, yes. All I can say is that we got in the Gulf region, particularly which is where I think most of the controversy arises, the requests which we made for things that we needed and we made the requests because we needed them, and we got what we needed. Mr. Frelinghuysen. Well, from our constituents' viewpoint, besides England, where was Germany, where was France? We are pumping all this money into NATO, our military alliance. These are natural allies. Many of our constituents question the Saudi regime, Jordan. I mean when push comes to shove and we put a lot of economic and humanitarian support into a lot of these countries, what are we getting if, indeed, both the Secretary of State and you, say that our top priority is to protect the security and vital geo-political interests of the United States, what are we getting for that type of financial investment by the taxpayers? And I think that is the basic question. It may be rhetorical but that is really what we are here about. Mr. Slocombe. First of all, we are not going around--none of us have said this morning and none of us have said any of the times that the reason that we do this is so we are strictly unlimited but we are buying support for the Persian Gulf. For example, something like three-quarters of the troops in Bosnia are provided by, mostly by the European allies and other countries other than the United States. So, that in areas like the Persian Gulf, there is no question that we would like to have more support from our allies and more support from the countries in the region, for that matter. We have what we need but we could always be pleased to have more. The reasons why these countries are, particularly the Arab countries, are reluctant to get out in front are the ones which Mr. Yates identified. The Arab street, wrongly but genuinely, was not sympathetic to the war in 1991 and has not been sympathetic to the position of the United States in this issue since. And that makes it complicated for the Arab regimes to take the lead in the way that I believe their interests would suggest that they should. All that said, Saudi Arabia, for example, a country which does not welcome foreigners, and does not welcome military involvement is on a day to day basis is the host to thousands of American, British or French troops. Kuwait, Kuwait is in many ways obviously a special case, but Kuwait has American and other coalition troops there. We will be having support aircraft and strike aircraft based in other Arab countries. Look, I do not dispute that it would be nice if they were more enthusiastic. But I think that it is also not correct to say that either that we are not getting any support or that they are just being feckless or something like that, in not providing support. Mr. Holum. I have one point, too. It is important, I think, to keep in perspective the fact that the specific issue here was over the strategy of military strikes and when they would occur. Mr. Frelinghuysen. But wait a second, in reality, what we are doing and have been doing in the Gulf over the years has been protecting our vital oil supplies which, indeed, are very important to some of our closest allies. Some are wholly dependent on that source. Mr. Holum. This is part of a strategy we are dealing with to get rid of Saddam Hussein's weapons of mass destruction and make sure he cannot use them to threaten his neighbors. Over seven years there have been periodic votes in the UN Security Council as to whether there should be sanctions on Hussein. Not one country in seven years has ever voted to lift sanctions. They may argue about the timing or the strategy of the military strikes, but the world is united on this issue. And constituents or no one, certainly not Saddam Hussein, should get the impression that there is a division and that somehow he can just wait this out. He is going to incur---- Mr. Yates. What question is the world united on? Mr. Holum. On the question that Saddam Hussein needs to comply with the Security Council Resolutions and comply with the inspections. They have never voted, never voted to lift sanctions in the United Nations Security Council. As we sit here, Iraq is suffering complete and total economic sanctions of the kind that no country has ever experienced before. And he has not had those lifted because the world is united on the fact that he has got to give up his weapons of mass destruction before the embargo is lifted, before the sanctions will be lifted. So, all I am doing is adding a dimension to the argument of international support. He is isolated. nato Mr. Frelinghuysen. The dimension is appreciated. Just one question on NATO. I have read every conceivable material that is put in front of me in terms of the cost of NATO expansion. Is there not a potential here, a strong probability that in the overall budget of which we are talking about here, that at some point in time you are going to come to this committee and say, well, you know, Department of Defense had one, the State had another, that we may be--and let me say I support NATO, it is an important alliance--but is there not a potential here and would you like to comment on it that we may have a budget buster of no small proportions? Mr. Slocombe. I think that is an extraordinary remote probability. Let me explain why. Mr. Frelinghuysen. Given all the evidence that is out there from people who are probably equally qualified in these areas, I mean it seems to me that there is quite a lot of material to the contrary. All right, it is your time. Mr. Slocombe. What the United States will provide in connection with enlargement is, first of all, our contributions to the NATO common budgets. Our present estimate is that the increased contributions will be on the order of about $40 million a year for the U.S. Some of those are in the defense budget, in the 050 account, and some are in the 150 account. This is because there are three different NATO common budgets which go through three different subcommittees of the Congress. Two are in the 050 account and one is in the 150 account. Mr. Packard. Would you yield to me for just a moment, because that was my question and I would like to simply not ask the same question twice. I am sorry that I am late. I just finished a hearing on my own subcommittee. I chair the military construction subcommittee and we also have a significant budget amount for the NATO expansion, probably more than you have here in this subcommittee. Mr. Slocombe. I would expect that it is because that is the NATO Security Investment Program which goes---- Mr. Packard. Does your total NATO expansion budget take into consideration the other committees or is it just limited to this subcommittee? Mr. Slocombe. No. It is all--the estimate is that the total incremental costs to the NATO common budgets--and I want to come back to why that qualification is important in a minute-- but the total incremental costs to the NATO common budgets over the course of a decade would be about a $1.5 billion. The United States pays about a quarter of the common budget. That is $150 million a year, a quarter of a $150 million is about $40 million a year. Mr. Yates. Why a quarter? Mr. Slocombe. Because the Europeans pay the rest. There is a long-standing formula by which the different countries pay amounts which are---- Mr. Yates. And that will continue? Mr. Slocombe. It goes down a tiny bit. For all the current members, it goes down a tiny bit because of the new members make small contributions. Broadly speaking the contributions are proportionate to national income with some allowance for rich countries and poor countries. But it is just mathematics that the Poles, the Czechs and the Hungarians will pay a---- Mr. Yates. Will you yield for a further question on this question? When we start building under the military construction program for NATO expansion, will the costs of that construction be borne as well by the other countries who are expanded into NATO? Mr. Slocombe. Everything that goes through the NATO common budgets is paid for three-quarters by the Europeans. So, the answer is, yes. The Europeans would pay--if you upgrade a communications system in Poland, and that qualifies for NATO common budget funding and there is an arcane set of rules for what---- Mr. Callahan. Are you saying that if we build barracks in a NATO country that the other participating members of NATO contribute to the construction of that barracks? Mr. Slocombe. Barracks, in general, are not eligible for common funding. But, for example, and this, I think, people find surprising, we have built in the United States facilities which are associated with reinforcement capability for Europe that have qualified for NATO common funding and have been paid for three-quarters by the Europeans. Now, most of them, obviously, are in Europe but it does not depend on where they are. Mr. Yates. What is an example of that? Mr. Slocombe. There are port facilities that are used that were identified as used for reinforcements. Let me, if I could, explain. You know, we are talking about numbers which are, by anybody's perception in absolute terms, very large, but relative to the Federal budget and even the foreign affairs budget they are small. The reason we get these huge numbers is if you assume that we are going to go back to the Cold War and we are going to have a massive Russian threat to Central Europe and presumably worldwide then, obviously, we would be making huge changes in our assumptions about security and about what was required for defense, what was required for national security in general. And these very large numbers are in general that tend to estimate what it would cost to refight the Cold War. No question that is---- Mr. Frelinghuysen. So here today you are ruling that out as a potential---- Mr. Slocombe. We do not rule it out. We---- Mr. Yates. Mr. Chairman, I have a question following Mr. Frelinghuysen's question about where were they when the whole world was united and still continues these sanctions. Will that be true, as well, after, as a result of the Kofi Annan agreement? Mr. Holum. I have no doubt that it will be true. I think the world is watching with a great deal of suspicion to see whether Saddam actually fulfills the commitment he made to Kofi Annan. We are in the same position. We are maintaining our capability to respond promptly and with powerful force if this agreement is not kept. Mr. Callahan. With respect to overall percentages of the budget that is not a good response. Percentage-wise my salary is not a huge percentage of that budget but perception-wise in Alabama it is. [Laughter.] Mr. Slocombe. The only point I am making, sir, is that---- middle east Mr. Callahan. Well, the point is that perceptions are powerful, and from perceptions come your appropriations. Because we have to respond to the people in our respective districts. Now, following up on Congressman Frelinghuysen's theme that the perception is that Saudi Arabia turned us down. The perception is that during the Persian Gulf War when we went to Egypt, as much as we give to Egypt, that they agreed to participate but only after we forgave them $6 billion in debt. You know, the perception is that we are being used. That they want their money--I mean we do not have any trouble, we do not have to go to Netanyahu and say, we need your help. We know that. We only have to pick up the phone. Now, here we are contributing to King Hussein and Jordan and trying to increase that and now, we are saying that well, we ought to be cautious now we do not want to get him in any uncomfortable position. So, perception-wise we have a problem with Saudi Arabia. When it was apparent that Saddam Hussein was going to invade Saudi Arabia after he went through Kuwait, we did not have to plead with them too deeply to let us land our planes there. So, we have a perception problem of a total lack of support of anybody but Israel in that region, when it came time to protect them. I mean this biological, chemical warfare, we are not concerned about them sending a missile to Washington, D.C. but to Israel, yes, and to Jordan, yes, or to any other area. They are the ones who have the exposure, and they are the ones who ought to be concerned, more so than we are. So, you have a perception problem or the Administration does that these are fair-weather friends who come to us and tell us what great allies they are, send us billions and billions of more dollars and then in a time when we need them, they say, well, we do not want to get involved because it is an Arab brother or something of that nature. We are talking about billions of dollars to protect them from an aggressor like Saddam Hussein and then when we do that, that is fine, but when it is not to their political liking they turn their back on us. So, he is absolutely right, perception is very important towards our success in being able to get you enough money for all the foreign military financing program. So, it is a very serious problem. You have been very patient, Ms. Kaptur. Mr. Slocombe. Mr. Callahan, I only want to say that I think the points you make are entirely valid, both as to the perception and, to some degree, the reality. But I also want to make the point that they did provide support. Mrs. Kaptur. Thank you, Mr. Chairman. I want to invite both secretaries--I have to tell the Chairman that was a brilliant statement, by the way. nuclear weapons I wanted to ask a question about the Partner for Peace and the newly independent states. How much confidence should I have or the American people have that the--and we will take Chornobyl as an example--that that reactor is sufficiently contained and that there is no trafficking either from spent material from that plant or any other plant in that country or any of the other republics? Mr. Holum. Well, that is an another case of, as Secretary Slocombe said earlier, of we cannot prove what we do not know, we cannot confirm what we do not know. We do know---- Mrs. Kaptur. Sir, that is my very point. I am wondering what do we know about the safety of a number of those facilities? I know our own Department of Energy is involved in this, but I am very interested from a defense standpoint, what is going---- Mr. Slocombe. Chornobyl is in the Ukraine, and I think we are highly confident about Chornobyl because---- Mrs. Kaptur. You are highly confident? Mr. Slocombe. Yes. I do not know how confident I am about the--I would not want to live in the community--but in terms of misappropriation of the material out of Chornobyl, I think we are highly confident about that, as we are in a lot of other areas. Mrs. Kaptur. Are you confident about the containment of the facility against future mishaps? Mr. Holum. There is an effort underway through the G-8 and G-7 to fund a new sarcophagus, a new containment for the facility. No. It is not safe over the long-term. Mr. Slocombe. Safe for the local community. Mr. Holum. That is right. But it is a different question from whether special nuclear material or the fuel might be taken out and used for nuclear weapons, potentially, for example. I think there is no realistic prospect that that would occur. It would not be the sort of target where terrorists or others seeking plutonium or highly enriched uranium would go. Mrs. Kaptur. All right. As a lay person--and I am sure I am expressing the concern of others in my community and elsewhere--there is some desire for clarification regarding the containment of the existing Chornobyl facility, as well as others that may have been designed similarly in that country or others. There are several under the same design. And how confident are we as a Partner for Peace in that region that similar mishaps will not occur and that spent materials are properly guarded against any type of trafficking? Mr. Holum. I think the first part of your question is better answered in writing and in more detail than I can provide here because there are a number of similar type reactors in a number of former Soviet states that need---- Mr. Slocombe. What we are trying to do is distinguish the danger of a nuclear accident, like what happened at Chornobyl, from one of other plants of the same design and the possibility that from those reactors or any other places in the Former Soviet Union people steal the materials to make a nuclear weapon. And they are quite different problems. Mrs. Kaptur. Is this a high priority for our military cooperative efforts? Mr. Slocombe. It is a very high priority. It is one of the ones that we focused on. The obvious place if you want to steal a bomb, do not steal the contaminated fuel rods from a wrecked reactor. Go find a bomb and steal the bomb. That is what we worry about. And we have been working with the successor regimes and with Russia to keep the control over their nuclear materials. The most important accomplishment, which if you look back on it, is quite remarkable is when I came into the Government in 1993, the Ukraine, Belarus and Kazakhstan, all had nuclear weapons. Not nuclear materials, nuclear weapons--missiles, bombs, airplanes. Those are now all removed from those countries. That is a major accomplishment in terms of keeping control over the successor nuclear material. Some of them, most of them were dismantled, some went back to Russia. We have been providing funding, technical assistance, and support for the dismantling of Former Soviet nuclear weapons and also for improving the safety and security of the nuclear weapons that they still retain and of the, you know, research reactors, power reactors, safety and control procedures and so on. Some of it is done by the Department of Defense and some is done by the Department of Energy and some of it is done internationally. The Germans have put a lot of money into these programs. So, it is a very high priority and it is also one of the areas where we have good cooperative relations with the Russian military. General Haberger, who is the commander of the strategic command, has had a series of visits between his people and his Russian counterparts working on the problem of assuring the safety and security of the Russian nuclear weapons and nuclear materials. It is a very high priority and a very high concern. We have also worked---- Mrs. Kaptur. Do you have, personally you have a high level of confidence then in what we have done to date---- Mr. Slocombe. I have a high level of confidence but the problem is so serious that you want to have a very, very high level of confidence. This is a problem on which 99 percent assurance is not good enough and we are working to get that 99 percent up higher and higher. Some of the other things we are doing just to explain. John should talk about the export control effort. We have, for example, you may remember a thing called Project Sapphire, where we took some nuclear material that was in one of the Central Asian republics under conditions we thought were inadequately safe-guarded and got that out of the country so it was not available to be picked up by the wrong people. This is a very high priority for the United States Government, including for the United States military. Mrs. Kaptur. Are those facilities, not having visited any of them, are those facilities guarded? The Russian military, the Ukrainian military, the---- Mr. Slocombe. This is an area where the United States and Russia have an exact commonality of interest. The Russians have even less desire to have somebody steal their nuclear weapons and nuclear materials than we do because they are more likely to be stolen by Chechneyans or something like that than by people who would be an immediate problem for us. And, so, it is something where we work very closely with the Russian Government and it is a very high priority for the Russians. The Russian military is in a terrible mess. But they have very wisely continued to give top priority to funding and paying and providing for the safety of their nuclear weapons. Mrs. Kaptur. What worries me is when you see people who work in these plants march on Moscow because they have not been paid in nine months or more. And the economic pressure is so great on many families that, you know, you cannot guarantee what any one individual will do. I guess because I am a lay person I am not quite as confident as you are at the permutations and combinations that can result in mischief. And I will tell you what also did not build confidence in me is when I had to see these nations begging one another up at the UN to raise $30 million or something for another sarcophagus on that Chornobyl facility, I was thinking, you know, I thought we already did that. You know, I thought how much does the world really know about how to contain this and I am sort of afraid to even ask the question, but I guess I am not quite as comfortable as you are not having all the details. Mr. Slocombe. Well, and as I say, I think I probably have a reasonably high level of comfort but I know that there are enough--this is so important that it--we have what we call in the American nuclear business, one-point safety. That is the probability that this is safe has to be one-point-zero, not point 999999 something. And anything less than that, if you are at anything less than one-point-zero assurance in this business, you should keep working on it. If I may say, it is one of the reasons why it is so much in our interest to continue things like the non-nuclear program, the cooperative debt reduction program even when we have other problems with the Russians that this is not something that we are doing to be nice to the Russians. This is because we do not want this system to fall out of control. And it also is very much a lever on what the Russians spend money on. The amount that the Russians spend on the safety and security of their own nuclear weapons is vastly larger than what we provide. But this provides a window into what is going on, and it helps us have assurance that the standards that they are working towards are secure. nis Mrs. Kaptur. I am sure that Mr. Obey has some questions but if I could just say that if you could use your influence in whatever that might be, if we look at the prostitution slave trade that is occurring now in the NIS going to countries like Israel, if there is any pressure that can be brought to bear to get at the people who are doing this, and it is not just you and DoD but it is AID in a lot of these other places, to get information out to people through television to the girls, I am saying and to the villagers, because a lot of them really do not know what is happening. This is a priority of the First Lady, I know. But a lot of the so-called recipient countries are hosts to what is happening. I said, well, maybe all these genius intelligence people are letting it go to Israel because Israel is our friend. And, therefore, if we are going to catch the thugs, that is a better place to find them. I do not know. That is trying to put a good face on it. But it seems to me that because of our inability as a world to deal with democracy building, we have got people who are being treated as chattel as we are almost in the 21st Century and somehow the military has got to use some of its power to get attention of this at the highest levels and help to stop it and apprehend those involved in it. And I would just encourage you within the executive circles that you deal within over there at the Administration to talk about this and try to get a more coherent effort underway to stop it. Mr. Slocombe. That is a very good point and I will take that very seriously. Mr. Yates. We have a few mobs in Russia, have we not? Mr. Slocombe. The problem of organized crime in Russia is very, very serious. Mr. Callahan. Mr. Packard and then Mr. Obey. I am going to go vote in the interim. Mr. Packard. If this question has been asked of all of you then I apologize but last year we fixed our assistance to Russia based upon, at least in part, upon them withholding sending nuclear weapons to Iran. And that was based upon certification by the President. Do you anticipate that the President will be able to certify? Mr. Holum. Fifty percent of the funds still have been withheld from obligation because the waiver has not been exercised. And the President has not yet decided on the outcome. This is an issue that will be discussed with Prime Minister Chernomyrdin by the Vice President and others during Gore/Chernomyrdin meetings March 9th and 10th. But I cannot prejudge what the President's decision will be. I can tell you that as of now 50 percent of the funds that were provided by the legislation are fenced and have not been obligated. Mr. Knollenberg. Would the gentleman yield. This is a question on the article that appeared in the Washington Times that is kind of relevant to what we are talking about there, which alleges that there is a continuation of nuclear materials that is moving from Russia into Iran. Do you have any comment on that article, very quickly as to its authenticity? It was 2- 23-98, so it was in the last couple of days. Mr. Holum. Yes. I have seen the article. And I cannot talk about the specifics of what the article says. It draws on intelligence sources and the answer would draw on intelligence sources and I cannot go into it. What I will say is that what has been in the press is not a full and fair account of what has actually been underway in our efforts and in the Russian response. We, particularly Ambassador Wisner and others, have been available a number of times on the Hill to come up and brief in a classified context on where we stand on this issue. We would be happy to do that if the members here want to explore that further. It is a very important issue. Mr. Knollenberg. Thank you. turkey/greece/cyprus Mr. Packard. I notice that we have not reflected any funding for Turkey or Greece. I visited those countries recently, not too recently, and I think that is a step in the right direction, frankly. Are they in agreement with that proposal? They have not shown a resistance to the refunding. Mr. Holum. We consulted with both and neither has protested. Both have accepted the decision with equanimity. Mr. Packard. Cyprus was a part of that overall equation and they are being funded by $15 million or at least that is the request. In Cyprus there is only one side of the conflict there that has participated in the bi-communal activities. What kind of problems are they running into there? We will only have one side that will be participating and there will be funding the other side? How is that, where does the $15 million go? Mr. Holum. I will have to take that question back because I do not have the information and give you a detailed response. Mr. Packard. I just do not understand how that fits into Cyprus, the realities in Cyprus relative to the Turkish versus the Greek components there. Mr. Holum. In the broader context, I would say that the graduation of Greece and Turkey from military assistance is related to, in the case of Turkey in particular, the growth of their economy, the size of their economy. Similarly with Greece, it reflects a maturing of our relationship and their ability to do without this kind of assistance. That same kind of consideration does not apply in the case of Cyprus. Mr. Packard. Cyprus, the economy of Cyprus I think is such that they also can probably give up on any assistance but maybe it is being used for student or other purposes that are not military. I presume it is. Mr. Slocombe. I will get you that. It is ESF so that it is not directly used for military. Mr. Packard. It is not for military purposes. And, thus, does not affect really the dispute between the Greek and the Turkish elements there. Mr. Slocombe. I do not know what it is. I only know what it is not. Mr. Packard. Very good. Mr. Chairman, I appreciate that. Mr. Callahan. Mr. Obey. Mr. Obey. Thank you, Mr. Chairman. nato Mr. Slocombe, let me just ask a couple of quick questions about NATO. Last year, my understanding is that the Administration came to Congress with a cost estimate for the whole ball of wax, everything somewhere between $27 and $35 billion over the next 12 years, and that the U.S. share would be less than $2 billion. And that most of the cost would be borne by the European members. This year, your testimony indicates that the budget includes an additional $13 million for FMF grants to the Warsaw Initiative for making of a new NATO invitees, ``truly interoperable with U.S. and NATO forces.'' Laying aside questions about the wisdom or the timeliness of NATO expansion, is that money accounted for in the Administration's original cost estimate? Mr. Slocombe. Yes, it is. Mr. Obey. Secondly, Defense News reported that---- Mr. Slocombe. You mean the assistance, the so-called Warsaw Initiative money, yes, was reflected in the report. Mr. Obey. So, I mean this $13 million is not in any way above your cost estimates? Mr. Slocombe. No. Mr. Obey. Okay. Secondly, in Defense News it reports that NATO's military assessment of our new members indicates that the militaries are far from reaching interoperability. What is the Administration's latest estimates for how much those three new members will have to spend on their own to achieve functional interoperability and readiness as NATO fully participant States? Mr. Slocombe. We have not made any new assessment of that issue which is what those countries will have to spend on their own forces since the estimate that you referred to about a year ago. So it is the number which it was last year. And the only way I can remember this is to say in round numbers it was $10 billion in each of the three categories so it is around that number. That is not exact but that is the order of magnitude. Mr. Obey. Okay. Let me---- Mr. Slocombe. During a period of 12 years. Mr. Obey. All right. Just one other question then. Mr. Slocombe. Those countries understand that they have a lot to do to create modern, effective militaries that are fully capable of operating with NATO. That said, they have done a lot and talked a lot about whose contributed what. Each of those three countries were among those making contributions to the coalition force for the Persian Gulf. Mr. Obey. Just one other question, Mr. Holum. On page four of your statement, you have a paragraph which relates to the PFP program of $20 million for CEDL. And you indicate that that program will enhance defense and military capabilities of Poland, Hungary, the Czech Republic and other NATO candidates to move quickly in achieving NATO compatibility by assisting in the acquisition of defense equipment such as and then you go on to list what they are. This means that we are providing additional assistance for countries that have not yet been determined to be future NATO members. If we approve this money for those countries does not that put the Congress in a position where we are slowly but surely making it inevitable of the determination that other countries will, in fact, join NATO? Mr. Holum. No. As you know no decisions have been made beyond the initial three countries. That funding has a Partnership for Peace purpose, as well as a possible NATO enlargement purpose, because there is a security connection and a value to interoperability and closer military relationships between NATO and countries that remain in the Partnership for Peace. So, I think your concern about prejudging the question is not valid. Mr. Obey. Well, I am more concerned about Congress supinely avoiding all necessary thought about whether we should be going down this road at all. And not that it will do a damn bit of good for anybody including me, but at least I want to get on the record again my view that while I generally try to be supportive of this and all administrations in foreign policy I deeply believe that the decision of the West to proceed to expand NATO is historically the most arrogant act that the West has taken since the end of World War II. I think that that decision makes more difficult the lives of Soviet reformers who want to reach out to the West and we had our own ``Who lost China'' debate which gutted sections of the State Department for years and poisoned the domestic political atmosphere in this country, led by the sickest man in Wisconsin ever sent to the United States Senate--he has a good friend there who said, good old Joe---- [Laughter.] Mr. Obey. But, it seems to me that we have helped make it more likely down the line that the forces in Russia most friendly to us will be more vulnerable to the question, ``Who Lost Central Europe'' then they would have been absent our arrogant actions. And I think we have also made it easier for the rejectionist forces in the Duma to justify their resistance to arms control treaties, and it just seems to me that Congress provided virtually no, absolutely no platforms for the discussion of this issue before the Administration and our NATO allies agreed to let the three new members in. I think that the Congress will probably have even less debate about the advisability of moving that line even further East in the future. That is why I am very reluctant to see this funding here because I think that Congress will flaccidly and uselessly sit by and simply allow this to happen without ever debating it. It serves no useful purpose for the Senate to debate the issue after the decision has been made by NATO because then we would look like damn fools if we reverse our course. But I just think this is part of an action which we will come to deeply regret and I, for one, want to be on the record again expressing my profound misgivings about what the Administration has done on this issue and what NATO, in general, has done on this issue. I find it amusing almost to the point of nausea that people wring their hands about the fact that we did not have a vote about whether we were supposed to engage in a few days of air attack on Iraq and, yet, people will not raise a single voice for a single second on Congress' obligation to debate in a full way the long-term consequences of our moving to expand NATO over the objections of the Russians. And I think it is a decision which, in the long-term, we will come to regret because it could help create, at least it makes it more likely that we will, in fact, create a resurrection of the very threat to Central Europe that we are supposedly trying to avoid by expansion of NATO. And I know that I do not expect you to even respond but I just wanted to get that in the record so that at least 10 years from now it is clear that I did not participate in the idiocy. Thank you, Mr. Chairman. Mr. Callahan. Two or three questions with respect to your budget request. One, you are requesting a $25 million increase for the Palestinians. You know, that is going to be very difficult under the circumstances until such time as an agreement is finally reached and the controversy that is taking place between the Palestinian Authority and Israel is resolved. We are going to have to come up with some strong justifications if you expect this committee to increase or even to maintain funds for the Palestinian Authority. So, I just want to forewarn you that that is going to be a problem area. haiti The second area of concern is you are asking to double the economic support assistance to Haiti. The subcommittee went to Haiti and we met with Preval, we met with the leadership, if there is any in Haiti, and we were not impressed with what we saw. We spent billions of dollars there including the military aspect of Haiti and, yet, very little has been accomplished. You have really no privatization. When we were there we met with the Privatization Committee and they told us last spring that it was just going to be a month or so before some advancement was going to be made with respect to the flour mill and the cement factory and the telephone company and still nothing has been done. Government corruption is so prevalent that nothing can be done unless some former members of the active government participates in it, and while I recognize that we must do everything we can to build that community up, by doubling the economic support to Haiti we are having to take away economic support from other needy areas in this hemisphere that really could make some significant advances. I met with the ambassador yesterday, our ambassador to Haiti, and I know that he is new on the job and none of the past problems can be attributed to him but Haiti is a country that has made no significant advancement. The government will not cooperate. They met with the military people, they are building a road in Haiti and the only thing the Haitians had to do was provide an available source of rock and gravel. And while we had hundreds of people down there to build the damn road, we could not even get the Haitians to deliver the rock. So, I mean we are getting no cooperation from the current government and they are making absolutely no advances on our demands and so we are going to tell the rest of the countries that really could make some serious advances to helping their people and their democracy building efforts and yet the Administration comes and asks for the only increase with respect to this hemisphere is to double the economic support funds for Haiti. And that gives me heartburn, I will tell you that. Maybe there is justification for it, maybe there is hope, maybe you know something the ambassador does not know, but to come and ask to double ESF and ignore the needs of other countries which pose the same threats such as Jamaica, with respect to illegal immigrants coming in here and the problems that exist in other areas in Central and South America. This committee has been insisting to the Administration to recognize the potential we have to develop partnerships and create true democracies and stop internal strife within those countries and look at the trade potential. And, yet, we are ignoring them and pumping all of our money into a bottomless pit in Haiti which has made no significant advancement that I can see from the day we first went in there. So, that is going to be a problem area for me and I think for our subcommittee. comprehensive test ban treaty The Comprehensive Test Ban Treaty, as you know, is a responsibility of Commerce, State and Justice subcommittee. And Chairman Rogers has not seen fit to fund that through his committee in as much as he says, you do not need the money yet. And we wonder if you are trying to go around Mr. Rogers, why would you make the request of this committee for the Comprehensive Test Ban Treaty when it is not our jurisdiction and when we have limited funds available for your other programs. Why would you request the monies coming from this committee rather than Commerce, State and Justice? Mr. Holum. Can I respond to those three in the order you raised them? Mr. Callahan. Yes. Mr. Holum. First, on the Palestinian increase. I want to underscore that none of the funds would go directly to the PLO or to the Palestinian Authority. This funding is concentrated on an expansion of assistance to the private sector, particularly private trade organizations and to help enterprises meet international product standards. It is also assistance, additional assistance in the water sector, which as you know, is an enormous problem on the West Bank--wastewater treatment, reuse of agricultural water and those kinds of projects. And we think this is part of a broader endeavor that is essential to the peace process and that is to build the economic constituency for peace, to give them an economic stake in resolving the dispute. There has been an economic decline in the Palestinian area where per capita income is down by one-third since 1993. So, these are really urgently needed funds. haiti On Haiti, I recognize certainly your concern about the increase. Part of the reason for this is that the political impasse in Haiti means that the international financial institutions have reduced their aid. Our approach is to bypass the government and based on some of the concerns that you have raised, to go through NGOs to reach grassroots areas. The economy of Haiti is recovering very slowly. There is no question about that. It is still the poorest in the hemisphere and per capita income in Haiti is $300 annually. And the aid does go to the poorest people. This is not funding to prop up the government. It is aimed at, in particular, building economic bases and secondary communities around the country to stop the migration into Port au Prince and to develop the economy on a more diversified basis. In terms of what the government is doing, there are some signs, I think, of positive intentions. They have passed legislation on privatization, on trade liberalization, on civil service reform. And they have, over opposition, pushed programs to privatize nine inefficient government-owned entities. And as I understand it, the state-owned flour mill, one of those nine, has now been sold. With respect to the state-owned cement company, it will be sold when the president signs the decree. So, there is some progress. I do not for a minute minimize the challenges ahead in Haiti but I think it is in our interest--recognizing the overall context of this problem and the fact that we have known for a long time that if we did not solve the problems in Haiti we would have to solve them later in the United States--that it is in our interest to stick with this program and try to build the economy outside of Port au Prince and to reach the poorest people. On the CTBT we have concluded, based on the need for significant programmatic type funds, that Preparatory Commission funding is more logically placed in the NADR account, where we have consolidated a number of proliferation related programs. Chairman Rogers did provide some funding last year. We are anxious to have the international monitoring system in place when the treaty enters into force. It is a valuable addition, even before the treaty enters into force, to our capabilities to monitor nuclear weapons related activities by other countries. This is a case where we are not just building an infrastructure, an administrative body. We are building a number of sensors around the world, some 400 sensors, seismic, hydro-acoustic, and others, that will increase monitoring of potential nuclear explosions. You may recall last August when there was a dispute about the seismic event that occurred in the Kara Sea, near the former Russian test site, the seismic stations around the region were indispensable to our ability to decide over a period of time that that was not a nuclear explosion. That is very important. That is true whether or not the treaty ever goes into effect. We want to keep pursuing the construction of the monitoring regime; it is in our own interests to do so. I understand your concerns about moving the funding. I think it makes sense to put this into the NADR account, but it is something we should obviously discuss further. Mr. Callahan. Well, it would appear to me that Chairman Rogers is going to have a better ability to increase his overall appropriations than Chairman Callahan is when it comes to 602 allocations. And since he, as you say, has already chosen to partially fund something for this Fiscal Year maybe we ought to keep it on that track and since he is more familiar with it. Maybe you ought to suggest to him that you suggested to us that we put it in ours but it might be better to put it in his. Mr. Holum. Well, I would, before doing that, prefer to consult further with you on why it makes sense to put it in your account. Mr. Callahan. Yes. Mr. Ambassador and Mr. Secretary, we appreciate especially under the circumstances, Mr. Itolum's father died last week and he has to get back to his family, which is where he should be. And let me tell you or anyone else connected with the State Department who comes before this committee that we would always consider a family crisis a priority over anything we have to do here and any time subsequent that it might happen, any of you are invited to request to delay the hearing. But thank you so much for coming, we appreciate that. Mr. Holum. Thank you, sir. Mr. Slocombe. Thank you. [Questions and answers for the record follow:] Submitted to the Department of Defense Questions for the Record Submitted by Mr. Porter e-imet for latin american Question. Has the goal of 30% of IMET spending going towards Expanded IMET (E-IMET) courses for Latin American students been met? What efforts are being undertaken towards achieving that goal? Answer. DSAA conducted a review of the Southern Command (SOUTHCOM) region in February 1998 to determine how Latin American countries were responding to this goal. We examined courses that are ``funded'' and those that are ``programmed.'' ``Funded'' means that countries have actually spent IMET allocations on courses and that these courses have already been conducted or about about to commece. ``Programmed'' indicates what training a country has selected for all of Fiscal Year '98. As of February, 13.92% of ``funded'' courses for the region were E-IMET while 36.25% has been ``programmed'' for E-IMET courses throughout Fiscal Year '98. ``Programmed'' courses and the percentage associated with them may not be achieved. We are endeavoring to meet the 30% goal by encouraging the countries to take advantage of E-IMET courses and by encouraging the use of Mobile Education Teams (METs) to provide in-country training. In a recent message to all countries in the Southern Command, we indicated priority will be given to E-IMET requests for reprogramming of IMET funds. We will continue to emphasize to Latin American countries the importance of meeting the 30% funding goal. colombia Question. What is our role, particularly from a military perspective, in fostering peace talks between the government and the guerrillas? Do our personnel in Colombia emphasize the importance of civilian authority and control over the military? Has our military encouraged the Colombian military to carry out civilian orders to apprehend members of paramilitary death squads, which are responsible for some of the most serious abuses? Answer. From a military perspective, history has shown that successful resolutions to such conflicts have generally only come about when the insurgents are under pressure to negotiate. Clearly the Colombian armed forces and police have a role to play in enforcing the rule of law and restricting the insurgency's access to drug money and pressing them to negotiate in good faith. Not only do U.S. Government personnel in Colombia emphasize the importance of civilian authority and control over the military, the recently established Center for Hemispheric Defense Studies just concluded its first three-week seminar on ``Defense Planning and Resource Management'' with attendees from Colombia as well as other nations in the hemisphere. This Center was established as a result of the first Defense Ministerial of the Americas in an effort to improve the capacity and effectiveness of civilian defense authorities charged with overseeing their nation's military forces. The training programs at major U.S. military installations also include themes related to military deference to civilian authority in its professional development programs as well as other IMET-funded training in the United States. We regularly emphasize the need for the Colombian military to make every effort to confront the paramilitary threat in Colombia, divest itself of personnel known or believed to be sympathetic to the paramilitaries, and prosecute those who collaborate with them. This was a recurring theme during the recent visit of Colombian Armed Forces Commander Gen. Manuel Jose Bonett to Washington. We note that the Colombian Army recently arrested several paramilitary members, and we will encourage the Colombians to sustain this effort. turkey--end-use monitoring Question. Will the United States continue to vigorously monitor the end-use of U.S.-issue military equipment by the Turkish military to ensure that it is not diverted from its intended purpose? Answer. The Administration will continue to monitor the end-use of U.S.-origin defense articles and services provided to Turkey, as well as to other foreign recipients, to ensure that such articles and services are used only for the purposes authorized, as required by law and regulation and with attention to Congress' particular interest in equipment provided to the Turkish military. The Administration's efforts in this regard are most recently detailed in the report, U.S. Military Equipment and Human Rights Violations, submitted to the Committees on Appropriations in July, 1997. turkey Question. Are U.S. military ties with Turkey being used towards positive resolution of long-running issues such as the Cyprus problem, overflights in the Aegean, the Kurdish separatist conflict and the Nagorno-Karabagh conflict? Answer. The U.S. enjoys close and productive relations with the Turkish defense establishment. These relations allow us to speak candidly and productively with our Turkish friends about issues of mutual concern. Tensions in the Aegean and on Cyprus, human rights issues associated with Turkey's struggle against PKK terrorism, and instability in the Caucasus and other areas are of much concern to both the U.S. and Turkey and are discussed frequently with Turkish defense officials. For example, these issues were discussed at length during the November 1997 U.S.-Turkey High-Level Defense Group. Secretary Cohen had a productive discussion of human rights and U.S. arms transfer issues with Turkish Prime Minister Yilmaz in Washington in December 1997 and when Secretary Cohen visited Turkey in April 1998. We believe that these discussions make an important contribution to ongoing efforts to reduce tensions and resolve underlying disputes between Turkey and Greece, to reinforce the Turkish government's efforts to improve human rights in Turkey, and to promote stability in the Caucasus and other troubled areas in the regions that Turkey borders. Questions for the Record Submitted by Mr. Packard nato--expansion Question. As Chairman of the Military Construction Sub-committee, I share a portion of the NATO expansion costs in my sub-committee. When the Administration calculates the overall cost of expansion, is this Sub-committee's funding included in that overall total? Answer. Yes. In the context of both the Administration's February 1997 cost report, and NATO's December 1997 cost estimate, the U.S. annual contribution to NATO common military budgets was included in the calculation. There is about $41M in DOD's FY99 budget request for direct national contributions to the NATO commonly funded Military Budget and the Security Investment Program (NSIP). When this request was finalized, none of this money was earmarked for enlargement-related requirements. (In this regard, DOD's FY99 funding request for military construction appropriations to support U.S. contributions to NSIP will total $185M. We hope to obtain your support for full funding of this request.) The U.S. expects to incur about $10M in enlargement costs in FY99, which will be met from the $412M budget request. In our recently-released Cost Report to Congress, we reported that NATO and DOD estimated that from 1998 through the first few years following the accession of new members, some or all of the costs associated with enlargement are expected to be met from within currently-planned budgets. Based on NATO's agreed cost estimates, DOD has assessed that the resource implication of enlargement for NATO's three commonly funded budgets would be $1.5B over the decade after accession, of which the U.S. national share is estimated to be abut $400M. Beginning in 2002, as the bulk of enlargement costs begin to be incurred, DOD expects that virtually all of predicted enlargement costs will have to be reflected in increased DOD budget requests for contributions to NATO common military budgets. Beyond 2003, the funding picture is less clear, because NATO only assessed the impact of enlargement on common-funded budgets in detail out to 2002. Thereafter, NATO expects that common-funded enlargement costs will peak in 2005. Considering this likely expenditure profile, DOD believes that most or all of these predicted costs will require resources above current budget levels. Questions for the Record Submitted by Mr. Yates ``leahy language''--school of the americas Question. While the ``Leahy Language'' applies to funding from our bill, what is the Administrations policy with regard to DoD programs? Answer. Section 570 of the 1998 Foreign Operations, Export Financing, and Related Programs Appropriations Act (P.L. 105-118) applies only to programs funded through that Act. Section 570 does not apply to DoD programs funded through other Acts. the imet program Question. Could you please provide a list of the number of students from each country who took courses and the location of the courses and a description of the course? Answer. The U.S. Military Training Program consists of over 2,000 courses at approximately 150 military ``schoolhouses.'' This extensive training infrastructure is maintained primarily for the training and instruction of U.S. military and civilian defense personnel. However, this military training infrastructure may also be used to provide training to foreign military and civilian defense personnel. With a few exceptions for certain classified or sensitive courses, nearly every course available to U.S. personnel is also available to foreign students. In most cases, foreign students are incorporated into the student body and receive training alongside U.S. military personnel. Foreign student quotas for each course are requested at annual Training Program Management Review (TPMR) sessions. A foreign government may pay for training services with its own funds through a Foreign Military Sales (FMS) case or, if available to the country, it may use grant funds appropriated by the Congress under the International Military Education and Training (IMET) program. (Countries receiving grant Foreign Military Financing (FMF) funds may also purchase training through the FMS system with those grant funds.) Comparative figures for fiscal year 1997 are as follows: ------------------------------------------------------------------------ No. of $ value students (millions) ------------------------------------------------------------------------ IMET training........................... 7,994 $43.475 FMS training \1\........................ \2\ 10,743 446.869 ------------------------------------------------------------------------ \1\ Training purchases through FMS are more expensive than grant training provided under the IMET program. Since under the AECA the U.S. must recoup all costs associated with the training for foreign students via FMS, the course cost/tuition is higher. The IMET rate only covers those costs expended over and above costs associated with training of U.S. DoD personnel. Also, IMET does not fund more expensive categories of technical training, such as pilot training. \2\ This figure does not include numbers of students trained outside the CONUS through Military Training Teams (MTTs). The IMET program was established in the 1950's as a low-cost foreign policy program to provide training in U.S. military schools to military students from allied and friendly nations on a grant basis. In 1990, the Congress (in P.L. 101-513) directed the DoD to establish a program within IMET focused on: (1) Training foreign military and civilian officials in managing and administering military establishments and budgets; (2) creating and maintaining effective military judicial systems and military codes of conduct (including observance of internationally-recoginzed human rights); and (3) fostering greater respect for the principle of civilian control of the military. To comply with this directive, the DoD refined some existing U.S. training and began creating new courses (a process which continues today). This initiative became the Expended IMET (E-IMET) program. It is important to note the E-IMET is not a separate program from IMET, but is rather a classification for U.S. training programs that meet the goals of the Congressional mandate established by P.L. 101- 513. Training at courses qualifying for classification as E-IMET may be funded with grant IMET or may be purchased through the FMS system. Some E-IMET courses have been developed that are foreign-only courses; that is, they were not developed with the attendance of U.S. military personnel in mind, but were developed specifically to meet the needs of foreign students and E-IMET objectives. Examples include the International Defense Resource Management Course and the International Health Resources Management Program, and programs in disciplined military operations and the rule of law (Military Justice) and civil- military relations. E-IMET programs are also presented outside the U.S. in a host country through Mobile Education Teams (METs). METs allow large numbers of high-level officials to receive economical training in their own language and in their own country or region. In FY97, IMET sub-allocations to the military services were as follows: Army.................................................... $16,264,385 Navy.................................................... 16,245,673 Air Force............................................... 10,964,942 Breakout of training conducted in the U.S. (CONUS) and training conducted outside the U.S. (OCONUS) for fiscal year 1997: CONUS Training--$33,862,678 (77.89% of the IMET program); OCONUS Training-- $9,612,322 (22.11% of the IMET program),\1\ Travel and Living Allowance (TLA) costs represent a portion of most IMET course costs. For FY97, TLA costs were $16,917,277.\2\ --------------------------------------------------------------------------- \1\ 99% of OCONUS training is for E-IMET Mobile Education Teams (METs). \2\ TLA is primarily used for students undergoing CONUS training, but on occasion it is used for students attending a regional MET outside their own country. --------------------------------------------------------------------------- The FY97 IMET appropriation of $43.475M may be broken down into the following categories: PME, Management, and Postgraduate training at 59.50% (or $25,867,625). Technical training at 17.89% (or $7,777,678), which includes $7,390,750 for English language training (17% of the program). Mobile Education Teams (METs)/Mobile Training Teams (MTTs) at 22.11% (or $9,612,322), of which 99% ($9,516,199) is for E-IMET METs. Orientation tours at 0.50% (or $217,375). Approximately 27% of the program (or $11,681,143) was expended for E-IMET courses which were spread over all types of training. The FY98 IMET program is broken out as follows: PME, Management and Postgraduatue Training: 70%; Technical training, to include English language: 17%; METs and Orientation tours: 13%; E-IMET: 30%. We expect that the FY99 IMET program will have a similar training percentage. Due to the enormity of the FY97 IMET program (approx. 8,000 students), it would be an onerous task to provide course locations and course descriptions. Please see attachment for number of students, by country, which took IMET courses in FY97, as derived from the document entitled FY99 Congressional Presentation for Foreign Operations. In the future, the Department of Defense encourages specific questions about country IMET programs. We are happy to provide the information in writing or provide a briefing team at your convenience. [Pages 213 - 215--The official Committee record contains additional material here.] foreign military financing (fmf) pipeline Question. Why is there still so much old money in the pipeline for Foreign Military Financing? Answer. We define ``pipeline'' as being uncommitted funds, that is, the amount of monies not programmed for a specific defense article or defense service. Since the early 1960s, a total of $96,279B in FMF has been apportioned among 141 countries and international organizations. Of that amount, $751M (or 0.78%) remains uncommitted to date, and only $427M (0.44%) represents funds apportioned in FY96 and prior. Moreover, $288M of the $427M in prior-year uncommitted funds relates to loans apportioned for Greece. We do not believe a program that has been over 99% committed is under-utilized. A total of 23 countries/organizations have not received any new FMF apportionments since FY95 and five countries are restricted from using FMF (e.g., Brooke Sanctions). Question. Is that money ever transferred for other uses and what are the uses? Answer. Legally, the money could be transferred to another account/ agency as long as the funds were uncommitted, undisbursed (meaning bills have not been paid from the FMF account) and were apportioned within five years of the transfer date. (Ref: Sec 632, FAA and 31 USC 1551) In practice, however, funds have not been transferred to other accounts. Moreover, the transfer of FMF funds among countries has occurred only once: in FY94, $2.190M of FY90 funds were deobligated from Guatemala and reobligated to Bolivia. We are currently prohibited from exercising ``deob-reob'' authority (Ref. Sec 510, P.L. 105-118). Question. Can you please supply this Committee with a new estimate on FMF monies still in the pipeline? Answer. A report identifying current uncommitted FMF monies is attached. [Pages 217 - 219--The official Committee record contains additional material here.] the imet program Question. Is there a book that lists all IMET courses available to foreign students? Can you make it available to this Committee? Answer. There is no single book or publication that lists all IMET courses available to foreign students. However, the U.S. Military Services recently made available all of there course catalogs available via the Internet. The Army Formal Schools Catalog is available via the Army Training Requirements and Resources System (ATRRS) at: http:// www.asmr.com/atrrs/catalog.html. The catalog of the Navy Training Courses (CANTRAC) is available at: http://www.cnet.navy.mil/netpdtc/ cantrac. The Air Force Formal Schools Catalog, AFCAT 36-2223, is available at: http://afpubs.hq.af.mil/elec-products/pubs/af/36/ 36222300/36222300.pdf. The following attachment provides a lengthy listing of all courses that are scheduled currently for the FY98 IMET program, as of 15 March 1998. Please note that many changes (additions, deletions) will occur throughout the rest of FY98. The ``course title'' and ``military course number'' provided in the attached listing can be used to locate a course description in the course catalogs found via the Internet. [Pages 221 - 242--The official Committee record contains additional material here.] chemical weapons Question. Mr. Slocombe, last year you paraphrased Clausewitz, saying that war is the continuation of policy by other means. You also stated that it is the policy of the United States that if any country uses chemical weapons against the United States they will be met with a prompt and overwhelming response. I know that it was our public position during the Gulf War, but does that remain our position today? Answer. Yes, that remains our position today. As Secretary Cohen said to the National Press Club on March 17, ``We've made it very clear to Iraq and to the rest of the world that if you should ever even contemplate using weapons of mass destruction--chemical, biological, any other type--against our forces, we will deliver a response that's overwhelming and devastating.'' chemical weapons--deterrence policy Question. Would you assess the effectiveness of this policy as a deterrent? Answer. Effective deterrence depends on a combination of our ability to respond to threats of use of biological or chemical weapons against U.S. or coalition forces with a devastating retaliatory blow, and our ability to carry out military operations successfully, even in the face of widespread energy use of chemical and biological weapons. In deterring the threat of use of biological or chemical weapons use against U.S. or coalition forces, we depend on strong conventional military forces that are trained and equipped to operate effectively in a chemical-biological warfare (CBW) environment, and a powerful, flexible nuclear capability. Effective counterforce combined with improving active and passive defenses can deny the tactical, battlefield advantages that an adversary might otherwise perceive it could gain by employing chemical or biological weapons. We have, in fact, a broad spectrum of credible force options available. From these we can choose the appropriate option for delivering a devastating and overwhelming response to NBC use against us. chemical weapons--iraq Question. Could this type of response be applied to Iraq? Answer. Yes. We have made it very clear to Iraq and the rest of the world that if you should ever even contemplate using weapons of mass destruction--chemical, biological, any other type--against our forces, we will deliver a response that's overwhelming and devastating. security assistance Question. How can our security assistance programs help our allies to deter ``rogue nations'' from developing chemical, biological and other weapons of mass destruction? Answer. Our security assistance programs help train and equip U.S. allies to become more capable coalition partners and improve their ability to survive and sustain military operations under the threat of chemical or biological weapons. Strengthening the chemical and biological defense capabilities of our allies--including passive defense hazard avoidance, protection and decontamination equipment, as well as theater missile defense systems--enhances deterrence by denial: that is, our potential adversaries are less likely to use chemical and biological weapons in the face of strong defenses because the benefits of any such attack would be greatly reduced. The Secretary of Defense places a high priority on improving the defense capabilities of likely partners in future U.S.-led coalitions so that they can provide basing and host nation support, as well as sustain operations alongside U.S. forces under chemical or biological attack. Toward this end, the United States has undertaken discussions with regional allies in Europe, the Middle East and East Asia to improve their chemical and biological defenses. An important aspect of these discussions will continue to be the role of U.S. Security assistance programs, particularly the Foreign Military Financing (FMF) and International Military Education and Training (IMET) accounts. wmd proliferation Question. What is our first, last, and best line of defense in dealing with the proliferation of chemical, biological, and other weapons of mass destruction? Answer. The primary objective of U.S. policy is to prevent countries from acquiring NBC weapons and their delivery systems or to roll-back proliferation where it has occurred. To accomplish this objective, we utilize diplomacy, and the Defense Department contributes to U.S. efforts to prevent the acquisition of NBC weapons and their delivery systems by supporting the Department in negotiating and implementing various arms control and non-proliferation regimes, such as the Chemical Weapons Convention and the Wassenaar Arrangement. Since the dissolution of the Soviet Union, the Department's Cooperative Threat Reduction (CTR) program has assisted Belarus, Kazakhstan, Russia, and Ukraine with the elimination (or, in the case of Russia, reduction) of weapons of mass destruction and their delivery systems, proliferation prevention efforts, and the dismantlement and transformation of infrastructure associated with these weapons. Howver, we recognize that despite our best efforts, we will not be fully successful in preventing such proliferation. The goal, failing that, of the Defense Department's Counterproliferation Initiative is to deter and prevent effective use of chemical and biological weapons (CBW). We do that by posing a credible threat of swift, devastating, and overwhelming retaliation and by ensuring that U.S. and coalition forces are trained, equipped, and prepared to fight and win in a CBW- contaminated environment. Prevention, deterrence, and protection strategies are mutually reinforcing. There is no single, simple counter to chemical and biological weapons. Instead, an integrated counterproliferation strategy is required, because each component will have its limits and failings. The strategy must include attempting to stop the proliferation of threatening capabilities, increasing the risks the adversary may face for the use of NBC weapons, and seeking to deny the gains an adversary might hope to achieve. Support for international nonproliferation regimes is also an important component of U.S. policy. International cooperation that is consistent with U.S. nonproliferation objectives offers a broader base to combat proliferation. Proliferation of weapons of mass destruction and their delivery systems is not solely the concern of the United States; it is an issue that affects every nation. imet for guatemala Question. What IMET or Expanded-IMET funding was used in Guatemala in FY97? Answer. As directed by Section 567 of the 1997 Omnibus Consolidated Appropriations Bill, all of the Guatemalan IMET allocation ($205,000) was spent on Expanded-IMET (E-IMET) courses. The emphasis in E-IMET is typically placed on upper level professional military education, military justice, civil-military relations, and defense resource management. In FY 97 the following E-IMET courses were provided to Guatemalan students: Civil Military Relations (Mobile Education Team [MET] in Guatemala); Company Grade Officer Professional Development Course; Defense Resource Management MET (in Guatemala); Legal Aspects of Military and Peace Operations; Managing English Language Training; Phases I and II of the Military Justice MET (in Guatemala); The Rule of Law and Disciplined Military Operations MET (in Panama). Two American Language Courses were offered in FY97 to one student. While not specifically E-IMET courses, they were critical to establishing an English language laboratory in Guatemala. This laboratory will enable Guatemala to send English-language proficient students to the United States and give them a wider variety of E-IMET courses from which to choose. (Spanish-speaking only students are limited to E-IMET courses provided at the School of the Americas.) The two American Language Courses included discussion of topics which are E-IMET objectives (i.e., human rights, civilian control of the military, reading the U.S. Constitution and the Bill of Rights, as well as other literature that educates students in the democratic process.) The 1998 Foreign Operations Bill continues to restrict Guatemala to E-IMET coursework. Questions for the Record Submitted by Ms. Pelosi cooperation with pakistan Question. How many official military visits and joint military exercises have occurred between the U.S. and Pakistan? Answer. During FY96 and FY97, the following official military visits occurred between the U.S. and Pakistan: GEN Peay, CINCCENTCOM, 23-26 May 96; LTG Arnold, CDR ARCENT, 18-23 Jul 96; GEN Peay, CINCCENTCOM, 18-20 Jan 97; VADM Fargo, CDR NAVCENT, 18-19 Mar 97; GEN Ralston, VCJCS, 14-16 Jul 97; GEN Peay, CINCCENTCOM, 20-22 Jul 97; LTG Franks, CDR ARCENT, 5-8 Aug 97; VADM Fargo, CDR NAVCENT, 27-29 Aug 97. Joint exercises: With the implementation of the Pressler sanctions and DESERT SHIELD/DESERT STORM, the U.S.-Pakistan exercise program was suspended during the period 1990-1992. Since the suspension, the following joint military exercises were conducted between the U.S. and Pakistan: ---------------------------------------------------------------------------------------------------------------- Exercise Dates Type Remarks ---------------------------------------------------------------------------------------------------------------- INSPIRED SIREN 93-2.................. unknown................ SURFEX................. note 1 INSPIRED VENTURE 93.................. 7 Feb-7 Mar 93......... SOF FTX................ note 2 INSPIRED VENTURE 94.................. 1-31 Jan 94............ SOF FTX................ note 2 INSPIRED ALERT 94-1.................. 26-30 Jan 94........... AIREX.................. note 3 INSPIRED SIREN 94-1.................. 30 Jan-2 Feb 94........ SURFEX................. note 1 INSPIRED ALERT 94-2.................. 11-17 Mar 94........... AIREX.................. note 3 INSPIRED SIREN 94-3.................. 21-25 Aug 94........... SURFEX................. note 1 INSPIRED SIREN 95-2.................. 11-15 Mar 95........... SURFEX................. note 1 GAMBOL VENTURE 95.................... 1-31 Apr 95............ SOF MTT................ note 4 INSPIRED SIREN 95-3.................. 14-18 Mar 95........... SURFEX................. note 1 INSPIRED ALERT 95-3.................. 27-31 May 95........... AIREX.................. note 3 INSPIRED VENTURE 95.................. 13 Jul-15 Aug 95....... SOF FTX................ note 2 INSPIRED ALERT 95-4.................. 26-30 Aug 95........... AIREX.................. note 3 INSPIRED GAMBIT 95................... 17-30 Sep 95........... FTX.................... note 5 INSPIRED ALERT 96-1.................. 13-17 Jan 96........... AIREX.................. note 3 INSPIRED ALERT 96-3.................. 26-30 May 96........... AIREX.................. note 3 INSPIRED SIREN 96-2.................. 14-18 Feb 96........... SURFEX................. note 1 EAGER DANCER 96...................... 2-26 May 96............ JCET................... note 6 INSPIRED SIREN 96-3.................. 26-30 Jun 96........... SURFEX................. note 1 INSPIRED VENTURE 96.................. 4-23 Aug 96............ SOF FTX................ note 2 INSPIRED ALERT 97-1.................. 18-22 Feb 97........... AIREX.................. note 3 INSPIRED SIREN 97-2.................. 4-9 Apr 97............. SURFEX................. note 1 INSPIRED GAMBIT 97................... 6-22 Jun 97............ FTX.................... note 5 INSPIRED UNION 97.................... 7-12 Aug 97............ SURFEX/AIREX........... note 7 ---------------------------------------------------------------------------------------------------------------- Note 1. INSPIRED SIREN is a surface exercise conducted between U.S. and Pakistani navies and normally conducted two to three times a year. INSPIRED SIREN normally includes two Pakistani destroyers and one to two U.S. ships. Note 2. INSPIRED VENTURE is a special operations field training exercise conducted between U.S. and Pakistani SOF forces (Army and Navy). Note 3. INSPIRED ALERT is a naval air exercise conducted between USN and USMC fixed wing aircraft and Pakistani Air Force. Note 4. GAMBOL VENTURE was a one time SOF MTT that trained Pakistani SOF on static line and free fall jumping. Note 5. INSPIRED GAMBIT is a ground FTX conducted between a U.S. light Infantry company and a Pakistani conventional Army battalion (-). Note 6. EAGER DANCER is a Joint Combined Exchange Training (JCET) conducted between U.S. and Pakistani SOF. Note 7. INSPIRED UNION is the exercise name when INSPIRED SIREN and INSPIRED ALERT are conducted simultaneously. Questions for the Record Submitted by Ms. Kaptur bosnia Question. How much money has the U.S. expended to date from all accounts for Bosnia-related activities? Answer. The incremental costs of DoD participation in operations in and around the Former Yugoslavia, predominately Bosnia, totaled $2.5 billion for FY 1996 and $2.3 billion in FY 1997. The current projection for FY 1998 through June is approximately $1.6 billion. These Bosnia costs cover the preparation, deployment and sustainment of U.S. forces, as well as the costs associated with enforcement of the no-fly zone over Bosnia, and support of other UN observer related missions in the AOR. Incremental costs totaling $347.4 million in FY 1995, $292.0 million in FY 1994, $138.8 million in FY 1993, and $5.8 million in FY 1992 were incurred by the DoD to support humanitarian related mission in, and aircraft operations over, the Former Yugoslavia. The Department of Defense only has oversight and visibility for the DoD related programs being executed in Bosnia by other government agencies, including State and AID. We are informed by the listed agencies that their expenditures in Bosnia are as follows: [In millions of dollars] ---------------------------------------------------------------------------------------------------------------- Fiscal year-- ------------------------------------------------------- Est. Est. 1992 1993 1994 1995 1996 1997 1998 1999 ---------------------------------------------------------------------------------------------------------------- State/AID............................................... 47 343 387 181 641 448 405 382 ---------------------------------------------------------------------------------------------------------------- Question. How much have other nations expended? Answer. There is no source of information to answer this question as it applies to military costs. Different accounting systems and rules make it virtually impossible to accurately report other country expenditures in Bosnia. Additionally, most countries are reluctant to openly report their military expenditures. This has been a continuing problem due to disclosure issues, accounting practices, and the lack of a common accounting baseline. NATO, GAO, DOS, OMB, DoD Comptroller, and the Joint Staff were all contacted to address this issue; no one was able to address the issue of foreign military expenditures in Bosnia. Question. What percentage of all troops deployed in Bosnia are U.S. forces? Answer. The following chart depicts current contributions to SFOR from all contributing nations: MND (N) (U.S. Sector) Denmark: 1,000 (2.83%)--Mech Infantry Battalion in Nordic Brigade. Estonia: 41 (.116%)--Infantry Platoon in Danish Battalion. Finland: 341 (.968%)--Mech Battalion. Iceland: 6 (.017%)--Security. Latvia: 39 (.110%)--Infantry Platoon in Danish Battalion. Lithuania: 40 (.113%)--Infantry Platoon in Danish Battalion. Norway: 615 (1.74%)--Infantry Security Co.-SFOR HQ Battalion-Nordic Brigade. Poland: 400 (1.13%)--Mech Infantry Battalion in Nordic Brigade. Russia: 1,400 (3.97%)--Airborne Brigade. Sweden: 480 (1.36%)--Mech Infantry Battalion in Nordic Brigade. Turkey: 1,520 (4.31%)--Mech Infantry Brigade. United States: 8,500 (24.13%)--1st Armor Division MND (SE) (French Sector) Egypt: 270 (.766%)--Mech Infantry Battalion in French Brigade. France: 2,500 (7.09%)--French-German Brigade. Ireland: 50 (.141%)--MP Company, SFOR HQ. Italy: 1,790 (5.08%)--Mech Infantry Brigade. Jordan: 10 (.028%)--Special Forces Contingent. Morocco: 650 (1.84%)--Infantry Battalion in Italian Brigade. Portugal: 320 (908%)--Airborne Battalion in Italian Brigade. Spain: 1,550 (4.40%)--Mech Infantry Brigade. Ukraine: 380 (1.07%)--Mech Infantry Battalion. Germany: 2,470 (7.01%)--French-German Brigade. MND (NW) (UK Sector) Bulgaria: 30 (.085%)--Engineering Construction Platoon, Attached to Netherlands Battalion. Canada: 1,250 (3.54%)--Mech Infantry Battalion. Czech Republic: 640 (1.81%)--Mech Infantry Battalion. Malaysia: 925 (2.62%)--Mech Infantry Battalion. Netherlands: 1,080 (3.06%)--Mech Infantry Battalion United Kingdom: 5,000 (14.19%)--7th Armored Brigade. Multinational combat support elements--SFOR logistics command Albania: 40 (.113%)--Attached to German Brigades below. Austria: 230 (.653%)--Transportation Co. in Beluga Battalion. Belgium: 50 (.141%)--Support Element. Germany: 850 (2.41%)--Logistics, Medical, Transport Brigade Battalion, Engineering Battalion, Aviation Regiment (these numbers are reflected in the Germany totals above). Greece: 210 (.596%)--Transportation Co. in Beluga Battalion. Hungary: 255 (.724%)--Engineering Battalion. Luxembourg: 18 (.051%)--Transportation Platoon in Greek Co. Romania: 200 (.567%)--Engineering Battalion. Commonwealth nations contributing to United Kingdom total Australia: 5 (.014%)--Part of Armored Brigade. New Zealand: 8 (.022%)--Part of Armored Brigade. South Africa: 3 (.008%)--Part of Armored Brigade. Other Slovenia: 50 (.141%)--Security forces based in Slovenia. The final size of the follow-on force is being determined by the NATO force generation process that is on-going at this time. Question. What is the percentage of troops deployed by other nations? Answer. Percentages of troops deployed by nation are listed in the previous answer. nato Question. With future expansion of NATO, can you tell me if our European allies have increased their contributions to aid in this effort. Answer. We are confident that our European allies will pay their fair share of the costs of NATO enlargement. Our confidence is based on an established track record of nearly fifty years during which our allies consistently fulfilled their NATO financial obligations. We are further encouraged by the fact that NATO political leaders, both in Madrid and in Brussels acknowledged that there will be costs associated with NATO enlagement, and confirmed their nations' willingness to meet these costs. Questions for the Record Submitted by Mr. Torres school of the americas Question. How does DoD and the School of the Americas intend to track the career of SOA graduates? Answer. It is not administration policy to track the careers of the attendees at any U.S.-sponsored training, including attendees of the U.S. Army School of the Americas. U.S. country teams will vet thoroughly all candidates according to U.S. State Department guidance and maintain these background checks for 10 years. The Administration recently reported to Congress on careers of some students that had achieved prominence after taking courses at the U.S. Army School of the Americas, and we anticipate this type of information will continue to be available. Question. How do the Defense Department and the SOA intend to track the careers of SOA graduates to understand the impact of training on human rights? What sources will be used? How actively will this kind of evaluation be pursued? Answer. It is not Administration policy to track the careers of the attendees at any U.S.-sponsored training, including attendees of the U.S. Army School of the Americas. U.S. country teams will vet thoroughly all candidates according to U.S. State Department guidance and maintain these background checks for 10 years. The Administration recently reported to Congress on careers of some students that had achieved prominence after taking courses at the U.S. Army School of the Americas, and we anticipate this type of information will continue to be available. Question. The November 1997 DoD Inspector General's report mentioned that the SOA was still, at the time of the report, circulating a list including 40 outdated manuals for sale to Latin American militaries. Four were military intelligence manuals. Can you make those four available to me? Answer. All 40 of the outdated manuals discovered during the Inspector General's visit were immediately destroyed and are no longer in possession of the School of the Americas. We, therefore, are unable to make the four manuals available. Question. The Defense Department has stated that the SOA has added an additional human rights course, ``Human Rights Train the Trainer''. How was this curriculum developed? What are the requirements for teachers of this course? Please provide a copy of this curriculum. What students are currently enrolled in this course? Answer. The Human Rights Train the Trainer Course was developed in 1997 to fill the specific needs of nations who need qualified trainers with an expertise in Human Rights training. The course combines the Instructor Training Course curriculum with the Human Rights Awareness training to provide students with the ability to competently present instruction based on Human Rights scenarios. In 1997, the course was validated in Paraguay by teaching twelve students during the course of a Human Rights Exchange Seminar. The course uses as its principal source documents, the U.S. Army field manual, FM 27-2, Conduct in Combat Under the Law of War and the U.S. Army's Staff Judge Advocate's Handbook. The Human Rights portion of the course is taught by a School of the Americas Staff Judge Advocate, an U.S. Army Lawyer, and the School Chaplain, an ordained minister. The technical aspects of instructional techniques are taught by the instructors of the SOA Instructor Training Course. A copy of the curriculum is attached. We have had no requests for attendance at this course in FY98. [Pages 249 - 251--The official Committee record contains additional material here.] Question. The certification report provided to our subcommittee, as well as many previous references by the Defense Department and the SOA, state that the training manuals used at the SOA which advocated human rights abuses contained only ``24 inappropriate or vague statements inserted throughout six publications (1,100 pages) that were otherwise completely consistent with U.S. law and human rights policy.'' Who made this determination that all but 24 passages of these manuals are (un)objectionable? What criteria were they using to evaluate the manuals? Answer. During its 1991/1992 investigation regarding improper material in Spanish-language intelligence training manuals in use in the U.S. Southern Command area of responsibility and the School of the Americas, the Assistant to the Secretary of Defense for Intelligence Oversight (now the Special Assistant to the Secretary of Defense for Intelligence Policy) directed a review of the seven training manuals, totaling 1169 pages, that reportedly contained objectionable language. The review was carried out by numerous U.S. Army language-qualified subject matter experts working independently of one another. Their conclusions were reviewed and certified by U.S. Army legal officials. The review concluded that five of the seven manuals contained two dozen short passages which contained material that could be interpreted as to not be consistent with U.S. government laws, regulations, and policy as articulated in: 1949 Geneva Convention, Articles 3 and 18; Title 18 United States Code (USC), Sections 872 and 875; Title 22 USC, Sections 2304(a)(3), 2347b and 2349 aa-1; Executive Order 12333, paragraph 2-11; and DoD Directive 5240.1-R, procedures 2, 3, 4. Question. A directive was supposed to be issued to ensure that no foreign military intelligence training materials used at the SOA or anywhere else advocate human rights abuses. What is the status of this directive? If it is finalized, please provide a copy as well as an explanation of how such a directive will be distributed, explained and implemented to all relevant agencies. Answer. On 27 August 1992, the Assistant Secretary of Defense for Command, Control, Communications and Intelligence issued a policy memorandum entitled ``DoD Policy on Intelligence and Counterintelligence Training of Non-United States Persons'' to the Secretaries of the Military Departments, the Chairman of the Joint Chiefs of Staff, and the Directors of the Defense Intelligence Agency and the National Security Agency. In its Evaluation Report on Training of Foreign Military Personnel--Phase I (Report Number PO 97-007 dated 21 February 1997) the DoD Inspector General recommended that the policy memorandum be reissued as a DoD Directive. That Directive is currently being coordinated and it is expected to be published later in 1998. A copy of the Directive, along with the plan for dissemination, will be provided once it is signed. Question. In the Army's SOA certification report received in January, on page 34-37, is a list of the graduates of the School who currently hold various positions of prominence in their respective countries. Specifically, who is the Army referring to, can you please attach names to the titles supplied in these pages? Answer. A list of the names of those prominent former students and their titles referred to in the Army's SOA certification is attached. [Pages 253 - 256--The official Committee record contains additional material here.] u.s. military training Question. There has been an increase in U.S. military assistance to Mexico, primarily for counternarcotics training. Is there any end-use monitoring with regard to the activities of the Mexican Army personnel trained by the U.S. Government? Is there end-use monitoring of the UH- 1H helicopters transferred to Mexico? Answer. DoD provides counternarcotics training to individuals who serve in a variety of assignments upon their return to Mexico, and they are further assigned periodically thereafter to a wide variety of jobs. As a practical matter then, it is impossible to monitor those individuals. However, there is a UH-1H End-Use-Monitoring agreement with Mexico. On a bi-monthly basis, pursuant to this agreement negotiated by the U.S. Embassy and the Government of Mexico (GOM), the Mexicans provide the U.S. Military Liaison Office (MLO) a summary of their use of the 73 UH-1H helicopters that DoD provided to the Mexican Secretary of National Defense under authority of the Foreign Assistance Act. In addition, the MLO conducts quarterly visits to installations where these aircraft, pilots, and maintenance personnel are located to check aircraft, to interview personnel, and to verify and corroborate information. Question. Who are the foreign officials trained by the Special Operations Forces? Answer. The majority (80 percent) of Special Operations Forces (SOF) training missions focus on the junior, tactical-level leadership (Captain and below) of the host nation armed forces and counternarcotics forces. Larger SOF exercises (2-3 per quarter) also incorporate the Battalion and Brigade level leadership (Lieutenant Colonel/Colonel level). During some Humanitarian Civic Action (HCA) missions and the Counterterrorism Enhancement Program (CTEP), the host nation national-level civilian and military leadership is also included. Question. What are the counternarcotics operation that SOF have carried out? Answer. None. SOF have not directly participated in any counternarcotics operations in Latin America. DoD policy specifically precludes such involvement by any DoD personnel; personnel are not authorized to accompany U.S. or host nation law enforcement forces on actual field operations or, during the course of their activities, intentionally expose themselves to situations where hostilities are imminent. SOF have conducted counternarcotics training at various locations in Latin America and in the United States. Question. What are the ``miscellaneous other-than-war activities'' that SOF have carried out? Answer. SOF activities include providing training and logistical support to the Organization of American States' deminining program in Central America (MARMINCA) (1995 to present). SOF continues to provide the U.S. peacekeeping contingent assigned to the Military Observer Mission Ecuador-Peru (MOMEP) formed following the February 1995 Peru- Ecuador border conflict. SOF provided camp coordinators and security support to the Cuban Displaced persons (10,000) during Operation SAFE HAVEN in Panama (Sept. 94-Feb. 95). During UPHOLD DEMOCRACY, Haiti, SOF teams deployed to rural towns throughout Haiti to provide stability to local communities. Following Operation JUST CAUSE, Special Forces teams provided that same stability to rural Panama in Operation PROMOTE LIBERTY (1990-91). SOF is also prepared to conduct and assist in Disaster Relief, Non-Combatant Evacuation and Search and Rescue missions. Recently (Feb. 98), for example, SOF deployed 18 personnel and 2 MH60 helicopters to Costa Rica to rescue an American citizen who had been lost four days in the jungle. Question. What are the ``direct actions'' that SOF have recently carried out? Answer. Operation JUST CAUSE in Panama (Dec. 89) and Operation UPHOLD DEMOCRACY (Sept. 94) were the recent SOF direct actions. During H-Hour of JUST CAUSE, SOF elements serviced 20 targets in support of the larger invasion force, The Ranger Battalions conducted Airborne Assaults into the two principal targets of Torrijos/Tocumen Airport and Rio Hato Airfield. During UPHOLD DEMOCRACY, SOF elements secured Haitian military and Police bases and disarmed Gen. Cedras' forces. Question. What paramilitary forces have recently been (during this decade) and/or are currently being trained, advised, or helped by SOF? Answer. Special Forces trainers in El Salvador helped establish the Civil Defense training school (1984-91). SOF filed advisers ensured that Civil Defense units were properly supported. The Costa Rican Rural Frontier Police receive training though the JCET (Joint Combined Exchange Training). The training focuses on land navigation and patrolling. Rural Counternarcotics police units in Colombia, Ecuador, Peru, Paraguay, and Bolivia are trained by Special Forces units. These police units have the primary counternarcotic role in their country. These units need light infantry skills to succeed in their missions. Latin American national terrorist response forces, some of which are police units, do participate in counterterrorism enhancement and interoperability exercises with U.S. special operations forces in order to heighten the respective host nation's ability to assist in the protection of official USG personnel and facilities. other security assistance Question. What U.S. security assistance is being provided to which countries through channels not covered by the Foreign Operations Act? Please differentiate between training and the provision of goods and specify what those channels are. Answer. Security assistance, as defined by Section 502B of the Foreign Assistance Act, is funded solely through the Foreign Operations Appropriations Act. Of course, the U.S. engages numerous countries in cooperative programs other than security assistance. We are happy to provide a briefing team to address specific countries and relevant programs at your convenience. Submitted to Department of State Questions for the Record Submitted by Mr. Porter guatemala Question. Given the delicate peace process in Guatemala and the vital importance of ending impunity for human rights abuses in maintaining that peace, will Guatemala continue to be limited to expanded IMET courses only for fiscal year 1999? Is Guatemala able to purchase regular IMET courses for its students? Given the apparent inability of the civilian authorities to deal with these problems, what steps--beyond asking for information from these same civilian authorities--are being taken to ensure that persons who have been involved with human rights abuses--past or present--are not permitted to participate in IMET training? Answer. Currently, Guatemala is legislatively restricted to expanded IMET only. Because the Guatemala peace agreement remains tenuous, the training regimen should continue to focus on expanded IMET courses. However, we believe Guatemala would reap greater benefits if it had access to the full range of courses offered by the IMET program. Over the past year, the Department has worked with DoD to put in place more comprehensive, fail-safe procedures to guard against participation by individuals who have been involved in activities such as human rights abuses, drug trafficking, and corruption and other behaviors that would render them ineligible. Accordingly, more definitive guidance was provided to training program managers in Latin America which specifies the criteria to be used in screening nominees and requires long-term monitoring and record keeping on graduates. We are confident that this additional emphasis on the screening process will ensure the continued integrity of all our training programs. Question. How successful have efforts to enhance donor participation in the Clarification Commission been? Answer. The Historical Clarification Commission of Guatemala (HCC), charged with investigating human rights abuses that occurred during the internal conflict, had its mandate expanded by two months, brining it to a year. The HCC expects to issue its final report by the end of July 1998. The USG is proud to have contributed $1 million to support the HCC in its goal of helping Guatemalans come to terms with the past and reinforcing the peace process. Additionally, the USG has declassified and turned over approximately 3,000 pages of official documents to the HCC. The total budget for the HCC is $7.7 million. When the HCC recently appealed for international help to make up its $1.9 budget deficit, it received pledges from Austria and Holland to bring the projected deficit down to $1 million. The USG is in the process of making an appeal to several European allies and the European Union to bridge this budget gap. colombia Background. Despite recent dramatic increases in the portion of the counter-narcotics budget under our jurisdiction, the flow of illegal drugs into the United States has been virtually undiminished and the use of drugs among America's young people continues to occur at high rates. Cheap, extremely high quality heroin and a new generation of amphetamine-based designer drugs are readily available to our young people. In Colombia--a key supplier nation--coca cultivation is actually up this year, despite increased efforts by the Colombian government and the U.S. government. In addition, Colombia is currently facing one of the worst human rights crises in the region due to the deadly mix of counter-insurgents, violent drug traffickers and paramilitary forces--often acting with government knowledge or cooperation. By focusing on a military solution to the war on drugs, the U.S. inadvertently reinforces a belief that military institutions, rather than civilian ones, are the most important ones in Colombia. Question. How does our approach towards assistance to Colombia seek to deal with the underlying issues of state-sanctioned violence, impunity and systemic poverty that create an environment where the drug trade flourishes? In particular, do we have a holistic approach to Colombia that includes support and training to assist the judiciary in dealing with political and drug-related human rights abuses in a fair and systematic manner, as well as elements which reinforce civilian rather than military solutions to Colombia's problems? Have positive reinforcement programs, such as crop substitution, received increases proportional to other elements of our counter-narcotics efforts in Colombia and the region? Answer. Our efforts in Colombia are focused both on counternarcotics assistance and democratic institution building, to help Colombia develop the infrastructure it needs to address the many serious problems it faces. Our counternarcotics program aims to meet the US national security objective of reducing the flow of illegal drugs into the United States, but it also benefits our other objectives. Counter-drug programs erode a primary source of financing for Colombia guerrillas' violent terrorist acts, limiting their ability to commit such acts over the longer term. On human rights, US pressure on the Colombian government for reform has helped lead to: a significant drop in reported abuses committed by Colombian security forces; legislation to reform the military justice system; and the arrest of paramilitary leaders and Army members accused of collaboration. In addition, we signed an End Use Monitoring agreement with the Colombian government in 1997 to ensure that no US assistance is provided to security forces whose members have committed gross violations of human rights, unless we can determine that the Colombian government is taking appropriate measures to investigate and prosecute the offenders. Other US initiatives to strengthen Colombia's civilian structure include Administration of Justice programs to train investigators and prosecutors in more efficient processing of casework; and support of Colombia's private sector, which is in the forefront of Colombian society in lobbying for government reforms. Our programs in Colombia do not at this time include crop substitution. In our judgment, conditions in Colombia are currently not appropriate for a successful program. For a program to succeed, the Government of Colombia must have the area proposed for the project under its firm control. Local leadership must also be capable of providing effective support for the program. We recognize the value of alternative development as part of an overall counternarcotics strategy, and hope to establish such a program when conditions permit. In the meanwhile, Colombia is a beneficiary of the Andean Trade Preference Act, which grants duty-free access to the US market for a variety of non-traditional Colombian agricultural products. Colombia uses this program, particularly in the cut flower industry, to develop these sectors as employment alternatives to the drug trade. Finally, we note that the President's February 26 decision to grant Colombia a vital national interests counternarcotics certification will lift the restrictions on assistance programs which had been imposed by decertification. OPIC, EX-IM, and TDA funding can now resume for, inter alia, infrastructure development, and the US is no longer required to vote against loans to Colombia in the multilateral lending institutions. cambodia Background I am also pleased to see the Administration making an expanded commitment to efforts to eliminate the deadly scourge of landmines and unexploded ordnance which continue to endanger civilian populations long after a conflict has ended. Last year, when I sought to gain additional funds for the Cambodian Mine Action Center (CMAC) to expand their excellent work in mine removal and education, I was told that the well-developed program there had virtually reached the limits of the assistance that could be provided under the training-oriented program that was in place. Question. Will the increased resources in the NADR account for demining make it possible to expand into providing more--both quantitatively and qualitatively--advanced technology and equipment to organizations such as CMAC, which have reached their training capacity but not their operational capacity? If yes, what procedures are in place or will be implemented to ensure that these cutting-edge technologies will be made available to those countries where they are most seriously needed and can be used most effectively? Answer. The Cambodia program is considered one of the most successful. The Cambodian Mine Action Center (CMAC) is a Cambodian organization that actively manages landmine clearance activities in Cambodia. We are requesting additional resources in the NADR account to expand the concept to other country programs, and to sustain ongoing programs in countries such as Cambodia. NADR funding to sustain the Cambodia program is used to purchase equipment according to the priorities of CMAC. To date, CMAC has requested standard equipment from the U.S. in order to field additional demining platoons. As new and more effective technologies become available, CMAC continues to review and evaluate those new technologies that are best suited to the Cambodian landmine problem. The Department of Defense and other organizations continue their work to develop and test promising technologies in actual mine-affected countries. This operational evaluation not only heightens awareness of developing technologies, but also assists in removing mines in the process. However, the humanitarian standard of landmine clearance requires that all landmines be removed; this level of reliability will be essential in any further technological development for humanitarian demining. Technology provides a tool box of options for mine clearance which differs from mine-affected country to country. The President's Demining 2010 Initiative, announced by the Secretaries of State and Defense last October 31, is designed to accelerate global humanitarian demining operations, including landmine survivor assistance, to eliminate the threat to civilians of anti- personnel landmines by the year 2010. This initiative aims to gain consensus on international coordination for research and development of demining technologies. Question. Will any of the funds available for this account be used to accelerate research and development of technologies? Answer. Consistent with the basic objectives of Congress in appropriating these funds, funds in the NADR account are used to establish and sustain actual indigenous operational demining programs in mine-affected countries to remove landmines from the ground. Technological research and development are conducted by the Department of Defense with DoD appropriated funds. Question. I anticipate that there will be substantial cooperation between the Defense and State Departments on this issue. Can you provide us with detailed information about the mechanism for ensuring that the efforts of the two departments will be coordinated so as to facilitate maximum utility of the available funding? Who will be responsible for setting priorities and designing expanded programs? Answer. The U.S. Government Humanitarian Demining Program functions under the auspices of the Interagency Working Group (IWG) for Humanitarian Demining, charied by the State Department. The Department of Defense designates the Vice Chair. I enclose a copy of a recent Congressional Report which describes in detail the coordinating mechanism. The IWG and its member agencies are responsible for setting priorities and designing expanded programs, as detailed in the report. Questions for the Record Submitted by Mr. Packard russia Question. Will the Administration be able to certify that Russia and Ukraine are not providing nuclear information and materials to Iran? Answer. The Administration is required to certify Russia and Ukraine every six months. That certification has been made in the past. We are currently in the process of making the determination required at the beginning of May. That process is not yet complete and I can not say whether the certification will be made this time. Question. Why is funding for the International Science Centers shifted from FREEDOM Support Act to the NADR account? Have these funds been effective? With all of the accusations about the leaking of nuclear technology and information from Russia to Iran, how can these merger funds compete with the open market for such information? Answer. The International Science Centers program is a nonproliferation activity and fits logically into the group of security activities funded under the NADR account. The program has been shifted to NADR in the State Department's efforts to work cooperatively with Congress to rationalize the organization and funding of these activities. The International Science Centers continues to be one of our most effective nonproliferation tools. Recent reports from our embassies in Moscow and Kiev attest to this, as do independent assessments, including the General Accounting Office and the National Research Council. If anything, programs such as this are more important now than they were when we began them. We started them as an attempt to stem an anticipated brain drain of weapons of mass destruction expertise. They performed extremely well in this respect, engaging more than 22,000 scientists and engineers in more than 600 projects over the past 4 years. In that time, the centers have become real tools of nonproliferation policy, giving us the ability to focus our resources and engagement on facilities of highest proliferation concern. Their tax and customs exempt operation also makes them an attractive venue for a variety of USG-funded programs that share the centers' overall objectives. In this case, programs of the Department of Energy and Department of Defense, for example, may conduct projects under the centers' umbrella, maintaining technical responsibility for the work done, but enjoying the tax, customs, and on-site administrative benefits of the centers. The International Science Centers are a programmatic nonproliferation tool. When dealing with an issue as vital to our security as sharing of nuclear technology with Iran or any other country of proliferation concern, the United States utilizes every means at its disposal. Interdiction is one approach; government-to- government dialogue is another; international pressure is yet another dimension. The centers' programmatic activities strongly complement these other approaches. Each addresses the nonproliferation issue from a different perspective, but the overarching nonproliferation objective is the same. Question. What does our PFP funding for Russia go toward? What about any proposed FMF funding? Why should the U.S. provide such funds for our largest competitor on the international arms market? Answer. U.S. PFP funding is used to support Russian participation in PFP exercises and other activities. FMF funding will be used to purchase non-lethal items necessary for more effective Russian participation in international peacekeeping operations. We anticipate these funds will be used for English language instruction, language labs to support this instruction and radios for troops involved in peacekeeping functions. Russian military radios are not compatible with NATO radios, a fact that has hampered our cooperation in Bosnia and in PFP exercises. These are very limited programs, both in the dollars involved and the kinds of equipment contemplated. They are aimed at ameliorating specific problem areas affecting Russian military participation in PFP exercises and other cooperative activities with the alliance. Our ultimate goal is to improve trust and cooperation between the Russian military and those of the West. Question. To follow on to those questions, is the administration considering providing Excess Defense Articles to Russia, and if so why? Answer. The Administration intends to make Russia eligible to receive certain limited types of EDA. Like all EDA, it would be available on a first come, first served basis and it is not clear that Russia will be able to benefit from the program. We are making Russia eligible for EDA as a possible means of supplementing the limited FMF funds allocated to Russia. For example, if radios were available as EDA, Russia might be able to acquire the requisite number faster than if it had to rely solely on available FMF funds. We intend to subject Russia's potential acquisitions under EDA to the same limitations placed on FMF purchases. kedo Question. With the current economic crisis in Asia, what will be the impact on KEDO? The United States has already pumped over $2.5 billion into it, will we be asked to provide more? Will South Korea be able to live up to its commitments? Answer. The U.S. has contributed a total of $86.5 million to KEDO, including our FY 1998 appropriation, and in addition has spent roughly $27 million on the canning of the DPRK's spent nuclear fuel. We do not anticipate that the financial crisis in Asia will have a long-term impact on the ability of the ROK and Japan to fulfill their commitments to fund most of the cost of the light-water reactor (LWR) project. Since the project's estimated 5.2 billion dollar estimated cost would be spread out over a number of years, yearly payments by the ROK and Japan to the project should be manageable, despite the current financial situation in Asia. LWR burden-sharing discussions with South Korea and Japan continue and we expect both countries to honor their previous commitments to provide most of the funding for the project. indonesia Question. How has or will the loss of IMET effect our relationship with Indonesia? Answer. What we lose by not having full IMET for Indonesia is an opportunity to positively influence future military leaders relatively early in their careers and enhance access to them after they have assumed positions of broad authority. These are of course intangibles which are impossible to quantify but are nevertheless important for American interests. As Indonesia faces its current crisis, proper military conduct is essential. The IMET program represents an opportunity to expose the Indonesian military to U.S. culture and values, and resumption of IMET would complement Indonesia's efforts to instill professionalism, proper conduct and respect for human rights in its military. IMET graduates have played prominent roles in investigating human rights abuses and are likely to be major players in future military reforms. Congress has limited Indonesian participation to Expanded IMET (E- IMET), which focuses on senior military and civilian officials and thus does not allow us to reach the key target audience of mid-level military officers in Indonesia. Based on past experience in a number of countries, we have found that foreign officers who are exposed to multiple training opportunities over the course of their careers are those upon whom American training has the greatest impact. vietnam Question. Is the Administration close to making a determination on Jackson-Vanik as it applies to Vietnam? If so, when can we expect that determination? Answer. On March 10, 1998, the President signed a determination authorizing a waiver of the Jackson-Vanik Amendment for Vietnam. At that time, he also waived the prohibition on Export-Import Bank operations in Vietnam. The waiver of Jackson-Vanik, in combination with related waivers, will permit us to make available to Vietnam and U.S. businesses operating in Vietnam U.S. export promotion and investment support programs. The Secretary of State approved national interest waivers February 23 to two provisions of the Foreign Assistance Act that prevent the United States from furnishing assistance under the act in Vietnam. These waivers permit the Agency for International Development (USAID) and the Overseas Private Investment Corporation (OPIC) to initiate bilateral assistance and investment support programs in Vietnam. egypt Question. What is or has Egypt contributed to the military build-up in the Gulf? Considering our large annual FMF contributions, I hope it's a lot. Answer. The United States maintains a strong, comprehensive, friendly, and mutually beneficial relationship with Egypt. The benefits of this relationship were most recently demonstrated by Egypt's crucial support during the recent Iraq crisis. On the military front, Egypt provided timely critical assistance in providing Suez Canal transit, overflight clearances, and refueling services. These arrangements were essential to our preparedness to face all possible contingencies in the Gulf. Additionally, President Mubarak--even as Arab public opinion was running strongly against possible action against Iraq--set the tone for other Arab leaders and the Arab League in calling for Saddam Hussein to comply with United Nations Security Council Resolutions. Mubarak also made clear in public statements that Saddam would be responsible for whatever consequences ensued from a failure to comply. This action deprived Saddam of key diplomatic support. President Mubarak has also made clear his opposition to Saddam Hussein and Iraq's efforts to acquire weapons of mass destruction and long range missile capabilities. haiti Question. How much money has the U.S. contributed to Haiti in the last ten years and if it is as much as I think, how do you justify doubling the $70 million we provided last year? Answer. Based upon available data, USG assistance (excluding Department of Defense costs) from FY 1988 through FY 1998 totals approximately $1.1 billion. Since the restoration of democratic government in October 1994, total USG spending (excluding Department of Defense costs) through FY 1998 is about $680 million. With this assistance, Haiti has taken important steps toward development of a democratic society. Haiti's progress has a profound impact on the U.S. According to the U.S. Coast Guard, over 67,000 Haitian migrants were interdicted at sea from FY92-FY94, the period of the de facto regime: in 1994 alone, the U.S. spent $400 million dealing with 25,000 interdicted Haitian migrants. Since October 1994, fewer than 5000 migrants have been interdicted, a dramatic reduction in illegal migration from Haiti. Our strong national interest in Haiti's progress toward democracy, stability and economic growth requires our engagement, patience and, where necessary, increased assistance. Our proposed increase will focus on the rural areas and secondary cities outside of Port-au-Prince, areas where the majority of Haitians live and where development is most lacking. To the greatest extent possible, we will bypass the Haitian government and rely on NGOs and local structures to implement programs such as agricultural development, democracy building, public health, education, and environmental reconstruction. For instance, such programs would include planting of fruit and coffee trees which would revitalize Haiti's ecologically-devastated hillsides and provide income to local farmers. We would support Haitian orphanages, immunization programs for children, and nutrition programs for pregnant women and infants. cyprus Question. I understand that one side on the Cyprus conflict has chosen to stop participating in bicommunal activities. Is that affecting our efforts in Cyprus and if so is it wise to continue to provide funding for such activities? Answer. The U.S. provides $15 million annually to Cyprus for bicommunal activities aimed at the reunification of the island and designed to reduce tensions and promote peace and cooperation between Greek Cypriots and Turkish Cypriots in a wide variety of fields. The bicommunal assistance program brings together people from both sides to meet face-to-face and to plan and implement concrete projects that benefit the island as a whole. Most, but not all, of these activities take place on Cyprus. Last December 27, however, the Turkish Cypriots suspended bicommunal contacts in ``retaliation'' for the European Union's decision, at its December 14-15 Luxembourg Summit, to open accession negotiations with Cyprus. Since then, no bicommunal meetings on the island have taken place, although a few bicommunal activities have been allowed to take place outside of Cyprus--most notably a January study tour of the U.S. by water experts from both communities. The U.S. has been very critical of the Turkish Cypriot suspension of bicommunal contacts. Ambassador Brill, Special Cyprus Coordinator Miller, and other U.S. officials have pressed the Turkish Cypriots repeatedly and forcefully to lift the suspension. Bicommunal contacts serve Turkish Cypriot interests well, as they reduce the international isolation that the Turkish Cypriots themselves complain about and provide opportunities for Turkish Cypriots to articulate their positions. In addition, they bring concrete, practical benefits to the Turkish Cypriots, in key areas like water conservation and management, sewage treatment, and cultural preservation. Despite the ban on bicommunal meetings, our assistance program remains an important tool in our efforts to resolve the Cyprus dispute. Funds that cannot be used for bicommunal meetings can be used to support the many bicommunal groups that remain active in both communities. We will continue to plan important bicommunal activities outside of Cyprus. Of course, we will continue to press the Turkish Cypriot leadership to lift its suspension. Ultimately, we expect to see a resumption of on-island bicommunal activities. Thus the U.S. should continue to fund the bicommunal Cyprus assistance program. Questions for the Record Submitted by Mr. Knollenberg kedo Question. The U.S., Japan, and South Korea established KEDO in 1995 to implement the Agreed Framework between the U.S. and North Korea. Under KEDO, the U.S. is responsible for providing annual shipments of heavy fuel oil, and South Korea for arranging the financing and construction of two light water reactors (LWRs) in North Korea. The Asian financial crisis and its effects on the economies of both South Korea and Japan has rasied doubts about whether these countries will be able to make good on their commitments to fund the bulk of the $5.1 billion LWR project. Since North Korea is not committed to dismantling its nuclear facility until after the second of the two reactors is ready, how would a possible delay impact the Agreed Framework, which so many claim has ``frozen'' North Korea's nuclear weapons program? Answer. The commitments made under the Agreed Framework, including the DPRK's nuclear freeze, remain in effect. The freeze has been monitored and verified by our National Technical Means and by IAEA inspectors, who have maintained a continuous presence at North Korea's nuclear facilities since the signing of the Agreed Framework. We are confident that we can continue to monitor effectively the DPRK's compliance with the Agreed Framework. We see no signs that the North is backing away from its commitments, including its commitment to dismantle its frozen nuclear facilities upon completion of the LWR project, even if completion is delayed beyond the target date specified by the Agreed Framework. While the DPRK has complained of slow progress on the LWRs and irregular oil deliveries, we believe that the DPRK continues to see the implementation of the Agreed Framework as its best option. We do not anticipate that the financial crisis in Asia will have a long-term impact on the ability of the ROK and Japan to fulfill their commitments to fund most of the cost of the light-water reactor (LWR) project. Since the project's estimated 5.2 billion dollar estimated cost would be spread out over a number of years, yearly payments by the ROK and Japan to the project should be manageable, despite the current financial situation in Asia. LWR burden-sharing discussions with South Korea and Japan continue and we expect both countries to honor their previous commitments to provide most of the funding for the project. Question. The Agreed Framework committed North Korea to freeze plutonium production at only one site discovered by the International Atomic Energy Agency (IAEA) in Yongbyon. Yet the Administration has lauded this accord for stopping North Korea's nuclear program. If the agreement only pertains to one facility, and the IAEA is prohibited from inspecting the country for other nuclear sites, how can we be sure that the nuclear program has stopped? Do you have any guarantees that North Korea is not continuing plutonium production at other undisclosed sites?'' Answer. The nuclear freeze which North Korea agreed to under the Agreed Framework is in place and under constant monitoring by the IAEA. All of the DPRK's known nuclear facilities with the capacity to contribute to a weapons program, including the 5 MW(e) reactor at Yongbyon and two unfinished reactors at Yongbyon and Taechon, their ancillary facilities, spent fuel reprocessing facility and nuclear fuel fabrication facility are frozen. In addition, to IAEA monitoring the U.S. uses its National Technical means to survey the entire country for signs of clandestine nuclear activity. While no amount of surveillance can ever provide absolute certainty, we have seen no evidence that the North has an ongoing clandestine program. Questions for the Record Submitted by Mr. Kingston weapons proliferation Question. Just as alarming to me is the recent revelation of evidence that Russia arranged to sell sensitive equipment to Iraq for the use of manufacturing biological weapons. I have also read the Russian embassy's cleverly evasive rebuttal. Last year's act, of course, placed strong conditions on aid to Russia, requiring its cessation of missile technology assistance to Iran. Other legislation has taken the government's lack of control into consideration by targeting individuals and companies who proliferate. This new revelation in Iraq, however, clearly would have required governmental involvement. Has Russia provided a more complete account of the deal to the U.S. than they did in their press release on Feb. 12? In what way does the administration propose to hold the Russian government accountable for this example of gross violation of the embargo? Answer. We have no information indicating that Russia entered into an agreement to provide Iraq with either technical knowledge or equipment that would advance the Iraqi biological warfare program. The press reports to which you refer relate to contract negotiations in 1995 between a Russian entity and Iraq--negotiations that neither the U.S. nor the press reports indicate ever resulted in a contract or any deliveries. Nonetheless, the U.S. Government did raise this issue with the Russian Government, which also has been engaged in discussions with UNSCOM. Question. What effect are these specific proliferation problems having on the regional balance of power? Answer. We remain very concerned about the large imbalance in the size and military capabilities of Iraq and Iran compared to those of our friends in the Gulf. Having militaries many times larger than those of the Gulf Cooperation Council (GCC) countries, Iran and Iraq are in a position to threaten the use of force and to apply strong coercive pressures on our friends in the Gulf. U.S. force presence in the region and the strong cooperative relationship with the United States, including strong military sales and training programs, are essential elements in helping the Gulf states resist coercion, and also in ensuring the security of other friends in the region, such as Israel, Egypt and Jordan. The prospect of the acquisition of weapons of mass destruction by Iran and Iraq, and by others such as Libya and Syria, would materially affect the regional balance contrary to U.S. interests across the entire region and would strengthen the coercive pressures any of these states could bring to bear against any of the countries friendly to the U.S. in the region and potentially beyond it. Question. Can you also assess the resulting change in the threat environment for Israel, which may also face a range of new conventional weapons acquired by Syria from Russia? Answer. Because of declining economic resources, Syria cannot easily maintain or modernize its rapidly aging military equipment in a way that threatens Israel's qualitative edge. Syria's traditional military relationship with Russia has been dormant since 1991. Recent reports of renewed Russian-Syrian military cooperation are of concern. We have made it very clear to the Government of Russia that such assistance should not go forward. Russia is a partner in the Middle East Peace Process and is committed to maintaining peace and stability in the region. Because Syria has been designated, since 1979, as a state sponsor of terrorism, shipments of lethal weapons to Syria by foreign governments may trigger provisions of U.S. law that subject those foreign governments to sanctions, specifically the curtailment of some U.S. Government assistance to those governments. We are aggressively investigating the situation and intend to fully and conscientiously implement the requirements of U.S. law. It would be premature now to comment on whether U.S. sanctions are warranted. Question. What is the status of U.S. cooperation with Israel on development and deployment of joint missile defense systems? Answer. We are committed to continuing to support and cooperate with Israel on security matters in order to preserve Israel's qualitative military edge and to reduce the security threat posed by WMD and missile systems. The U.S. and Israel are currently jointly funding the ARROW deployability program designed to integrate, test, and evaluate the complete ARROW weapons systems at a cost of $616 million between 1996 and 2002. The first ARROW battery is scheduled for full deployment in 2002 with an initial operating capability in early 1999. The President has just signed legislation that will provide an additional $45 million for ARROW research and development this year, which will help free up Israeli national funds to help pay for a third ARROW battery. We have also engaged in joint research programs on other weapon systems such as the boost phase intercept concept, which would destroy ballistic missiles in boost phase, and the Tactical High Energy Laser (THEL), designed to counter the threat to Israel from Katyusha rockets. We are also cooperating closely with Israel in the areas of missile early warning and increasing interoperability between our theater missile defense forces. aid to israel and egypt Question. Israeli Finance Minister Ne'eman recently presented to the U.S. a proposal to restructure Israel's foreign assistance over the coming years. In the weeks since this proposal was announced, what reaction has the Administration developed to the overall structure and the details of the plan? Can we expect a similar proposal from Egypt soon? Answer. In late January, Israeli Finance Minister Yaacov Ne'eman began discussions with Members of Congress and Administration officials on a proposal that would gradually reduce Israel's annual $1.2 billion economic assistance to zero, while phasing in a $600 million increase in military assistance over the same 10-12 year period. We agree that it is time to adjust the level of assistance, but are still formulating our response to Israel's offer. The Israeli proposal calls for all increases in FMF to be made in the form of off-shore procurement (OSP), as opposed to direct purchases of U.S.-sourced equipment. We understand there may be congressional concerns about this aspect of the Israeli proposal, and are carefully studying the implications. We have asked the Israelis for programmatic justifications of additional OSP and will take those into account when formulating our position. We have asked the Egyptian government for its thoughts on future assistance levels, focusing on the Egyptian economic situation and priorities. We want to ensure that any proposed reduction in assistance does not affect our regional security interests. We depend on Egypt for rapid naval access to the region through the Suez Canal, for overflight clearance and for air access to Egyptian facilities. In addition, Egyptian contributions to coalition operations substantially reduce the drain on our own resources. U.S. economic assistance helps sustain Egypt's economic reform program. Egypt continues to face major economic challenges including creating jobs for nearly half a million new workers annually. Reform- generated economic growth contributes to a strong and stable Egypt. Question. I continue to be concerned about U.S. contributions to the KEDO. (I am not convinced the whole ``agreed framework'' approach is appropriate for that matter. Obviously we're not interested in duplicating it for Iraq's WMD programs.) What is the rationale for another increase (excluding the debt repayment last year) for KEDO? Is fuel consumption going to increase by 14 percent next year? Answer. Although the yearly U.S. HFO commitment to North Korea remains fixed at 500,000 metric tons, the annual U.S. contribution to KEDO's heavy fuel oil (HFO) program has never been sufficient on its own to fully fund the program, which has cost about $60-65 million per year since it began in 1995. While the European Union has emerged in the last year as a major fellow contributor, our Asian allies have, under present economic circumstances, found it difficult to step up their contributions to the HFO program. The increases are necessary for the continued viability of KEDO's HFO program. Continuing strong U.S. financial support for the program will also assist us in our efforts to approach other countries for HFO funding. school of the americas Question. I appreciate the thorough report prepared by the Department of the Army regarding certification requirements for the SOA outlined in last year's act. I would like to ask for some fellow-up information, however, on a couple points. Can you please further describe the U.S. embassies' vetting process of potential student candidates? The annexed cables in the report did not clearly define measurable criteria for this process. What constitutes a thorough check and screen of candidates? What specific, quantifiable criteria are used? I also understand from the cable the standards may continue to vary from post to post. To what degree are they allowed to vary and on what types of points? Why shouldn't we maintain consistent standards-- regardless of unique national situations? Answer. Guidance has been provided to embassy training program managers that incorporates certain core criteria in screening plans, while still allowing some flexibility to accommodate unique circumstances such as variations in the size, composition, and expertise among country teams in Latin America. This guidance facilitates standardization and uniformity among the various country programs in the critical area of record keeping on participants and certifying background checks on nominees. Training program managers specifically have been tasked to develop or amend existing screening plans to include the new guidance and to forward their plans to us for review. In addition, as one of the first steps in the process, embassies have been instructed to ensure the host country fully understands the criteria and U.S. laws governing eligibility. The involvement of all relevant country team members in the screening process and requirement to maintain student files will assist in scrutinizing candidates, guarantee long-term continuity among training managers, and more importantly, prevent participation by ineligible personnel. We are confident that, over time, these adjustments will serve to further strengthen the process for screening nominees and guarantee the continued integrity of U.S. training programs. economic support fund Question. Part of the stated mandate to support democracy under ESF in Mr. Holum's testimony is to provide judicial training and to assist in the administration of justice. Can you further describe this training efforts? How does the U.S. measure success in our assistance for administration of justice? Answer. The rule of law (ROL) is a critical element of democracy; it serves as a foundation for the other elements. The ROL is required to hold leaders and institutions accountable. It supports free and fair elections and provides the breathing space for civil society. The ROL also ensures the protection of human rights through a fair, effective and efficient legal system headed by an independent judiciary. U.S. assistance programs that provide judicial training and help improve the administration of justice are focused on developing an independent judiciary and improving the ROL in recipient countries. Training programs include helping judges establish independent judicial associations and create judicial training institutes, advice on legislative reform, as well as training for prosecutors, defense attorneys, and law enforcement officials. Administration of justice programs are focused on improving the overall legal process--how a justice system operates. Through this assistance, we try to identify the causes and recommend solutions to such problems as judicial delay, limited access to courts, case backlog and judicial corruption. As with other democracy building programs, strengthening the ROL through judicial training and improvements in the administration of justice is a long-term process. Therefore, evaluating the success of our ROL assistance must be done over an extended period of time and with the caveat that the political will for change in recipient countries must come from the recipients themselves. That said, by helping to create new institutions like independent judicial associations or training institutes, by shrinking judicial backlogs and increasing the use of courts to resolve disputes, we can show that our assistance is having a positive impact on strengthening the ROL. Questions for the Record Submitted by Mr. Frelinghuysen haiti Question. To date, what is our total spending for programs in Haiti? How do we judge progress, if any, that we are making? What effect, if any, will a doubling of aid have now after all the millions that have already been spent there? Answer. Since the restoration of democratic government in October 1994, total USG spending (excluding Department of Defense costs) through FY 1998 is about $680 million. With this assistance, Haiti has taken important steps toward development of a democratic society. A popularly-elected President peacefully succeeded another for the first time in Haitian history and democratic institutions such as an independent and popularly-elected parliament play an increasingly important role in public life, another first for Haiti. Haitians of all walks of life enjoy unprecedented freedom of association and expression and the Haitian media operate unhindered by governmental censorship or restraint. Haiti's first civilian police force has been trained and fielded. This progress has a profound impact on the U.S. According to the U.S. Coast Guard, over 67,000 Haitian migrants were interdicted at sea from FY92-FY94, the period of the de facto regime: in 1994 alone, the U.S. spent $400 million dealing with 25,000 interdicted Haitian migrants. Since October 1994, fewer than 5000 migrants have been interdicted, a dramatic reduction in illegal migration from Haiti. Our strong national interest in Haiti's progress toward democracy, stability and economic growth requires our engagement, patience and, where necessary, increased assistance. Our proposed increase will focus on the rural areas and secondary cities outside of Port-au-Prince, areas where the majority of Haitians live and where development is most lacking. To the greatest possible extent, we will bypass the Haitian government and rely on NGOs and local structures to implement programs such as agricultural development, democracy building, public health, education, and environmental reconstruction. For instance, such programs would include planting of fruit and coffee trees which would revitalize Haiti's ecologically-devasted hillsides and provide income to local farmers. We would support Haitian orphanages, immunization programs for children, and nutrition programs for pregnant women and infants. demining program Question. This year, you are requesting an increase in demining from $20 million to $50 million. To date, what is the total U.S. commitment to demining? To put that in context, what is the total international commitment to demining to date? And, what is our commitment expected to be over the next five years under the President's budget projections? Answer. For FY 98, we requested $15 million for demining in the NADR account and received $20 million. From FY 93 through FY 98, the total U.S. commitment to demining, from all accounts totals $153 million. We estimate that this constitutes approximately half of the total international commitment to demining to date. The President's demining 2010 Initiative, announced by the Secretaries of State and Defense last October 31, is designed to accelerate global humanitarian demining operations, including landmine survivor assistance, to eliminate the threat to civilians of anti- personnel landmines by the year 2010. This Initiative aims to raise $1 billion annually worldwide--from public and private sources--for global humanitarian demining efforts, including landmine survivor assistance and research and development. Our expected commitment over the next five years, and through the year 2010, will require modest amounts to sustain established U.S. Government-supported humanitarian demining programs and to provide additional funding for incremental increases in humanitarian demining operations in newly established country programs, and to transition into more demining infrastructure and landmine survivor assistance and rehabilitation activities. Question. In real terms, what do these dollars actually accomplish in number of mines that are dug up and deactivated. How and where do we decide to use U.S. demining dollars? Answer. The overall objective of the U.S. Government Humanitarian demining Program is the establishment of a sustainable, indigenous demining capability that will continue to conduct demining operations after direct U.S. involvement declines. The principal goal is returning to peaceful, civilian use land and other infrastructure believed to be mined. In fourteen countries, landmines are being destroyed now; we have recently expanded our program into five additional countries with others under active consideration. The U.S. has trained one quarter of all active deminers in the world today. Several countries, including Namibia and Rwanda, are making progress towards mine-free status. Our Central America program functions in Costa Rica, Honduras and Nicaragua, under the auspices of the Organization of American States and the Inter-American Defense Board, with Guatemala recently added to the program. The Honduran demining unit has cleared ten discrete areas totaling more than 167,000 square meters, locating and destroying more than 1,925 mines, 10 booby-trapped hand grenades, 48 82mm mortars and five 120mm mortars. The Costa Rican demining unit has cleared a total of over 33,000 square meters of land, destroying a total of 37 mines in the process. Nicaraguan deminers have cleared over 17,400 square meters of land, destroying over 1,650 mines. These efforts are paying off. In those parts of Cambodia where U.S.-supported demining is taking place, the death rates from landmine injuries have dropped by one half. In Namibia, the casualty rate has fallen 90 percent. But the current pace of demining is clearing inadequate. For this reason, last October 31, Secretary of State Madeline Albright and Secretary of Defense William Cohen announced the President's demining 2010 Initiative to rid the world of all landmines threatening civilians by the year 2010. Under this initiative, the U.S. will be working with other donor governments, international organizations, non-governmental organizations and mine-affected countries to develop a mechanism to match needs to resources and ensure more effective global humanitarian demining efforts. Question. Are you also working with ``mine experts'' in DOD to develop better ``technologies'' to deactivate mines rather than digging them up one by one? I hope you are taking advantage of the expertise at Picatinny Arsenal in my district which has the history and know-how on mine technology. In fact, I included report language in last year's bill on this issue. Answer. All U.S. Government-supported technology research in humanitarian demining is conducted or coordinated by the Department of Defense under the auspices of the Interagency Working Group (IWG) on Humanitarian Demining. The DoD has several mechanisms in place to ensure thorough coordination among all agencies, including Picatinny Arsenal, that have technology that could aid in humanitarian demining. I refer you to the Department of Defense for further specific details. Questions for the Record Submitted by Ms. Pelosi pakistan Question. Since mandatory economic and military sanctions were imposed on Pakistan in October 1990, and counting through the end of January 1998, what is the total dollar value of military goods that the State Department has approved for export to Pakistan and what portion of those goods was actually delivered? Answer. According to the Office of Defense Trade Controls, the total value of commercial licenses and assistance approved for Pakistan from Oct 1990 through Feb 1998 totals $461,338,402. As our system does not effectively track deliveries, we cannot provide accurate information on the value of goods actually delivered. Licenses are valid for four years from issuance and deliveries can be made at any time within that period. For foreign military sales (FMS), the Defense Security Assistance Agency (DSAA) reports $445,300,000 worth of equipment and spare parts were approved for export to Pakistan over the same period with $392,000,000 worth reported as delivered. DSAA reports that delivery of all FMS equipment was put on hold beginning in October 1990. The FMS equipment was subsequently released through the Brown Amendment in 1996. The FMS equipment released under the Brown Amendment in 1996 is the only FMS equipment delivered to Pakistan over the period of concern (October 1990 through February 1990). Question. When is the last time the U.S. approved the export of spare parts and technology or capability upgrades for Pakistan's F-16 aircraft? Answer. In March 1998, the State Department approved the export of release assemblies, equipment used primarily for safety of flight, for Pakistani F-16s. This is consistent with our policy of providing spare parts and support for the F-16s, but not capability upgrades. Question. Have U.S. military exports to Pakistan since January 1996 increased or decreased? Answer. In terms of commercial export approvals, they have decreased. In 1996 we approved $99,540,523 in hardware and assistance. In 1997, we approved $54,702,477. For the first two months of 1998, $28,896 has been approved. DSAA did not provide any data for foreign military sales (FMS) items over the same period, but reiterated that the only FMS equipment delivered to Pakistan for the period of October 1990 through February 1998 was the equipment released for delivery to Pakistan by the Brown Amendment. Question. Is the U.S. now proposing to relax existing arms export controls to Pakistan to permit even more military assistance to Pakistan? Answer. The Department has decided to take modest, limited steps regarding USG provision of defense equipment and services in areas the Brown Amendment specifically exempted from Pressler Amendment sanctions. Thus, we intend to renew the lease of aging T-37B trainer aircraft now in Pakistan, as permitted by Brown's ``training'' exception to Pressler. Further, we hope to conclude a submarine rescue agreement with Islamabad--along the lines of agreements reached with India and several other states--permitted by Brown's ``humanitarian assistance'' exception to Pressler. In both instances Pakistan would use its own national funds to pay for these items. The Department also has aligned its commercial munitions export policy with the Brown Amendment, allowing case-by-case consideration of potential commercial sales related to military-to-military contacts, training, humanitarian and civic assistance projects, counter- narcotics, anti-terrorism, and peacekeeping and other multilateral operations. Our current restrictive commercial export policy otherwise will be maintained with a few narrow exceptions. For example, we will allow case-by-case consideration of additional commercial exports as systems become obsolete and only can be replaced by currently produced items (where a reopening of the assembly line for the original product would prove infeasible or prohibitively expensive). In such circumstances, only the lowest generation upgrade would be considered. Other exceptions include modest increases in items held by Pakistan in 1990 or transferred subsequently under Brown; items not in the 1990 inventory or transferred under Brown but of lesser capability than items in the 1990 inventory; items, although new to Pakistan's inventory, the primary purpose of which is safety; defense services and technology associated with the above exceptions. Question. Does the U.S. expect any conceivable level of U.S. conventional arms shipments to Pakistan in any way to give Pakistan strategic military parity with India, and if not, what is the military purpose of these shipments? Answer. India enjoys a marked quantitative and qualitative advantage in most conventional weapons categories. For example, India has more than 1,300 BMP 1 and 2 infantry fighting vehicles while Pakistan hold approximately 850 less capable M 113 armored personnel carriers. New Delhi maintains a nearly 2:1 edge in combat aircraft; Indian Air Force assets include advanced Russian Su-30s. Clearly, limited U.S. commercial munitions exports, principally spares and munitions, will not help Islamabad attain strategic military parity. Our basic commercial munitions export policy for Pakistan was instituted in 1990. In permits licensing, subject to strict case-by- case review, of items which would permit Islamabad to maintain its military capabilities at 1990 levels. Key elements of Pakistan's arms inventory, such a anti-armor capabilities, now are beginning to degrade below 1990 levels, further skewing the existing regional military imbalance. We are concerned that continuing, serious degradation of Pakistan's conventional arms inventory ultimately could affect regional stability. Recently implemented updates to our commercial munitions export policy therefore constitute a limited, common sense response to these circumstances. Even so, the Department still will consider negatively sales of new systems or significant upgrades except in a few narrowly drawn areas, such as substitutes (the lowest generation upgrade) for items in Pakistan's 1990 inventory which no longer are being manufactured. Question. Since mandatory economic and military sanctions were imposed on Pakistan in October 1990, and counting through the end of February 1998, U.S. exports to Pakistan requiring validated licenses under the Export Administration Act and the subtotal of such items that were specifically on the U.S. nuclear referral list? Answer. For the period October 1, 1991 to May 20, 1998, Commerce Department records show 373 approvals of validated licenses for exports to Pakistan for a total value of $151,546,304. The Commerce did not have the computer capability to recall separately files on nuclear referral list items until November 1996. Since that date, Commerce Department records show only two approvals of nuclear referral list items; one involving spare parts for a chemical plant and the other for supply of an oscilloscope to the Ministry of Defense. Commerce Department did not have information for the period October 1990 to 30 September 1991. Question. Does the U.S. still regard these F-16s as Pakistan's probable nuclear weapon delivery vehicle, as U.S. officials have repeatedly testified? Answer. We believe Pakistan potentially could deliver nuclear weapons using fighter aircraft, but increasingly are concerned about the possibility that it could attempt to mate a nuclear warhead with a ballistic missile. In concert with Indian development of ballistic missiles, this would substantially reduce reaction time during a crisis and consequently increase prospects for New Delhi and Islamabad misreading each others' actions and intentions. Question. Since mandatory economic and military sanctions were imposed on Pakistan in October 1990, and counting through the end of February 1998, what is the total dollar value of financial assistance projects approved for Pakistan with U.S. consent by multilateral financial institutions? Answer. Between October 1990 and February 1998, development assistance projects for Pakistan approved by international financial institutions with U.S. consent include: (1) Development assistance of $3.1 billion by the World Bank Group (IDA and IBRD). As of the end of Fiscal Year 1997, social sector projects targeting education, health, and nutrition accounted for the largest share (25 percent) of the Bank's portfolio in Pakistan, and projects targetting rural development accounted for the next largest share (21 percent). (2) Private sector loan and equity financing of $1.1 billion for Pakistan by the world Bank Group's International Finance Corporation and investment guarantees of $95 million for the world Bank Group's Multilateral Investment Guarantee Agency (MIGA). (3) Development assistance by the Asian Development Bank to Pakistan totalling $3 billion. During the period between 1990 and 1998, the ADB has increasingly focussed on projects in education, health, and water supply and sanitation. (4) Between 1990 and 1998, the International Monetary Fund (IMF) entered into two financial arrangements with Pakistan totalling $2.2 billion. Pakistan's performance in implementing program targets has been uneven; the IMF has disbursed only $598 million of potentially available funds. Question. Nucleonics Week reported on 2/26/98 that China is considering the supply of a second nuclear power reactor to Pakistan to follow the 300-MW Chasnupp (sic) reactor. How will China's decision to supply this second reactor without full-scope safeguards, along with other nuclear assistance to Pakistan's nuclear fuel cycle, affect the future of U.S./China nuclear cooperation? Answer. Chinese and Pakistani officials have discussed the possible supply by China of a second nuclear power reactor to Pakistan for several years. But, to date, the parties have apparently not concluded any formal agreement or contract for such supply. If China were to supply such a reactor, we would expect it to require the same conditions of sale that covered the first reactor, namely application of IAEA safeguards to the facility and its fuel supply. Any such sale would not affect the course of U.S./China nuclear cooperation inasmuch as foregoing peaceful safeguarded cooperation with Pakistan was not a U.S. condition for making the requisite certifications for implementing the U.S./China Peaceful Nuclear Cooperation Agreement. A key factor in determining the future of U.S./China nuclear cooperation will be China's compliance with its May 1996 commitment not to provide assistance to unsafeguarded nuclear facilities, in Pakistan or anywhere else. The Chinese appear to be taking this pledge very seriously. We are not aware of any transfers of equipment or material by Chinese entities to Pakistan's unsafeguarded nuclear program since the pledge was made. While China has not adopted full-scope safeguards as a condition of supply as a general policy principle, the U.S. will continue to urge that it do so. mexico Question. Human rights organizations, church organizations and observers have reported an intense military buildup in Chiapas since the massacre of 45 children, women and elderly in Acteal. According to reliable reports, this military presence is being used to intimidate, harass and persecute church workers and communities of the indigenous population. It is also reported, from credible sources, that paramilitary groups, like the one that was responsible for the massacre in Acteal, are being supported and supplied with arms by the military. What end-use monitoring is in place to ensure that U.S. military and counter-narcotics assistance is not being used to supply or train paramilitary groups and is not being used against the innocent civilian population? Answer. When the U.S. provided 73 UH-1H helicopters to the Mexican military under authority of the Foreign Assistance Act, we negotiated with the Government of Mexico exacting end-use monitoring procedures. The purpose of these procedures is to ensure that the equipment is used only for the counternarcotics purposes for which it was supplied. Under the end-use monitoring procedures, Mexico furnishes bi- monthly reports indicating the use to which each aircraft was put and its operational status. In addition, personnel of the U.S. Embassy in Mexico make quarterly on-site observations at installations where these helicopters are located to check the aircraft, interview personnel, and verify and corroborate information. These procedures are working well, with no indications that any U.S.-supplied equipment has been diverted to unauthorized uses. We are confident that this equipment is being used for the counternarcotics mission for which it was furnished to Mexico. As to the allegation that the Mexican military has supported and armed paramilitary groups in Chiapas, we note that the most recent report from the Mexican Attorney General's detailed investigation of the Acteal massacre indicates that such groups were advised and supplied with arms by local public security forces, not the Mexican Army. We have not seen any evidence that the Mexican Army is advising or supplying such groups. We are aware that one of the missions of the Mexican Army in Chiapas is to attempt to separate and prevent further confrontations between the Zapatistas and their supporters and those armed groups that oppose them. african crises Question. The Administration is requesting $5 million for continued assistance to the African Crisis Response Initiative, and an additional $5 million has been requested for military assistance to East Africa. Please explain why these funds continue to be necessary and provide an update on recent operations of the African peacekeeping forces at work in East Africa. Answer. For Fiscal Year 1999, the Administration is requesting $5 million in Foreign Military Financing (FMF) and $15 million in Peacekeeping Operations (PKO) to continue the African Crisis Response Initiative (ACRI), the Administration's program to enhance African peacekeeping capacity. The Administration's vision for the ACRI is a greatly enhanced African capacity to perform peacekeeping and humanitarian relief operations in a timely, professional competent manner. The ACRI aims to provide equipment and training to 10,000- 12,000 African soldiers in well-prepared companies and battalions, commanded by trained African officers and capable of deployed operations with consistent doctrine and procedures, using interoperable communications. Fiscal Year 1999 funding is for the third year of the proposed five-year funding for the ACRI; $15 million was allocated in FY 1997 and $20 million was allocated in FY 1998. The combination of FMF and PKO funding provides the most efficient process to address expenses associated with the ACRI. Training expenses for U.S. Special Forces trainers involved in initial (70 trainers for 70 days) and sustainment (30 trainers for 30 days) training events are paid for by FMF. A sustainment training event will take place in each ACRI partner country approximately every six months, during a total training period that extends over 36 months for each ACRI unit. Equipment costs (approximately $1.2 million per battalion) are funded by PKO monies. The ACRI program is on schedule. By the end of 1998, the ACRI will have equipped and provided initial training to approximately one-half the 10,000-12,000 African peacekeepers that represent the ACRI`s objective. The United States has completed initial training with battalion-sized contingents from Senegal, Uganda and Malawi and began training a Malian battalion in early February, 1998. Training with a Ghanaian battalion is scheduled for early April, in cooperation with Belgian military trainers. Later this year, training will begin in Ethiopia, the first country to commit two battalions and a brigade staff. The first sustainment training session began in Senegal in early March, 1998; a similar session with Uganda will run from mid-March to mid-April, 1998, followed by sustainment training in Malawi. In addition, in order to help our African partners develop regional and sub-regional command and control capabilities, we will invite international observers to training events and exercises, help sponsor peacekeeping and complex humanitarian emergency meetings, and we will also help sponsor joint and combined peacekeeping staff and field training exercises. The Administration is requesting $5 million in FY 1999 for the East Africa Regional program. This program, separate from the ACRI, provides non-lethal assistance to Ethiopia, Eritrea, and Uganda to bolster their defense capabilities and to help them resist regional destabilization being promoted by the Government of Sudan. Sudan, an immediate neighbor of these three states that have each cooperated closely with the United States on numerous regional and international issues, remains a destabilizing factor in the Horn of Africa and the world because of its policies and actions, ranging from support of terrorism to disruption of humanitarian assistance. This funding will address the priority needs for defensive security assistance for Sudan's neighbors. turkey/greece: abandoning loan assistance Question. Why is the Administration not pursing the provision of loans to Greece and Turkey in 1998? Is this decision based on Turkey's economic situation? Answer. A drop in Turkey's commercial credit rating would have required us to charge higher interest rates that would have eroded the usefulness of the loan subsidy for Turkey. Despite structural problems that have affected its credit rating, however, the Turkish economy is growing at a rate of over 6% per year, and the Turkish Government's payment record on loans from U.S. is spotless. For both Greece and Turkey, the provision of grant rather loan makes our assistance dollar more cost-effective. turkey: why grant assistance? Question. What is the policy justification for providing military grants to Turkey, and how does that square with the recently reported incident in which Turkish planes ``buzzed'' the plane carrying the Greek Minister of Defense on a recent trip to Cyprus? Answer. The post-Cold War evolution of NATO and the Alliance's increasing emphasis on security on the southern flank have made the security partnership with Greece and Turkey more important than ever before. We encourage both countries to use their grants to improve their ability to meet alliance obligations. We view the tension between Greece and Turkey with the utmost gravity. Both countries have engaged in provocative behavior toward each other. We do not believe, however, that disputes between these two Allies should preclude our helping them meet their NATO obligations. We are working with our Greece and Turkey allies to develop mutually acceptance avenues through which they can resolve their disputes. turkey: defense spending and the economy Question. Given Turkey's economic problems, what guidance have both the Departments of State and Defense given the Turks with respect to their level of defense spending and extensive plans to upgrade their weapons inventory? Answer. Turkey not only major NATO responsibilities, but faces serious threats to its security elsewhere, including instability in the Caucasus, an ongoing terrorist threat from the Kurdistan Workers' Party (PKK), and neighbors--Iran, Iraq, and Syria--that support terrorism and seek to acquire weapons of mass destruction. The Turkish economy is dynamic and is growing at a rate of greater than 6% per year. We have no reason to suppose that Turkey cannot afford to defend itself. It cannot afford not to. A secure environment is the essential foundation of a healthy economy. Moreover, Turkey's credible defense posture vis- a-vis aggressive states in the Middle East supports U.S. interests and lessens our own need to commit assets to the region. Questions for the Record Submitted by Mr. Yates counternarcotics Question. Please provide a breakdown by country of what aid goes to military vs. police forces? Answer. The following is a breakdown by country, as presented in our FY 1999 budget request, of what counternarcotics aid goes to military vs. police forces: ------------------------------------------------------------------------ Counternarcotics assistance Police Military ------------------------------------------------------------------------ Bolivia........................... $11,575,000 $4,900,000 Colombia.......................... 40,000,000 2,000,000 Ecuador........................... 800,000 390,000 Peru.............................. 13,600,000 2,000,000 ------------------------------------------------------------------------ Question. What part of these funds goes to training and what for equipment? Answer. The funds identified for the military will go primarily for training, fuel and POL with some monies for minor repairs, aviation and boat spare parts and operational support. The support provided to the police will mostly fund commodities, air support costs, Training, telecommunication equipment and operational costs. Question. During the past two fiscal years, which countries benefited from INL interregional aviation programs? How much equipment was used in each country? Answer. INL interregional aviation programs benefited the countries of Colombia, Peru, Bolivia, and Guatemala during the past two fiscal years. The number of the INL owned aircraft used in each country was as follows: Colombia: Early in the period in question, seven T-65 aircraft and one Cessna 208 were employed in Colombia. This was expanded to where today there are eight T-65s, two Casa 212's, five OV-10's, one Cessna 208, six Bell 212's and UH-1's in Colombia being supported by the INL contract Peru: 16 UH-1 helicopters. Bolivia: In FY 97, there were 22 UH-1 helicopters employed in country. As of FY98, this number has been reduced to 16. Guatemala: Previously five Bell 212 helicopters were employed in Guatemala, but these have since been relocated to Colombia. Question. Could you please provide the funding levels for the INL interregional aviation programs by country? Answer. The following approximate amounts are provided for FY 1998. Please note that these amounts include a prorata share of Main Operating Base (Patrick AFB) costs which are all incurred for the ultimate benefit of overseas country programs. [In millions of dollars] ------------------------------------------------------------------------ FY 1999 FY 1998 planned ------------------------------------------------------------------------ Colombia...................................... $23.7 $29.5 Bolivia....................................... 6.4 5.5 Peru.......................................... 7.9 6.0 ------------------------- Total................................... $38.0 41.0 ------------------------------------------------------------------------ Question. Much of our military assistance to Mexico is for counternarcotics training. How do we know that those troops we helped train for counternarcotics are not used instead for counterinsurgency? Answer. In response to Mexico's interest in improving the skills and capabilities of military personnel being assigned to newly-created counter-drug units, the US arranged for training by the US Army Special Forces. This training has emphasized skills and discipline useful for personnel engaged in counter-drug activities or other low-intensity conflicts. The Mexican Secretariat of National Defense selects personnel for US training who are most likely to be assigned to counter-drug units, or to units which regularly perform counter-drug missions. Both of the Mexican states currently experiencing insurgencies are also major drug-trafficking and producing states. Therefore, it is likely that some of the personnel who receive US training will, at some point, be assigned to units or missions relating to those insurgencies. However, we are not in a position--nor would we presume--to tell a sovereign nation where it can or cannot assign its military or civilian personnel. Recipients of US Special Forces training are exposed, however, to internationally-accepted concepts of protection of human and civil rights, the rule of law, and appropriate interaction between military forces and civilian populations in conflictive situations. A key aspect of such training is knowing when to refrain from use of force. Question. Is there any ``end use monitoring'' of the counternarcotics training programs? Answer. The U.S. Government attempts to conduct post-training assessments or evaluations to determine the impact of the training and to be able to make changes in curriculum or training methods to make it more effective in the future. We are also very interested in ascertaining if personnel receiving specialized U.S. training are assigned to positions where they can make use of it. This will affect where we invest limited training resources in the future. We are not able, however, to follow up on each and every individual around the world who receives U.S. training. fmf--improving our allies' security Question. In the Congressional Presentation for Foreign Military Financing (FMF), it is stated in the United States Foreign Policy Objectives that ``* * * diplomacy and international programs go hand in hand with military force to prevent and resolve conflicts * * * our security assistance programs help U.S. allies to become capable coalition partners * * *'' How have these programs improved the security of our allies, our partners in the Middle East Peace Process, and our friends in the states of Eastern Europe and throughout the world? Answer. Our Foreign Military Financing (FMF) programs have improved the security of our allies worldwide by supporting the acquisition of U.S. defense equipment, defense services, and military training. In the Middle East, for example, our annual $1.8 billion in FMF for Israel and $1.3 billion for Egypt enabled these two central peace process partners to modernize, expand, and sustain their defensive force capabilities. Israel maintains its qualitative edge through FMF purchases of major defense systems such as F-15 fighter aircraft, AIM- 120 missiles and combat systems for SAAR-5 corvettes. Israel's security posture in the region, bolstered by FMF purchases, is a critical prerequisite for advancing the peace dialogue with its Arab neighbors. Similarly, FMF has given Egypt the confidence to take risks in support of the peace process, assist us in containing well-armed regional rogue states, and resist terrorist coercion. As a result of major FMF-funded and sustained programs including the F-16 and Apache program, frigate acquisition, and Hawk modernization, Egypt remains the only friendly Arab state capable of making a strategically meaningful military contribution to any future regional coalition combat operation, as they did during Desert Shield/Storm with a contribution of 33,600 combat troops. Finally, the U.S. commitment to enhancing the Jordanian Armed Forces' self-defense capabilities is demonstrated by our expanding FMF program to support the refurbishment of F-16s. In Europe, we have used FMF to support Central European and former- Soviet states' participation the Partnership for Peace. These funds have helped improve recipient states' security by preparing and equipping national forces to participate in PFP exercises and NATO peace support, humanitarian, search & rescue, and peacekeeping operations. Under PFP, these countries have procured much-needed equipment and training, including: communications equipment, search and rescue equipment, the Regional Airspace Initiative in seven countries, and English language training for thousands of soldiers. Elsewhere, our FMF has bolstered the internal defense capability of states bordering the Sudan, strengthened the Southern Flank of NATO, and helped develop a credible peacekeeping capability among select African nations. fmf: supporting american freedom and security Question. How do these [FMF] programs support American freedom and security? Answer. By helping friendly and allied countries to defend themselves, FMF programs help to deter and, if necessary, to defeat aggression which could otherwise threaten vital American interests. By strengthening NATO allies and helping to prepare Poland, the Czech Republic, and Hungary to become NATO members, FMF helps to build a free and peaceful Europe, where twice in this century the United States has fought in World Wars to protect vital interests. In the Middle East, a region of vital importance and chronic instability, military assistance to countries like Israel, Egypt and Jordan helps to deter aggression and to supports progress in the Middle East Peace process. In addition to these obvious tangible benefits derived form our FMF programs, the American people also enjoy benefits that may not be outwardly apparent. Because FMF is used to purchase U.S. defense articles and services, these funds directly support a strong U.S. industrial base and create jobs for Americans, may lengthen production runs, and can help reduce unit costs of equipment procurement for our own military. Additionally, implementation of the FMF program requires coordination and contact between the U.S. and the recipient government during all phases--from developing the request for a particular defense article or service to training the foreign military how to operate and maintain the equipment. As a result, not only will the foreign government's systems be compatible with ours during times of crisis, but the relationships established at all levels between our military and that of the foreign government builds and strengthens alliances beyond the formal, official ties. It is not uncommon for the U.S. to rely on these personal and professional contacts in times of crisis to provide support critical to our own military--such as access to ports and airfields. Together, the spectrum of tangible and intangible benefits derived from our FMF program support the freedom and security of the American people. international security assistance: strengthening american security Question. Would you expand on how FMF and security assistance in general strengthens the security of the United States. Answer. by helping friendly and allied countries to defend themselves, U.S. security assistance programs help to deter and, if necessary, to defeat aggression which could otherwise threaten vital American interests. By strengthening NATO allies and helping to prepare Poland, the Czech Republic, and Hungary to become NATO members, our assistance helps to build a free and peaceful Europe, where twice in this century the United States has fought in World Wars to protect vital interests. In the Middle East, a region of vital importance and chronic instability, military assistance to countries like Israel, Egypt and Jordan helps to deter aggression and to supports progress in the Middle East Peace process. The range of U.S. security assistance programs--from Foreign Military Financing, to the International Military Education and Training (IMET) program, to the peacekeeping operations programs-- serves to strengthen our own national security. Because FMF is used to purchase U.S. defense articles and services, these funds directly support a strong U.S. industrial base and create jobs for Americans, and can help reduce unit costs of equipment procurement for our own military. Additionally, implementation of both the FMF and IMET programs involves coordination and contact between the U.S. and the recipient government during all phases--from senior level visits, to developing a request for a particular defense article, service or training program to actually training the foreign military in a wide range of technical and professional issues. As a result, not only will the foreign government's systems and standard operating procedures be compatible with ours during times of crisis, but the relationships established at all levels between our military and that of the foreign government builds and strengthens alliances beyond the formal, official ties. It is not uncommon for the U.S. to rely on these personal and professional contacts in times of crisis to provide support critical to our own military--such as access to ports and airfields. Even in times of peace, our security assistance programs help give the U.S. military access to a host of unique training environments that would otherwise be unavailable. Finally, by helping teach other militaries how to conduct successful peacekeeping and humanitarian operations, our programs help reduce the likelihood that our own troops will be called into action--thereby protesting U.S. lives and resources. Together, the spectrum of tangible and intangible benefits derived from the range of international security assistance programs support U.S. diplomatic objectives and strengthen the security of the American people. general foreign aid Question. How has our foreign aid improved our ability to function in the world? More specifically, how has it helped us in our recent troubles with Saddam Hussein? Answer. U.S. foreign assistance plays a role in maintaining strong, comprehensive, and mutually beneficial relationships with key regional partners. Foreign assistance helps enable our partners to participate in international peacekeeping efforts, as well as combating terrorism. During the Iraq crisis, we forged a coalition of like-minded nations determined to see the UNSC's resolutions enforced and to counter the threat posed by Iraqi weapons of mass destruction. Not one country reversed its commitment to us. Our allies understood that our combined resolve and steadfastness brought us to the point of agreement. Question. Did our former coalition allies and recipients of security assistance reduce the drain on our own resources, physical and financial, during the recent build up in the Arabian Gulf? Answer. Eighteen countries offered military assets for the coalition and another twelve offered basing and overflight rights. More than 70 governments spoke out about the need for Iraq compliance with the obligations they accepted at the end of the Gulf War as part of the UN cease-fire resolution. With our coalition partners standing by, the robust force currently deployed in the region will stay in place until we are confident that Iraq will comply fully with its obligations. Question. Could we depend on Egypt, Jordan and other Middle East nations or was our access limited? Answer. Our Middle East partners played an important role in the Iraq coalition. We worked closely with Bahrain both in the region and on the UN Security Council to address the threat to the security of the Gulf and the authority of the United Nations posed by Saddam's pursuit of weapons of mass destruction. King Hussein of Jordan called repeatedly for full Iraqi compliance with all relevant UN resolutions. Egypt provided timely critical assistance in providing Suez Canal transit, overflight clearances, and refueling services. We consulted closely with the Saudis during the Iraq crisis and were confident of their support. We have a cooperative defense relationship with Qatar and several other regional partners. demining Question. Demining is an area of utmost importance to many of us on this subcommittee. The removal of landmines is a major challenge requiring a very long term commitment. It is, indeed, one of the most important initiatives in the world today. The United States recently failed to sign the international agreement banning landmines, which was very disappointing to me and many of my colleagues. However, the Administration's request for demining programs has been increased from $20 million last year to $50 million for FY '99. Would you please comment briefly on why the United States failed to sign this agreement, and explain the increase for the program. Answer. The United States is committed to the elimination of anti- personnel landmines (APL). In September 1994, President Clinton became the first world leader to publicly call for a global ban on landmines. The U.S. UNGA resolution on APL, passed overwhelmingly in 1996, has consistently been cited by Ottawa Process supporters and others as the basis for their work in establishing an APL ban. in 1996, the United States led negotiation of the Amended Mines Protocol (Protocol II) to the Convention on Conventional Weapons (CCW), including creating the requirement that unmarked APL self-destruct and self-deactivate. On January 17, 1997, the President announced that the United States would observe a permanent ban on the export and transfer of APL. Also in 1997, the United States worked vigorously to establish negotiations for an APL ban in the Conference on Disarmament (CD), the preeminent multilateral forum for arms control negotiations. Unable to achieve hoped for progress in the CD at that time, we attended the Oslo Conference in September 1997 determined to make every effort to negotiate an effective, comprehensive global APL ban that would also address the security concerns of participants. At Oslo, we attempted-- and failed--to negotiate two changes that would have allowed us to sign the Ottawa Convention: A nine-year transition period to phase out the APL (not including anti-personnel submunitions in mixed anti-tank systems) we now use to protect our troops, giving us time to devise alternatives; and a provision permitting continued use of our mixed anti-tank munitions systems. (These systems have self-destructing anti- personnel submunitions which protect anti-tank munitions from being easily breached, but which are deemed APL under the treaty.) Our self-destructing, self-deactivating mixed anti-tank munitions systems are the safest anti-tank systems from the perspective of protecting civilians. They are also the most militarily effective. They are set to self-destruct in as little as 4 hours, at most in 15 days. The mechanism is extremely reliable: in more than 32,000 tests, all except one destroyed itself on schedule or earlier; one was one hour late. Self-destruction leaves these mines completely harmless after hostilities have ceased. At the same time, these weapons are essential to protect American forces where they may be greatly outnumbered and facing attack by enemy armored forces. We estimate our casualties to be as much as 30% higher if we are denied the use of these devices. Despite our best efforts to negotiate an exemption for our self- destructing mixed anti-tank munitions systems, we were unsuccessful, even though the Ottawa Convention permits continued use of non self- destructing mines (anti-tank mines with anti-handling devices) which will explode upon contact with a human being and are a humanitarian problem. Rather than expose our troops and the civilians they may be sent to protect to additional risk by banning self-destructing mixed anti-tank munitions that do not cause a humanitarian problem, we have not signed the Ottawa Convention. (Part II: Demining) As President Clinton, the Canadian Prime Minister and Foreign Minister, and the United Nations Secretary General have said, a ban on anti-personnel landmines is only a first step. The critical task before us is to remove the mines currently emplaced and threatening innocent civilians. Even if an international ban takes effect today, landmines will continue to remain in the ground in some 60 countries worldwide. These hidden killers need to be removed in order for the land and infrastructure to be returned to peaceful civilian use and economic development and progress. For that reason, the Secretaries of State and Defense announced on October 31, 1997, the President's Demining 2010 Initiative, designed to accelerate global humanitarian demining operations, including landmine survivor assistance, to eliminate the threat of anti-personnel landmines to civilians by the year 2010. Working with others, the U.S. aims to create an effective international coordinating mechanism to ensure that sustained public and private resources for demining are directed, in an organized and rational manner, to programs in the mine-affected countries. We have requested $50 million for FY 99 to expand the program into additional countries, and to enhance and sustain ongoing indigenous demining efforts in nineteen countries, including the five countries added to the program in FY 97 and FY 98. Question. What is the next step? Answer. In addition to our extensive efforts in demining, the United States has taken many steps toward ending the APL problem. The CCW Amended Mines Protocol, a treaty which ensures responsible use of APL, was submitted in January 1997 to the Senate for advice and consent. The major historical APL producers and exporters who have the majority of the world's APL stockpiles and have not participated in Ottawa have approved adoption of this protocol. The President announced on September 17, 1997 that we would redouble our efforts to establish serious negotiations for a global APL ban in the CD. We will start by seeking an export ban on APL to capture the major mine producing countries in order to stop the spread of landmines which are causing the humanitarian problem. The President also directed the Department of Defense to develop alternatives to APL (not including anti-personnel submunitions in mixed anti-tank systems) so that by the year 2003 we can end the use of these weapons outside Korea. As for Korea, the objective is to have alternatives to APL ready by 2006. In addition, in January 1997, the President announced that the United States would observe a permanent ban on the export and transfer of APL and would cap its APL stockpile at current levels. In May 1996, the administration announced the destruction of non-self-destructing (NSD) APL not designated for the defense of Korea or for training. Since May 1996, we have now destroyed 3 million such weapons and are expected to destroy the remaining stocks by the end of 1998. Question. How can we get a truly effective global ban on landmines? How do we negotiate a realistic ban? Answer. We share a common goal with Ottawa Process supporters: the elimination of landmines worldwide. While the Ottawa Process is to be commended for the progress it has made, there is much left to be done. A truly effective global ban on APL would have to capture both those states who are most affected by the scourge of APL and the principal producers and exporters of APL. We hope to make progress toward this end in 1998 by negotiating an export ban on APL in the CD. It is our belief that the CD offers the best possibility of capturing those major APL exporting and producing states who have not signed the Ottawa Convention. In order to stem the supply of APL worldwide, not just to states but to non-state parties in civil conflicts, it is critically important to bring in the major producers and exporters. The U.S. was also a leader in negotiating the Convention on Conventional Weapons Amended Mines Protocol. Once it enters into force (possibly this year), it will address the humanitarian problem caused by APL by strengthening restrictions on landmine use and transfer and by also capturing key landmine states that are not party to the Ottawa Convention. Specifically, CCW mandates that non self-destructing APL-- the true ``hidden killers'' which are responsible for civilian casualties worldwide--must be marked and monitored wherever they are used. Those who willfully violate and cause death to civilians will be subject to penal sanctions and/or extradition. CCW also bans the transfer of APL to non-state parties--who make up a large proportion of the humanitarian problem in zones of civil conflict--and carries strict proscriptions against the use of non-detectable mines. The CCW Amended Mines Protocol goes directly to the heart of the humanitarian problem associated with APL. It is certain that if it had been observed by all the key states for the past 40 years, the number of post-combat civilian casualties from the indiscriminate use of APL would be very dramatically reduced. The CCW Amended Mines Protocol was submitted to the Senate for advice and consent to ratification in January 1997. Question. Does the United States intend to commit to working for a global ban on landmines? Answer. Again, the United States is and has long been committed to working for a global ban on anti-personnel landmines. Since 1994, when President Clinton called for the comprehensive global elimination of APL at the United Nations, the United States has been at the forefront of active efforts to ban them. The United States led efforts to adopt the Convention on Conventional Weapons Amended Mines Protocol (Protocol II). The U.S. UNGA resolution urging states to pursue an agreement to ban anti-personnel landmines passed overwhelmingly (155-0) on December 10, 1996, helped set the Ottawa Process in motion. On September 17, 1997, President Clinton committed the United States to redoubling efforts to establish serious negotiations for a global APL ban in the CD, beginning with an export ban. It is important to note that U.S. APLs are not causing the humanitarian problem. Long before the Ottawa Process began, the United States developed and began using self-destructing, self-deactivating short-duration mines in order to eliminate residual casualties from emplaced APL. These U.S. mines self-destruct within 4 hours to 15 days after activation with a reliability rate better than 99.99%. On May 16, 1996, the President banned U.S. use, production, and export of non self-destructing APL (the type which can last for decades and which is almost exclusively responsible for the humanitarian problem) worldwide except for training purposes and for the Korean Peninsula, where NSD APL are imperative to the security of U.S. and Korean forces. Since then, we have unilaterally destroyed 3 million such weapons and are expected to destroy the remaining stocks by the end of 1998. On January 17, 1997, the President announced that the United States would observe a permanent ban on the export and transfer of all APL (including even self-destructing/self-deactivating APL) and would cap its APL stockpile at current levels. On September 17, 1997, the President directed the Department of Defense to develop alternatives to APL (not including anti-personnel submunitions in mixed anti-tank systems) so that by the year 2003 we can end even the use of our self-destructing APL outside of Korea. As for Korea, the objective is to have alternatives ready by 2006. In 1997, the U.S. actively pursued a comprehensive and global APL ban in the CD. Also in 1997, the U.S. was leading sponsor of an UNGA resolution calling on the CD to ``intensify its efforts'' on APL. We are continuing these efforts during the current CD session, working to establish a mandate for negotiation of an export ban. Question. How far off in the future do you expect such a ban could take place? Answer. It is difficult to predict how long it would take to establish an effective comprehensive global ban. The CD has agreed to establish a Special Coordinator for APL for the '98 session, and we hope to begin negotiations for an export ban this year. The CCW Amended Mines Protocol requires 20 nations to ratify in order to enter into force and may reach 20 within a few months (it has been submitted to the Senate for advice and consent to ratification). A principal reason the U.S. is not signatory to the Ottawa Convention is that it prohibits U.S. mixed anti-tank systems, which are necessary to protect our forces and which pose virtually no risk to non-combatants. We have made clear that the U.S. reserves the right to use mixed systems indefinitely. However, this could change if we find a viable and affordable concept for replacing these systems with an alternative that is comparable in terms of military effectiveness, safety of use, and minimal risks for non-combatants. As of now, we have not identified any operationally viable concept. We will keep Congress informed as administration policy develops in this area. Question. To follow up on my initial question, wouldn't it have been easier for the United States to sign the Treaty and work from the inside, that is if we are trying to reach the same goals? Answer. Our nation has unique responsibilities for preserving security and defending peace and freedom around the globe. As Commander-in-Chief, the President will not send our soldiers to defend the freedom of our people and the freedom of others without doing everything he can to make them as secure as possible. For that reason, the United States insisted in the treaty negotiations in Oslo that two provisions be included in the treaty. First, we needed an adequate transition period to phase out the APL we now use to protect our troops, giving us time to devise alternative technologies. Second, we needed to preserve the self-destructing mixed anti-tank munitions systems we rely on to slow down an enemy's armor in a battle situation. In neither case was there a willingness on the part of the Ottawa process nations to accept these provisions. If we had become a party to the Ottawa Convention, from that moment on we would have been unable to use self-destructing mixed anti-tank munitions and our troops would have been exposed to additional risk despite the fact that self-destructing mixed anti-tank munitions do not cause a humanitarian problem. Despite our best negotiating efforts, the United States could not sign the Ottawa Convention. In the Oslo negotiations of the Ottawa Convention, we went the extra mile and beyond in an attempt to negotiate an effective agreement that would protect our forces. As the President has said, there is a line that simply can not be crossed, and that line is the safety and security of our men and women in uniform. The offer we made at Oslo remains on the table. latin america Question. It is my impression that some of the embassies are not taking the ``Leahy Language'' seriously. For example, in Bolivia. The State Department's Bolivian section of the Country Reports on Human Rights Practices for 1997 raises questions about the U.S. Embassy's human rights reporting and its implementation of the amendment. The report states that ``* * * 14 civilian were killed in the course of law enforcement operations that encountered armed resistance. The precise cause and circumstances of these deaths have not been officially determined, but it appeared that some resulted from the use of excessive force by authorities.'' I would like to know what was the Embassy's conclusion about these deaths? How were these 14 people killed? What information did the U.S. Embassy use to evaluate and reach its conclusions? Were any of those security forces receiving U.S. counternarcotics aid? It is my understanding that there is credible evidence regarding human rights violations and abuses provided to the Bolivian embassy by the Andean Information Network, an NGO on the ground in Bolivia. This is very important to note, because our ambassador to Bolivia has moved on to Colombia, a country where this committee has expressed its grave concerns in the past with regard to human rights violations, and if this policy is not fully embraced on the ground then the will of Congress, as expressed in the ``Leahy Amendment,'' is being defied. Mr. Holum, could you please investigate this and report back to this committee at the earliest possible change. Answer. Nine of the 14 civilians, and one police officer, were killed in December 1996 after police and military forces were ordered to the Amayapampa area in Potosi department to dislodge miners who had seized a privately owned mine in a dispute with the mine's management. The Bolivian Government requested an investigation by the Inter- American Commission on Human Rights (IACHR). The IACHR reported that five civilians died of gunshot wounds, one from a crushed skull, one bled to death from an untreated bullet wound and the other two deaths were not explained. The IACHR concluded that some of the civilians killed in the Amayapampa area were not active in the conflict. It called upon the Government of Bolivia to complete a full investigation, punish those officials responsible and make fair compensation to the victims or their survivors. The U.S. Embassy reviewed the IACHR and police reports, had conversations with government officials and reported this information to the Department. In a February 1997 meeting with the Bolivian Minister of Government, Assistant Secretary Gelbard raised the potential implications of unresolved investigations of human rights abuses and echoed Ambassador Kamman's concerns over the Bolivian government's handling of the Amayapampa incidents. None of the police or military units involved in the Amayapampa violence receive U.S. counternarcotics aid or funds appropriated under the FY-98 Foreign Operations Appropriations Act, nor are we considering providing such assistance to these units. As such, no further actions were necessary under either the Leahy Amendment or section 570. The remaining five of 14 civilian deaths occurred at the time of clashes, which began on April 17, 1997 in the Chapare region, between coca farmers and Bolivian government coca eradication units. A 300-man force from the Ecological Police and UMOPAR (the specialized police unit that enforces counternarcotics laws) was ambushed by a mob of about 1,500 peasants, wielding firearms, stones and dynamite. Three civilians and one policeman died of gunshot wounds. Justice Ministry human rights investigators found that the fourth civilian death, which had initially been attributed to gunfire, was caused by the victim falling from a roof. The fifth civilian death, that of an infant allegedly overcome by tear gas fumes, was attributed to a severe infection, undernourishment, and dehydration. The Embassy used police reports and conversations with government officials and the Andean Information Network to investigate this case. From this information it appears that the Chapare deaths were a result of the police protecting themselves in the course of a legitimate law enforcement operation from a coca growers' ambush and that the police did not use excessive force. There are no neutral or objective eyewitness accounts of this incident and we have encouraged the Bolivain government to carry out a thorough and professional investigation. The Ecological Police and UMOPAR receive U.S. counternarcotics aid. These incidents were reported to the Department, and we have pressed the Government of Bolivia to more thoroughly investigate this and any other such incidents. Pending receipt of any further information developed in this case as a result of the GOB's or our own investigations, the Department concurs with the Embassy's conclusion. We note that the information initially received in this case was not processed strictly in accordance with established procedures. The Department has since established a committee for the purpose of regularizing the mechanism for review of such incidents. u.s. embassy procedures for implementing the ``leahy amendment'' Question. What procedures are the U.S. embassies using to implement the Leahy language? Answer. In February 1997, the Department of State sent a cable to all diplomatic posts regarding the ``Leahy Amendment'' provision included in Title II of the FY 97 Foreign Operations Appropriations Act (FOAA), under the heading ``International Narcotics Control'' (INC). That cable instructed posts to establish specific and detailed procedures for review at post of reported incidents of human rights violations by security forces, to correlate that information with INC- funded programs, and to report all such information to the Department in order to help ensure compliance with the provision. In March 1998, the Department sent a similar cable to all posts regarding section 570 of the FY 98 FOAA. That cable instructed posts to follow similar procedures with regard to all FY 98 FOAA-funded assistance to be provided to host nation security forces. Because the size and personnel resources of each embassy varies, the specific procedures used to implement Leahy and section 570 are tailored to each post. Nevertheless, we have encouraged posts to rely on both unofficial and official sources when gathering information about human rights abuses. sources on human rights violations Question. What sources are consulted about human rights violations committed by the military? Answer. We rely on a wide range of sources. Here in Washington, we keep in touch with human rights organizations who monitor these issues. We maintain good contacts with the best known international organizations, such as Human Rights Watch and Amnesty International, as well as a large number of smaller organizations that focus on specific issues, such as religious freedom, or on specific regions. Overseas, our Embassies rely on both official and unofficial sources for information about all kinds of human rights abuses, including those allegedly perpetrated by the military. Embassies meet with representatives of the Ministries of Justice or officers of the court to obtain information about possible indictments or ongoing trials. In Embassies where there is a defense attache, he or she will maintain contacts with a variety of officials in the host country military and will consult with them about allegations of human rights violations. Embassy officers often visit the scene of abuses, or meet with family members or representatives of victims. Local non-governmental organizations and human rights commissions or ombudsmen remain among the most important sources of information about violations by the military and other human rights assets. There has been an increase in the number of locally-based organizations of this kind, often linked to larger international human rights NGO's, and our Embassies regularly report on the findings of these groups. guatemala Question. During the past year, I requested from your office information regarding pipeline military aid. DOD sent me a chart indicating that there is still military aid in the pipeline for Guatemala. In 1994, the committee expressed its clear intent that pipeline FMF monies should be transferred to a peace fund. If you could clear something up for me I would appreciate it. It seems to me that some of the money was transferred to the transition peace fund, why not all of it? Answer. In 1994 we did transfer $4.6 million of suspended FMF and MAP funds to the ESF account as a Guatemala Peace Fund. The $4.6 million included all funds for Guatemala obligated but not committed to specific Letters of Offer and Acceptance (LOAs). The remaining $2.45 million of suspended FMF and MAP funds was attributable to already completed, but undelivered, transactions such as the acquisition of barracks and buses. Those ``monies'' clearly would not have been transferred to the Peace Fund. At that time DOD began an effort to liquidate as many as these Guatemalan LOAs as possible through sale of the goods to alternate buyers and the cancellation of contracts. The proceeds from these efforts were then placed in a DSAA Guatemala Holding Account which now totals approximately $2.58 million. The funds remain uncommitted. nato enlargement and the partnership for peace Question. Please explain the extent of our military assistance to Poland, the Czech Republic, and Hungary? Answer. Since the beginning of PFP funding in FY 95, the USG has provided $98.6 million in Foreign Military Financing (FMF) to Poland, the Czech Republic, and Hungary. Since FY 91, we have also provided approximately $19 million in International Military Education and Training (IMET) funds to these three countries. The total for direct military assistance to these three countries is just under $120 million. [In millions of dollars] ------------------------------------------------------------------------ FMF IMET ------------------------------------------------------------------------ Poland............................................ $45.7 $6.9 Czech Rep......................................... 24.1 4.4 Hungary........................................... 28.8 6.7 ------------------------------------------------------------------------ These countries have used FMF primarily for the purchase of defense equipment and training to improve their militaries' interoperability with NATO forces. For example, funds have supported the Regional Airspace Initiative, English language labs, Search and Rescue Equipment, NATO-standard mapping equipment, tactical field radios, navigation and safety aids and similar uses. IMET funds have provided training for officers, NCOs, and civilians from these countries at U.S. military education institutions in the areas of defense resource planing, doctrine, civil-military relations, language, leadership, and other core military science disciplines. In addition, we have offered these countries low-cost loans under the Central European Defense Loan (CEDL) program. Although none of the three took advantage of the loan program in FY 97, they have expressed interest in the program and we will offer them loans again in FY 98. We obligated $18.24 million in FY 97 subsidy for loans to Poland and the Czech Republic and have set aside $20 million for the program in FY 98. The above levels do not include DOD programs and funding in support of Partnership for Peace (PfP) program. Because most of these programs are open to all Partners, DOD is unable to provide country-specific costs for the participation of the three states invited to join NATO. Examples of the DOD programs include the Joint Contact Team Program, which puts military liaison teams in Partner country MODs; the Partnership Information Management System (PIMS); the Defense Resource Management System (DRMS); Marshall Center programs; Exercise Support Funds; and other programs designed to maximize interaction between Partner militaries, U.S., and NATO forces, as well as to promote familiarity and interoperability with NATO forces. Other USG programs, such as cooperation between the militaries of these three countries and National Guard units in the U.S., have exposed thousands of Central European soldiers to U.S. military personnel, procedures, and perspectives. Poland, Hungary and the Czech Republic have taken only limited advantage of the Excess Defense Articles program, largely due to the cost of transporting, upgrading, and maintaining EDA equipment. Question. What is the out-year plan for our military assistance? Answer. The President's budget requests $80 million in Foreign Military Financing (FMF) for FY 99 to support the Partnership for Peace (PfP) program. Of this, we plan to allocate $25.0 million to assist Hungary, Poland, and the Czech Republic in achieving NATO standards and improving their interoperability with NATO forces as they prepare for membership. We are also requesting $4.45 million in IMET funds for these three countries to continue U.S. military training opportunities for an expanded number of military and civilian personnel. Finally, we are requesting $20 million in loan subsidies to support the Central European Defense Loan (CEDL) program, which will allow those countries to address deeper infrastructure needs. Beyond FY 99, we intend to continue providing FMF grants to Hungary, Poland, and the Czech Republic at reduced levels to facilitate their integration with NATO. With regard to IMET, we intend to maintain current levels for the next several years to ensure that critical training needs are met. Question. What is the status of military loans to these countries and what are they being used for? Answer. The Central European Defense Loan (CEDL) program was designed to assist creditworthy Central European nations in improving their NATO interoperability by providing low-cost loans to remedy military infrastructure deficiencies. Fiscal Year 1997 was the first year of the CEDL program. We offered loans to Poland, Hungary, and the Czech Republic. Both Poland and the Czech Republic stated their desire to take out loans of $100 million and $80 million, respectively, to finance procurement of advanced radar, air defense systems, and safety and navigation upgrades for military airfields. However, last-minute problems in gaining parliamentary approval in the Czech Republic and a sensitive political climate in the lead-up to the Polish parliamentary elections prevented both governments from signing a loan agreement before the end of FY 97. Hungary withdrew its request for loan assistance in August 1997. We intend to use the remaining FY 97 funds, to offer comprehensive loan packages to the Czech Republic, Hungary, Poland and Slovenia. A joint State Department/Defense Security Assistance Agency (DSAA) team will visit Poland, Hungary, and the Czech Republic in April 1998. The team will brief the governments on the CEDL program, alert them to changes in the program (specifically a decrease in the loans' interest rate), and answer technical questions on procurement procedures and financing under the program. We are optimistic that these countries will find the CEDL program a sound mechanism to help themselves prepare for NATO membership. Question. Explain the reasons for the military grants to the PfP countries. What purposes are these funds used for? Answer. The State Department provides grant Foreign Military Financing (FMF) funds to support the Partnership for Peace (PfP) program. PfP's primary objective is to establish strong, enduring security ties between NATO and all its PfP Partners, and to assist those Partners interested in joining NATO to meet the obligations of membership. PfP strengthens the forces of Partner countries, and thus their contributions toward our common goals of securing peace throughout Europe, deterring aggression, preventing, defusing and managing crises, and supporting the new democracies in Central Europe and the NIS. State's FMF program funds the purchase of defense articles, services, and training to assist partners in improving their compatibility with and understanding of NATO practices and terminology, strengthening democratic control of the military, and improving defense planning, structure, and budgeting processes. It facilitates military preparedness, and provides critical English language training--the baseline requirement for functioning in a NATO environment--for thousands of soldiers. Additionally, PfP has: Helped Poland, Hungary and the Czech Republic prepare for NATO membership through the purchase of equipment, services, and training to improve interoperability with NATO; Provided continued support for the Baltic Peacekeeping Battalion; Helped the newly created Central Asian Peacekeeping Battalion (Centrasbat) gain crucial experience and equipment; Prepared and equipped national forces to participate in PfP exercises and NATO peace support, humanitarian, search & rescue, and peacekeeping operations; Taught partners how to participate more actively in European security matters, including new operations or crisis management efforts; Trained PfP states to become active and engaged partners with the United States and other NATO Allies on critical issues of Euro-Atlantic security; Funded the Regional Airspace Initiative in the NATO selectee countries, Romania, Slovakia, Bulgaria, the Former Yugoslav Republic of Macedonia, and the Baltics; Increased the size, depth and complexity of PfP and ``in the spirit of'' exercises, leading to interoperability and even deployability with NATO forces; Trained partners for real life operations including IFOR/SFOR/SFOR II and the Iraq Deployments; and Provided the technical wherewithal for cooperation (such as tactical radios, Search & Rescue equipment) that permit NATO interoperability for exercises and real world operations. russia Question. $1.5 million has been requested for military aid to Russia in FY'99. This is in addition to $2.25 million allocated in FY'98. What is the purpose of these funds? Answer. FMF funding will enable Russia to purchase non-lethal items necessary for more effective Russian participation in international peacekeeping operations. We anticipate these funds will be used for English language instruction, language labs to support this instruction, and radios for troops involved in peacekeeping functions. Russian military radios are not compatible with NATO radios, something that has hampered our cooperation in Bosnia and in PFP exercises. This is a very limited program, both in the dollars involved and the kinds of equipment contemplated. It is aimed at ameliorating specific problem areas affecting Russian military participation in PFP exercises and other cooperative activities with the alliance. Our ultimate goal for this program is improving trust and cooperation between the Russian military and those of the West. Question. What is the Administration's position with regard to President Yeltsin's outspoken opposition toward our policy in Iraq and his statements that military actions could trigger World War III? Answer. While we differ over tactics, senior Russian officials have assured us that Russia shares our goals of keeping Iraq from developing weapons of mass destruction. In February, the United States and Russia were able to come together on a set of principles that UN Secretary General Annan could take with him to Baghdad. Both Russia and the United States, along with other members of the UN Security Council, supported the agreement Secretary General Annan worked out with Iraqi officials, and called upon Baghdad to comply with the terms of that agreement. However, Russian officials, including President Yeltsin and Foreign Minister Primakov, publicly stated their opposition to the use of force against Iraq. They stated the Russian view that no country or countries has the authority to use force against Iraq to bring about Iraqi compliance with UNSCOM without a new review and authorization by the Security Council. The U.S. does not share Russia's interpretation of UN Security Council resolutions (UNSCR's) and the need for a new review by the Security Council. The U.S. believes strongly that resolutions already in effect authorize the use of force. The use of force might prove necessary now or in the future, if Iraq's failure to comply with UNSCR's intended to impede Iraq's development of weapons of mass destruction and to compel Iraq's full compliance with all Security Council resolutions would constitute a serious violation of the cease- fire agreement. Frankly, we do not agree that military action taken against Iraq to secure its compliance with relevant UNSCR's would trigger a world war. comprehensive test ban treaty prepcom Background. ``The Administration has requested $28.9 million for the development and installation of international monitoring systems to detect nuclear explosions. It is my understanding that a portion of this $28.9 million is to fund the United States share of the costs of the Provisional Technical Secretariat for the Comprehensive Nuclear Test Ban Treaty.'' Question. Why should we provide funds for this purpose prior to the Senate's ratification of this Treaty? Answer. The CTBT mandates that the verification regime be capable of meeting verification requirements at the Treaty's entry into force. This requires us to start now to build the global monitoring networks and other verification capabilities provided by the Treaty. A Preparatory Commission (Prepcom), composed of states signatories to the Treaty, was established in November 1996 to carry out this task. The Prepcom directs the work of the international staff of the Provisional Technical Secretariat. The requested funds are to pay the balance of the U.S. 1998 contribution and 1999 contribution to the Prepcom. The Prepcom budget includes the costs of establishing the International Monitoring System and the International Data Center, as well as the operation and expenses of the Provisional Technical Secretariat. The prompt establishment of the verification regime is in the United States interest. To the extent we develop the verification regime, we augment our ability to monitor the current global testing moratorium, we ensure we have the benefit of the Treaty's monitoring capabilities at entry into force, and we facilitate entry into force by maintaining the international community's commitment to the Treaty. Question. What national security benefits do we get from upgrading these monitoring sites as opposed to waiting for Senate ratification? Answer. We need not, and should not, seek a delay in the Prepcom's work to establish the International Monitoring System (IMS). The U.S. needs to monitor worldwide testing activity, with or without a CTBT. The IMS augments U.S. national monitoring capabilities. It provides us with access to data from sensitive locations that we would not otherwise have, and with global monitoring coverage. For example, under the terms of the Treaty, 31 monitoring stations will be installed in Russia, 11 in China, and 17 in the Middle East. The CTBT Prepcom will save taxpayer dollars by requiring other nations to pay for most of the costs of deploying and upgrading certain monitoring stations that the U.S. would otherwise be paying for entirely. For example, the Air Force originally intended to pay 100% of the cost of deploying a seismic station in Egypt required for national purposes. Since this station will be part of the IMS, and will be funded as such, the U.S. will be paying only about 25% of its costs. Question. The Congress placed restrictions on the use of the initial program funds in the FYs '98 Commerce-Justice-State Appropriations Bill. Have these restrictions hindered your operations? Answer. We have been assured by the Provisional Technical Secretariat that it would satisfy the conditions placed on past U.S. contributions. We are not aware of any hindrance arising from these conditions. Question. Would you oppose a continuation of such conditions in FY '99? Answer. Yes. We believe that setting conditions on the use of our funds is inappropriate and ultimately counterproductive. The U.S. participates actively with other signatories in developing the Prepcom's program of work and budget. To selectively fund only specific portions of that agreed program undermines this collaborative process and reduces our credibility. Moreover, we cannot know whether such conditions, if imposed on U.S. contributions to the 1999 budget, would hinder PTS operations. If other signatories follow suit and earmark their contributions, operations could be severely affected. georgia Question. What can you tell the Committee about the recent assassination attempt on President Shevardnadze of Georgia in terms of who might be responsible? Answer. The evidence indicates that the assassination attempt was perpetrated by supporters of former Georgian President Gamsakhurdia and Chechen mercenaries. On March 19, Russia extradited to Tbilisi Guram Absnadze, a former Georgian finance minister under Gamsakhurdia. Georgian authorities are currently holding Absnadze, who is accused of organizing and financing the February 9 terrorist act against President Shevardnadze, as well as assisting the infiltration of terrorist groups into Georgia. Others involved with the attack are also under detention. Question. As you know, the Committee vastly increased resources to Georgia last year partly to help them bolster border security. What is the status of these programs.? Answer. In FY 1998, under the FREEDOM Support Act, the U.S. Government will allocate up to $20.1 million for programs to enhance Georgia's border security, law enforcement and export control capabilities by providing equipment, training, and services to Georgia's Border Guards, Customs Service and other law enforcement officials. The priority objectives of this assistance program are to: Assist Georgia in gaining control of its seacoast, particularly the Poti Port; establish a transparent land border regime, focusing on the Azeri and Armenian borders; and then on the Russian and the Turkish borders; Enhance the Georgian Border Guard and Customs export control capabilities to prevent, deter, and detect potential weapons of mass destruction smuggling; Improve capabilities of the Georgian national law enforcement and legal authorities to investigate and prosecute internal and transnational criminal activity; and Develop the law enforcement, legal and regulatory infrastructure in Georgia to help establish a society based on the rule of law and respect for individual human rights. The Special Georgia Border Security and Related Law Enforcement program will be implemented through two program elements. First, the United States Customs Service will implement the majority of the program including almost all equipment procurement, delivery, support and related training, with policy oversight by the Department of State's Bureau of Political Military Affairs Arms Transfer and Export Controls office (PM/ATEC) and the International Law Enforcement and Narcotics Bureau (State/INL) respectively, subject to overall coordination by the U.S. NIS Assistance Coordinator (S/NISC) to ensure no duplication of programmatic efforts. The Coordinator will rely on the Departments of State, Defense, Commerce, Energy, the U.S. Embassy in Tbilisi, and other USG agency experts for guidance as appropriate. Question. Is the United States exploring other ways to help the Georgians with their security? Answer. Other U.S. Government programs that focus on assisting Georgians with their security include: The DOD Cooperative Threat Reduction (CTR) program, the U.S. is purchasing two patrol boats for Georgia (delivery expected in mid-1998) to help the Georgian border guards patrol the black sea coast and independently assume more control of Georgia's maritime borders. Georgian officials also participated in a Nuclear Defense Fund funded legal, regulatory and enforcement forum organized by the Department of Commerce. The DOD/FBI Counterproliferation program will focus on training law enforcement officials including the police, judiciary, procuracy, customs officials, appropriate parliamentary entities, defense and foreign affairs officials. Georgian officials are expected to be invited for a two-week basic course on weapons of mass destruction (WMD) smuggling issues, probably at the Budapest International Law Enforcement Academy (ILEA). The DOD/Customs Counterproliferation program plans to provide training to assist Georgia's customs service and border guards over the next two years. The program includes training, both in-country and in the U.S., as well as provision of appropriate equipment to enhance Georgia's border security. The Department of Energy/Export Control is working with multilateral partners to develop a regional workshop which will focus on nuclear export control issues in the region, including Georgia. The Department of State/Export Control assistance plans to provide an automated export licensing system which will improve the abilities of export licensing officials to control the transit and export of strategic materials from the territory of Georgia. Questions for the Record Submitted by Mrs. Lowry israel fmf Question. While the annual FMF amount for Israel has remained constant over the last decade, the cost of U.S. weapons systems has increased considerably and inflation has risen over that same period. The real value of the $1.8 billion we are giving to Israel this year is substantially lower than its worth a decade ago in constant dollars. I have been a vocal proponent of an increased U.S. military commitment to Israel to keep pace with its changing and growing security needs. What can we do about this situation? What is the Administration prepared to do to help Israel accelerate development and deployment of joint missile defense programs such as the Arrow system? Answer. The United States has an ironclad commitment to Israel's security and well-being and to sustaining and enhancing its qualitative military edge. We believe that strengthening Israel's capability to defend itself is important to regional stability and security and serves the broadest range of U.S. national interests as well as Israel's. The cornerstone of our military assistance to Israel is an annual $1.8 billion Foreign Military Financing (FMF) grant. While this amount has remained constant, it represents an increasingly large portion of our shrinking military aid budget. In FY-97, Israel received approximately 56 percent of all U.S. FMF grants, compared to 43 percent in FY-91. To assist Israel in meeting its defense needs, we have been able to supplement its FMF through a number of extra steps, such as early disbursement of its annual FMF which allows Israel to collect interest on its allotment. Israel's FMF account earned $103 million in FY-97. A total of $61.5 million in excess defense articles was notified to Congress for delivery to Israel in FY-97, and last Fall we agreed to preposition an additional $115 million worth of military equipment in the War Reserve Stockpile in Israel and to earmark $100 million in munitions in the U.S. for use by Israel in a crisis. Additionally, in FY-97, DOD procured over $295 million worth of goods and services from Israel, an increase of over $69 million over FY-95. The FY-98 Defense Appropriations Bill contains more than $320 million in funding for joint programs which augment our security assistance and reinforce the strength of our relationship. Included in this sum is $61 million for the Theater High Energy Laser Program and $50.7 million for the Arrow anti-tactical ballistic missile program. The U.S. and Israel are jointly funding development of the Arrow missile system and the U.S. has committed to contribute $248 million over six-years (through 2001) for the integration, test and evaluation of the Arrow and to insure interoperability with U.S. theater missile defense forces. imet Question. I would like to pose a question about the fundamental benefits of the IMET program: The Administration has testified time and again that the IMET program, and especially the Expanded IMET component, is intended to teach human rights, civilian control of the military, and democracy building. We have been providing IMET and Expanded IMET to Indonesia for many years, but that country's military is still categorized by atrocious human rights violations. When will we see this predicted pay-off for our military assistance? When can we expect the millions of dollars we have put into the IMET program to result in a greater respect for human rights in Indonesia? And I might add that Indonesia is just one of several countries that this question can apply to. Answer. As you note, greater respect for human rights, professionalism, and proper conduct are among the many benefits that we see flowing from the IMET program. While it is impossible to quantify the human rights ``pay-off'' from IMET, we believe that engagement with the Indonesian military through IMET has produced some progress in this regard. IMET provides the opportunity for Indonesian military personnel to be educated in the United States, to observe our commitment to rule of law and American values, and to acquire additional skills. IMET graduates are more professional, more committed to improving their own armed forces, and more likely to be at the forefront in reforming their own services. Indonesian IMET graduates return home with an understanding of what we Americans stand for and what we stand against. IMET graduates have been prominent in investigating and punishing the failures of discipline that cause human rights abuses. We would neither claim that the Indonesian military's human rights record is spotless, nor that IMET is responsible for all improvements. However, there have been some significant steps in the right direction. Citing just a few examples, Indonesian graduates of the IMET program have: Chaired the Military Honor Council that disciplined officers involved in shooting civilians in East Timor in 1991; Drafted and disseminated rules of behavior for Indonesian soldiers confronting civil disturbances; Drafted the ``Basic Human Rights and Respect for Law'' handbook for officers serving in Irian Jaya; and Instituted training programs on international law. latin american arms sales Question. I was extremely disappointed at the Administration's decision last year to lift the twenty-year old ban on high technology arms sales to Latin America. This ban has served U.S. interests well in Latin America by helping promote stability and democracy in the region. Now is the time to flood that region with expensive weapons systems that will divert scarce resources from poverty eradication and provoke a regional arms race. I have introduced legislation to codify this ban, but it is not too late for the Administration to reverse its ill- advised decision to lift the ban. What is the current status of this policy? What potential arms sales are currently being discussed and what is the timetable for these sales? Answer. On August 1, 1997, the Administration decided after a two year review of security policy in Latin America to establish a process for case-by-case consideration of requests for advanced arms transfers. That process is in place today. This decision puts U.S. arms transfer policy toward Latin American on par with the rest of the world and reflects the significant political, economic, and military transformation that has occurred in the region. It also reflects the new level of maturity, cooperation and dialogue we have reached in our partnership with the country's of the region. Our former policy of presumption of denial on advanced arms transfers to Latin America, while appropriate and successful for its time, is, in the Administration's view, no longer the right policy for today's situation in the hemisphere. Nonetheless, restraint remains the fundamental principle of U.S. arms export policy. In considering arms transfer to Latin America we take into consideration our guiding goals of strengthening democracy (including civilian control of the military), encouraging concentration of resources on economic and social development, avoiding an arms race, supporting transparency and confidence-building, and ensuring that responsible defense modernization occurs in a manner appropriate to each country's legitimate security requirements. Our change in policy has not resulted in a significant increase in advanced arms sales to the region to date. The only significant sales of advanced weaponry currently under consideration are the possible sale of fighter aircraft and associated weapons systems to Chile and two used F-16B models to Venezuela to replace lost aircraft. The Government of Chile has yet to decide if it will choose a U.S. fighter (F-16 or F/A-18) over competing Swedish and French aircraft. The current modernization plans underway in some Latin American countries are a result of aged and obsolete inventories of weapon systems. We do not believe the decision by some civilian elected leaders in South America to modernize their defense forces represents the beginning of an arms race nor do we believe that a unilateral U.S. ban on advanced arms transfers would alter modernization plans as non- U.S. suppliers are ready and eager to sell. Questions for the Record Submitted by Mr. Torres blackhawk helicopters for colombia Question. It is my understanding that the amount of funding available to the Bolivian government was substantially reduced in order to provide Colombia with the additional three Blackhawk helicopters while maintaining another $30 million for antinarcotics efforts in that country. What impact do you think this transfer of money is going to have in interdiction, or in your overall counternarcotics plan? What will be the political fall-out of cutting aid to Bolivia by nearly two- thirds? How will the $12 million for Bolivia be divided up among the different antinarcotics programs? Answer. The $50 million Congressional earmark for FY 1998, requiring INL to purchase Blackhawk helicopters for Colombian counternarcotics operations, would force INL to cut the Bolivian budget for FY 1998 from a planned $45 million level to $12 million (a 75% reduction). At this level, neither INL nor the Bolivians will be able to sustain the current counternarcotics programs or maintain the tempo of eradication and interdiction operations. The Bolivians see this as our dismantling of the partnership between our two countries. The Bolivians have invested heavily in changing public opinion from favoring and supporting the coca growers to seeing them as criminals who are destroying the fabric of Bolivian society and hindering economic progress. The new government's five-year plan to eliminate all illegal coca will not work without the backing of the Bolivian people and the economic support of the U.S. At the $12 million level of funding for Bolivia counternarcotics programs, we will be able to fund just over half of the eradication program, very little of the interdiction/law enforcement operations, only a third of the alternative development program (unless we take funds from yet another country program), and none of the balance-of- payment program. Cuts must also be made in Program Development & Support and Infrastructure, which will require us to fire employees, break leases for some facilities, and significantly reduce maintenance for vehicles and aircraft--making them unavailable for operational use. At this level of funding, we can expect to see significant reductions in levels of eradication, and significantly fewer seizures and prosecutions. Question. Seven new Blackhawk helicopters were purchased by the Colombian Army in 1996 with their own funds. In addition, the Colombian Air Force has had Blackhawks in their inventory since the late '80s. Where are these helicopters and what are they being used for? Which units are using them? Answer. The Colombian Air Force has 20 Blackhawks--8 ``L'' models and 12 of the older ``A'' models. Fourteen are with the 31st Combat Air Command. Six are with Combat Air Command 1. The Army's seven new Blackhawks are with the 10th Airborne Infantry Brigade. To date, virtually all available Blackhawk flight hours or ``blade time'' has been devoted to air support of the military's counter- insurgency efforts against the leftist guerrillas. We are in the process of negotiating with the Colombian Ministry of Defense for some Blackhawk flight time for support of the National Police's counternarcotics missions. In exchange we have offered to provide the Colombian military with assistance in developing maintenance programs and spare parts inventories to enable them to have their aircraft up and operating on a more regular basis. colombia Question. Has a list of units been drawn up for the provision of aid to the Colombian army? What is the timeline for making a decision on whether aid to the Colombian army can go forward? Answer. Six units in the Colombian Army were initially identified as potential recipients of U.S. counternarcotics assistance. Pending negotiation of an end-use monitoring agreement with the Government of Colombia, and the provision of information regarding Colombian security force units, assistance was withheld from these units. The Government of Colombia has provided information regarding these units, under the terms of the agreement, and we are evaluating it. Based on that information and other information available to us, we determined to provide assistance to one of the six units immediately, and to another unit upon removal from that unit of two individuals who are under investigation for alleged human rights violations committed prior to their joining that unit. We are still evaluating the information provided regarding the other four units, and have requested additional information in order to clarify some points. We anticipate that we will soon have sufficient information to enable us to either proceed with assistance to these units, or to make recommendations to the Secretary, for determination in accordance with the Leahy Amendment and/or Section 570 of P.L. 105-118, as appropriate. Question. Has a list of units been drawn up for the provision of aid to the Colombian army? What is the timeline for making a decision on whether aid to the Colombian army can go forward? Answer. Six units in the Colombian Army were initially identified as potential recipients of U.S. counternarcotics assistance. Pending negotiation of an end-use monitoring agreement with the Government of Colombia, and the provision of information regarding Colombian security force units, assistance was withheld from these units. The Government of Colombia has provided information regarding these units, under the terms of the agreement, and we are evaluating it. Based on that information and other information available to us, we determined to provide assistance to one of the six units immediately, and to another unit upon removal from that unit of two individuals who are under investigation for alleged human rights violations committed prior to their joining that unit. We are still evaluating the information provided regarding the other four units, and have requested additional information in order to clarify some points. We anticipate that we will soon have sufficient information to enable us to either proceed with assistance to these units, or to make recommendations to the Secretary, for determination in accordance with the Leahy Amendment and/or Section 570 of P.L. 105-118, as appropriate. implementation of the leahy amendment Question. What is the process for determining that the human rights conditionality, known as the Leahy Amendment, included in last year's foreign operations bill, will be complied with? In understand that good instructions have been sent out to embassies regarding their reporting requirements, but am interested in how the process will work in Washington. Is an interagency process in place? Will Dr. Shattuck be heading that up, as he indicated in testimony recently? Where will final decisionmaking authority rest? When will we be able to review the list of units to receive or receiving assistance? Answer. The Department of State sent a cable to all diplomatic posts in mid-March, informing them of the new requirements of section 570 of the Foreign Operations Assistance Act (FOAA); instructing them to formulate and submit to the Department of State an action plan to ensure that U.S. assistance would not go to human rights abusers; and mandating that any credible allegations of gross human rights violations by security forces receiving U.S. assistance be reported immediately to the Department of State. Since section 570 of the FOAA requires the Secretary of State to make a determination as to whether (a) there is credible evidence that members of a security force unit receiving U.S. assistance have committed gross human rights violations and (b) the local government has taken effective measures to bring alleged abusers to justice, ultimate authority rests with her. In that regard, there is no interagency decisionmaking process in place. State Department officials from the affected regional bureau, the Bureau of Legal Affairs, the Bureau of Democracy, Human Rights, and Labor, the Bureau of Political/ Military Affairs and other affected bureaus meet to (a) discuss an allegation of gross human rights violation committed by a security force unit receiving U.S. assistance, (b) decide whether the information is credible, and (c) if it is, draft a memorandum to the Secretary of State so that she can decide whether the local government is taking effective measures to bring alleged abusers to justice or whether the U.S. Government should move to cut off assistance to the unit in question. Recommendations will be submitted to the Secretary to State, who will be the final decision maker, as required by law. At present, we have no worldwide list of units proposed to receive assistance or already receiving it. Each of our embassies has information regarding to which units it is providing assistance. Question. Was there a single unit anywhere in the world whose funding has been cut off as a result of the Leahy Amendment? If yes, which ones? Answer. So far, assistance has not been cut off for any security force units anywhere in the world as the result of the Leahy Amendment. However, a mechanism has been established for reporting to the Department by posts throughout the world of possible human rights violations by security force units that are receiving or proposed for U.S. assistance. A committee has been formed within the Department to evaluate any such reports and monitor distribution of U.S. assistance. Among the matters under review by such committee is that of counternarcotics assistance to Colombia. Pending negotiation of an end- use monitoring agreement with the Government of Colombia, and the provision of information regarding Colombian security force units, assistance was withheld from six Colombian Army units that have been proposed for U.S. assistance. The Government of Colombia has provided information regarding these units, under the terms of the agreement, and we are evaluating it. Based on that information and other information available to us, we determined to provide assistance to one of the six units immediately, and to another unit upon removal from that unit of two individuals who are under investigation for alleged human rights violations committed prior to their joining that unit. We are still evaluating the information provided regarding the other four units, and have requested additional information in order to clarify some points. We anticipate that we will soon have sufficient information to enable us to either proceed with assistance to these units, or to make recommendations to the Secretary, for determination in accordance with the Leahy Amendment and/or Section 570 of P.L. 105-118, as appropriate. Question. The Leahy Amendment for FY 97 prohibited aid under the International Narcotics Control Account (DOS) to security force units if the Secretary of State has credible evidence that such a unit has committed gross violations of human rights. It was apparently expanded by the Administration to cover all forms of counternarcotics aid. Can you tell us in which instances the Secretary has received this evidence? What is the procedure to forward the Secretary such credible evidence? Who is involved in assessing the evidence for the Secretary's review? Answer. To date, the Secretary has received no credible evidence of gross human rights violations committed by security force members of units which receive U.S. assistance; however, we have received information from the Government of Colombia which we are evaluating. The procedure to forward such information to the Secretary is by memorandum from an intra-Department of State team which has thoroughly reviewed the information and deemed it to be credible. The team assembled to review this information will at a minimum include members of the Human Rights Bureau, the Legal Bureau, the Narcotics Bureau (if applicable), the Political/Military Bureau, and the affected regional bureau. This team will, if necessary, request additional information from any or all of the following sources: our embassy, human rights NGO's, the host government, our intelligence agencies, and DOD, until sufficient information is available to determine whether or not an allegation of a gross human rights violation committed by the unit receiving U.S. assistance is credible. Question. The Amendment also stated that the aid can go forward if the Secretary determines and reports to the Committees on Appropriations that the government of such country is taking effective measures to bring the responsible members of the unit to justice. In which instances did the Secretary make this determination? Who else was involved in making the determination? Could we have copy of such reports? Answer. To date the bureaus responsible for reviewing reports of violations of human rights abuses have presented no recommendations to the Secretary regarding determinations under either the ``Leahy Amendment'' or Section 570 of the FY 98 Foreign Operations Appropriations Act. However, the Department is withholding proposed U.S. assistance to five Colombian army units due to allegations of gross human rights violations. The Department is reviewing the evidence with respect to the allegations and is requesting more information on them. Question. This Amendment was re-adopted for FY98 and expanded to cover ALL forms of security assistance. In the future, what will be the procedure that will lead to the Secretary reviewing the credible evidence? Answer. Section 570 of the FY 98 Foreign Operations Appropriations Act (FOAA) is a provision similar to the ``Leahy Amendment'' included in the FY 97 FOAA. Under procedures established to help ensure compliance with this legislation, reports of incidents of gross human rights violations received by the Department are examined by Department personnel, including representatives from the affected regional bureau, the Office of the Legal Adviser, the Bureau of Democracy, Human Rights and Labor, the Bureau of Political-Military Affairs and, as appropriate, the Bureau of International Narcotics and Law Enforcement Affairs. Additional information is requested when needed, and when appropriate, recommendations would be made to the Secretary. Question. Assistant Secretary Shattuck testified before the International Relations Committee (Country Reports and US policies, February 3, 1998) that he would be asking ``diplomatic posts to provide an action plan for implementing this legislation.'' How will this build on procedures established for the implementation of the original Leahy amendment? Answer. This procedure is very similar to those established for the implementation of the original Leahy amendment. A telegram was sent to all of our diplomatic and consular posts in March, informing them of the requirements of Section 570 of the FY 98 Foreign Operations Appropriations Act and instructing them to provide an action plan to the Department of State explaining the procedures they have in place to monitor reports of gross human rights violations by security forces units and to correlate such information with ongoing or planned U.S. assistance to such units. We are reviewing incoming responses to our telegram to ensure every post (1) is aware of and understands this legislation, (2) is collecting and reviewing information regarding allegations of gross human rights violations by security forces, and (3) is promptly reporting to Washington any allegations of gross human rights violations committed by members of security forces receiving or proposed to receive U.S. assistance. Question. The instructional cable to all diplomatic posts detailing the procedures for the implementation of the original Leahy amendment stated that ``In the first instance, posts must be responsible to correlate country human rights reporting with individual recipient units of INC-funded assistance.'' Who will determine the methodology for obtaining this information? Answer. Each embassy has a designated human rights officer. In addition, some embassies have representatives of FBI, DEA, and the Defense Department. These individuals are all tasked with monitoring the flow of U.S. assistance to security force units in their country and with reporting any allegations of gross human rights violations committed by them or by units proposed to receive U.S. assistance. Our embassies are well-connected to local police and military sources, as well as to human rights NGO's, religious groups, and others who routinely report allegations of gross human rights violations. Our diplomatic posts have been instructed to immediately pass this information to Washington by telegram. This is the standard methodology for obtaining and reporting to Washington this information. Question. This same cable instructed all diplomatic posts to ``report promptly to (the State Department any information which the post may have concerning gross violations of human rights committed by units of host government security forces that could bear on a unit of these forces that may receive INC-funded assistance for FY97...'' and other clear instructions for the immediate reporting back to the Department of such information. What happened to this information from the moment it was received in State to the moment that a determination was made on taking this before the Secretary? Were any units cut-off? If yes, which ones? Answer. When information is received from posts alleging gross human rights violations committed by security forces receiving or proposed to receive U.S. assistance, a Department of State term from the Bureau of Democracy, Human Rights and Labor, the Office of the Legal Adviser, the Bureau of Political/Military Affairs, the regional bureau, and other affected bureaus will meet to review the information. The team will decide whether the information is credible, not credible, or insufficient to make such a determination. In the latter case, more information will be requested. If the information is deemed credible and the security force unit is receiving U.S. assistance, a memorandum will be prepared for the Secretary who will make a determination whether to cut off assistance or whether to continue it, based on whether the local government is taking effective measures to bring the perpetrators to justice. To date, no memorandum has been forwarded to the Secretary. However, proposed U.S. assistance to five units of the Colombian army is on hold while we review information regarding alleged gross human rights violations committed by their members, and the status of ongoing investigations or other judicial proceedings in their cases. end use monitoring report Question. The End Use Monitoring Report for calendar year 1994 was published in March 1996; the one for calendar year 1995 was published in February 1997. What is the reason for the consistent hold-up on the End Use Monitoring Report produced by INL? Can we expect the EUM Reports for calendar years 1996 and 1997 this year? Answer. The drafts of the 1994 and 1995 End Use Monitoring reports encountered unusual delays in the internal clearance process. Most prior reports were issued in the summer or early fall of the following calendar year. The report for calendar year 1996 was issued in September, 1997. The target date for the 1997 report is July, 1998. international law enforcement academy (ilea) Question. I would like more information on the new Western Hemisphere Law Enforcement Academy. Where is it going to be located? What is its mandate; only counterdrug? Will it train only civilian students, or military as well? Answer. As part of the Administration's objective of strengthening international law enforcement efforts, the Department of State is establishing regional law enforcement academies to provide training and enhance cooperation. In 1995, the first International Law Enforcement Academy (ILEA) was created in Budapest, and it has proved to be a successful model, drawing on the expertise of U.S. law enforcement agencies and participating nations. President Clinton announced a proposal at the San Jose Summit in May 1997 to establish an International Law Enforcement Academy for Latin America, or ``ILEA South.'' The goals of ILEA South are to expand relationships with the among foreign law enforcement officials from the region, support democracy by stressing the rule of law in international and domestic police operations, and raise the professionalism of law enforcement and judicial officials. We began negotiations to locate the facility in Panama, where we hope it will complement other counterdrug activities which might be based there after 1999. The first course of the academy was held in Panama in November-December 1997, and the second in March 1998. The Administration believes it must be located within the region in order to encourage broad participation and a sense of ownership by countries in the region, which are essential to the success of the academy. Another key concern is the ability to offer significant contributions, so that the United States does not bear all the costs. ILEA South's mandate is not limited to counterdrug issues, but includes the broad range of law enforcement and judicial concerns. While primarily concerned with training civilian students, training of appropriate military personnel at ILEA South is not excluded. u.s. military training Question. The 1997 Report to Congress on U.S.-Mexico Counterdrug Cooperation by the Office of National Drug Control Policy details the training of Mexican military personnel consisting of approximately 300 for 1996 and over 1500 for 1997. Are there other Mexican military personnel receiving other training? What is the vetting process to ensure that no trainees have been implicated in human rights violations? What does the human rights component of their training consist of? Answer. DoD provided 300 training slots for Mexican personnel in FY 1996 and 1300 in FY 1997. By the end of FY 1997, 829 Mexican personnel had received training. As the ONDCP report indicated, DoD is providing counter-drug training to Mexican military personnel who may be assigned to newly-created special units, one of whose primary missions is counter-drug. DoD also trained over 250 Mexican Navy personnel in maritime operations or skills. There are small numbers of Mexican military personnel receiving other kinds of training through the International Military Education and Training (IMET) program, and a few military officers participate annually in military academy exchange programs. Personnel selected by the Mexican military to receive U.S. training are chosen from those who have performed well in their own academies and in their military duties. U.S. trainers have given them high marks for professionalism and military conduct. In addition to Mexican government screening, the U.S. routinely screens all foreign students, whether civilian or military, before issuing appropriate visas. This is not a fail-safe process, but has proven to be a practical procedure. Promotion of human and civil rights is an important part of our counternarcotics and military policies overseas, including Mexico, and is also a standard component of all U.S. training. These concepts are embedded in the program of instruction taught by the U.S. Army Special Forces. Mexican President Ernesto Zedillo has publicly affirmed his Administration's commitment to uphold internationally-recognized human rights. The independent National Human Rights Commission is playing an increasingly-important role in investigating abuses by military and police personnel. Question. I understand that the agreement between the United States and Mexico prohibits the use of U.S.-supplied helicopters in the states of Chiapas and Guerrero. Is that correct? If so, how are we guaranteeing that this is the case? Answer. As required by our legislation, the Government of Mexico has provided us with binding assurances that any equipment transferred to Mexico will be used only for the purposes for which it is intended-- in this case counternarcotics. These are the same required legal assurances provided by all recipients of U.S. excess military equipment, and Mexico will be held to the same standards as all other recipients. While both Guerrero and Chiapas are states with serious drug production and trafficking problems, they are also conflictive zones, and Mexico has agreed informally not to assign U.S.-provided aircraft to those areas. We are, of course, following closely the situations in these states. We regularly discuss human rights issues with the Government of Mexico, as we do with many other governments. The U.S. Embassy, by agreement with the Government of Mexico, conducts regular end-use monitoring of the aircraft and equipment provided to Mexico, as is done worldwide. Under the end-use monitoring procedures, Mexico provides bi-monthly reports indicating how each aircraft was used and its operational status. In addition, personnel from the U.S. Embassy in Mexico make quarterly on-site observations at installations where the aircraft are stationed to check the aircraft, interview personnel, and verify the information provided. These procedures are working well, with no indications that any U.S.-supplied equipment has been diverted to other than authorized purposes. We are confident that this equipment is being used for the intended counternarcotics missions. Question. Are any of the INL funded programs actually implemented by the Defense Department? If so, which ones? Answer. There are no INL funded programs implemented by the Defense Department. INL does reimburse DOD for foreign participant training costs related to various courses offered by DOD such as for pilot training, mechanics training etc. Question. Are any of the INL (International Narcotics and Law Enforcement) funded programs actually implemented by DOD? If so, which ones? Answer. No. INL and DOD have a close partnership in international drug control training and support. INL frequently funds the training of foreign personnel, generally civilians, in DOD training facilities-- such as pilot and mechanic training--and purchases spare parts from DOD for UN-1H and other aircraft. Likewise, DOD has provided significant material and training support to INL and to many of our international programs. However, DOD does not manage any of INL's programs. Questions for the Record Submitted by Mrs. Kaptur bosnia Question. How much money has the United States expended from all accounts for Bosnia-related activities? How much have other nations expended? Answer. The set of financial benchmarks used in accounting for expenditures in support of nonmilitary Bosnia-related activities is complex. The World Bank has the most comprehensive database for the international effort. That database is broken out into committed, under implementation, disbursed and expended categories. Under expenditures, by yearend 1997 the United States had expended $347.45 million, approximately 20.3 percent of the international total of $1.7 billion. For military expenditures, the calculation uses fiscal rather than calendar year, but the numbers are more clear. The Department of Defense Comptroller reports the FY96 cost for U.S. support operations in and around Bosnia to have been $2.5 billion. The FY97 cost for IFOR/SFOR operations was approximately $2.3 billion. FY98 costs for SFOR are projected to be $2.0 billion. (Note: The President's $1.5 billion FY98 budget request for Bosnia assumed a reduction from 8,500 to 5,000 in U.S. troops by the end of FY97. Higher force levels were required due to the delay in municipal elections to September 1997. The extension of the 8,500 troop level through June 1998 added $487 million to the projected budget.) The FY99 estimate to maintain 6900 troops in Bosnia as a follow-on force is $1.9 billion. This FY99 requirement was identified to Congress as a non-offset emergency budget amendment for FY99. Calculating the expenditures of other nations' support of IFOR/SFOR peacekeeping activities in Bosnia is problematic. There is little relevant public information on such spending and few of the participating nations use comparable accounting methods. Nevertheless, we can state that U.S. troops today comprise less than 25 percent of the international forces in Bosnia and Herzegovina overall and that that percentage will decline as our troop strength drops. Question. What percentage of all troops in Bosnia are U.S. forces? What percentage of troops in Bosnia are deployed by other nations? Answer. U.S. troops comprise approximately 24 percent of the military force deployed in support of peacekeeping operations in Bosnia and Herzegovina. The balance is provided by the other nations participating in this international effort. nonproliferation: security of nis nuclear facilities and materials Question. How confident are you with the safety and security of NIS nuclear plans and the material associated with them? Answer. We have been concerned about the security of nuclear materials in the nations of the former Soviet Union. We are working cooperatively with these countries to ensure that the nuclear materials are safe and secure. Together we have already made substantial improvements, and must continue to provide support through completion of these projects several years from now. Several Administration programs are involved. The Department of State administered Nonproliferation and Disarmament Fund provides grants that support a variety of efforts, including strengthening export control regimes to prevent illicit trafficking of nuclear materials. The Department of Energy Materials Protection, Control and Accounting Program works with NIS nuclear facilities to improve security, physical protection, and safety. They are working with each facility which has weapons-usable nuclear material (unirradiated plutonium and highly-enriched uranium). The Department of Defense Cooperative Threat Reduction Program promotes nonproliferation of weapons materials, and was critical in the programs to help Belarus, Kazakstan, and Ukraine become nuclear weapons-free states. Question. How confident are you with the containment and remediation of the Chornobyl reactor and site? Answer. U.S. concerns at Chornobyl rest largely with the 20-story steel and concrete ``Shelter'' built to cover the radioactive remains of the destroyed Chornobyl-4 reactor. Built in just seven months, under difficult and hazardous conditions, the shelter was never intended to serve as a long-term solution for the problems posed by the destroyed reactor. The unstable condition of the shelter is now a source of serious concern and requires prompt international attention. In the 1995 Memorandum of Understanding (MOU) between the G-7 and Ukraine on Chornobyl Closure, Ukraine agreed to permanently close the remaining operational units at Chornobyl by the year 2000. To help Ukraine develop a plan to stabilize the shelter over the destroyed reactor, Ukraine and the G-7 nations approved the internationally prepared Shelter Implementation Plan (SIP). At the G-7 Denver Summit in June 1997, the G-7 nations pledged to contribute $300 million toward the $760 SIP million project cost. The U.S. share of this pledge is $78 million. Ukraine has pledged $50 million in kind. As of March 23, 1998, countries have agreed to provide over $400 million over the next 5-6 years to implement the SIP. This total is sufficient to initiate work while additional pledges are sought. Public sector fundraising will continue, and the private sector fundraising effort is expected to kick off within a year. Bilateral funding by the European Union and by the United States was also provided in 1996 to enable early work on the shelter to take place. U.S. bilateral assistance are focused on improving safety at the site, and include provision of a nuclear safety monitoring system, provision of occupational safety equipment, and provision of equipment for shelter operations. The U.S. is working to strengthen the capabilities of Ukraine's Nuclear Regulatory Authority, which plays an important role in reviewing and approving implementation of the SIP. In addition to our bilateral activities at the Chornobyl shelter, the U.S. has contributed funds through the Nuclear Safety Account (NSA) at the EBRD to construct two facilities (for liquid radioactive waste management and safe spent fuel storage) which will support decommissioning of the Chornobyl plant. The NSA is also funding four small projects to improve the near-term safety of Chornobyl Unit 3 prior to its closure in 2000. As a contributor to the NSA, the U.S. sits on the NSA Assembly of Contributors and has a vote in determining how projects are implemented. The U.S. is also funding completion of a partially-built heat plant at Chornobyl which will support the site during decommissioning activities, after the last Chornobyl reactor is closed. Question. How confident are you with the safety and security of Newly Independent States (NIS) nuclear power plants built to the Chornobyl design? Answer. The Chornobyl-style RBMK reactor is a Soviet- designed boiling water, graphite-moderated, pressure-tube reactor which contains fundamental uncorrectable safety deficiencies which would prevent these reactors from ever being licensed to operate in the U.S. These deficiencies include a susceptibility to power instabilities; lack of a modern containment system to prevent release of radioactivity to the environment; and inadequacies in the emergency core-cooling systems, fire protection systems, and electronic control-and- protection systems. There are a total of 14 RBMKs operating in Russia, Lithuania and Ukraine. The U.S. has strongly urged these countries to close them down as soon as possible. In Ukraine, we have seen excellent progress with the closure of Chornobyl Unit 1 in 1996 and Ukraine's commitment to close the remaining operational reactor at Unit 3 by 2000. In Ukraine, Russia, and Lithuania, the U.S. Agency for International Development (AID) is working with the host country to identify safe, environmentally acceptable and least cost options which will permit other RBMK reactors to close. The programs of DOE and the Nuclear Regulatory Commission to reduce the risks of a serious accident at these RBMK reactors and to strengthen the nuclear regulatory authority in these countries continue. Question. With the many questions of biological weapons proliferation, who has the final say if a country should get the possible ingredients that could be used for military purpose? I asked this question, because I watched one of the news shows and was stunned to hear a former DOD official say that ingredients that were eventually shipped to Iraq, which he had blocked, were overridden by the State Department and the Commerce Department. What is the current procedure? Answer. All export licenses for Commerce-controlled dual-use biological weapons-related items are reviewed by the interagency, including the Departments of State, Defense, and the Arms Control and Disarmament Agency. Each agency provides the Commerce Department with a recommendation to approve or deny a license application. Taking into account interagency views, the Department of Commerce determines whether a license should be approved or denied. On those occasions when agencies disagree with the disposition of a license, they may appeal the decision to Commerce-chaired interagency review board. A mechanism exists--but it is rarely used--whereby an agency may continue to appeal a license decision to the Export Administration Review Board--which is composed of Cabinet-level officials--and ultimately to the President. demining Question. Your budget shows a 700% increase over the last two years for humanitarian demining. I recognize the importance of this work, but can such a rapid ramp-up actually be used effectively? Answer. Within the last year, we have expanded the program from fourteen to nineteen countries and are seriously examining several additional countries. We are also continuing our support to existing country programs which continue to remove landmines from the ground. Commitments to sustaining existing country programs, and expanding into new country programs, have already utilized the $20 million received for FY 98. The worldwide U.S. Government Humanitarian Demining Program is managed and monitored by the Interagency Working Group (IWG) on Humanitarian Demining which ensures effective use of the funds. Actions within the State Department are increasing our oversight and program management which we believe will effectively monitor and manage these resources. In addition, with the announcement of the President's Demining 2010 Initiative on October 31, 1997, we will be working to accelerate all global humanitarian demining operations, including the U.S. program, to eliminate the threat to civilians of anti-personnel landmines by the year 2010. Question. What commitments do we have for similar contributions from our allies? Answer. We estimate that approximately half of all international demining assistance comes from the U.S. with the European Union as the next largest donor. Other major donors include Norway, which has committed $100 million over five years, Japan ($80 million over five years), Canada ($100 million Canadian over five years), Sweden ($23 million in 1998), the United Kingdom (10 million British Pounds per year for the next three years and Finland ($6 million in 1998). The 1998 edition of the State Department report Hidden Killers will include information on international contributions to the worldwide humanitarian demining effort. With the announcement of the President's Demining 2010 Initiative on October 31, 1997, the U.S. will be hosting a conference in May, bringing together key donor governments and others to create an effective international coordination mechanism to ensure that sustained public and private resources for demining are directed, in an organized and rational manner, to programs in the mine-affected countries, with the goal of eliminating the threat to civilians of anti-personnel landmines by the year 2010. The Demining 2010 Initiative has challenged the international community--public and private sectors--to raise $1 billion annually for global humanitarian demining. Question. Who administers international demining programs? Answer. The U.S. Government Humanitarian Demining Program is administered by the Interagency Working Group (IWG) on Humanitarian Demining, chaired by State. The Department of Defense designates the Vice Chair. A recent Congressional Report (copy attached) explains the IWG process. Question. Do we directly fund demining operations or is the funding funneled through NGOs? Answer. In most cases, our goal is the establishment of a sustainable, indigenous demining capability to manage and conduct demining operations in a landmine-affected nation, rather than funding ongoing demining operations. The first step is to establish a Mine Action Center, which is an office of the host nation government responsible for solving the landmine problem in that country. U.S. Government assistance is provided in-kind through the host government Mine Action Center. Where a direct, government-to-government military relationship is not appropriate, we have functioned through the United Nations (in Afghanistan and Angola) and through USAID (in Angola and Rwanda). In the future, new funding through the Nonproliferation, Antiterrorism, Demining and Related Programs (NADR) account will provide additional resources and administrative flexibility to consider accomplishing overall objectives through NGOs as well. Question. Can you please explain to what extent Laos and Cambodia will benefit this year and succeeding years from this program? Answer. We plan to provide Cambodia with $2.0 million in NADR funds in FY 98 and $3.0 million in FY 99 (out of the $50 million requested). We plan to provide Laos with $2.0 million in NADR funds in FY 98 and the same amount in FY 99. In both cases, the program has successfully established a sustainable, indigenous demining and unexploded ordnance (UXO) clearance capability in each country. Ongoing funding provides additional equipment to sustain and expand the program. Question. How does this compare to the past support? Answer. In FY 97, we provided both Cambodia and Laos with $1.0 million each in NADR funds. We have increased our support together with increased managerial capability in each country. Wednesday, March 4, 1998. U.S. DEPARTMENT OF STATE WITNESS HON. MADELEINE K. ALBRIGHT, SECRETARY OF STATE Mr. Callahan's Opening Statement Mr. Callahan. Good morning, Madame Secretary, and welcome back to our subcommittee. Between the 1998 request and the '99 request, the Administration, you and the President, have requested that we consider a total of about $31 billion dollars in requests this spring. And in order to give our members adequate time to discuss these issues with you, we appreciate very much you coming 30 minutes earlier than usual. We respect your tight schedule, and we will try to get you out as quickly as we can. But, as you can imagine, the members of the subcommittee have a great deal of interest in many of the things you are in charge of, and I am sure there will be a lot of questions. Since your last visit, we have a new member of our subcommittee. Congresswoman Kaptur I do not think is here yet, but she is very knowledgeable on international affairs and I am sure when she gets here she will have some very strong questions, especially about the Ukraine. I am not going to read a formal statement. I invite you-- and I have had the opportunity to review your statement--to use as much time as you like, but we will accept your full statement for the record. And let me just say we hope that you will address especially the Middle East and certainly the problem in Iraq. We have talked with some members of the Executive Branch, some of the under secretaries, in subcommittee hearings. I think I got from the attitude of the members of the subcommittee that some of us are grossly disappointed that some of the very countries you are requesting aid for this coming year and countries that have been huge recipients of American aid in the past, both military and other aid, did not readily-- or at least the perception was that they did not readily come to your side when you visited them. Conceivably you know something that we do not know, but it is disheartening to me and to many members of our subcommittee when we send the billions of dollars we send to these foreign countries, and when we entertain their leaders as they come to the United States, that they did not readily respond to your request. It would appear that either we had a flawed policy or a flawed program or a flawed plan. Or, if that was not the case, it appeared as if maybe they were fair weather friends. So we are interested to know what took place. I do not imagine you had to call Mr. Netanyahu twice when you went to him for his support of our latest Iraqi venture. But we were very disappointed that other nations did not seemingly come immediately to your side, especially since you went to the tremendous effort you went to in going to visit with them to explain the problems. Our perception is that what we were trying to do primarily was to protect the very countries who sit in the middle of the most dangerous area--the very countries that refuse to publicly come out and say we are with you 100%. But we respect your professionalism, and we know that you may have had private conversations with some of the leaders of these countries. But nevertheless, it is a sincere concern. And as these leaders come to visit us, especially this spring in their quest for additional aid, I am certain that some of them are going to have to answer some very tough questions from members of this committee. I know you just came back from Africa, and I know the President is going to visit Africa sometime in the near future. I am real happy to see that you have taken our advice and have not gone over there promising them the moon. The President, I think, is indicating there is an additional $60 million for Africa. While Latin America is still problematic or some areas of it, your request asks for a sizeable increase in assistance to Haiti. I see no progress has been made in Haiti. As a matter of fact, after our visit there last spring, there was no progress--zero progress that we could see. And reports that have come back give us an indication there is still very little progress. As a matter of fact, it has deteriorated to the point now that you cannot even safely land a commercial airplane on the international airport because of the cows grazing on the runway. And there has been no privatization to our knowledge even though they have repeatedly promised us that privatization would immediately begin. To the best that we can understand, there has been no privatization in Haiti. Other areas in South and Central America--you know of our concerns about this area of the world. We think that more concentration should be put on Central and South America and the Caribbean rather than on some of the countries we are spending so many billions of dollars on. So we hope that you will continue your direction of giving assistance to countries in this hemisphere and priorities to countries in this hemisphere because they naturally, because of their proximity to the United States, are countries that can mean the most to us not only in trade, but from a national security point of view. Russia still has tremendous problems. I know that you are going to visit Ukraine. I think you are leaving tonight or tomorrow to visit Ukraine. We have had reports, this committee has, with respect to business people doing--trying to do business in the Ukraine. And yet, corruption and the hardship that some of the people in Ukraine give to our American business people gives us heartburn. And I hope that when you go to Ukraine, you will tell them of the Congress' concern about American business people being mistreated in the manner in which they are. And that if indeed this continued and some of the problems they have created is not corrected, then you are going to have difficulty getting this subcommittee to afford you any money for Ukraine. I know that you are concerned about that as well. And I hope that before you go to Ukraine, you will discuss some of these problems business people and then address their particular problems with the leaders of Ukraine. I just want to forewarn you that the request for the additional appropriation is going to be difficult to come by. The chairman and the ranking member of our full committee are here, and we understand that there probably is going to be some kind of highway program, but we are not going to take it out of the surplus. We are going to, to the best of my knowledge, apply that surplus to pay off some of the national debt. And we are going to have to come up with monies for the IMF or any increased monies you have with the limited amount of resources because I think we are also going to have a highway program that we are going to have to come up with several billion dollars to fund. And I think, based upon information I have received, that we are going to take the highway monies out of some existing spending capability. So monies are going to be extremely limited. But let me tell you that I personally appreciate the kindness and courtesies you have shown to me, especially during this last year; that you are a very responsible and forceful leader; and that your respect not only here in the United States but worldwide is certainly a feather in the cap of this Administration. So we thank you. And at this time, I would like to yield to the full committee chairman, and then to the ranking member, and then to the ranking person from California, Ms. Pelosi. Mr. Livingston's Opening Statement Mr. Livingston. Thank you very much, Mr. Chairman. I will be brief because I know the members want to get into questions. But Madame Secretary, I want to welcome you. I have not had a chance to formally welcome you to the second session of the 105th Congress appearing before the various committees, but I will take that opportunity now. You have been very busy. You are covering the world and have a lot of problems confronting you and, of course, confronting this Nation as well. And please understand that if the questions get a little tough from time to time, we all share the same goals and do wish you all of the best of success as you undertake prospective solutions to these very difficult problems. I would associate myself with the remarks of the chairman, Mr. Callahan. Add only that I will have a number of questions which I would like to ask later on. And if I am not here, forgive me, but I will submit them for the record. But highlighted among my interests are, in fact, the cost for doing business in Iraq, Bosnia and Haiti. I feel that the Administration and the request has underestimated those costs if not totally in this bill, but certainly when you consider the defense bill in which they did not even make a request for Bosnia, let alone the process in Iraq in the President's request which means we just have to, for fiscal year '99, take it out of thin air or create that money out of other programs. The chairman mentioned the problems in Ukraine. The fact is we are very much concerned about the lack of security of American investment in Ukraine. And worse than that, the safety of investors as they travel to Ukraine. That is a very serious problem. Thirdly, it appears that the Administration has removed the IRA from the list of known terrorists or the terrorist list that we have carried forth from year to year. We removed it last year, and now we find out that the IRA is engaged in acts of terrorism once again. We will be curious to see how the State Department intends to deal with that problem. And finally, we do want to cooperate with you, Madame Secretary, but we have some very tough issues in dealing with the IMF and UN funding and others that will be incorporated presumably in the supplemental bill that will go through Congress within the next few weeks. And I am concerned that the Administration has taken an awfully hard nosed, inflexible attitude to the very simple request that we made last year to forego the advocacy of abortions around the world and blame the Congress for being intransigent. The fact is that the pro-life advocates in this Congress made tremendous concessions to reducing their request to that one forbearance, not to lobby for abortion internationally. And for the Administration to say well that is so totally off the table when we have so many other--much more serious, significant problems on the table before us in the coming weeks is just unfortunate and unwise. The Department allowed the UN Fund For Population Activities to renew its program in China. That is not only unwise; it is just plain dumb. So I hope that you will deal with these problems in your statement and that we can have a dialogue that can resolve these issues. We have got a lot of significant and difficult problems to negotiate through the mine fields, and it is going to have to be a two way street. We are going to have to have some give and take if we are going to get adequate solutions for the American people. With that, thank you, Mr. Chairman. I will have questions later on. And if I do not have an opportunity to ask them myself in person, I will submit them. But thank you again, Madame Secretary. Mr. Callahan. Thank you very much. Mr. Obey's Opening Statement Mr. Obey. Well, thank you, Mr. Chairman. In the interest of time, I had not planned to make any comments; but I nonetheless, as I often do, find myself required to respond to some of the comments of my friend, the distinguished gentleman from Louisiana. Let me simply say, Madame Secretary, I do not believe that the Administration's position has been inflexible at all on the question raised by the chairman. I think what the Administration's position has been is simply this: the Administration is saying that we have national interests that have to be dealt with with respect to our funding of the International Monetary Fund. I think the Administration is saying we have national interests that have to be dealt with with respect to cleaning up the arrearages at the United Nations so that we do not wind up asking an organization to do a lot of the work that we want to see done even though we are technically a deadbeat in that institution. And I think the Administration is saying that those interests ought to be dealt with on their own without being linked to a side bar issue which happens to be the divisions within the Congress on the questions to how we ought to conduct our family planning issues around the world. I think the Administration is simply saying that each of those issues are legitimate issues, but they all ought to stand on their own. They ought not be artificially linked politically. They ought not to held hostage to one another. And as adults, we ought to be able to work them out on a stand alone basis, and I hope that we can. It would be preposterous for us to refuse to defend our economic interests on the IMF front. It would be preposterous for us to continue to disarm ourselves and our ability to effectively influence the United Nations by getting that tied up into a separate issue involving what our family planning policy ought to be in some country a thousand miles away. It just seems to me that reasonable people ought to be able to find reasonable solutions on each of those fronts, but they ought not be linked in some kind of a political hostage fashion, and that is all the Administration has been saying, and I think it is correct to do so. I would simply hope, Madame Secretary, that as you pursue your duties, I would hope that we can find a way to persuade parties on both sides in the Middle East that, for the good of the region and the good of the world, that they need to be more forthcoming in their negotiations with one another. I would certainly think the Iraqi situation has emphasized once again the need for us to make progress on the core problem in the Middle East, which is the continuing disagreement between the State of Israel and its neighbors and the Palestinians as well. So I know that it is very difficult for us to prod two parties to negotiate under these circumstances, but I hope that we will do all we can because, after all, not only is their own national interest at stake, so is our own. Mr. Callahan. Ms. Pelosi. Ms. Pelosi's Opening Statement Ms. Pelosi. Thank you very much, Mr. Chairman. I am pleased to join you in welcoming Secretary Albright to our subcommittee. And I want to say that I believe our country is well served by and is very proud of Secretary Albright and the job that she is doing. The Administration's request of $14.1 billion represents about a $900 million dollar increase over FY98. However, even with this increase, I think this amount is the bare minimum necessary to conduct a foreign policy that preserves the national security of the United States. I want to spend a moment on the budget because that is what this hearing is about. This budget is largely a status quo request. In fact, the only increases of any significance in State Department run programs are for narcotics control, assistance to the New Independent States and in the proliferation, anti-terrorism and demining account. Overall resources for the conduct of international affairs remain as only one percent of the U.S. budget. Secretary Albright will, I am sure, present us with compelling justification for every penny today. As I have said, before, it is the least we can do. I was not going to bring up the subject of the Mexico City policy, but since our distinguished chairman did, I associate myself with the remarks of Mr. Obey. I believe that we can have that debate separately and let it stand on its own weight. I commend the Administration for not allowing the poor women of the world to be held hostage to the politics of the Congress of the United States, and opposing any kind of gag rule that some would want to impose on organizations regarding what they do with their own money. We are not talking about U.S. taxpayer dollars being spent on these activities. We are talking about what they do with their own money. That is a standard I do not think we would want to apply to all of the funding that the Federal Government does domestically or internationally. We spent a good deal of time discussing the IMF with Secretary Rubin. I know that it is his domain, however it certainly does have State Department involvement even beyond the Mexico City language. I am sure we will touch on that today. The concerns that I will raise today range from China to Chiapas and everything in between. I am concerned about what is happening in terms of the UN Commission on Human Rights in Geneva regarding a resolution on China's human rights practices. And I am very concerned, Madame Secretary, about recent press reports that significant numbers of Mexico Army troops are being trained at U.S. bases and that some individuals from the Mexican Armed Forces are receiving intelligence training. This training is supposed to be used in the drug war. My questions will relate to how this training may be being used for counterinsurgency purposes in Mexico. I support the President's leadership and policy in Bosnia, and I know you will give us a justification for the $225 million dollar request. My concern centers around Bosnia war criminals or, as we now call them, persons indicted for war crimes, PIWC's. And of course, I share the concern of my colleague, Mr. Obey, about a resolution of the Middle East situation as well as the situation in Nagorno-Karabakh. Your brief is a very full one, Madame Secretary, and I do not want to go into all of it in my opening statement. Suffice it to say that I think we will have a lively discussion today. In closing, I again want to commend you for your many, many, many successes and the distinction with which you serve our great country. Thank you, Madame Secretary. Mr. Callahan. Madame Secretary. Secretary Albright's Opening Statement Secretary Albright. Thank you very much, Mr. Chairman and members of the subcommittee. We clearly do have an awful lot to cover. Even though I have covered many issues in my statement, I clearly have not addressed all the questions, thus we will have a great deal to talk about. I am very pleased to be here to ask for your support for the President's request for funds for the Foreign Operations Program of the United States. I want to acknowledge at the outset that this subcommittee and its members have been leaders in supporting a principled and purposeful U.S. foreign policy. I think that our record of working together has been great, and I appreciate the fine work that we have been able to do together. I do think that we have been able to move the process forward. And Chairman Livingston, I am especially pleased to see you here. I cannot resist saying something about your recent decision. As you know, when I became a diplomat, I had all my partisan instincts surgically removed. But, as a citizen, I am very pleased to say hallelujah. We do not always agree, but I do know a true public servant when I see one, and I am very grateful to you for having made the decision that you made and am very happy to have you here this morning. Thank you. Mr. Chairman, the budget request before you seeks to ensure that we will have the foreign policy tools we need to sustain American leadership and serve American interests. It includes funds for programs that help us promote peace and maintain our security; work overseas to build prosperity at home; promote democratic values and strengthen democratic institutions; respond to the global threats of international terrorism, crime, drugs and pollution; and provide humanitarian aid to those in need. I will not read my written statement, but I encourage you all to review it. It deals with some of the vital issues and parts of the world that I cannot include in my oral remarks and still honor any semblance of your time. Let me instead review a few front burner foreign policy issues where strong American diplomacy is critical for American leadership and American lives. Ten days ago, Iraq promised UN inspectors immediate, unconditional and unrestricted access to all sites inside the country, including those previously kept off limits. This step back by Iraq is a step forward for our policy of containing the threat posed by Saddam Hussein. If Iraq lives up to its agreement, we will have achieved our goal of maintaining an effective and professional inspection and monitoring regime inside Iraq. If Iraq violates the agreement, there will be greater international understanding and diplomatic support than there would have been previously for a forceful response. Either way, the forces of law and stability are strengthened. We are working with the Security Council and UNSCOM to ensure that the agreement is implemented in a manner that reflects the core principles upon which we insisted: that Security Council resolutions are obeyed; that UNSCOM's integrity is preserved; and that UNSCOM is not prevented from doing a full and professional job. In the days ahead, UNSCOM will be testing Iraq's commitments thoroughly and comprehensively. And under the agreement, there is no question that operational control for all inspections rests with UNSCOM. To keep a lid on Saddam's military options, we will continue to enforce the no fly and no drive zones. We will insist that UN sanctions against Iraq be maintained until there is full compliance with all relevant Security Council resolutions. As President Clinton has said, our soldiers, our ships and our planes will stay in the region in force until we are satisfied Iraq is complying with its commitments. If Iraq does not comply, we have made it clear that we have the responsibility, the authority, the means and the will to respond. I am convinced that this is the best policy to protect our interests and those of our friends and allies in the Gulf. It embodies both our desire for peace and our determination to fight if necessary. It takes into account current realities without, in any way, ruling out future options. It presents the leaders in Baghdad with a clear choice, and it reflects principles that are vital to uphold not only in the Gulf now, but everywhere always. In the Middle East, the United States has been working hard to encourage the parties to make the hard decisions that will move the peace process forward. This matter is urgent and the stakes are high. Under the Oslo Accords, a permanent status agreement is mandated by May 4, 1999, less than 14 months from today. We take that deadline seriously. The parties must tackle the hard issues now. I hope as we strive to move ahead on the diplomatic front that we will have the subcommittee's support for our requests for assistance to our partners in peace, including Israel, Egypt, Jordan and the areas under Palestinian self rule. Over the years, the level of assistance provided to this region has been the subject of scrutiny. This is appropriate, and we welcome Israel's discussions with the Executive Branch and Congress on a gradual reduction and eventual phase out of economic support funds coupled with the proposed increase in security assistance. I look forward to coordinating closely with you as consultations on this subject continue. In Bosnia, we must finish what we started and continue helping the parties to implement the Dayton Accords. The nation remains deeply divided, but multi-ethnic institutions are once again beginning to function, economic growth is accelerating, more refugees are returning, and more indicted war criminals are facing trial. Perhaps most importantly, a new Bosnian-Serb Government has been elected that is committed to implementing Dayton and has begun to make good on this pledge. In response, I have waived restrictions on our assistance with the understanding that our support is designed to help the builders of peace, not those determined to undermine it. In order to continue the progress that has been made, we and our allies have agreed that NATO will continue to lead a multi-national force in Bosnia after SFOR's current mandate expires. We have already held informal briefings with members of Congress on these consultations, and you can expect to hear more from us on that in the days ahead. Mr. Chairman, the infrastructure of Bosnian peace is gaining shape and the psychology of reconciliation is taking hold, more slowly than we foresaw, but as surely as we hoped. The funds we request for Bosnia in fiscal year 1999 will help make this welcome process irreversible by strengthening democratic institutions and bolstering the rule of law. These monies will also help ensure that when our forces do leave Bosnia, they do so for good. Let me also take this opportunity to reiterate the Administration's deep concern about recent violence in Kosovo. We have made clear to President Milosevic that making progress on Kosovo is a precondition to lifting the so-called ``outer wall'' of sanctions against his country, and that the use of force to resolve what is a political problem can only deepen the isolation of his regime. We also expect the Kosovo-Albanian leadership to distance itself from those who use violence for political ends. More broadly, we are working with our European partners to make further progress toward a continent whole and free. We are adapting NATO to new challenges and seeking Senate support for admitting three of Central Europe's new democracies. With respect to Russia, we are working to keep economic reforms on track while urging START II ratification by the Duma, pressing for new measures to prevent proliferation and continuing our support for Russian membership in the WTO. We are also supporting Ukraine's fragile economic and political reforms. As you said, Mr. Chairman, tomorrow I will travel to Kiev where I will bring a strong message of friendship, but also a warning. As you know, later next month I must certify that Ukraine has made significant progress in resolving complaints by U.S. investors or see our aid cut by 50%. I hope that I will be able to indicate to this body that progress has been made. Throughout the new independent states, the construction of stable market democracies remains a work in progress. Our contribution through the Partnership for Freedom will not remake the region overnight. But this program provides essential help to a process that is vital to the stability of this region and has major implications for our own long term prosperity and security. In our own hemisphere, we have important interests dictated not only by proximity of geography but by proximity of values. And next month, President Clinton and the democratic leaders of this hemisphere will gather for the Second Summit of the Americas to set an agenda for the 21st Century, an agenda of education, trade, economic integration, fighting poverty, the war on drugs, judicial reform, the environment and human rights. In Haiti, the job of creating a democratic culture and market economy where neither has ever existed is especially daunting. Other young democracies have taken years and endured much violence to sort out tensions similar to those Haitians now face. If we turn our backs now on Haiti, we run the risk of creating a Haitian future that mirrors the past. Accordingly, I ask your support to continue and increase our investment in Haiti to respond to basic human needs, strengthen civil society, expand opportunities for free enterprise, and give democracy a chance to put down deeper roots in Haitian soil. In Africa, we have a rare opportunity to bring newly democratizing partners into the world economy and gain valuable allies in the fight against terror, narcotics trafficking and other global threats. As we prepare for the President's visit later this month, I urge the subcommittee's support for our initiative to promote justice and development in the Great Lakes region. I also ask your support for our request for funds for education, development and a substantial new program of debt relief. In Asia, we are working to promote stability during a time of great economic uncertainty. The approach we have taken to the East Asian financial crisis is clear. To recover, a nation must reform its economy. And if a nation is willing to work seriously on reform, it will be in our interest to help. In South Korea, the new President, Kim Dae Jung, has built his career and staked his life on the idea that democratic development and economic growth go hand in hand. He is working now with the IMF to restore financial confidence, promote better governance and encourage greater openness in decision making. In Thailand, both the leaders and the people have taken strong steps to put their fiscal house in order and to enact a more democratic constitution. In Indonesia, however, it is plain the government must do more. Former Vice President Mondale has delivered to Jakarta our message that full implementation of the IMF agreement is essential. If Indonesia is to restore confidence and growth, it must address the problems of its financial sector and attack longstanding structural problems, including corruption and a lack of democratic accountability. As people throughout the region look for reassurance about the future, it is vital that timely support from the international community be forthcoming. This matters to us economically, but the IMF reforms also promote better governance and thereby stronger democracies. The IMF's programs are a ``hand up,'' not a hand out. These programs are loans that will be repaid with interest as our trade with the Asia-Pacific region recovers and grows. Thus, I hope we can work together to contribute our full share of the IMF's quota increase which will support economic recovery in East Asia and help prevent similar crises elsewhere. Our supplemental request would also extend to the IMF a line of credit for use in the event of a serious financial crisis. These requests are for budget authority only. They require no outlay of funds and have no effect on calculations of Government spending. Mr. Chairman and members of the subcommittee, in addition to this IMF request we have unfinished business which includes arrears to the UN, which undermine our diplomatic leadership and cost U.S. taxpayers money. I ask your support for prompt action that is not tied to any unrelated issues on our supplemental appropriations request for UN arrears. Let us act quickly and put this issue behind us to enable us to restore American influence within the UN system, pursue our reform agenda and get on with America's diplomatic business. Mr. Chairman, when we help end conflicts; pursue arms control; fight terrorism, drugs and crime; promote child health and support democracy, we advance the long term interests and safety of Americans. In each of these areas, we ask your support in exercising U.S. leadership and promoting the values our people cherish. Mr. Chairman, half a century ago a Democratic President and a Republican Congress worked together to help forge the institutions that have shaped our foreign policy and defined the history of our age; institutions that proved instrumental in the defense and spread of freedom, the growth of prosperity, the defeat of Communism and the confirmation over and over again of America's standing as a leading force for justice and law around the world. Our predecessors were not prophets. But because they stood tall, they were perhaps able to see a little bit further into the future than others. They also had faith in our people and in the principles upon which our Nation was founded. Today we have a responsibility to honor their faith, to reject the temptation of complacency and to assume uncomplainingly, the leader's role established by our forbears. For only by living up to the heritage of our past can we fulfill the promise of our future and enter the new century free and respected, prosperous and at peace. Mr. Chairman and members of the subcommittee, thank you very much for listening to my statement. And now I am very pleased to respond to your questions. [The statement of Secretary of State Madeleine Albright follows:] [Pages 308 - 334--The official Committee record contains additional material here.] haiti Mr. Callahan. Thank you, Madame Secretary. Let me just comment briefly on some of the things that you expressed in your opening statement. Number one, and I know today we do not have time to go through an elaborate and detailed discussion of Haiti; but as I mentioned in my opening statement, we see very little progress there. The subcommittee has visited Haiti. We have met with the president of Haiti. We have met with the leaders of Haiti. We see zero progress, and yet we see a request nearly doubling the assistance to Haiti while we see countries like Bolivia who are trying to do the right thing with respect to the drug situation have their funds dramatically cut. So Haiti is going to be a problem with this committee. It is going to be a problem with me. It is not that I do not think we should help. I think we have other priorities in this hemisphere, and I doubt very seriously if we are going to be able to come forth with this additional money for Haiti. And I see little justification. If there was an indication of progress in Haiti, it would be different. But there is no progress being made in Haiti. You have huge unemployment. The only economy they have is foreign assistance and our military. When we were there, we were trying to assist Haiti, for example, on their road building problems. Their roads are in horrible condition. We had the U.S. Army Reserve down there building them a road. And according to the commander of that force, we could not even get the Haitians to deliver rocks to help build a road for them. So we, I think, are going to have to tell Haiti that we are sorry; but in the absence of any progress, we might have higher priorities in this hemisphere. kedo Kedo is still problematic. The fact that they are borrowing money and borrowed it without any notification to this committee--and I realize they have the collateral backed up by promises from other countries. We are concerned about the increased borrowing taking place in Kedo. Bolivia, as I mentioned, is a problem. We are going to have to find some resolve to the tremendous cuts which appear to be some type of punishment for Bolivia when they are making progress and when they have a new Administration there that has pledged to eliminate the growing of cocaine leaves by the year 2002. We should encourage this, not discourage it. The vice president of Bolivia was here this week. He met with some of us. He told us that it was an insult to his country after the cooperation they had pledged, the progress they have made for us to cut them as dramatically as we did. I know that some of the instructions of that came from this committee and this Congress when we instructed you to provide Blackhawk and Huey helicopters for Colombia. But we will correct that this year. But we must find something immediately in the form of relief for Bolivia. imf The IMF, as we told Secretary Rubin a couple of weeks ago, has serious perception problems. People in America do not understand the IMF. They think it is a slush fund for the President. They do not understand, as you so, I think, diplomatically explained to the Senate committee, it is a credit union--that we are a member of the credit union and that we are not providing all of this aid, but it is important that we participate. They do not understand the Mexico bail out when we promised Mexico $30 billion dollars, that Mexico paid all of that money back, that we have never lost money on any IMF endeavor. As a matter of fact, on Mexico I understand we even made a profit because they paid us back immediately. But still, the American people do not understand, and someone has to get the message out. Now you mentioned in your statement not to tie anything to the IMF issue. But it is going to be tied. It is not necessarily the will of all of the members or even a majority of the members of this committee, but the issue is going to be there. We are going to have to face the reality of whether or not this Mexico City language or something along those lines is more important with respect to the Administration than IMF. That issue is going to be there. It is not going to be put on in this subcommittee; but when we get to the full, we are going to have to address Mexico City language. Other administrations have lived with Mexico City language and it has not impeded their ability to have an effective foreign policy. And I know the White House has a strong feeling with respect to that, and I know a lot of members of this subcommittee and the House and Senate have strong feelings. But it is an issue that is here. And it is something that we cannot do anything about. But we have to recognize that the issue is here and that a great majority of the members of the House feel that way and we are going to have to address it in some form or fashion. I am really happy to see that the Administration has finally come to their senses on child survival. It was created in this committee, and, for the first time, you requested that it be funded. Albeit, you did not request the full funding of last year, but we are going to give you more than you requested in the child survival account this coming year. iraq With respect to the perception of problems you faced with the leaders you went to see on your visit prior to the Iraqi situation, I think you should address that to make certain that we fully understand the responses, if that is something we can publicly talk about. If some of the conversations are classified or you would rather do that in a closed meeting, we would be happy to accommodate you there. But once again, perception in this industry we are in, you are in, is very important. And the perception is that our allies turned their backs on you. And that aggravated me not only for you, but for this country. It aggravated me when a similar thing happened to Secretary Baker when he went to the Philippines and they refused to meet with our Secretary of State. We are not going to tolerate that. And the only vehicle we have to respond is the fact that we are the ones who hold the purse strings for the money that you get to provide to these countries. So I wish you would address the perception of the lack of support of our endeavors in Iraq with the leaders you visited, if you can. Secretary Albright. Yes. Thank you very much, Mr. Chairman. First of all, let me say that the perception is wrong because we are confident that we have the support that we need if in fact we have to pursive a military option. But there clearly is a perception, and therefore let me address at that. First of all, I think that we have to understand that the threat this time is less concretely visible than it was when there was an attack by Iraq into Kuwait; an attack by one Arab country and an invasion by one Arab country into another Arab country, which I think was a concrete act that was easier for people to understand and to react to. We have maintained very close contact with all the Arab countries, especially in the Gulf. I went there, as you know, and so did Secretary Cohen. We actually got what we considered good statements of support at a time when many of those countries believe that our sanctions policy is hurting the Iraqi people. That is a perception that I believe is wrong. If I might parenthetically say it here, the United States has done and cares more about the Iraqi people than Saddam Hussein does. And we have made provision for humanitarian assistance by allowing the Iraqis to sell oil in order to buy humanitarian assistance. These Arab countries were concerned about the fact that they believe that our policies were hurting the Iraqi people. Also, the threat of weapons of mass destruction and instability in the region I think is something that we need to pursue. It is a national interest issue for the United States, but it is harder, I think, for these countries to understand than we feel about it. The main point, though, and I must say this, is that in private, I felt that I had very good assurances, which we can discuss if you like in some other setting. But you have to understand that thoese countries' public statements are geared to the fact that they are in the neighborhood with the bully. We are there as the main protector, but we are not there all the time. They are in the neighborhood with Saddam Hussein, and therefore their statements, to some extent, are tailored to that reality. But I have to tell you that both Secretary Cohen and I feel comfortable with the support that we are getting from these countries. Monetary Support Mr. Callahan. Imagine how disappointing though when these leaders of these nations come and they tell us how much they need and how badly they need our monetary support both from a military and an economic support factor only to read, and perception though it may be--only for us to read that you were not warmly received. I am sure personally they warmly received you, but your message was not warmly received. So it is a concern to me. And I intend, as they come to visit us this spring, to press this question. You know, our attitude, or at least my attitude, Madame Secretary, is that you are the voice of the United States of America. And they must respect that. And either they must tell you why your plan is flawed, or they must stand beside you. As I mentioned, I do not imagine you had to call Mr. Netanyahu twice before he immediately responded. I do not imagine you had to call the leaders of Kuwait twice because they remember very vividly how protective we were to them in the Persian Gulf encounter. But some of these leaders we are giving hundreds of millions of dollars to should recognize that the reason we are doing that is for their securit. At the same time, in return for that, if we are going to protect them, we expect them to stand beside us in our endeavor. The message they send by being silent, even though they could possibly have some political problems in responding openly, it is the wrong perception. And if we are going to give them monetary support, we expect in return their full support anytime you call on them or any endeavor we might undertake. Secretary Albright. Mr. Chairman, if I might say, I did in fact make statements such as the one that you have just made and made quite clear that not only the Administration but our friends in Congress would make that message quite clear. So I would be very happy if you made those statements. Mr. Callahan. Thank you. And now I will yield to my colleague from California, Ms. Pelosi. And after Ms. Pelosi, I am going to ask the committee members to respect each other and to limit their questions, including the response time, to five minutes and we will try to get through twice. So Ms. Pelosi, I kept mine to six minutes, but the floor is now yours. Ms. Pelosi. Thank you, Mr. Chairman. Mr. Chairman, I just wanted to defer to the ranking member of the full Committee. Mr. Obey, I do not know if you have other committees you have to cover this morning and if you wanted to go first. Okay, thank you very much. Thank you, Mr. Chairman. Haiti Chairman Callahan and I share a different view of the Administration's successes in Haiti, but one would have to admit that we still have a long way to go in reaching the success we would like to see there, and I look forward to working with you on that issue. I visited Haiti with the chairman last Easter and his characterization of what we saw is correct. However, I believe that the President has done the right thing by being involved in Haiti. We just have to make sure that our policy is more effective, including in terms of the cooperation we receive from the Haitian leaders. But I do not think we can walk away from that situation. Iraq I want to go directly to the Iraq situation because I did not mention it in my remarks except to associate myself with the remarks of others. I really want to commend the Administration for making a diplomatic solution possible. I hope that Saddam Hussein will comply. In the last few weeks, I have had the occasion to be in several different churches and the sermon was always the same, a rejection of the use of violence. My pastor has a different responsibility than the President of the United States, but I think the American people very much want a diplomatic solution to this conflict. I know that requires carrying a big stick, but I was pleased that the Administration gave the opportunity to Saddam Hussein to comply. I hope and pray that he does. You have explained, if he does not comply, what some of the options are. Since you set up that ``if he does not comply,'' structure, I have a different ``if they do not comply'' question for you. Weapons of Mass Destruction In your statement, you mentioned some of the successes that you see in Asia, and you count China's commitment to strictly control nuclear exports, its assurances on nuclear cooperation with Iran as steps in the right direction. Last year, the U.S. Navy identified China as one of the most active suppliers of Iran's nuclear, chemical and biological weapons program. In a March 1997 report, the Office of Naval Intelligence stated that ``Discoveries after the Gulf War clearly indicate that Iraq maintained an aggressive weapons of mass destruction procurement program. A similar situation exists today in Iran with a steady flow of materials and technologies from China to Iran. This exchange is one of the most active weapons of mass destruction programs in the Third World and is taking place in a region of great strategic interest to the United States.'' The statement goes on to talk about the C802 ballistic missiles which are not weapons of mass destruction but delivery systems. I was disappointed in the Administration's certification that China is cooperating in halting proliferation, and I hope that Congress would act on that. However, I do believe that placing an emphasis on weapons of mass destruction is very important. There is probably nothing more important to our national security. I think our voice on it would be more respected if it were more consistent. Since you mentioned what would happen if Iraq did not comply, I wondered if you would comment on what would happen if China did not comply with the promise. Certification in the past has really been built on performance, not promises. And in this case, the Administration certified on the promise that China would act in a way completely different than the Office of Naval Intelligence has described them acting. If they do not comply with restrictions on the export of weapons of mass destruction technology to Iran, especially in the nuclear area, what action would the Administration take? Would that lead to a decertification of China? Would the sanctions which the law requires be put into effect? Or what other option would you suggest? Secretary Albright. Well, first, Congresswoman, thank you very much for your statements. And let me say that China has acted consistently with its May 1996 pledge not to assist unsafeguarded nuclear facilities. And it is also agreed, as you have stated, to end nuclear cooperation with Iran, and we believe that China is serious about this commitment. We are strongly encouraging China to complete their nuclear related dual use export control regulations which the Chinese have said would be issued by mid 1998. We are also stressing to China the importance of using effective export controls to block any transaction which would be inconsistent with their pledges. I also believe we should look at how far China has come in the last years in developing a whole set of initiatives--of being part of the NPT, the CTBT and the chemical weapons convention. They are systematically moving to put themselves within the international regimes of weapons of mass destruction. We are going to keep pressing them on this subject and making them live up to their obligations. If they do not, they will be subject to the series of potential actions that you have stated. But what we are doing now is pushing them very hard on these issues because we do consider them of major importance, and would not certify or take action that we believe was contrary to the promises or pledges that they have made. Ms. Pelosi. Well, I think you are being very generous. I just repeat--because you say they are honoring what they said in May '96--that one year later, the Office of Naval Intelligence says, ``A similar situation exists today in Iran with a steady flow of materials and technology from China to Iran. This exchange is one of the most active weapons of mass destruction programs in the Third World and is taking place in a region of great strategic interest to the United States.'' UN Human Rights Commission On another subject, the President said when he delinked trade from human rights with China that the U.S. should step up efforts to insist that the UN Human Rights Commission pass a resolution dealing with serious human rights abuses in China. I just wondered what the plan was for the Administration this year because, as you know, the meetings begin March 16th, very soon. Secretary Albright. Yes. First of all, again, I think that you know how strongly the President stated the case to President Jiang Zemin when he was here making very clear publicly that China was going to be on the wrong side of history if it did not live up to greater responsibilities as far as the human rights issues are concerned. As far as the UN Commission, we are currently consulting about our next steps on a resolution's introduction. Ms. Pelosi. So this begins March 16th. This is what, the 4th of March now, and we are still consulting. I mean, does not it seem like a decision should be soon if we are going to make something more than a pathetic or feeble attempt at this, that this should be something that we had been working on for a longer period of time than--what is this, is this the 4th? Secretary Albright. Yes, yes. Ms. Pelosi. Eleven days before the---- Secretary Albright. We have been very actively consulting on this. We will have an answer very soon. What is happening, Congresswoman, is that the EU countries are basically thinking that this is not the best approach. We know that we have a very difficult row to hoe here. We are dedicated and committed to pushing on the human rights issue in China and will continue to do so. Ms. Pelosi. Well, all I can say is that when the President rejected one approach, he suggested another. And I would suggest to you that the United States be a leader and not a follower of the EU. We know that China has, ironically, used the surplus that it makes out of U.S.-China trade to buy peace with smaller countries on the UN Commission, as well as with countries they trade with in Europe. So the trade issue now, instead of delinkage in the U.S., has been linked to the Human Rights Commission. And I would hope that we would not be followers in the UN Commission but leaders there. Mr. Chairman, how am I doing on time? One more minute? Okay. Thank you, Mr. Chairman. I will have to go to the next round. I think I have shared with you our concerns about Bosnia, and you spelled out why you issued the waivers. You know of those concerns and I support your overall policy in Bosnia. I think you have made an enormous difference in saving lives and helping to bring a civilized resolution to that issue. I am going to come back later on questions on the Middle East, but I did want to ask about Chiapas because I have concerns that I raised earlier about whether we are sure that the money that is targeted for the drug war is not being used against the Mexican people in Mexico. Chiapas Secretary Albright. Well, on this, we are not engaged in any counter insurgency training. And the Mexican Government has not requested such training, nor do we expect it to. And the Mexican Government has said it wants to reach a negotiated settlement on Chiapas, and we welcome their efforts to do so. We discussed that with them. But I will--I know that you raised many questions on this, and we will get back to you with more of the details. Ms. Pelosi. Thank you, Madame Secretary. I would be particularly interested in the end use monitoring of the assistance that is going supposedly in the drug war. I think my time now has expired. Thanks again, Madame Secretary. Mr. Callahan. Mr. Porter. Mr. Porter. Thank you, Mr. Chairman. Madame Secretary, thank you for the outstanding job you are doing for our country and for the energy and commitment that you bring to your job. Secretary Albright. Thank you. Iraq Mr. Porter. I would like to talk to you about Iraq, Armenia-Azerbaijan, Turkey and Cyprus. Critics say that we have placed all of our peaceful approaches in Iraq in one basket, the UN basket; and that Saddam Hussein has had seven years to comply and is not going to comply, and that he obviously cares more for his weapons programs than he does his own people. Madame Secretary, why do we not pursue an alternative approach to declare Saddam Hussein a war criminal and provide support to the opposition within Iraq, the Kurdish groups in the north and the Shia in the south and southwest? Why do we not prevent any movement of military material or personnel within Iraq from the air, no fly, no drive, no movement whatsoever? And why do we not set up and begin immediately broadcasting a PR message, both within and outside of Iraq, through Radio Free Iraq, to reach the American people and the people of this world. Broadcasting the truth about this regime will help to undermine Saddam. It is obvious that he is not going to comply with UNSCOM and so, are left not only looking weak in the UN but attacking when people do not want us to attack. Secretary Albright. Well, first of all, I think that it is very important to understand that actually the policy that we have been following in terms of getting rid of weapons of mass destruction has been working. UNSCOM itself, when it is able to do its work, has been able to get rid of more weapons of mass destruction than were gotten rid of during the Gulf War. I think that in the course of this last couple of weeks that this fact has been forgotten because UNSCOM has not been able to do its work. But when it can, I think UNSCOM has been very effective. We also have managed to keep Saddam Hussein in his strategic box. He has not been able to threaten his neighbors, and we have lessened his abilities to do so. What has created this most recent crisis was Saddam's attempt yet again to break out of his box and our pushing him back. In March 1996, I gave a speech in which I made quite clear that we were ready to deal with a post-Saddam regime. And we would like to do that. We have been working with opposition groups. We are looking for ways to work with them more effectively. Some of the suggestions that you have made are suggestions that we have in fact been looking at and are exploring. The indictment campaign, the war criminal concept, I think is something that bears looking into. It is not simple because he is the head of a state, but we are looking into that. Also, in terms of looking at different ways to strengthen some of the points that you have been making, I think that, however, we should not forget that the containment policy of the no drive, no fly zones has been working while, clearly, in the last couple of weeks we have been frustrated by UNSCOM's inability to go into Iraq. UNSCOM should be able to do that very soon. And what I am very pleased about is that Chairman Butler has stated now many times that he feels comfortable with the arrangement that has been made; that he is in operational control of these new teams that will be going in and of the arrangements, and we will have to test. At the same time, Congressman, we are looking into the kinds of suggestions that you have made. Mr. Porter. Thank you, Madame Secretary. Turkey I just returned from, among other places, Turkey with a congressional delegation looking at human rights because in my judgement, human rights are preventing Turkey from moving into partnership with the EU, gaining a good relationship with their neighbors and destroying the fabric of Turkish society within by using only military means to address social and economic problems that I believe exist. Prime Minister Yilmaz has put forward a five point program which he announced here. He has vowed first to decriminalize free speech; to release imprisoned journalists and parliamentarians, of which there are more journalists in the world in prison in Turkey than anywhere else; to reopen human rights NGO's and to end the state of emergency in the six southeastern provinces where the fighting has occurred; and to provide some social and cultural and economic support and development in that area. Are you hopeful that this can be accomplished politically within Turkey? Also, what is the United States doing to help the Prime Minister get from where Turkey is to where they need to go and help them become a member of the EU and be accepted there as they should be? Secretary Albright. First of all, let me say how much I agree with you in terms of the importance of Turkey becoming a part of the EU. I think it is very important to make sure that Turkey stays turned westward. In my visits to Turkey, I have made that clear, as well as in my discussion with Prime Minister Yilmaz when he was here and my very frequent discussions with Foreign Minister Chem. We do continue to urge the Turkish Government to make systemic human rights reforms. I will not repeat them because you stated them, and I think it is a case that we make very loudly to them. The Turkish Government has taken some positive steps in 1997. They lifted the state of emergency in three provinces, and they have reduced the maximum pre-arraignment detention period in the southern part of the country, and they have granted some provisional amnesties to six jailed editors; however, they do have a ways to go. Now what has happened is that I asked Assistant Secretary Shattuck to visit Turkey--he did that last month--to deliver a very firm message and to review our concerns, including the recent arrest of some Kurdish politicians. We expect his Turkish counterpart to visit the U.S. soon, and we will continue to keep our focus on these human rights issues. They are of great concern to us and obviously of great concern in other parts of the world. I do think that some of the reasons that Turkey is not a member of the EU are other than those associated with human rights concerns, and we are talking to our EU friends about this. Nagorno-Karabakh Mr. Porter. Madame Secretary, can we talk for a moment about Armenia and Azerbaijan and Nagorno-Karabakh because it seems to me this is a place where, with the right negotiations, there can be a win-win-win situation. And by that, I mean a win for Azerbaijan in terms of its relationship with Armenia and vice versa; a win for Armenia in terms of sharing in the economical development of the Caucasus oil fields; and a win for American oil companies who can develop those oil fields for the Azeris. This is a very difficult part of the world where people do not think in terms of winning; they only think in terms of one side winning and the other side losing. There have been some very pronounced developments, particularly politically, within Armenia very recently with the resignation of President Ter- Petrosian and the elections that are about to occur. Congressman Wolf has been very concerned about the situation with Azeri refugees. And we are both concerned about reports that humanitarian aid intended for Azeri refugees has been improperly diverted by the government agency in Azerbaijan which is responsible for distributing that aid. Further, there are reports that the Azeri government does little to assist these persons. The Azeri refugees number pretty close to three quarters of a million or maybe more than three quarters of a million people living in very, very difficult circumstances. So I would ask if you would comment upon what Congress did to encourage the Minsk process in this fiscal year? What hope do you have for that process working and what can we do to assure that the humanitarian assistance that this country wants to provide to the people displaced by the conflict in Nagorno- Karabakh actually gets to these people and helps them. Secretary Albright. Yes, thank you. Again, this is one of these disputes that we have been involved in trying to resolve through a number of methods. One is the Minsk process. Also, the United Nations has tried to support that process. What I think is very important to understand is that despite the fact that there have been these attempts, the peace efforts have generally made little progress. There have been four Security Council resolutions that have not been abided by. What has happened is that Nagorno-Karabakh, which is backed by Armenia, retains a lot of the military advantage; whereas Azerbaijan has the economic clout and leverage; thus they are at a stalemate to a great extent. What we have tried to do, given that we do believe that we have a strategic energy interest as well as an understanding of the importance of strategic this area, is to try to make the Minsk process work as well as provide aid to Armenia and Azerbaijan, though aid to Azerbaijan is limited, as you know, by legislation. We are starting a direct aid program to Nagorno-Karabakh. We are seeking a negotiated end to the conflict. And we are now pursuing a tripartheid approach, and Strobe Talbot is the co- chair of the conference along with Russia and France. And that had been working to some extent in 1997. Mr. Porter. That may be part of the problem, Madame Secretary, I am sorry to say. Secretary Albright. The fact that there are three of them? Mr. Porter. No, the fact that Strobe Talbot is in charge. Secretary Albright. I would dispute that because I think that he is taking great interest in it and working very hard on it. The co-chairs presented a new peace proposal in May 1997. But given the intractability of the process, they proposed an interim agreement to liberate the occupied territories, allow the displaced persons to return and guarantee security to permit the sides to negotiate on status with no threat of resumed hostilities. Now, Armenia and Azerbaijan accepted this proposal as the basis for negotiations. But Nagorno-Karabakh rejected it because they were determined to trade land directly for a status amounting to independence. Now we have the added dimension of the change of government in Armenia. And the Minsk co-chairs have met in February to try to develop some new steps. They are going to be briefing the OSCE chairman and office this week, and then further negotiations await the inauguration of a new Armenian president and the establishment of a new government. It has been a process that was not exactly marching forward before and now has the added issue of the Armenian elections. That is where we are on that. In terms of assistance to Nagorno-Karabakh we have tried to work through a coordinators office to make sure that the assistance is properly distributed. Before giving approval to spend any of the funds, you all asked the coordinator in December, to send an assessment team to the region. In January, a USAID team went to Armenia and Azerbaijan, including the Nagorno-Karabakh region, and that report is still in draft. It concludes that there are no acute humanitarian crises in the region, but it does identify several humanitarian needs that we should address. The first assistance program will be an effort to treat tuberculosis, including preventative immunizations for children under five. And USAID has identified a non-governmental organization to implement that. When we get the final report, we will talk to you again about this. Moreover, I will look specifically into the Azeri displaced issue. Mr. Porter. Thank you, Madame Secretary. Mr. Callahan. Mr. Yates. Mr. Yates. Thank you, Mr. Chairman. Madame Secretary, I join my colleagues in welcoming you. I am in favor of the work that you have done and the Administration's foreign policy in general. Iraq I do have a question with respect to Iraq. I could agree with you as far as the bombing to enforce the ceasefire agreement with Iraq. But what happens after that? What are you going to do after the bombing? Provide foreign aid to Iraq? Then what happens--do you put a government in there? I do not believe you can install a democratic government in Iraq. Secretary Albright. Well, first of all, I think that we do hope that this diplomatic approach will work. Mr. Yates. I join you in that. Secretary Albright. What has been very interesting, as a former professor of international relations, is that now I am practicing what one always reads and writes about--to try to have diplomacy backed by the threat of the use of force; that that is sometimes where diplomacy can make its greatest contribution. I was very pleased that Secretary General Kofi Annan has made quite clear that the presence of American and British forces in the region added a lot of clout to his diplomacy. And the diplomacy that he carried out was very much guided by the red lines that the United States had put down. We hope very much that the agreement made will in fact bear fruit. But, as the President said and I have said, it has to be tested. We will be testing to make sure that Saddam Hussein does live up to allowing these inspectors to go forward and do their jobs unfettered, unconditioned and be able to go to all the sites. If we have to take military action, it will be for the purpose of diminishing his weapons of mass destruction threat and his threat to his neighbors. At the same time, as I responded to Congressman Porter, we are looking at ways to work with the opposition groups more effectively and at some of the other suggestions that he made. But we believe that a continued approach of containing him is the best way to go. Mr. Yates. That answer does not quite satisfy my curiosity. How are you going to enforce the agreement? I mean, all right, we have bombed Iraq and the teams are now looking for the chemical and biological weapons sites. Are you going to put any U.N. troops with the teams in Iraq to look for the weapons of mass destruction? Are you going to put occupation forces in there--in there, in Iraq? How are you going to do it? And suppose Suddam Hussein does not cooperate with you? What then? Secretary Albright. First of all, I am hoping that the diplomatic route will work, and the questions that you are asking are indeed hypothetical. I think that if he breaks the agreement now, there will be much greater support for our use of force than there was before, and therefore more support potentially in terms of pressing Saddam Hussein to allow the inspectors to go back in even after a bombing. I am not going to discuss any further what the operational aspects of the bombing would be. But basically, as I have said, the purpose of that would be to diminish his weapons of mass destruction threat. We have no intention of having an occupying force. We would continue to work through various sanctions regimes and the support of the international community which I am convinced would be much greater if Saddam Hussein now does break the agreement that he made. Clearly part of the issue here is how one gets him to live up to what his obligations are. We cannot do that alone. We need international support to do that. Mr. Yates. Well, I believe that is true. Have France, Russia and China indicated they would support you in the event of a breach now of Kofi Annan's agreement? Secretary Albright. They have in fact said that the atmosphere would be so different if he broke with the agreement that they--they have described it that way, that they--I do not want to commit them here, but they have made quite clear that they would view a breaking of this agreement as a completely different situation and that they would be supportive of us. Mr. Callahan. If the gentleman would yield just for a second. Madame Secretary, Saddam Hussein broke the agreement that the UN drafted when he surrendered after his invasion of Kuwait. He has already broken the agreement. So that is a point that I think they are laying a lot of blame on us. The UN drafted the agreement. Saddam Hussein signed it and agreed to it in his surrender policy. And then he totally ignored it. So we go and negotiate another one saying we hope he does not break this one. I am sorry, Mr. Yates, I just wanted to make that point. Mr. Yates. That is all right. Secretary Albright. I agree with you, Mr. Chairman. Mr. Yates. How do you reply to the chairman? Secretary Albright. I mean that Saddam did sign an agreement. And for seven years the international community has been able to carry out its task. It was only in the last few weeks that he totally impeded it. He has now signed an agreement that actually has his--as Chairman Butler has said-- ``his thumbprint on it.'' Saddam has been part of negotiating it. And I think it will be even clearer to the international community that he has broken his word. The United States, as I said in my statement and we have said repeatedly, is prepared to act if he does not follow through. Mr. Yates. Did not he break his word to the international community, as the Chairman indicated? Secretary Albright. He did, and that is why we took the action that we did and are prepared to continue to take that kind of action. We were not opposed to what Kofi Annan was trying to do based on some red lines that we provided. We now have another opportunity to give diplomacy a chance and have the inspectors test the agreement. And, as I said, if Saddam Hussein does not pass this test, we are prepared to use force again. It is my considered opinion that, were that to happen, the countries would be with us on supporting the use of force. Mr. Yates. Countries would be with us--does that include Egypt, for example? Secretary Albright. Well, we have talked to the Egyptians and they I think, and others all wanted to provide one more chance. In discussions that I have had in the last 48 hours, I think that they all agree that the severest consequences, which is what the Security Council resolution said, which in fact is code word for the use of force, would apply. Mr. Callahan. If I just might comment in following up on what Congressman Yates is saying. You know, we keep talking about perception here, Madame Secretary. And the agreement that was broken was a UN agreement. And if any agency or any group should have initiated this type of response and retaliatory efforts toward Iraq, it should have been the United Nations. Instead, the United States took the leadership because this was a threat not only to the Middle East, but to the entire world. Why in the world the United Nations did not initiate the threat of military activity before we had to force the issue is a mystery to me. Now you are coming and saying we must come forward with some arrearage monies to fulfill our obligation to the United Nations. But what General Secretary Annan did was to give the perception that the United States are warmongers and that the UN are the peacekeepers. But they were the ones that should have initiated the action. It was a threat to the world. Saddam Hussein does not have the missile capability of bombing the United States of America. We were trying to protect the members of the United Nations from the activity that no doubt would come if we allow him to continue to develop this. So while all heaps and praise are being placed upon the United Nations Secretary General, in my opinion he should have been the one initiating the original military threat to Iraq if he did not cease to break the agreement he signed with the United Nations. So maybe Secretary General Annan is going to get the Nobel Peace Prize for his efforts, but he was derelict in not initiating the threat to Iraq if indeed they would not permit the continued inspections as they agreed to do. So a lot of activity and a lot of focus is placed on his efforts to peacefully trust a man that you cannot trust. But at the same time, he was derelict, as was the United Nations, when they permitted this to take place without the threats other than some type of agreement that ultimately was negotiated. I do not want to get you embroiled in that international controversy, but once again, perception is there, Madame Secretary. The United Nations failed. The United States of America did not fail in foreign policy. We did exactly the right thing by utilizing our force capabilities, stationing them there and threatening him with military action if he did not comply with the UN agreements. So while the Secretary General is accepting all of this praise worldwide for his peacekeeping activities from keeping the warmongers in the United States from bombing innocent people, that is the wrong perception. The United Nations was wrong in not initiating this insistence that we threaten Saddam Hussein if indeed he continued to denounce the capability of further inspections that he agreed to. Mr. Packard. Mr. Packard. I'll try to be brief because I came in late. I was conducting a hearing of my own. We were, fortunately, able to conclude in time to be here. I'm sorry I missed your testimony, Madam Secretary. ukraine I'd be interested to know--I'm aware that you will be going to the Ukraine shortly--tomorrow, I believe it is, is it not? Secretary Albright. Correct, yes. Mr. Packard. And we have been fighting this battle with the Ukrainian government and business over there, the joint ventures, and, in specific, on the Gala Radio issue. That has gotten worse, rather than better, in my judgment. And it will be your responsibility to make a decision as to whether the Ukraine has literally made progress in corruption and impeding of joint venturing in their country by U.S. business and industry. I would be interested in knowing how you plan to follow up on that. I've got a press release that shows that the Ukrainian government is actually now retaliating against the Gala Radio because they have used their right to arbitrate their disputes through the process that has been set up. And now that they have initiated arbitration proceedings, the government of the Ukraine is literally retaliating by investigating, on three separate fronts, their employees in the company, and really things have deteriorated and gotten worse rather than better. It's almost unconscionable for us to send $200 million to the Ukraine when they are literally impeding American joint venturing in their country. I'd be interested in a response and what you intend to do as you go visit there tomorrow. Secretary Albright. Thank you, Congressman. At some point, I would like to respond to what the Chairman said in his last remark, but I probably won't get another chance. Mr. Packard. You're welcome to do that before you answer-- -- Secretary Albright. All right. Let me just say this. I think, Mr. Chairman, that we need to separate the United Nations per se from some of its member states. There clearly were members of the Security Council that did not want us to take action forcefully. The Secretary General, I believe, was doing the job that he is mandated to do--to try to help resolve some disputes. I also do not like the fact that the United States is being portrayed as the warmonger while others are taking credit for peace, when I believe that the United States is the greatest force for peace. And statements that the Secretary General made in which he said that his diplomacy was aided by the use of force I think are the appropriate statements to make. I believe that the United Nations per se is one part, and some of the member states with whom we disagree are another. I also think that it's very clear that this should not be an Iraq versus U.S. struggle but an Iraq versus the world struggle. And it is my considered opinion and belief that this is not a matter of trusting Saddam Hussein. It is testing him. And if he fails this test, then the international community will, once again, see his actions as causing the disruption of peace, and the U.S. actions as those supporting peace. Now, let me say that on the Ukrainian issue, we have been very concerned about the issues that you are raising in terms of investment disputes. Vice President Gore, Ambassador Sestanovich, Ambassador Morningstar, and others have raised these issues with Ukrainian officials, and I will do so on Friday when I am in Kiev. I am going to be meeting with the business community there. President Kuchma assured Vice President Gore that the Ukrainian government would act in a forthright manner to seek the resolution of these disputes, and we're determined to do everything to get these matters settled. We are concerned about the fact that while there has been some progress in macroeconomic stabilization and privatization, we are concerned about the fundamental pace of economic reforms in Ukraine. I will be raising those subjects there. Private investors do continue to face major hurdles. Some of the unresolved investment disputes are responsible for the government's inability to create a favorable climate. We very much have a chicken and egg problem--that they have serious economic problems because they are not able to attract investment. One of the reasons they're not is that they haven't been able to undertake all of their economic reforms. It would be premature for me to speculate on what decision I'm going to make on certification, but I clearly am going to raise these points. On the Gala Radio issue specifically, the U.S. Government has weighed in strongly on behalf of the company with all levels of the Ukrainian government, and I will do so again. Ambassador Pifer, on February 27th, expressed serious concern to the government about the actions against Gala that have occurred since the government of Ukraine was served notice of Mr. Lemur's filing under the Bilateral Investment Treaty in mid January. We will continue to press on that, and I can just assure you that I will personally do so. Mr. Packard. I hope that you will bring up the concern that we have that--if the Bilateral Investment Treaty is to resolve these kinds of disputes. If a company uses that process in an effort to resolve the dispute, only to find that the government retaliates against the country, then that process is of no use. And that would be very frustrating to any company, whether it be American or any other country that is investing in the Ukraine--to simply not be able to use the system in place to resolve disputes because it will invite retaliation. I would-- -- Secretary Albright. We'll make that point. Mr. Packard. I would hope that you would--I'm not just looking at the one company. That's the most obvious example of the macro problem that exists there on corruption. Mr. Callahan. It might be a good idea, Madam Secretary, if you met once again, if your time permitted, with some of these American companies with complaints before you visited with the political leadership in the Ukraine. I think there have been some new developments since they last talked with you, and maybe you should be aware of them. Secretary Albright. We'll try that. Mr. Callahan. So if your schedule permits, it would be best. Mrs. Lowey. Mr. Packard. Thank you, Mr. Chairman. Mr. Callahan. Yes. Ms. Lowey. Thank you. Mr. Chairman, may I defer to my colleague, Ms. Kaptur, for just 10 minutes, since I was just informed I have to rush off. We're always pulled in different directions. But I did want to ask you some questions. And if I could defer to my colleague, and then I will return in just about 10 minutes. Is that okay? Mr. Callahan. That would be good. Mrs. Lowey. I thank you, Mr. Chairman. Mr. Callahan. Ms. Kaptur. Ms. Kaptur. Thank you, Mrs. Lowey. Welcome, Madam Secretary. We're so proud of the work that you're doing. I know that I'm watching living history, I guess, and it's pretty exciting. cyprus I wanted to ask three or four different questions. One concern in your statement on page 5 which you mentioned is Cyprus. And our country--the administration--has taken a really strong stand on the United Nations security resolutions concerning the Iraq situation. However, the Security Council also, over the years, has passed a number of resolutions concerning Cyprus. And there appears to be a less vigorous enforcement of those than perhaps others that have been passed. And so my question to you is: Since you mentioned Cyprus in the testimony, what is the administration doing to resolve that particular situation? When you were at the U.N., you affirmed the territorial integrity of Cyprus; in fact, quoted as saying the illegality of the Turkish army's occupation. I am very interested in what the administration intends to do to resolve this particular situation. Secretary Albright. Well, this has been, I think, one of the longest-running and most troublesome disputes that we have had to deal with, and that has been on the United Nations docket. We place a very high priority on resolving the Cyprus dispute, and we are actively engaged from the President on down on this. We have assembled a very strong negotiating team led by Ambassadors Richard Holbrooke and Tom Miller. What we are doing is supporting U.N. efforts to resolve the Cyprus dispute on the basis of the bizonal/bicommunal federation through direct talks between the Greek and Turkish Cypriot leaders. We have been working very hard to create a positive climate in which the U.N. settlement talks can resume. I took part in this when I was U.N. Ambassador, and I have tried to be involved in it at this stage. We have been somewhat delayed for the moment because of the elections in Cyprus, which are now over. With President Clerides reelected, I think that we are now reengaging very actively to get them to talk to each other. Part of the issue, as you know, has to do with Cypriot accession to the EU and the various problems in trying to assemble a delegation, and trying to get those two processes working together. But I can just assure you that it is high on our agenda. Now that the elections there are over, I think we will be able to reengage more actively. Ms. Kaptur. Thank you. We would hope to see that as soon as possible. Secretary Albright. Thank you. demining Ms. Kaptur. Your budget includes now in southeast Asia the demining issue. Your budget shows a 700 percent increase over the last two years for humanitarian demining. One of my questions is to what extent Laos and Cambodia will benefit this year and succeeding years from this program. Will it be an increase in those particular countries compared to past years? Secretary Albright. I have to get you the specific numbers on that. But generally our approach here is to add a great deal to demining. We have a demining project going. Ambassador Endrfirth is heading that up. It is our major effort, to dealing with the horror of land mines. And we will be elaborating more with you what the various parts of that program involve. I'll have to get the numbers Laos and Cambodia for you. ukraine Ms. Kaptur. We'd be very interested in that. I am very interested in your upcoming trip to Ukraine. Our family traces its roots to the western part of that country. Of course, it has been five different nations, and at one point the area in which our family came from was occupied, et cetera, by other nations. But I guess by traveling back several times long before independence, and now after independence, I have a growing concern about our ability at the village level. I know how it is to travel as a Congresswoman. You're insulated from so much. It's a real hindrance. It's a handicap in traveling. I can only imagine what it must be as the Secretary of State in traveling for the United States in many of these countries. But I am more and more concerned about the ability of people at the village level to feed themselves and to sustain life because of the complete breakdown of agriculture in the old system. Production in Ukraine has gone down by about 85 percent now compared to prior years in the breadbasket. This will sound so simple. We talk about these big ideas and big projects, but I think one of the most important aspects of stability in Ukraine right now is to get seed into the hands of those who own private plots, not with 150 horsepower tractors to till up the land, but little rototillers, anything, to let people at the village level feed themselves over this most difficult transition. It isn't very romantic. It isn't very exciting. You don't make the front page by doing it. However, what I have found in my recent travels is that people are literally crying at the village level for the ability to feed themselves. It has become harder, even though, our agricultural efforts in that country are very well meaning, I don't think they're having the kind of impact that they need to have at the most local of levels. So I would just encourage you in your capacity, if you could, to meet perhaps with some of our agricultural specialists over there while you're there to think about a project this spring using some of our money from this country and other nations that are trying to help, working perhaps through the churches and the philanthropic groups that have a presence at the local level to get good seed, which we can absolutely do, with some minimal amounts of fertilizer, into the hands of the private plot owners. We do not even have to deal with these largely privatized collective farms yet because it is going to take us a while to turn those around. But just making this available, so people at least can have potatoes and perhaps some tomatoes and things to feed themselves over this period of time. The other point I wanted to raise--I also serve on Agriculture Appropriations Subcommittee and I talked with former Congresswoman Jill Long Thompson, now Under Secretary of Agriculture, yesterday. There is going to be a large conference of women in agriculture and rural development here in our nation's capital in June. I would hope that as you meet with people in Ukraine you might suggest that some of the women leaders of that country who are involved in agriculture might send a delegation. I know about the Gore talks, and some of the people have been appointed to these international bodies. I just wonder how many women are involved since they're the ones that are holding things together at the village level. They're trying to feed their families, take care of sick children or incapacitated husbands, or just being heads of families themselves. And I just think if we could reach out more to the women farmers of Ukraine, since they're the ones working these private plots, we could do an enormous amount to hold things together while we try to assist in fixing the rest of that system. In that regard, I know one of Mrs. Clinton's priorities is ending the slave trade and prostitution in all of those states, including Ukraine. And many of these are village women have been taken in on these schemes. The very women I'm talking about would be much better back home in weaving co-ops, and planting on these private plots to support their families. I would hope that you could be as supportive as possible to Mrs. Clinton's efforts, and hopefully our efforts on this subcommittee, to try to stem that tide and to give these women better alternatives. I think it's very hard sometimes to communicate between Kiev and the villages. But Ukraine is the breadbasket, and, in my judgment, her future is in agriculture. We have to help her get there as soon as possible, starting from the private plot level on up. I think this is worth mentioning. My own observation in meeting with many well-meaning people from the western world over there is that our presence is too fragmented. It is too short term. In other words, you send somebody in; they're out in six months. We have a lot of very well-meaning Peace Corps workers--God bless them--but they don't have the experience that is needed in agronomy in the kind of concentrated effort to start at the grass roots level. In my humble opinion, too many of our people end up in Kiev. They make $325 a day as consultants, and that's great, but the future of Ukraine has to be built in the countryside. So I would encourage you to advocate such a position. Secretary Albright. Thank you very much for that statement because in my previous life, before becoming Secretary of State, I spent a lot of time in Ukraine actually at the village level doing a lot of surveys. I have seen what you're talking about. And, in fact, I went to one place called Ushagarod that had been in five different countries at different times. So I know of what you speak. I think you've made some very, very important suggestions, and Ambassador Morningstar is going to be with me, who does our aid programs. And I will direct that we spend much more time talking about some of these village issues, which I think you're absolutely right about. I think the great sadness of Ukraine as you drive through is that you do actually see this black earth, and you know what it could produce. And I think I will take up everything that you've said, including the issue about the women leaders. Ms. Kaptur. Thank you very much, Madam Secretary. Thank you, Mr. Chairman. Mr. Callahan. Mr. Knollenberg. Mr. Knollenberg. Mr. Chairman, thank you. Madam Secretary, welcome. In going along with my colleagues, I, too, want to say that I'm impressed by the way that you handle yourself, speaking straightforward, and your grace and your grit. You've got both and you need both in that job. blackhawk helicopters A very quick question--I have a couple--it has to do with Colombia. The Chairman alluded to this comment on the helicopters. As you know, the FY 1998 Foreign Operations Appropriations Report included $36 million for three Blackhawk helicopters, for the Colombian National Police, because they need them at that altitude. It is one of the few helicopters, I think, that can fly at that altitude. Congress directed this action because of the dramatic influx of heroin, etcetera. What is the status of this procurement? Are you continuing to hold funds because you are thinking about reprogramming them for some other expenditure? Or what is the status of that? Secretary Albright. Yes. This is a very important issue, and it has to do with the difficulties of Bolivia and our narcotics budget. First of all, we're reviewing very carefully the report language and the technical issues relating to the helicopters. We understand the need to conduct these kinds of missions and the altitude, need to fly at a higher but we've developed a more cost effective way to deal with this. Over the weekend I was down at South Com, where they handle a lot of the drug aspects of it. They do not believe that these helicopters are essential to the program, nor does General Barry McCaffrey. And the cost of procuring the Blackhawks, and the much greater expense of operating them, would seriously reduce our budget to support operations against cocoa and opium in Columbia. To take $36 million out of our total budget would hit the other programs terribly hard. That is, in Bolivia and Peru. While we do think that there is obviously the need for greater attention to Columbia, the Blackhawk helicopters are not the best use our funds, and so we are studying this. nagorno-karabakh Mr. Knollenberg. Thank you. Let me also associate myself with the comments of Mr. Porter in regard to Nagorno-Karabakh. As you know, he and I authored the language that did designate $12.5 million in humanitarian aid that would be used specifically for Nagorno-Karabakh. And you had said--if I am paraphrasing you wrongly, you can tell me--but that you will work to ensure that the Nagorno-Karabakh assistance is properly delivered. My question is: delivered to whom? And will it be done in accordance with the intent of Congress? Madam Secretary, this is March. This was done last fall. And to my knowledge, I don't think there is a single program that has been placed in effect by the administration. We want to work with you on this. But one of the things you mentioned, too, was the needs assessment that took place recently, and it has yet to be finalized. According to information that I have, there is some interim reporting that has taken place at least that indicates there are some very, very major concerns that the people of Nagorno- Karabakh have. Shelter is a vital need, refugee housing obviously, there are serious sanitary problems, there are infrastructure problems, there are problems with hospitals and medicines. And I also believe that the medicines are housed in a single building that makes it very difficult to transport throughout the region. Stepanakert happens to be that particular city, and the warehouse is in that city. So a lot of this isn't getting out. They do need help. And my question is-- and we want to work with you on this--but can you respond with what do you intend to do, and when is the first money going to be distributed in Nagorno-Karabakh? Secretary Albright. Well, I would expect that this NGO that is going to be handling the issue of the tuberculosis would be giving children in the region their TB shots next month. Based on the final assessment of this team, we will be submitting additional projects to you very shortly for approval. I think that based on all of your and Congressman Porter's question, I will make an additional effort to see what is exactly going on. Mr. Knollenberg. We'd appreciate that. We want to work with you on it. We know that there are significant problems, and some of those obviously you're more aware of than I. But we both have traveled there in the last year, and we feel strongly about movement in the direction of seeing something happen on the basis of what was in the report language. Thank you, Madam Secretary. Mr. Callahan. Mr. Obey. Mr. Obey. Mr. Chairman, before I ask my two questions, I'd simply like to note we have our friend James Bond in the room, who used to be the counsel for the Senate Subcommittee. [Laughter.] I see Jim Bond in the room, but I don't see Sean Connery. [Laughter.] Just kidding, Jim. middle east Madam Secretary, let me ask about the Middle East. As you know, I strongly believe in pushing the peace process forward. But as you also know, there are a good many members of the American Jewish community who are concerned about that process. I'd like to ask you, how do you assess that peace process at this point? And what would you say to those in the American Jewish community who are concerned about what they see as insufficient action by the Palestinians and the PLO to respond to Israel's security concerns, who think that Israel's security may be put at risk by further Israeli concessions? Why is it in the United States' interest as well as Israel's interest for this peace process to continue to move forward, and for us to continue to deal directly with the PLO? I think it's important that they understand why, and I think it's important that this committee understand why. Secretary Albright. Let me say that, clearly, 1997 was not a good year for the peace process. We had been pressing all along to try to get two things accomplished. If I might just take a minute to put this into context, the Oslo agreement set up a process to have some interim agreements take place before the final status talks would begin. The purpose of those agreements was really so that the two parties would work together, would learn to have confidence in each other, and be able to develop some not only confidence but imagination to go to the permanent status issues. What happened was that, in fact, as the process began to move forward with the Hebron Agreement, and some of the subsequent acts, rather than working to build confidence, the interim process began somehow to erode it. And yet there are various parts of it that need to continue to take place in order to move to final status. There are questions about an airport in Gaza, a Gaza industrial state, a seaport, trying to get further redeployments of territory from the Israelis to the Palestinians. Those things have all been held up because of this lack of trust and ability of the leaders to deal with each other on some very serious problems. We do think--and I gave a speech last year that indicated that perhaps the way to move forward now was to marry the interim process to the final status process in order to begin to eliminate these frictions in order to be able to get to the permanent status. We have been working on trying to do two very specific acts. There is no question that security is a sine qua non, that it is essential for the Palestinians to take all of the steps necessary to make sure that there is not a security issue. You cannot negotiate in an atmosphere where there is concern as to whether security is being taken care of. And we have insisted that the Palestinians make a 100 percent effort on the security issues. We have pressed Arafat repeatedly on this, and we're going to continue to do that. We also have talked about the importance of a timeout in terms of issues by either side where there is a certain unilateral act that, in fact, kind of corrodes the atmosphere. We have been trying to make sure that those kinds of steps are not taken, and we are working to get the parties to move forward on the further redeployment schedule. We've had a number of meetings with both Prime Minister Netanyahu and Chairman Arafat. Dennis Ross has been meeting with people at other levels, and we are going to do everything we can now to reinvigorate the peace process. We deal with the PLO because it is the authoritative body that is, in fact, moving things forward and has made some progress. And we believe that Chairman Arafat is in a position to exert the effort on security, as well as be able to make the decisions necessary. What has to happen, Mr. Chairman, is that they have to do a great deal, but we cannot make the hard decisions for the leaders. They have to make the hard decisions, in terms of what the security issues are and the further redeployment, and then move to final status. That is what we're going to be trying to do is to reinvigorate it. And I sure hope that 1998 is better than 1997, because our national interest is based on the fact that we need to get this peace process moving. nato Mr. Obey. Thank you. Let me just not so much ask a question but simply raise, again, my concern about one issue with which I profoundly disagree with the administration, and that is expansion of NATO. As you know, I have minimum high regard for that decision. And I simply noted this morning in the paper a comment by Alton Frey, and I'd simply like to quote some of the points he made in that article this morning. First of all, he said, ``There is no near-term threat to the three candidates' security''--the three countries who have been invited to join. Second, he said, ``Modernizing their economies will do far more to shore up their democratic institututions than symbolic association with NATO.'' Thirdly, he said, ``Meeting the military requirements of NATO membership will divert resources from the urgent economic transformations needed for admission to the European Union.'' Fourthly, he said, ``Phasing them into NATO after they join the European Union will greatly strengthen their economic capacity to meet the substantial procurement, training, and operational costs alliance membership imposes.'' And lastly, he said, ``Their active participation in NATO's Partnership for Peace already affords them the full range of effective military cooperation for which they are prepared.'' And then three paragraphs later he asserted this, he said, ``Without rejecting the three pending candidates, the Senate can stipulate that final admission to NATO should await entry into the European Union. Indeed, by linking the two processes, the Senate would be applying useful leverage to encourage the European Union to expedite accession negotiations with the three countries. That would, in fact, serve Poland, Hungary, and the Czech Republic better than prematory admission to NATO.'' I agree with that, and I note that Senators Moynihan and Warner are evidently offering an amendment in the Senate that would provide exactly that. And while I would not presume to lobby the Senate to adopt the amendment, I would certainly state that I think that's a good idea. And I, again, would simply say that I am concerned. The defining moment in my life, in terms of my view of international affairs was watching what happened in this country when we went through a ``who lost China'' debate, and McCarthyism ran rampant in this country and destroyed decent dialogue between all kinds of people in this country for a good almost a decade. I am afraid that the way in which we have approached the expansion of NATO eastward could, in fact, down the line contribute to a similar debate within Russia with virulent nationalist forces directing the same kind of vicious attacks against those elements in Russia most friendly to us as were directed against very responsible parties in the State Department years ago when we had the debate about China. And so it just seems to me that it is a mistake, and that, in fact, we might be stimulating the very threat that we're trying to prevent by extending NATO membership. And I guess I would just ask you, since you have a right to reply, what would be wrong with requiring the action that is contemplated in the Moynihan amendment before they actually join. Secretary Albright. Well, first of all, let me say that all of the arguments that you read I clearly disagree with. I think that while there is no specific army standing on the borders of those countries at the moment, I do think that what we're trying to do is widen the area in which there would not be instability and a military threat. When we don't have the best way to prepare for not having a military threat is to try to deal with it at a time of peace. We already know that the major problem in Central and Eastern Europe are problems among the countries, and they have already dealt with a whole series of their border disputes, just on the hope of getting into NATO, and it has been a very positive action. In terms of their economies, I think that they would have to provide for their military defense anyway, and they find this is actually a better way, even as we are pressing them to fulfill their budgetary obligations toward an expansion of NATO. Now, on the specific issue of the EU, I think it would be great if these countries got into the EU, but we are not a part of the EU and we cannot force their pace. We also know already that there are certain questions about some of the products that the new countries are strong in, that are creating problems within the EU. So it is very hard to tie one process that we think is moving at the appropriate pace, in which we do have an influence, to one that we have no influence on, while I do believe that ultimately it would be very good for these countries to get into the EU. On the question of Russia, let me just say that I deal with this on a daily basis. While there are Russians who are not happy about NATO expansion, it is not preventing them from having a positive relationship with us on a whole series of issues, and they are, through the NATO-Russia Founding Act, very much more drawn into discussions that they were not a part of before. I think that the best way to strengthen the forces of reform in Russia is through our various assistance programs that we are going to be talking about, or have talked about, understanding their status in the world as a powerful, diplomatic force, and they did play, I think, a positive role on the Iraq issue. I think, generally, supporting the forces of reform, not giving in to the forces of looking inward and backward is the best policy for the United States. Mr. Callahan. Mr. Kingston. Mr. Obey. Yes. I would just say I think you're right. I mean, I hope you're right on the latter. Secretary Albright. My first answer was good. [Laughter.] Mr. Obey. No, I was--I think I misspoke. But let me simply say that I do really find it ironic that the Europeans ought to have at least as much interest as we do in the welfare of Central Europe. The Western Europeans ought to have at least as much interest in their welfare as we do. I do find it interesting that for a variety of very self- seeking reasons, some of which relate to agriculture, that the Western Europeans are saying to the United States, ``Oh, go ahead. You let them into NATO, and you spend the money that you have to spend to help effectuate that process.'' But no, we won't let them into the economic union, which, after all, ought to be, in my view, the very first step that is taken if we're to actually integrate those countries into our---- Mr. Callahan. Mr. Obey, if I might interrupt, your 20 minutes is up. [Laughter.] We have some people who have been waiting all morning, and I think we ought to make certain they have the opportunity. Mr. Kingston. latin america Mr. Kingston. Thank you, Mr. Secretary--excuse me, Mr. Chairman, Madam Secretary. Switching hemispheres. The congressional presentation refers to the importance of human rights in several places in the international narcotics section for Latin America, yet in Ecuador, according to your U.S. Department of State January 30, 1998, report, it just says, ``In Ecuador, people are subject to arbitrary arrests. Once incarcerated, they may wait years before being convicted or acquitted, unless they pay bribes. More than half the prisoners in jail have not been formally sentenced.'' Then, a New York Times article from August 22, 1997, goes into more of that. It says that human rights groups and government investigations have scrutinized the system which finds that judges demand payoffs to move a case toward trial. Defendants found not guilty remain in jail, are tortured. One statistic is that some 60 percent of Ecuador's inmates are eventually found not guilty. Of 2,700 inmates, 80 percent who have not been sentenced have an average waiting period of 400 days before they come to trial. Should an American citizen find himself, unfortunately, in this situation, what sort of support can he count on from the State Department? Secretary Albright. The support they would get is obviously from our embassies and consular services. We work very hard to try to give all the support we can to Americans that find themselves in a legal situation abroad. Mr. Kingston. To get into that a little bit, if an American in that situation is not satisfied that the embassy is looking out for his interest, or believes that signals from Washington prevent the embassy from looking at his interest, is there a way to redress it? Secretary Albright. Well, I think that part of the issue here is we know how to handle our people. But the problem is that in each country there are sovereign laws, and they apply them to people regardless of their nationality, and many times they can be inefficient or corrupt. Now, our role is to ensure that the rights are observed. While we can't get every American citizen released, we do our best to try to figure out how to move the process forward. We are prohibited by law from acting as legal counsel, but we can be present in the court to monitor and report on legal proceedings, and we visit incarcerated citizens, which we have, in fact, done. We do this quarterly in Ecuador as you mentioned, and once a month in Peru. We can provide dietary supplements and various other items. But it clearly is a difficult situation when we are operating within the laws of another country, but we do the best we can to assist. Mr. Kingston. In some conversations with officials from Ecuador, it has been suggested to us that--I mean, in my office--that sometimes the United States really pushes for convictions and arrests, and in doing so can sometimes put that in front of human rights or due process. How would you respond to that? Secretary Albright. I would respond that I do not think that is true. I think that what we try to ensure is that the rights of Americans arrested under foreign law are fully observed, and that they are treated humanely and according to international standards, and any violations we protest. You're saying that we push for convictions? Mr. Kingston. Excuse me? Secretary Albright. That the U.S. pushes for convictions? Mr. Kingston. Well, there has been some suggestion that sometimes, if it's an international drug ring, that it might be easier--if United States doesn't have a good enough case against the citizen, that it might be okay, not necessarily by the State Department, to let somebody sit in jail as a pawn in a foreign country to maybe get them to testify against somebody else in another country as part of an international drug ring. Have you ever heard of that? Does that--I mean, that doesn't sound like the good old U.S. of A. to me, and I would expect that you would react strongly in agreement. Secretary Albright. Well, I have not heard of that, but I will look into that. Mr. Kingston. We have written--our office--and 13 other members of Congress have written a letter to your office on December 2nd, which now is three months, regarding one case. And I would really hope that you could get us a response to that letter as soon as possible, because, you know, it's been three months. iraq Let me switch to Iraq. And forgive me for not knowing the exact fact, but I understand that there was an increase in the allowable oil sales to Iraq very recently, prior to the agreement. Are you familiar with what I'm talking about? Secretary Albright. Yes. Mr. Kingston. How much was that? Secretary Albright. I think it's very important that people really understand what this is all about. As I stated earlier, there are those who believe that the people of Iraq are suffering greatly as a result of the sanctions. We have never had any argument with the people of Iraq; we have an argument with their leadership. The various sanctions have never prohibited humanitarian assistance going into Iraq. The problem has been that the Iraqi government says that it does not have enough money in order to purchase the food and medicines necessary. In order not to allow Saddam Hussein to use his people as pawns in front of the international community, saying that we are starving them, we have for some time been pressing a regime that would make it possible for him to sell oil in order to buy food and medicines, which then are distributed in a very specific way to the people that need it and not to his cronies. It's a way, basically, for the United States and other countries to show the fact that we have no argument with the Iraqi people. What has happened is that recently that Oil for Food Program has been increased to--what is it? $4 billion I think is the figure. Mr. Kingston. I think it was $8 billion. Secretary Albright. I think it was $4 billion. Mr. Kingston. I'm not certain. Secretary Albright. Basically, the thing that needs to be made absolutely clear about this is that this in no way goes into Saddam Hussein's hands. It is a way, actually, to get around him so that the ordinary people of Iraq are benefited. Mr. Kingston. Okay. Also, in an exchange with the Chairman and Mr. Yates---- Mr. Knollenberg [presiding]. Mr. Kingston, if I could, can you close in about one minute? We have someone to get to, and we're trying to exercise getting---- Mr. Kingston. Before we vote? Mr. Knollenberg [continuing]. Everyone through before we all have to go. Yes. Mr. Kingston. Okay. Well, I'll tell you what. Let me go ahead and close now. We're having a second round, correct? Correct? Mr. Knollenberg. I'm not at liberty to say. I guess as long as the Secretary can--it would be a very quick round, yes. Mr. Kingston. If everybody was held to five minutes, we would--but I---- Mr. Knollenberg. Right. Mr. Kingston. I notice time gets shorter on the further edge of the platform up here. I'm going to yield for right now. Mr. Knollenberg. The Chair recognizes Mr. Frelinghuysen. Mr. Frelinghuysen. Thank you, Mr. Chairman. supplemental budget request Madam Secretary, good morning. We are figuratively reaching high noon, and literally as well. Thank you for the work you do and for using your bully pulpit around the country to speak on behalf of American interests. I'd like to return off the global tour for a minute back to the President's supplemental budget request. Congress is about to take up the President's request for a supplemental. I'd like to review it very briefly. We've got $18 billion for IMF. We've got money that is needed for U.N. arrears of about $921 million. We've got up to--and this is--I anticipate it's going to be coming from the White House--$1.3 billion for the existing deployment in the Persian Gulf. We've got another $600 million to cover the Bosnia mission from July through September. And I understand we have somewhere in the neighborhood of $380 million for recent storm damage. Since the hour is late, I'd like to give you your last best shot at why it's important that we get this supplemental through, because if you match the supplemental--and I know that you say that the IMF money is not out of pocket--and you compare it to our foreign aid budget, to the American taxpayer it is their money regardless of whether it's taken from the treasury for the IMF or whether it's supplemental. I just want to get your last best shot on why we need to have these critical dollars. Secretary Albright. Well, first of all---- Mr. Frelinghuysen. And if these dollar figures are accurate. Secretary Albright. First of all, let me say that this supplemental is composed of the items that you have mentioned, and they are all very important to us. The IMF issue, I think, is one where it is very clear that the Asian financial crisis is a deep one and one that could, in effect, have an effect on the American economy. The IMF, we believe, is the best vehicle for trying to get these countries to reform. They underpin the whole support for an orderly financial system that is critical to our own financial system. On the international organization aspect, I think it is essential that the United States be a member in good standing in an international organization that we founded, and that normally, if you have large bills to pay, you pay them. As a result of having held back last year on the U.N. arrears, it has cost us about $100 million a year, because one of the things we were trying to do was to renegotiate our assessment rate. And because we missed the deadline on that, we missed saving $100 million this year. Hopefully we can get this supplemental passed. Otherwise, we don't get a chance until the year 2000. On Bosnia, I really do think that we have to be able to deal with success. I think that we've done very well in Bosnia. As Senator Dole said, we're in the third quarter and we're ahead, and it seems kind of crazy to walk off the field. Therefore, what we need for Bosnia is a way to have the military force continue there in a way to provide security so that the civilian implementation can go forward. On Iraq, I believe that the presence of our forces there has given us the possibility of a diplomatic solution. If we cannot have a diplomatic solution, then it is in our national security interest to use force in order to diminish the threat of weapons of mass destruction and our security in the region. Mr. Frelinghuysen. Thank you, Madam Secretary. I think we've got a deadline. Thank you for your time. Secretary Albright. Thank you. Mr. Knollenberg. The Chair sitting in calls for a temporary recess until the Chairman returns. We do have a vote on, as you all know. We'll proceed with that. We'll take a recess for a few moments. When the Chair returns, hopefully we can open up, so that if anybody does have a question--I think Mrs. Lowey is returning--then we'll have the continuation of questioning. Until that time, thank you. [Recess.] Mr. Callahan [presiding]. I am sorry, Madam Secretary, but congressional activity sometimes is necessary. I'm sure that some committees will be interrupted when we're trying to convince the Congress to vote for the appropriation bill for the Department of State and for foreign affairs. So I know you understand. Mrs. Lowey. Mrs. Lowey. Thank you, Mr. Chairman. And I do appreciate the Secretary's patience and staying with us, and I'll be brief. nato expansion I did mention to the Secretary that I, too, had some questions about NATO expansion, and I won't discuss them now. But I think it would be very important, Mr. Chairman, if we can perhaps have an informal discussion--it doesn't have to be a formal hearing--to satisfy many of our questions, such as the amendment that's being brought up in the Senate and others as well. middle east So I'll move on, back to the area of the Middle East, because I do want to have a discussion with you on some of those issues. I know also that our leader, Mr. Obey, had an in-depth discussion on some of the areas with regard to the Middle East. I personally wanted to express my appreciation to you. I think this administration, your leadership, and that of your Department, has been absolutely persistent and determined in moving the process forward. And I know that because of the complexities of the issue, and the long-standing difficulties in the region, it has been very, very difficult. But most of us really appreciate your efforts, and I do want to personally express that to you. I am concerned, however, about the discussions that the administration is going to publicly issue a plan, issue an ultimatum. I have always felt--and I know in our discussions you have expressed your views--that the role of this administration is to facilitate, to bring the parties together. Behind the scenes, maybe, it is appropriate to push the parties together in discussing various options. But in the final analysis, the parties have to talk to each other, and have to agree that they are ready to move the process forward. And in many of your statements, you have talked about the United States as a facilitator. I just feel strongly that public pressure sets the process back. And I am not convinced that it is productive, and we all are committed to moving the peace process forward. Could you comment? Secretary Albright. Yes. First of all, I did make the statement that 1997 has been a bad year for the peace process. Unfortunately, when you're standing still on the peace process, in many ways you are going backwards, because it's something that needs to have momentum to it. And we are very concerned about the fact that there is not enough traction at the moment. There is no such thing as an American plan. We have some ideas that we have been proposing, and I have said over and over again that it is essential for the leaders to make the hard decisions. They have not been making them, and it has been a source of disappointment to all of us, because we can have nine million ideas of various levels and of various complexity, but ultimately the leaders themselves have to make the decisions. The pressure is not by us. The pressure is because the people of Israel and the Palestinians want peace. And I think what's essential is for the leaders to figure that out and make the hard decisions, and we are going to continue to press in the best possible way we can. Mrs. Lowey. Well, I thank you. And I just wanted to emphasize again that moving the process forward, bringing the parties together, pressing the parties to talk and take action, as you've said in the past, is the best way to proceed. I am just very concerned about perception or reality, that the United States is exerting pressure publicly because, in my judgment, this could lead to a real stalemate. And we all want to see the process move forward. You have also said in the past that the peace process will not succeed without security cooperation between the Israelis and the Palestinians, and I agree. There are reports that there have been some violations and that the Palestinians have been not living up to their commitments. Could you discuss with us your current assessment of security cooperation in that region? Secretary Albright. I think that, clearly, security cooperation is essential, and we have been pressing Chairman Arafat to have 100 percent effort in terms of cooperation, generally with what needs to be done to make sure that there is not violence, and that every effort is made. I believe that there has been progress. More can be done, but we are constantly in touch with Chairman Arafat and his people pressing for even more progress in this area, and want to make sure that he does continue to show 100 percent effort on it. Mrs. Lowey. The Chairman, I know, has met with Israeli Finance Minister Neeman, who came with a proposal. He discussed it with this administration and many of us here on the committee. Following up on the Prime Minister's speech to the Congress talking about cutting back and weaning Israel from economic assistance, Finance Minister Neeman talked about bolstering the security assistance while cutting back on economic assistance. Now, certainly we've seen--and our Chairman mentioned before that in this latest crisis, as the Chairman said so well, the administration didn't have to call Israel twice. They have been, certainly, our allies in the region. Could you discuss with us some reaction of the administration to the Neeman proposal? Secretary Albright. Yes. We very much welcome Israel's initiative for the Neeman proposal, and we have launched a dialogue. We are looking forward to working with them on this and trying to sort out exactly how to make this work. And we also would very much like to see Egypt take some kind of a similar step that would allow us to restructure our economic program. And we're going to consult very closely with you all in terms of how to work the Israeli aspect of it out. We want to maintain our unshakable commitment to Israel's security, and also maintain our strong support for Egypt. But we think that this proposal, if properly carried out, will allow us to free up funding for other regional priorities. We do want to spend a lot of time working this through with you. And, as I said, we welcome the initiative. Ms. Lowey. This administration has consistently reiterated its commitment to uphold Israel's qualitative military edge, and we certainly understand the complexities of that region and how important that is. And this commitment was most recently underscored in meetings last November between Defense Secretary Cohen and Israeli Defense Minister Mordechai. There has been concern that a flow of new technologies to the region, even sometimes before Israel has been the recipient of some of these same systems, has developed problems in maintaining the qualitative edge. Could you comment on your judgment? Do you feel that Israel's qualitative edge can be maintained while too often shipments are going to other adversaries in the region? And we know that Israel's security and Israel's strength gives it the option of taking risks for peace. Could you comment? Secretary Albright. Well, let me say that, as I've said, we are committed to having Israel have a qualitative edge. We work with them very closely. It is my belief that they have it and will continue to have it. We are very conscious of various aspects of military deployments in the region and continue to be committed to Israel's security. I do hope, in fact, that the fact that they do have a qualitative edge, and will continue to have it, will allow them to move forward in the peace process. Obviously, as you pointed out, that is a relationship that exists, and we are totally committed to Israel. We've made that very clear. But we also believe that it is just necessary, as I said in the previous response, to move the peace process forward. international family planning Ms. Lowey. Well, let me just say we are certainly in agreement, and let us be optimistic that the year 1998 is more positive than certainly the year before. And another area, Madam Secretary, there has been a good deal of discussion in this committee and in the Congress about not linking international family planning to the issues of the IMF and U.N. arrears and new arrangements to borrow. Could you share with this committee your view of the importance of international family planning and why that issue should be dealt with on its merits alone? Secretary Albright. Well, let me say that we worked--all of us--very hard last year to get a package together that included United Nations arrears and the IMF and reorganization of the State Department, and I think that everybody really devoted a great deal of effort to it. The issue of family planning is one that is of huge importance to an awful lot of people on both sides of the issue. I happen to be on one side, and other people are on another, but I do think that there are very good people on both sides of this discussion. I, as you know, believe in family planning and the importance of it for domestic as well as foreign purposes, because population expansion is one of the huge problems that we face as we move into the 21st century. The United States Government does not promote abortion. I think that is a misunderstanding. No taxpayer funds are used to promote abortion. We have supported organizations that deal in family planning, and what compromises were offered would not allow organizations that do not use taxpayer money for this to even attend conferences at which family planning is discussed, or the abortion laws of the countries in which they are taking place are being discussed. It's an international gag rule. There's no other way to describe it. But my feeling is that since this is an issue of such major import, it's an issue of principle to both sides, that the point that should happen is to vote on it. Let's have a separate vote on this issue, because it is important and people should be allowed to discuss it, and we should do it in a democratic way--vote--and not shut down our foreign policy because of this particular issue. I give credit to people on both sides of this. Let's discuss it and let's vote it up or down. Ms. Lowey. Probably lastly, Mr. Chairman, right, or is it two lastlies or----[Laughter.] Mr. Callahan. One lastly. Ms. Lowey. And then I'll submit the rest of the questions for the record. russia But we remain very concerned about Russia's delivery of ballistic missile technology to Iran. There are reports that the Russian intelligence community is aware of it. There is other information that Russia is working to stop it. Could you clarify for us recent reports, frankly, that the intelligence community is aware of it? The threat is very clear. Secretary Albright. This is an issue of major import, and we have been working it at all levels. The President has been talking to President Yeltsin about it; Vice President Gore to Prime Minister Chernomyrdin. I discuss it on a regular basis with Foreign Minister Primakov, and we have established a channel whereby Frank Wisner has been dealing with Mr. Koptev on this, and I think that there have been some very good and serious results. The Russians have issued an executive order making sure that their government is not involved in this kind of trade, and the Vice President is reviewing the subject. It again will be a subject at the Gore-Chernomyrdin meetings, which will take place next week. And we see some progress. We're monitoring this very carefully because it is a serious issue, and we will continue to do so. I think that in these Gore-Chernomyrdin meetings we will get some additional information on it. Mr. Callahan. Mr. Kingston. Mr. Kingston. Thank you, Mr. Chairman. Madam Secretary, on Chernomyrdin's recent decree, are there punishments involved in that, do we know, and has that decree been implemented? Secretary Albright. Well, the decree has been published, and they will have their own processes in Russia to deal with it. We watch it because, from our perspective, there are sanctionability punishments that would go with it. iraq Mr. Kingston. Okay. I want to get back to you on Iraq. You had said earlier in an exchange with Mr. Yates that--and I don't want to put words in your mouth, but here is the way I understood it--is that Iraq had followed the U.N. peace agreement for six or so years and only in recent weeks started violating it. Did I hear that? Secretary Albright. No. What had been established was an inspection regime, which had been working more and more intensively and following out a string of clues. Iraq had lied, in fact, about its biological weapons possibilities until Saddam Hussein's son-in-law defected and told them that there was a biological program. What has happened is that UNSCOM, in its work, has been able to destroy more weapons of mass destruction than during the Gulf War. And the figures are really quite astounding about what they were able to get at. But at all times UNSCOM was pushing up against the Iraqi government that was basically trying to develop excuses for not providing the information that UNSCOM should have. When I was Ambassador to the U.N., I spent a great deal of time listening to reports by Chairman Ekeus, the first Chairman of UNSCOM, talking about the difficulties of getting inspections taken care of. But the inspections did proceed. They would be stopped, and then they would move in again and they would require certain documents, and after a lot of arguing they would get the documents. What happened several months ago was that the Iraqis prohibited the inspectors going in to do these jobs. What has happened as a result of this agreement is that there were certain sites that were never part of what the Iraqis were allowing any inspectors to go into. Now, as a result of this agreement, they have said that there would be unfettered, unconditional access to all sites--something that UNSCOM never had before. Now, the question is whether, in the testing of this, this will actually happen. Mr. Kingston. Okay. One of the parts of the Annon Agreement is that there would be a new inspection team, and I think a two-tiered level with some new appointees on there. And one of the concerns that I've heard is that there would be pro-Iraqi folks on there who would, in fact, because of the two-tier, warn Iraq up front that there is going to be an inspection, and so the element of surprise would be out of it. How do you feel about that? Secretary Albright. Okay. If I can take a minute to describe the structure, I think it might clarify things. There is the Chairman of UNSCOM, and underneath him there is a group of experts that have been divided all along, from the time they were formed, into committees dealing with whatever issue they have--chemical, biological, et cetera. Then, there are a group of commissioners who meet a couple of times a year--experts--who review the work. Chairman Butler is in charge of both. What this agreement has done is create a group within the group of experts whose job it will be to do presidential sites. Those are these eight designated sites. That group is under the overall control of Chairman Butler, and there is going to be a commissioner from this other part that will also be directing the special group under Chairman Butler. Chairman Butler has made it very clear that he feels that he is in operational control of this group. The inspectors themselves, the experts, will be selected from UNSCOM or IAEA experts--the atomic energy experts. They would be accompanied by a small group of diplomats, who would be chosen by the Secretary General in consultation with Chairman Butler. Their only role in this is to be observers. They will have nothing to do with the inspection. Kofi Annon last night, in fact, on TV said that part of what they would be doing would be also observing to see if the Iraqis are making the access possible and are not standing in the way of the inspectors coming in. I have spoken to Chairman Butler, and so has Ambassador Richardson, so have others; basically, there will be a system set up whereby the diplomats will not be in a position to warn anybody. I can't go into the details of this, but this is one of the things that we have been concerned about, and Chairman Butler is working on a mechanism whereby they will not know ahead of time. Mr. Kingston. Okay. I think that's the essence of it. human rights in ecuador Mr. Chairman, if I could have one more minute, certainly of great interest to me personally, the situation, again, in Ecuador, an American in a jail as described by your January 30th report. We would very much like to have--and I don't want to put you on the spot and ask for your commitment, but we'd love to have maybe a little more proaction on the State Department to try to help us with the constituent who has found himself in an Ecuadoran jail with apparent human rights violations. As you know, all of these cases are very long and complicated, and there is lots of back and forth on all sides. But we do have a constituent who, since September '96, has been in jail. And it has just absolutely ruined the family, and we're trying to work through it. I would like to see a little higher energy level by the State Department. But let me say this, more the State Department in Washington than in Ecuador, because I think your folks in Ecuador have been pretty good. But I'm under the impression--just a gut feeling--that their hands are tied at a certain level, and they can only do so much. Secretary Albright. Well, let me look into it more. Mr. Callahan. Mrs. Pelosi? Mr. Kingston. Okay. Thank you. Ms. Pelosi. Thank you, Mr. Chairman. nagorno-Karabakh Madam Secretary, the Chairman has told me I have two minutes, not one second more, so I'm going to just associate myself with the concerns expressed by my colleagues about Nagorno-Karabakh. I hope that in making the decision about aid that we will be respecting the process and I support the administration in that. But in order to build support for the process in Nagorno-Karabakh, we must give as much aid as we legally can under the legislation. iraq And in terms of Iraq, I want to convey to you the concern that my constituents have. I said earlier, no use of violence, but Mr. Porter also mentioned Radio Free Iraq. I wondered if there was any way we could drop food into Iraq, too. There is grave concern about the Iraqi people. I know that Saddam Hussein is the cause of those problems, but nonetheless, the problems exist. africa And I just have one question, and that is on Africa. I don't think any questions have been asked today about Africa. The Africa Growth and Investment Act--I'm sure you're familiar with that--the centerpiece of the administration's new Africa policy--was strengthened by Representatives Gilman and Smith, who amended the bill to require that participating countries must respect the rule of law, they would be ineligible to participate in programs to receive assistance or other benefits, if the President determines that they engage in gross violations of human rights. Has the administration endorsed this amendment to the bill? And if so, why so, or why not? human rights Secretary Albright. I don't have an answer on that yet, but let me just say that we obviously feel very strongly about making sure that the rule of law and human rights are abided by. In fact, we have an initiative on a whole rule of law initiative in the Great Lakes. It's one of the things that I was pressing on my last trip. Ms. Pelosi. And speaking of that area, I want to commend you for raising the case of opposition leader Etienne Tsiseked: directly with Mr. Kabila. What other concrete actions is the U.S. taking, publicly and privately, to underscore the concern about the deteriorating human rights situation in the Congo. Secretary Albright. I told Mr. Kabila that I would call him when I needed to deliver such a message. I have done that. We will continue to press him to have a better understanding of what it means to run a democratic government. We are very concerned about what is going on in the democratic Republic of Congo, and believe that it's essential for the system to be opened up. Ms. Pelosi. And just, in closing, I understand also that you are very concerned about the resurgent genocide that could happen in Rwanda. I also understand that the administration may be considering providing security assistance to the Rwandan military. What concrete measurable steps is the U.S. taking to encourage the military to investigate and prosecute its own officers who may be responsible for serious rights violations? Secretary Albright. Again, when I was in Rwanda, I made a very strong point of the fact that they had to do more in terms of their own investigations. We are trying to provide them with additional judicial technical expertise and telling them about the importance of--obviously, the Rwanda war crimes tribunal is operating. It's not operating as well as the Bosnian one. But we are encouraging them to do that, and also doing more on the rule of law in Rwanda. Ms. Pelosi. Thank you, Madam Secretary. I am very pleased with the focus that the administration is placing on Africa. Sometimes I think that there is no southern hemisphere when I hear all of the big talk around here. I'm not talking about the administration, and I'm so glad that our Chairman is leading the way on the Latin American initiatives, and the administration is doing that as well with Africa. I think that's the right thing to do. I commend you for it, and thank you for your testimony. Secretary Albright. Thank you. Ms. Pelosi. And for your leadership. Mr. Callahan. Madam Secretary. Ms. Pelosi. Thanks, Mr. Chairman---- Mr. Callahan. I'm sorry. We're---- Ms. Pelosi [continuing]. For your leadership, too. If I had more time, I'd talk about you, Mr. Chairman. [Laughter.] Mr. Callahan. Well, I will yield to the lady for---- [Laughter.] Let me try to get you out of here. I'm going to close with a few statements, Madam Secretary, but to remind you that a lot of the questions that have come up today have revolved around policy as much as appropriations. I notice that you had four hours with the International Relations Committee, and that's commendable. However, in the absence of the ability to fulfill a total passage of legislation, sometimes it falls upon the shoulders of this committee to handle the responsibilities of both, and thus your four hours with them is not quite as--it's a little bit longer than the three and a half hours you spent with us. ecuador But nevertheless, let me echo my concerns about Ecuador that Congressman Kingston was talking about. I, too, have a personal interest in that case, and I am really concerned about that situation. I would appreciate and echo the concerns of Congressman Kingston. I would also like for you to look into one in Honduras, the same type of situation where I have first- hand knowledge of an American citizen, Gustave Valle, who has been imprisoned in Honduras for five years without a trial, huge abusive human rights violations, I'm going to ask the State Department to get personally involved in that. It's very difficult for us to justify continued support to these countries who treat our citizens in such a manner. We're not prejudging guilt or innocence. We're just simply saying we cannot tolerate a country who permits an American citizen to remain in jail for five years without a trial and under the most inhumane of circumstances. So I'm going to ask you to look closely--personally at the Gustave Valle case. iraq We talked a lot this morning about Saddam Hussein and the problems there, and I don't think we have different philosophies. And maybe we should change directions. There are a group of us who feel that Saddam Hussein has violated so many international situations, such as human rights, of his own people, such as the breaking of his commitment of surrender to the United Nations, that maybe it's time our mission should be to indict Saddam Hussein. If we cannot bomb him out, maybe it is time for the United States and the Secretary General of the United Nations, who wants to negotiate with that mad man, maybe it's time to bring this man to some type of international court and have him stand trial rather than have us face these problems we have with him from time to time. Ms. Pelosi. I agree with you, Mr. Chairman. Mr. Callahan. Thank you. family planning With respect, I'm going to say something you're not going to agree with--with respect to family planning. You say why don't we have an up or down vote on this. Madam Secretary, I'll remind you that the Republicans have not always been in charge of the Congress. We have not always been in a majority. And when we had a Republican administration and a Democratic Congress, it was not uncommon at all to attach things that President Bush or President Reagan disagreed with, or that the minority disagreed with to very important legislations. So this is not something that is happening for the first time in history. This is a very, very important issue to a majority of the members of the House. We know that if we pass that legislation single-handedly, the President would veto it, and we do not have the votes. So we have to use every piece of ammunition we have in order to get some of our points across. And the administration--I'll echo what I said earlier--has got to recognize this and to recognize that a government such as the United States can live with Mexico City policy, without tremendous interference into their ability to have an effective foreign policy. I know you'd like to debate me on that, but time is of the essence. bosnia Bosnia--once again, we have cooperated. This committee has been to Bosnia. We fulfilled the President's request for reconstruction monies in Bosnia. We did everything we've been asked, and now we're being asked to even extend what was originally asked, and there has to be some type of definite time limitation put on it. Now you want $200 million more in additional reconstruction assistance, and sooner or later we're going to run out of patience, unless there is a more definitive plan of withdrawing from Bosnia. imf The IMF--I have expressed our concerns about that and the perception that the American people have of IMF. I agree with the importance of funding the IMF. I agree with the importance of helping correct the situation in Asia, with respect to Indonesia especially. A plant in my district has been forced to shut its doors idling 900 people for several weeks because a business in Indonesia was one of their largest customers. The economic situation there is causing problems that only IMF can hopefully correct. Haiti--once again, big problem. Bolivia--we must find a way to convey to the Bolivian people that we were not penalizing them for doing the right thing with respect to drug interdiction. middle east The Ukraine--you've heard from us on that. Let me echo that we want to work with you. We don't want to interfere with you. We have supported you in your every endeavor. We think that you did an outstanding job on the Middle East with respect to the most recent problem with Iraq. It is no reflection upon your activities. It is a reflection of our disappointment that our allies that we support so aggressively, that we take from needy programs here in the United States, turn their back on you. So we are incensed that you didn't get what we feel is the total respect you deserve as our diplomatic representative in that region. So we're going to be supportive of you. We're going to work with you with respect to the budget you have submitted. We're going to forewarn you that there is not going to be enough money allocated to this committee to fulfill all of your needs. And it's going to be very difficult. But, nevertheless, we appreciate you keeping us informed as you do. I notice when you went to the Middle East, prior to your visit to the leaders there to talk about Iraq, you called and briefed me on what your mission would be. But the President has been extremely silent to members of Congress. Normally, when there is a problem, he calls some of us who support the philosophy of the constitutional charge that gives responsibility of foreign policy to the executive branch. He calls us to the White House and explains, but he has been extremely silent, or at least he has not contacted me with respect to what he expected in Iraq. So maybe there should be more communication between the President and some of us in Congress who support his endeavors in foreign policy. But let me, once again, tell you that the American people are proud of you. And as you well know, the people of South Alabama are proud of you. They speak very kindly of you there and with every good reason. So we are sorry to detain you as long as we have today, but, once again, we thank you for appearing before our committee. Secretary Albright. Thank you very much, Mr. Chairman and Ms. Pelosi. I think this is a great committee to work with, and I think we went through a lot of issues. And I'm very grateful to all of you for the fine support and the great working relationship. Thank you. Mr. Callahan. The meeting is adjourned. [Questions and answers for the record follow:] Questions for the Record Submitted by Chairman Callahan organizations that received funding from mra and erma in fy 1995-fy 1997 Question. Please provide a list of organizations that received funding (grant, contract, or otherwise) through the account ``Migration and Refugee Assistance'' and the account ``Emergency Refugee and Migration Assistance Fund'' for the fiscal years 1995, 1996, and 1997; the amount of funds provided for each fiscal year, and the purposes for which the funds were made available. Answer. The attached charts outline the information requested. Please contact the Department of State's Bureau of Population, Refugees, and Migration if additional clarification on any of the attached materials is desired. [Pages 374 - 403--The official Committee record contains additional material here.] decline in ``persons of concern'' Question. Since 1994, the number of ``persons of concern'' has declined from approximately 27,400,000 to approximately 22,700,000. Why hasn't the budget for ``Migration and Refugee Assistance'' fallen during that period? Answer. 1994 marked a year where the vast majority of the world's refugee populations were in first asylum countries and required assistance (e.g., food, shelter, protection) from the international community. Due to political resolution of some of the crises, repatriations are now underway for a significant number of refugees. Repatriation programs constitute additional costs for a period of time following the actual return of refugees. Such costs include transportation and reintegration assistance. u.s. financial support for unrwa Question. Please provide a list of the funding provided for each of fiscal years 1995, 1996, and 1997 to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA); anticipated funding levels for fiscal years 1998 and 1999; and the purposes for which the funds have been used--by project, if possible. Answer. During fiscal years 1995, 1996, and 1997, the State Department's Bureau of Population, Refugees, and Migration (PRM) made the following voluntary contributions to UNRWA using funds from the Migration and Refugee Assistance Account (MRA). FY 1995: $74,821,120 Total: $70,000,000 for UNRWA's Regular Program Budget. $2,000,000 for costs associated with UNRWA's Headquarters Move to Gaza. $2,821,120 for various UNRWA Peace Implementation Projects (PIPs) in Jordan, Syria and Lebanon. FY 1996: $77,000,000 Total: $74,000,000 for UNRWA's Regular Program Budget. $1,000,000 for costs associated with UNRWA's Headquarters Move to Gaza. $2,000,000 for various UNRWA Peace Implementation Projects (PIPs) in Jordan, Syria and Lebanon. FY 1997: $79,153,869 Total: $75,000,000 for UNRWA's Regular Program Budget. $1,000,000 for costs associated with UNRWA's Headquarters Move to Gaza. $1,500,000 for UNRWA's 1997-1998 Special Appeal for Palestine Refugees in Lebanon. $1,653,869 for various UNRWA Peace Implementation Projects (PIPs), primarily in Jordan, Syria and Lebanon. U.S. contributions to UNRWA's Regular Program Budget help cover the costs of the Agency's 637 schools, 123 health clinics, 7 vocational training centers and numerous relief and social service programs serving over 3.4 million Palestinian refugees living in Jordan, the West Bank, the Gaza Strip, the Syrian Arab Republic and Lebanon. (Note: In addition to the MRA funding listed above, UNRWA also received funding from USAID from 1993 to 1997 for specific PIP projects and other development activities, principally in Gaza. USAID contributions during this period totaled $29.2 million.) Thus far in FY 1998, the United States has provided in initial contribution of $70,000,000 to UNRWA for its Regular Program Budget (the same level as the initial FY 1997 contribution). The United States may make additional contributions to UNRWA's Regular Program Budget and/or specific Peace Implementation Projects later this year, following an analysis of prioritized needs. U.S. contributions to UNRWA in FY 1999 are expected to be at similar levels. u.s.-funded projects under unrwa's peace implementation program Question. What are the ``specific projects'' identified in the budget justification that the United States has supported through the UNRWA Peace Implementation Program? Please identify these projects by purpose and by funding provided through ``Migration and Refugee Assistance.'' Answer. Since FY 1994, the United States has provided UNRWA a total of $12,547,379 in funding from the Migration and Refugee Assistance account for specific UNRWA Peace Implementation Projects (PIPs). Nearly all of these projects have been targeted to benefit Palestinian refugees in Jordan, Syria and Lebanon. The attached table provides a summary of each projects including year, location, purpose, cost and number of expected beneficiaries. u.s. assessment rate with iom Question. The United States pays an assessment of almost 30 percent to the International Organization for Migration (IOM). Why is this assessment above the general assessment for United Nations organizations of 25 percent? If the U.S. contribution is in Swiss Francs, what are the savings due to exchange rate gains that are anticipated for fiscal year 1998 and 1999, compared to the budgeted levels? Answer. IOM is an intergovernmental organization separate from the UN. IOM's membership, while expanding in recent years, is much more limited than that of the UN's (IOM currently has 60 member states while the UN has 185). Hence, mathematically every member government receives a higher assessment percentage than in the UN. For 1998, we anticipate a total exchange rate savings of $900,000 from the budgeted level of $7.6 million. The FY 1999 request includes $7.8 million for the 1999 U.S. assessment, based on an exchange rate of 1.3 Swiss Francs to 1 $US. As the overwhelming majority of the MRA budget provides voluntary contributions, any savings or shortfalls are allocated to/from other MRA Overseas Assistance requirements. audits of iom Question. Has the United States commissioned, or been involved in reviewing, audits of IOM finances in the past three fiscal years? If so, please provide copies of the executive summaries of these audits. Answer. As a member of the IOM governing body, the U.S. reviews annually audits of IOM, as well as participates in the selection of the Board of Auditors. For the years 1998-2000, member states selected the Austrian Court of Audit to audit IOM's accounts. Attached for your review are the Executive Summaries of the audits for the past three years. [Pages 406 - 460--The official Committee record contains additional material here.] mra: why increase in multiregional activities Question. Why are funds for multiregional activities with the account ``Migration and Refugee Assistance'' projected to increase by $10,940,000 in fiscal year 1999? Answer. The increase in Multiregional Activities is composed of the following components: $5,940,000--UNHCR. This increase is for the multiregional categories of the UN High Commissioner for Refugees General Program. This category includes such items as UNHCR's Emergency Fund, the Voluntary Repatriation Fund, the Program Reserve, and other components of UNHCR's General Program that are not region specific. $3,500,000--Children's programs. Report language accompanying the 1998 appropriation bill recommends $5 million for increased attention to children's activities. Of this amount, $1.5 million was in the base of the FY 1998 budget; the additional amount incorporates the committee's full recommendation into the FY 1999 MRA request. $1,000,000--Migration Activities. Increased funds are requested to support migration activities that promote international cooperation on migration issues. $500,000--ICRC/IOM. This increase provides for increased headquarters costs of the International Committee of the Red Cross and the International Organization for Migration. These items fulfill statutory requirements. mra: regional delegations in east asia Question. The budget justification for ``Migration and Refugee Assistance'' indicates that part of the funds allocated to assistance programs in East Asia is projected to ``support ongoing programs such as regional delegations throughout East Asia * * *'' What does that mean? What specific activities are supported? Answer. This references the regional delegations (i.e., offices) of the International Committee of the Red Cross (ICRC), which currently has regional delegations in Bangkok, Manila, and Jakarta. In addition to the administration of emergency activities and early warning of impending crisis, ICRC's regional delegations have specific tasks and objectives that can be grouped under two main headings: ``operations'' and ``humanitarian diplomacy''. To meet their operational objectives, regional delegates (i.e., staff) must respond to emergencies caused by outbreaks of violence in countries covered by the delegation, and to needs created by active or sporadic conflicts or by tensions that can affect a region even in times of peace. Staff working in regional delegations can be called upon to act as neutral intermediaries, carry out visits to security detainees, provide tracing services or conduct limited, short-term emergency operations. Regional delegations also have major objectives that can be met through humanitarian diplomacy, i.e., developing and maintaining regular contacts with governments, regional organizations, local Red Cross and Red Crescent Societies, and senior officials in all the countries in their regions. andean eradication results Question. What have been the eradication goals, eradication results, total production levels; and net changes in production in Colombia, Peru, and Bolivia in each of the years 1993-1997? Answer. The table below provides the information requested: BOLIVIA ---------------------------------------------------------------------------------------------------------------- Eradication Production Percent Goal \1\ (hectares) (hectares) Change ---------------------------------------------------------------------------------------------------------------- 1993........................................................ 5,000 2,400 47,200 +4 1994........................................................ 5,000 1,100 48,100 +2 1995........................................................ 5,000 5,493 48,600 +1 1996........................................................ 6,000 7,512 48,100 -1 1997........................................................ 7,000 7,026 45,800 -5 ---------------------------------------------------------------------------------------------------------------- \1\Only Bolivia has mutually agreed upon eradication goals. The minimum eradication goal is 5,000 because Bolivia law 1008 requires yearly eradication of 5,000 to 8,000 hectares. COLOMBIA ------------------------------------------------------------------------ Eradication Production Percent (hectares) (hectares) Change ------------------------------------------------------------------------ 1993............................. 793 39,700 +6 1994............................. 4,910 45,000 +12 1995............................. 8,750 50,900 +12 1996............................. 5,600 67,200 +24 1997............................. 19,000 79,500 +16 ------------------------------------------------------------------------ PERU ------------------------------------------------------------------------ Eradication Production Percent (hectares) (hectares) Change ------------------------------------------------------------------------ 1993............................. 0 108,800 -16 1994............................. 0 108,600 0 1995............................. 0 115,300 +66 1996 \2\......................... 1,259 94,400 -18 1997............................. \2\ 3,462 68,800 -27 ------------------------------------------------------------------------ \1\ These are manual eradication figures separate from the widespread coca cultivation abandonment in Peru. In previous years, the security situation did not allow manual eradication operations. opium poppy eradication and colombia Question. What have been the eradication goals and eradication results for opium poppy eradication in Colombia from 1993-1997? What are the anticipated goals for 1998 and 1999? Answer. Illicit opium poppy cultivation, while documented as early as the mid-1980's gained a foothold in the early 1990's. 1993--The Government of Colombia sprayed 9, 821 hectares in 1993; environmental experts monitored the aerial application of herbicides to opium poppy. 1994--Progress throughout the year was not exceptional, but in early November 1994, the Colombian National Police reinvigorated operations with an aggressive plan to eradicate more than half the opium poppy in Colombia, in the shortest period of time. Nevertheless, total opium eradication was about 50 percent less than in 1993. 1995--The first-ever scientific survey of Colombia's opium poppy cultivation was carried out in 1995. The result indicated that approximately 2,180 hectares were under cultivation, not 20,000 as had previously been estimated. The Colombian National Police reported it sprayed 3,970 hectares of opium poppy during 1995, but this amount could not be verified. 1996--The Government of Colombia sprayed 6,028 hectares in 1996. 1997--The Government of Colombia sprayed 6,972 hectares in 1997. 1998--Anticipated Goals--informal discussions with the Colombian Government have been underway, however, formal demarches to the government and resulting agreements have not been finalized. 1999--Anticipated Goals--same as above. funds for opium poppy eradication in colombia Question. How much was budgeted for opium poppy eradication in Colombia in fiscal years 1993-1998, and how much is anticipated to be spent in fiscal year 1999? Answer. 1993--$5,100,000; 1994--$5,483,000; 1995--$6,080,000; 1996--$6,035,000; 1997--$5,985,000; 1998--$5,985,000--estimated if we only get $30 million of Total Budget; and 1999--Anticipated Funds-- $5,985,000. restitution to holocaust survivors Question. The Administration has requested $10,000,00.00 for the Holocaust Victim's Trust Fund for fiscal year 1999. How will these funds be used? What is the authority for this program. How will this program be administered? What other nations are contributing to this effort, and how much has been pledged to date? How many individuals will benefit from this program? What will be the average benefit per person, from contributions by all donors? Where do individuals live that will benefit from this program? How will their identities be verified? How will the State Department ensure that only qualified individuals benefit from this program? Answer. On Friday, Feb 13, the President signed S. 1564, the ``Holocaust Victims Redress Act'' into law. The law authorizes, among other things, a U.S. contribution of $25 million dollars to the Nazi Persecutee Relief Fund, an international fund intended to provide relief to aging survivors of the Holocaust, particularly those in Central and Eastern Europe who have received little or no compensation to date. The Fund can also be used to support education and other awareness programs related to the Holocaust. Creation of the Fund was announced at the London Historians' Conference on Nazi gold, held last December. The United States joined with the united Kingdom in encouraging a number of the countries still holding claims with the Tripartite Gold Commission (TGC), voluntarily to donate the amount of these claims to the new fund. To date, the Netherlands, Austria, Greece and Luxembourg have agreed to contribute their claims to the Fund and a number of other claimants are considering contributions as well. Other countries, including those countries that were neutral during the War, or participated in the collection and distribution of these assets, were also invited to contribute. The Fund is designed to work along the lines of the Combined Federal Campaign, with minimal administrative overhead. Contributors to the Fund will have one year from the time of their deposits to designate an approved non-governmental organization (NGO) to carry out a program consistent with the objectives of the Fund. A list of approved NGOs is included in the Fund documents. Other NGOs can be added to this list with the agreement of the Fund members. No determination has yet been made concerning the application or use of the projected U.S. contribution. This matter is now under discussion. bosnia economic reconstruction Question. Madame Secretary, two years ago I led a Congressional Delegation to Bosnia to review the prospects for peace in that nation, and to determine whether we should support an economic reconstruction effort. Although I had doubts about our mission in Bosnia, I put my credibility on the line and pledged to support the President's request for $600 million in economic reconstruction funds. I did so with the understanding that $600 million would be the total required from the United States for these activities. In the past two years, I have met my commitment to the President, and more. Not only have we appropriated every penny of the $600 million for economic reconstruction, we've provided funding for police training, assistance to refugees, contributions for elections, and contributions to the war crimes tribunal. From 1995 through 1998, the Administration has received approximately $1.1 billion from this subcommittee for all aspects of the Dayton Peace Accords. For 1999, you are asking for an additional $200 million for economic reconstruction, despite earlier assurances that $600 million would be our total commitment. a. Why are you asking for additional funds? Answer. The Administration is extremely appreciative of the efforts by the Chairman, other Subcommittee members, and the Committee's staff to provide the necessary resources for the economic reconstruction of Bosnia in this and the past two fiscal years. It is appropriate that there have been few differences between the Congress and the Administration on this, because it is clearly in the U.S. national interest to seek peace and stability in the Balkans. Our engagement and leadership in Bosnia is the right thing for America to be doing. We, our allies and, most unfortunately, the people of the former Yugoslavia have paid a terrible price for the rampant nationalism that overcame rational behavior in 1991 and 1992. We must make certain that a lack of engagement in Bosnia and other parts of the former Yugoslavia by the U.S. and others does not trigger another round of senseless destruction and violence. We have made a tremendous amount of progress in Bosnia, but the gains we have made these past two years are unfortunately still reversible. To disengage prematurely either militarily or economically would jeopardize our substantial investment in peace and stability in Bosnia and the region. The reconstruction effort in particular has made good process, in our view. USAID has done an outstanding job with the SEED funding provided by this Committee. USAID's programs have served as models for other donors and spurred increased commitments to refugee return programs, among others. Other donors have done their fair share. But in spite of this good start and broad international support, Bosnia is nowhere near having a self-sustaining economy and will need continued large amounts of external assistance to achieve economic self- sufficiency. Question. Will other nations, especially European nations, be making additional contributions as well? How much has been pledged by these nations for 1999? Answer. We cannot give you a precise answer to that, because the European states, like the U.S., are going through their budget processes. We have discussed funding levels with officials of the European Union and a number of significant European bilateral donors, and their intention at this point is the same as our own: to maintain 1999 levels of assistance for Bosnia at roughly 1998 levels. They have indicated that obtaining these levels of funding will be easier politically if the U.S. is able to obtain funding levels at the level of our FY 99 budget request for Bosnia. Accordingly, we believe that there will be no significant change in the patterns of assistance established over the past two years, which have the EU and nations of Europe funding about 50 percent of Bosnia's reconstruction costs and the U.S. share about 15 percent. Other donors, most notably the international financial institutions and the Government of Japan, pick up the rest. In summary, there is a continuing international commitment to share the burden of Bosnia's reconstruction. Question. What is the ``exit strategy'' for the phase-out of our economic reconstruction program, and when will this termination occur? Answer. We have developed criteria and benchmarks for a self- sustaining Bosnian economy which include elements common to the other transitional economies of Central Europe, plus a heavy focus on reconstruction required by Bosnia's unique war-time destruction. We cannot predict precisely the pace at which Bosnia will reach these benchmarks but, with the change in Governments in the Republika Srpska, the pace has certainly accelerated. The April 10, 1998 announcement in Sarajevo of the successful negotiation, after long delays, of an IMF stand-by arrangement will clear the way for Paris Club settlement and greater private investment in Bosnia. Similarly, we have seen, in the last few weeks, the removal of barriers to real privatization in both entities. Each is now working towards implementation of that key stage of economic transformation. But many elements necessary for a self-sustaining economy clearly won't exist for a number of years. Industry, which used to employ one out of every two Bosnians, is slow to restart because Bosnia has lost its markets and must replace its old industrial behemoths with more efficient companies. Much key infrastructure, such as the telecommunications system, has yet to be repaired. The World Bank estimates that Bosnia's economy has the potential to continue to grow at double-digit rates over the next several years if a number of conditions are met. These include substantial reconstruction financing, debt relief from creditors, effective use of external assistance, and good progress in institution building and in implementation of economic reforms. If this growth scenario is followed, Bosnia will recover its relatively low pre-war GDP by the year 2003 or 2004. It is too early to predict the economic recovery of the Bosnian economy with sufficient precision to give you a year-by-year estimate of reconstruction assistance and a date certain when Bosnia can move to a normal SEED program which focuses on technical assistance instead of reconstruction assistance. But neither do we believe that U.S. reconstruction assistance at the $200 million plus level will be necessary until the early years of the next century. The job remains a big one requiring the continued combined efforts of International Financial Institutions and other donors. colombian heroin--where do we go from here? Question. Madame Secretary, last year the Congress provided $36 million for the purchase of 3 Blackhawk helicopters for the Colombian National Police. It is intended that these helicopters be used to support the eradication of opium poppy crops at high altitudes in the Andes mountains. The Huey helicopters currently used by the police cannot operate effectively at high altitudes, which is where the opium poppies are grown. Operating at lower altitudes, closer to the ground, they are more likely to be shot down by drug traffickers. Unlike coca plants, which grow everywhere, opium poppies are grown in relatively small amounts; therefore they are more easily controlled and eradicated. Heroin has re-emerged as a serious problem in America; the historical estimate of 600,000 heroin addicts in the United States has recently been increased by 200,000. Approximately half of these addicts are in the Northeast, and most of the heroin used by these addicts now comes from Colombia. The funding for the Blackhawks was an attempt to address the heroin epidemic in the United States. It provides much-needed support to the Colombian police, who put their lives on the line for us in the effort to stem the flood of cheap heroin coming into the country. This may not be the only answer, but it was an attempt to address the growing heroin problem. I understand the use of these funds has been frozen. I would also say I am distressed that the unintended consequence of providing these funds has been a decision by the Administration to reduce funds for Bolivia, despite the fact we've doubled funding for international narcotics control activities in the past several years. I want to work with you to address this shortfall, including exploring the possibility of reallocating monies with the Economic Support Fund that are available due to the decision by Turkey not to accept assistance from the United States. Where do we go from here? How does the Department and the Administration intend to address the growing problem of Colombian heroin? Answer. Regarding BlackHawk helicopters for the Colombian National Police (CNP); we understand and share your concern regarding the CNP's need for helicopters with greater lift capability at high altitude, primarily to eradicate opium poppy in Colombia. We are reviewing carefully the Foreign Operations Appropriations Act report language and technical issues related to the helicopters. However, we have a great many concerns. BlackHawks cost $8 million each and are more than twice as expensive to operate as the aircraft currently in CNP's fleet, and due to the need for additional training, they would require considerable time to integrate into the CNP force structure. The cost of procuring and operating the BlackHawks would seriously reduce our ability to support operations against coca and opium in Colombia and elsewhere. The $36 million directed by the report language would shrink our available funding and, as a result, would hit other programs hard, particularly in Bolivia and Peru. The impact upon our Andean source country strategy to fight narcotics trafficking would be significant. Over the past two years, coca cultivation in Bolivia and Peru has declined dramatically. As much as 110 tons of potential cocaine production, most of it destined for the United States, has been removed from the pipeline. Now is not the time to reduce funding for these programs which are having such a dramatic effect. We are developing a more cost-effective alternative to provide the improved lift capability the CNP needs while still allowing us to meet other critical counternarcotics objectives. Our program to upgrade the existing CNP air fleet, over the next 2 years, will provide significant high-altitude capability at less than one-third the cost of the Blackhawks. In addition, the Colombian Air Force and Army already have BlackHawks, and other heavy lift aircraft, and we are exploring arrangements for their use in direct support of CNP operations. Colombia accounts for less than an estimated 2 percent of the world's opium production. Persistent eradication has kept Colombia's opium poppy crop from expanding overall cultivation. Cultivation levels have remained stable for the third straight year. Colombian heroin is a serious threat to our national interests, although the emergence of this threat has not diminished the threat posed by Colombian cocaine. In 1997 eradication of opium poppy improved significantly with assignment of greater aviation resources, despite continued incidents of hostile ground fire. We agree that eradication is the most efficient, but not the only, method for stopping the flow of heroin. Given that opium poppy is grown at high altitudes, improved performance helicopters are necessary to eradicate effectively. The Colombian National Police participated in the creation of a joint US/Colombian heroin task force that has provided intelligence to effect drug seizures in Colombia and assist in US-based investigations. Overall, Colombian National Police seizures of heroin were higher in 1997 than 1996. initiatives for sub-saharan africa Question. The 1999 budget includes a number of initiatives of sub- Saharan Africa, including: $30 million for a trade and investment initiative for Africa; $25 million for an Africa Great Lakes Initiative; $2 million for a South Africa Development Community Initiative; $21 million for a food security initiative; $26 million for an education initiative; and $35 million to fully forgive debt owed to U.S. government agencies. You add these initiatives up, and you reach $139 million--and we have missed a few in our initial review of your budget request. While some of these are to be funded from within base funds, $107 million of this total represents an increase above last year's level. The only initiative in Latin America is $20 million for something to do with the Summit of the Americas--and only $5 million of that is new money. What are the details of these initiatives for Africa? Is there some logic and relationship among each of these requests? Answer. All of the Africa initiatives emerge from the changing development reality in Africa, what some have called the ``African Renaissance,'' and the new partnership between the United States and Africa. Development Assistance for the Food Security Initiative ($21 million) and the Education Initiative ($26 million) falls within FY 98 base levels. Only the $30 million in Development Assistance for the Trade and Investment Imitative represents an increase over last year's request. Economic Support Funds for the Southern Africa Development Community Initiative ($2 million), the Great Lakes Imitative ($25 million) and the Education Imitative ($10 million) as well as $35 million for the Treasury Department for debt forgiveness also represent an increase over last year, bringing the total increase over FY 98 to $102 million. These initiatives center on two of the Administration's major foreign policy goals for Africa--bringing Africa into the global economy and reducing the incidence of violence. Three of the initiatives mentioned--trade and investment, food security and debt relief--are connected to the President's partnership for Growth and Opportunity launched in 1997. Along with opening American markets to African exports and creating a new forum for high level discussion of these issues between the United States and reforming states in Africa, these three initiatives are the major elements of this new partnership. The Southern Africa Development Community (SADC) Initiative is designed to provide technical assistance to SADC to assist the organization in achieving regional economic integration, as well as policy coordination on political and security concerns. The Education for Development and Democracy Initiative is built on the recognition that for the fragile political and economic transformations taking place in Africa to be sustained, much more attention has to be paid to African education. Finally, the Africa Great Lakes Justice Initiative is designed to promote the rule of law in the area and to help strengthen judicial institutions in an effort to address the cycle of impunity and bloodshed which the President spoke about in Rwanda. These initiatives allow the United States to promote our objectives more fully by expending more resources in a concerted way. The initiative for food security, for example, will help USAID expand its programs in agricultural technology development and agricultural marketing in five countries. Similarly, through the education initiative, we will be building on past successes, particularly in the area of university partnerships, but we will be trying some new ideas as well. Although we have supported rule of law projects bilaterally throughout Africa, under the Africa Great Lakes Initiative we will pursue a more comprehensive, coordinated approach to improving the rule of law and respect for human rights among countries in the central region. asian financial crisis Question. What is industry doing during the Asian financial crisis? Are they assisting or just standing by and watching? Answer. At the State Department and at our Embassies, we have met with representatives from industry groups such as the International Business Council, the U.S.-ASEAN Business Council and others, along with numerous representatives from individual firms doing business in the region. Industry has provided policy makers important insights, built over years of engagement in Asia and with an eye to doing business in the region over the long term. As the affected countries follow through on their agreed economic reforms, we fully expect businesses to resume investing in the region, demonstrating renewed confidence in the prospects of those countries, and providing the financing for renewed economic growth. Businesses are already exploring such possibilities. Question. Who would be taking the lead to organize U.S. business interests, you or Secretary Daley at the Department of Commerce? Answer. State, Commerce, Treasury and USTR have been working together closely with the White House to address concerns of the U.S. business community regarding the Asian financial crisis. We have an effective interagency process to ensure good coordination. Question. Why can't we just stand back and hope the crisis will work itself out? Answer. The financial crisis in Asia has the potential to cause contagion beyond the region. The United States, together with the international financial community, seeks to stem panic, stabilize markets, and restore confidence and growth as quickly as possible. Success is important to the affected countries and to all countries around the world, including the United States. The International Monetary Fund and the other international financial institutions have tremendous expertise and experience to resolve such crises. We cannot leave such matters to chance. We have a responsibility to our friends and allies in the region to engage through existing institutions. We do so not out of charity, as President Clinton has pointed out, but because these are our customers, our competitors and our allies. We have important national security interests in the region which are best protected by stable, recessions almost certainly would be deeper and their recoveries take longer. That outcome would mean smaller markets for our exports and a weaker global economy. We benefit from prosperity abroad. Question. How come the free market system will not self-correct itself in this instance? Answer. The rationale behind the IMF-led programs in Asia is to work with governments to produce good policies that will be convincing to market participants, and thus accelerate the pace of reform and recovery. Absent such efforts, market forces might lead to the same outcome. There is also a very real danger that the added uncertainty of the free market self-correction option would exacerbate political and social tensions in the region which could produce negative effects and further stall recovery efforts. Question. Developing countries now account for what percent of United States exports? Answer. Exports to developing countries accounted for roughly 44% of all U.S. exports in the second quarter of 1997. Forty-three percent of U.S. exports to developing countries went to Asia in the same quarter. It is striking that in 1996 51% of California's exports alone went to Asia. For Oregon and Washington state, and ratios were even higher (57% and 58%, respectively). The fastest growing markets for U.S. exports are the developing countries of Asia and Latin America. (Source: Direction of Trade Statistics Quarterly, International Monetary Fund). Question. How much have U.S. firms exported in goods and services to the very poor countries eligible for IDA assistance? Answer. According to preliminary figures from the U.S. Census Bureau's International Trade Statistics, U.S. firms exported $6.3 billion in manufactured goods to 53 IDA-only recipient countries in 1997. (Comprehensive figures for services exports are not available.) Question. How about those countries that are IDA graduates? Answer. According to preliminary figures from the U.S. Census Bureau's International Trade Statistics, U.S. firms exported $68.8 billion in manufactured goods to the 21 countries which have graduated from IDA since its inception in 1960. (Comprehensive figures for services exports are not available.) Questions for the Record Submitted by Congressman Porter turkey: human rights assistance Question. I am cautiously optimistic that the Turkish government is committed to addressing the serious human rights situation and the other internal problems that currently threaten the Turkish state. For fiscal year 1998, this subcommittee worked to make $20 million in ESF funds available to be spent on projects in these areas, but Turkey unfortunately rejected these funds. Given the new willingness of the Turkish government to address these issues, has the Department explored the possibility of using these funds to help implement the human rights, governance, and economic development goals that the Yilmaz government has put forth? Answer. Based on my own and the President's conversations with Prime Minister Uilmaz, there can be no doubt of this government's commitment to address the human rights problems it faces. We do not, however, see a possibility for using the ESF funds for these purposes. The key to Turkey's human rights problems is not so much resources as political commitment, which we now have from the Turkish government. Even more important is follow- through; we are actively pressing for concrete, significant improvements; We also regret the Turkish government's refusal of ESF. However, that action was not based on disagreement with the worthwhile goals of the legislation, but on other factors that have not changed; and In prioritizing assistance funds, the $20 million was allocated to other high priority projects in our budget one the Turkish government rejected it. We are considering providing assistance, including training, that furthers our human rights and democracy goals at modest cost. We already provide assistance to the human rights NGO community through programs administered by the International Republican Institute, the National Endowment for Democracy, and the U.S. Information Agency. cyprus policy Question. Last year, as in years past, I asked you about the latest ``big initiative'' that was underway with regard to Cyprus. Despite the opportunities created by European Union accession, the situation continues to deteriorate. I am increasingly pessimistic about the prospects of solving this problem, and I believe that bold action is required to break the current deadlock. (A) What new approaches are being considered by our Cyprus team? How are we working with other players on the Cyprus issue, such as the European Community an the United Nations, to spark innovative approaches to this problem? Answer. This Administration places a high priority on resolving the Cyprus dispute. Special Presidential Emissary Richard Holbrooke and Special Cyprus Coordinator Tom Miller are focused on resolving the core issues of a Cyprus settlement: powers and authorities of a federal government; territory; property rights; and security issues. During their April 2-5 visit to the region, they discussed with the leaders of both communities some ideas for addressing these core issues. Ambassador Miller will return to the region this month and Ambassador Holbrooke will follow in May. We work very closely with other key players on the Cyprus issue. Ambassadors Holbrooke and Miller consult frequently with British Special Cyprus Representative Sir David Hannay and other EU representatives and with the UN Secretary General's Special Advisor for Cyprus, Mr. Diego Cordovez. Question. What is the current status of efforts to bring the Turkish Cypriot community back into participation in the bicommunal projects? Answer. We have been pressing Turkish Cypriot authorities to life their suspension of bicommunal contacts from the moment they announced the suspension on December 27, 1997. We have pointed out to them that the suspension is contrary to their interests because it has cut off significant opportunities for Turkish Cypriot individuals and non- governmental organizations to articulate their positions and concerns to Greek Cypriots and others. The suspension, combined with separate measures to impose travel restrictions across the cease-fire line, has also severely limited the freedom of movement of Turkish Cypriot individuals. Our efforts have had some success. In January the U.S. Geological Survey hosted a bicommunal group of water managers and engineers from Cyprus on a two-week study tour of water management sites in the U.S. During his April 3-6 visit, Ambassador Holbrooke hosted a meeting of the Greek Cypriot and Turkish Cypriot leaders of the Brussels Group, a bicommunal Group of business people he first brought together in November 1997. In addition to our approaches to Turkish Cypriot authorities, we have also urged the Turks, EU partners, the UN, and others to us in pressing the Turkish Cypriots to lift the suspension. caucasus Question. I am also concerned about reports that State Department personnel have indicated to various officials in the region and to subcommittee staff that the $12.5 million which this subcommittee intended for Nagorno Karabakh will be or should be spent outside of Nagorno Karabakh. Such statements are contrary to the intent of this subcommittee in providing the funds and have served to unnecessarily create conflict and confusion in an extremely volatile region. What is the content of the guidance provided to department personnel regarding this issue? Answer. Our guidance is taken directly from the law: that the funds are to be used for humanitarian assistance for ``refugees, displaced persons had needy civilians affected by the conflict in the vicinity of Nagorno-Karabakh''. The Congressional statement of the managers of the appropriation provides further guidance, saying that the Coordinator should ``move forthwith to provide assistance of $12,500,000 for victims of the Nagorno-Karabakh conflict''. u.s. troops in bosnia and herzegovina Question. The President promised on at least three occasions that U.S. forces would be withdrawn by a specific date. However, those dates came and went without a U.S. withdrawal. How long are we going to be in Bosnia? What will it take for the U.S. to be able to pull out of Bosnia? What is the Administration doing to facilitate a peaceful withdrawal? Answer. The President has decided that the U.S. will participate in a NATO-led force in Bosnia beyond June 1998 and that the Follow-on Force should have a mission and size similar to SFOR, though the number of U.S. troops should decline from twenty-five to twenty percent of the total. The size of SFOR will be progressively reduced based on periodic review of the security situation in Bosnia and the progress of implementation of the Dayton Accords. While the U.S. has not proposed, and NATO has not adopted, and fixed end-date for the deployment, it will not be open-ended. Experience demonstrates that arbitrary deadlines tend to encourage those who would wait us out. The goal of SFOR is to establish conditions under which Dayton implementation can continue without the support of a large NATO-leg military force. The Administration has developed benchmarks that, once achieved, will allow the peace process to continue without the presence of a major NATO force. The Administration is actively pressing civilian implementation so that the peace process becomes self-sustaining. Specific examples include working with Bosnian election officials to design and produce an electoral law and model that will permit them to conduct elections without international supervision; working with the parties to develop the joint and central governmental institutions called for in Dayton; working with Federation partners to fully integrate governmental structures and abolish pre-war institutions of governance; working with police structures to bring them into line with democratic norms and practices; working with media to produce a more responsible and less ethnically-driven information system; and, of course, continuing to encourage the parties to deliver on their responsibility to surrender war criminals. All these are steps that will reinforce the stability of Bosnia and Herzegovina, so that when our troops depart, we can be sure they will not have to return. Questions for the Record Submitted by Congressman Livingston Question. Haiti has little economic freedom. It remains one of the most repressed economies in the world. While some trade barriers have been reduced of late, there has been little effort to improve their current economic policies. Crime, corruption and bad economic policies still plague the island. What is the Administration doing to ensure that Haiti is taking steps to combat corruption and encourage greater economic freedom? Answer. We agree with you that economic and political freedom lie at the heart of efforts to improve conditions in Haiti. That is why we have directed USG assistance at building Haiti's fledgling democracy, developing microenterprises, privatizing, providing technical assistance for small holders, and creating an apolitical, professional civilian police force and an independent judiciary. Under our democracy and governance program, we support elections, police training, judicial reform, local government development, Parliament, and community-based civic groups. Our assistance also supports economic policy reform, including public administration reform and privatization. One parastatal has been sold and another awaits the signature of a prime minister. Since 1995, the Government of Haiti has made substantial progress in stabilizing the economy. It has reduced its tariff structure from a range of 5 to 50 percent to a range of from 0 to 15 percent as part of its liberalization reforms. Other reforms designed to promote economic freedom are underway. Haiti can now face its future based on a market oriented economy and democratically elected government. We continue to receive the highest assurances from the Government of Haiti that they are committed to fighting corruption wherever it may occur. The USG has been encouraged by the work of the Haitian National Police's Director General and Inspector General in pursuing investigations against police officials who are involved in illicit activities. These changes are not yet fully institutionalized. We must remain committed to helping Haiti modernize if we are to see permanent change. ukraine Question. Will you meet with the aggrieved U.S. investors during your visit to Ukraine? And if so, will you meet with them before you meet with Ukrainian officials? Answer. During my March 6 visit to Kiev, I met with a group representing the U.S. business community in Ukraine, including a number of businesses that have raised complaints with the U.S. Government about problems they are having in Ukraine, such as Gala Radio and R&J Trading. The businessmen reviewed for me both company-specific problems and broader systemic obstacles to doing business in Ukraine. This meeting followed my meeting with President Kuchma, at which I raised directly our concern over the treatment of U.S. businesses and investors and the need for action to improve the investment climate in Ukraine. Question. What are your thoughts on certification? Do you believe there has been substantial progress on the business disputes for which we conditioned aid? Answer. On April 29, 1998, I decided to certify that the Government of Ukraine has made significant progress toward resolving U.S. investor complaints. We have worked very closely with the Government of Ukraine over the past year to push for resolution of investor complaints, including the twelve specific complaints covered by the legislation. Seven of the cases were resolved or there was significant progress toward their resolution. Since I announced my decision to certify, the government of Ukraine has continued to work with us to resolve the remaining cases, and we continue to make progress. We remain concerned, however, about the remaining investor problems, and more generally about Ukraine's poor investment climate and the slow pace of economic reform. In conjunction with my decision to certify I directed the withholding of certain assistance funds to the government of Ukraine in areas where reforms have stalled and such assistance cannot be used effectively. These funds will be redirected to the private and non-governmental sectors in Ukraine unless the Government of Ukraine implements the necessary reforms in these sectors and takes additional steps to resolve outstanding business cases in Ukraine. Question. The European Union is currently instigating dispute resolution procedures against Ukraine. This came about because Ukraine ignored both EU and WTO requests and implemented new tariffs on the auto industry that violate trade agreements and treaties they have with the EU. Do you think it is time for the U.S. to take similar action to protect U.S. investors? Answer. The EU announced on February 20 that it would undertake consultations with a view to using the dispute settlement procedure of the EU's Interim Trade Agreement with Ukraine. More recently, an EU delegation visited Kiev in March to discuss this dispute with the Government of Ukraine. However, we have not been informed that the EU has implemented the dispute settlement procedure. Ukraine is involved in negotiations to join the WTO, and is expected to adhere to WTO principles while it pursues those negotiations. The EU has charged that Ukraine's auto regime violates WTO disciplines, as well as its bilateral agreement with Ukraine. We are examining this issue as well. We have complained to Ukraine about trading practices which contravene WTO rules and we have raised these issues in the Trade and Investment Committee of the Gore-Kuchma Commission, as well as in the context of Ukraine's WTO accession process. Question. My constituent, Joe Lemire, has been threatened and employees at GALA Radio have been intimidated--without cause--and have been physically harassed and threatened with arrest. What is the Embassy doing to protect U.S. citizens such as Mr. Lemire in Ukraine? Answer. GALA Radio is one of the investment dispute cases we consistently raise with the highest officials of the Government of Ukraine. The U.S. Ambassador in Ukraine, Ambassadors Morningstar and Sestanovich, and numerous other U.S. officials continue to press the Ukrainian Government to honor the ICSID arbitration process and desist from retaliation or any kind of physical abuse against Mr. Lemire and his employees. I raised the GALA case with President Kuchma when I visited Kiev on March 6. We will continue to press our concerns with the Government. Embassy officers have met regularly with Mr. Lemire since he first informed us of his complaint against the Ukrainian government. I understand Mr. Lemire had an in-depth meeting with Ambassador Pifer on May 15. Embassy officers have responded promptly to protests from GALA of alleged harassment by Ukrainian Government agencies. In fact, Mr. Lemire expressed his strong appreciation for the physical presence of Embassy personnel when such events have occurred. In addition, embassy officials have frequently accompanied Mr. Lemire to meetings with Ukrainian officials during efforts to resolve this problems. While the Embassy is unaware of any direct threats to Mr. Lemire's life, they are keeping a close watch on events. The Regional Security Officer has also been working closely with Mr. Lemire on the recent burglary at his residence. To the knowledge of Embassy Kiev, no workers for Gala radio have been arrested. saddam hussein Question. Secretary General Annan stated that Saddam Hussein can be trusted. Do you believe Saddam can be trusted? Answer. No, Saddam Hussein can not be trusted. In his March 2 statement to the Security Council, Secretary General Annan said that Iraq's agreement to cooperate with UNSCOM and IAEA inspections must be tested and confirmed. We agree. Accordingly, it is necessary to continue the deployment of military forces in the Gulf at levels appropriate to ensure Iraqi cooperation with weapons inspections. iraq/un Question. Some say the real winner in this latest showdown with the U.S. was Iraq because they were able to defy the U.S. Without a clear policy on Iraq--the UN, Iraq, and Russia were able to set the agenda throughout the crisis. Why did the Administration allow the UN to conduct crucial parts of U.S. foreign policy? Answer. The United States conducted an active diplomatic campaign centered on the United Nations, designed to compel Iraqi compliance with its own commitments under Security Council resolutions and bolster the central goal of our policy toward Iraq: to make certain that Iraq is not in a position, now or in the future, to threaten its neighbors or U.S. interests in the region. The agreement reached in Baghdad by the Secretary-General is a win-win situation for the United States and the United Nations. UNSCOM has said cooperation from Iraq under the Annan-Aziz MOU so far has been good. If that continues, it will mark an important victory for the international community. But if Iraq violates the MOU, it will be clear to all that Iraq has reneged once more on its commitments under Security Council resolutions and reneged on the terms of the 1991 ceasefire. And the Council has made it clear that that will have the severest consequences. The United States is prepared to take whatever actions necessary, including military action, to respond to the breach of the ceasefire established by the Security Council. unscom: secretary-general's comments Question. It has been reported in some papers that Secretary- General Annan thought that some UNSCOM inspectors were ``cowboys'' who have thrown their weight around and behaved irresponsibly. Was that the case? Answer. The Secretary-General described this characterization of UNSCOM inspectors as an Iraqi characterization, not his own. military action in response to prior interference with unscom Question. As Chairman of the House Appropriations Committee, I was not formally briefed on the military aspects of the mission until I made a request for such a briefing. To be honest, I was troubled by the timing of the mission. Why was the President not making a stronger case for military action last year when UNSCOM inspectors were first denied access? Answer. Iraq has interfered with UNSCOM ever since weapons inspections began following the Gulf War. There have been at least seven prior major incidents of interference, one of which required a military response. Iraq's most recent confrontation with the Security Council occurred in two phases. On October 29, 1997, Iraq demanded the withdrawal of American members of the UN weapons inspection teams. This led to withdrawal of all UNSCOM personnel and a diplomatic effort by Russia to secure Iraq's agreement to UNSCOM's unconditional return. Iraq then pursued efforts to limit UNSCOM's access to so-called ``Presidential sites.'' The crisis came to a head when UNSCOM Chairman Butler reported to the Council in January that UNSCOM was effectively blocked from carrying out its mandate by Iraq's twin refusal to provide access and information to his inspectors. The U.S. approach throughout the crises was to seek a diplomatic solution if possible and to build international support for a recourse to military action if that proved necessary. This approach allowed us to put maximum pressure on Iraq, while rebuilding the coalition of concerned nations that would join us in military action. Our readiness to employ military force was evident from the outset, but it was important--and ultimately effective--to demonstrate that we would pursue all viable diplomatic options first. ira and list of foreign terrorist organizations Question. My understanding is that the Administration did not include the IRA on the list of terrorist organizations when that list was promulgated last year. This decision, as I understand it, was made despite a recommendation by the FBI that the IRA be so listed. a. Is this true? b. If not, why not? c. In light of several recent terrorist incidents attributable to the IRA, is the Administration reassessing that decision? If not, why not? Answer. Last October, we took note of the IRA's cease fire announcement of July 19 and the subsequent decision by the British government that the cease fire was ``genuine in word and deed'', permitting Sinn Fein to join inclusive, all-party talks in Belfast. Under those circumstances, the Secretary, who has authority under the law to designate a foreign terrorist organization, decided not to designate the IRA at that time but to continue to hold the matter under review. Since then, the all-party talks resulted in an agreement reached in Belfast in April. We hope that the goal of a democratically-reached peace agreement will be confirmed by the voters. We deplore the incidences of terrorism in both Ireland and Northern Ireland, acts that apparently were committed by extremist elements on both sides in an effort to disrupt the agreement. We will continue to monitor the situation and review the IRA and any other groups that may have committed violence in the past. ireland/no. ireland: background on international fund for ireland Question. Why does the United States continue to provide a portion of its limited foreign assistance funds to the International Fund for Ireland? Answer. The U.S. contribution to the IFI is a tangible and highly visible expression of our desire to promote peace and reconciliation in Northern Ireland through economic regeneration. The Fund, established by the British and Irish governments in 1986, receives contributions from the European Union, Canada, Australia, and New Zealand, as well as ours. The Fund has provided support for over 3,500 projects throughout Northern Ireland and the border counties in the areas of urban development, education, tourism, community infrastructure, and assistance to small businesses. Fund projects encourage reconciliation between nationalists and unionists by operating on a cross-border and cross-community basis. ireland/no. ireland: u.s. contribution to international fund for ireland only aid to eu country Question. What other members of the European Union currently receive bilateral economic assistance, and what are the fiscal year 1998 and 1999 assistance levels if such aid is provided? Answer. The U.S. contribution to the International Fund for Ireland is a unique case designed to address the unique circumstances in Northern Ireland and the border counties of Ireland. The U.S. is committed to assisting in the resolution of the centuries-old conflict there. Other EU members do not receive bilateral economic assistance. ireland/no. ireland: gdp figures Question. What are the gross domestic product (GDP) figures for Northern Ireland and the Republic of Ireland for 1994, 1995, 1996, and 1997, and what have been the economic growth rates for both during the same period? Answer. ---------------------------------------------------------------------------------------------------------------- GDP (in billions) Growth (percent) --------------------------------------------------- Ireland N. Ireland Ireland N. Ireland ---------------------------------------------------------------------------------------------------------------- 1994........................................................ $52.2 $21 9.8 3.0 1995........................................................ 62.0 22 7.8 3.5 1996........................................................ 67.4 23 8.5 2.5 1997........................................................ 68.8 n/a 1 7.3 1 3.0 ---------------------------------------------------------------------------------------------------------------- 1 denotes estimate. Questions for the Record Submitted by Congressman Kingston Question. I continue to be extremely concerned about the proliferation of dangerous and sensitive weapon technology by Russia, China, and others to ``rogue'' states, and I am very Supportive of the Administration's efforts to prevent its continuance. I know the President has not yet made the necessary certification required by last year's act that Russia has ceased this activity to fully obligate their aid. What are the chances of this certification? Answer. Every six months, the Administration is required to evaluate whether to certify Russia. We are currently in the process of making the determination required at the beginning of May for Russia. That process is not yet complete and I cannot say whether the certification will be made. Question. Recently, Russian Prime Minister Victor Chernomyrdin apparently issued a government decree making the unrestricted transfer of dual use technology to other nations illegal. What kind of legal weight does a Prime Ministerial decree have? Have any steps been taken to implement the decree? What, exactly, are the punishments involved for companies which violate the decree? Answer. On January 22 the Russian government took an important step when then-Prime Minister Chernomyrdin signed an executive order substantial strengthening the Russian export control process. The executive order gives the Russian government new legal authority to stop all transfer of goods and services to foreign missile programs and programs for weapons of mass destruction. The Russian Constitution gives the Russian government the power to issue such executive orders. This Russian government has taken such steps to implement this order as publication of the order and outreach efforts to explain its significance to Russian industrial organizations. In addition, Russian agencies have conducted investigations based on the new controls. Our analysis leads to the conclusion that the executive order is an appropriate vehicle for regulating export controls. Putting this legal authority in place was an important step. Now our attention has turned to Russian implementation and enforcement. We are monitoring this closely. Ambassador Gallucci will focus on these issues during his upcoming talks with Russian space agency head Koptev to end cooperation between Russian entities and Iran's missile program. The U.S. and Russia also convened their first meeting on implementation of export controls as agreed to at GCC X and discussed a full range of export controls, including catch all. egypt--foreign military financing Question. To what extent is Egypt, a primary recipient of U.S. Foreign Military Financing, obligated to procure U.S.-made equipment? Does FMF provide a near total proportion of Egypt's procurement? Answer. Egypt is a key U.S. all in the region and the most prominent political player in the Arab world. A strong relationship with Egypt affords us political and security benefits that no Arab state can provide. We share regional and international interests, including the pursuit of a comprehensive peace in the Middle East, regional development, international stability and peacekeeping, and the stemming of terrorism. Providing security assistance to Egypt enables to us to pursue our joint interests and reinforces Egypt's stabilizing role in the region and in international peacekeeping efforts. Egypt's FMF is spent in the U.S. or for U.S. goods and services. FMF-funded direct commercial contracts enable Egypt to purchase U.S.- made equipment and U.S.-provided services. Occasionally, an exception to the ``buy American'' rule is made, such as in conjunction with Corps of Engineers contraction projects, for heavy materials such as sand or cement. It is difficult to estimate the proportion of Egypt's total procurement represented by FMF purchases since the Egyptian defense budget is not made public. However, we believe that U.S. FMF represents between 35 and 40 percent of Egypt's annual defense budget. Overall, Egypt has used U.S. FMF to modernize, consolidate, and create an Egyptian defense force capable of interoperating with U.S. forces, as was the case during Desert Shield and Desert Storm. the korean peninsula Question. I understand that the North Korean government has taken steps to initiate a diplomatic dialogue with South Korea. This is obviously a very significant step. How far has this progressed? Is or will the United States be involved in any capacity if and when talks progress? Answer. We have long supported dialogue between South and North Korea as key to reducing tensions on the Korean peninsula. The United States is also a participant in the Four Party Talks (U.S., PRC, South Korea, North Korea) designed to replace the Armistice and reduce tension on the peninsula. This process, proposed in 1996 by President Clinton and then-President Kim Young Sam, was intended, in part, to facilitate dialogue between the South and the North and is complementary to such bilateral dialogue. If high-level North-South talks are successfully initiated, South Korea would inform, and consult with, the United States, but we would have no immediate direct role. Recent developments in North-South dialogue include a February 15 announcement on North Korean radio that North Korea had established a registry listing vital information on North Korean citizens who had been separated from family members as a result of the Japanese occupation and the Korean War. According to the radio report, members of divided families will be allowed to apply to the registry for information in order to locate their relatives still living in North Korea and ``abroad.'' It is not clear if all members of divided families (i.e., those living in South Korea or who fled North Korea) would be allowed to apply for information. North Korean organizations, clearly at state direction, also invited representatives of non-governmental groups in South Korea to a ``dialogue'' and ``negotiation''. These invitations are similar to previous North Korean offers of negotiations between North Korea and private groups in South Korea, selected by North Korea. All such proposals have failed due to concern that they implicitly questioned the legitimacy of the South Korean government. President Kim Dae-jung is seeking to broaden meaningful contact with the North, including an exchange of envoys. The South Korean Red Cross has just concluded an agreement with its Northern counterpart on the distribution of South Korean food aid to North Koreans. South Korea also continues to press for the implementation of the 1991 Basic Agreement it signed with North Korea, which would help re-establish high-level dialogue with North Korea. Question. The severe famine in North Korea is continuing, and the United States has continued to mitigate the disaster through contributions of food for the citizens. How thoroughly has the famine penetrated the population? Is food (I don't mean our assistance here) being rationed by the government in any way, for example by providing for the government and the military at the expense of the citizens? Answer. North Korea is an opaque society and reliable, comprehensive information is difficult to obtain. The food crisis is clearly severe and deeply affects the society. Certain regions, such as the northern part of the country, appear to be more severely affected, but we have only limited quantifiable information. Food rationing to the population at large has long been practiced in North Korea. Farmers hand over a certain amount of the food they produce to the Public Distribution System. It is charged with distributing set rations to the non-food producing population, including factory workers, urban dwellers in general, and the military. Rations vary depending on the availability of supplies. This system has always differentiated among age groups and classes of labor. Urban and certain privileged populations, including the military, apparently fare better than others. International assistance providers, including UN agencies, foreign NGOs and other international donors, have negotiated the ability to target their aid to vulnerable population groups (such as young children, pregnant and nursing women, and hospital patients). The rations for these individuals are determined jointly by the aid organizations and North Korean authorities. weapons inspection in iraq Question. Will the inspection teams be able to reach all the new sites they need to inspect before the U.S. force withdraws to avoid an identical crisis and mobilization a few months down the road? Would it have been possible for Iraq to relocate highly sensitive equipment and documentation during this standoff, making it necessary to start the inspections over from scratch? Answer. It is important to remember that the Annan-Aziz MOU reaffirms, in writing, that Iraq must provide immediate, unconditional, and unrestricted access to all sites in Iraq. The UN is in the process of intensively testing Iraq's commitment to provide such access. It is important that U.S. forces in the region remain at a heightened state of readiness until Iraq's intentions in this regard are clear. In any event, we will want to continue to maintain a significant military presence in the region--as we have for several years--to protect our vital interests and to deter aggression. During the recent standoff, it is quite likely that Iraq was able to relocate sensitive material to new sites. This is the game Iraq has been playing for the last seven years. Neither we nor UNSCOM are under any illusions about the need to continue intensive, surprise inspections until all such material is tracked down, fully accounted for, and, if necessary, destroyed. By making clear that Iraq must grant access to UNSCOM at all sites at any time--including the so-called ``presidential sites'' Iraq previously declared off-limits--the Annan- Aziz MOU should make it more difficult for Iraq to continue its pattern of concealment and deception. iraq/un Question. What can the Administration do to ensure compliance with Secretary-General Annan's inspection plan? When will the inspections begin? Is there a timetable for Iraqi compliance? Answer. The United States conducted an active diplomatic campaign centered on the United Nations, designed to compel Iraqi compliance with its own commitments under Security Council resolutions and bolster the central goal of our policy toward Iraq: to make certain that Iraq is not in a position, now or in the future, to threaten its neighbors or U.S. interests in the region. The agreement reached in Baghdad by the Secretary-General is a win-win situation for the United States and the United Nations. Inspections under the new MOU took place in March. UNSCOM has said cooperation from Iraq under the Annan-Aziz MOU so far has been good. If that continues, it will mark an important victory for the international community. But if Iraq violates the MOU, it will be clear to all that Iraq has reneged once more on its commitments under Security Council resolutions and reneged on the terms of the 1991 cease-fire. And the Council has made it clear that that will have the severest consequences. The United States is prepared to take whatever actions necessary, including military action, to respond to the breach of the cease-fire established by the Security Council. results act Question. Regarding the layout of the performance plans in the Congressional Presentation, why don't ``objectives'' in each region or program always address all aspects of the ``strategies''? For example, on page 380 of the Congressional Presentation, the strategy says, `` Press governments to respect land rights of indigenous people, freedom of religion, and remain alert for any signs of religious persecution,'' yet none of the objectives reflect that part of the strategy. And then, likewise, there don't always seem to be indicators to clearly address each aspect of the overall strategy and each listed objective. And finally, it seems that in many cases the indicators are simply restatements or rewording of the strategies and goals. Are there more specific reports available that clarify these area? Answer. The application of strategic planning and performance measurement to foreign affairs is an extremely complex undertaking. It involves the activities of multiple U.S. Government agencies and the range of Function 150 programs to achieve dozens of objectives organized around the 16 strategic goals of the International Affairs Strategic Plan in over 150 countries. This is going to take several years and enormous effort to get right. The Regional Program Plans contained in the FY 1999 Congressional Presentation for Foreign Operations represent our first effort to link Function 150 resources to our international affairs goals. Much needs to be done to improve the technical rigor of these plans. The case cited on indigenous rights is a good case in point. The identification of performance indicators for many international affairs goals remains open. This is particularly true for those that are not exclusively defined by program activities and are not inherently quantifiable, such as promotion of democracy and human rights. In addition, it was not possible to include in the Regional Plans country-specific objectives for every strategy. For the FY 2000 Congressional Presentation, our intention is to provide more specific performance information on priorities and resources at the country level, along with a more fully developed set of performance indicators. international narcotics Question. How can the United States take a more constructive cooperative approach to the international anti-drug effort? Answer. Cooperation is the hallmark of our approach towards international antidrug efforts. We base it on the need for countries to adhere to and comply with broad international agreements, such as the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. We provide leadership and financial contributions to a wide range of multilateral antidrug institutions in the UN, OAS, and elsewhere and we continue to provide substantial bilateral narcotics control assistance--training, equipment, and economic and technical support--to the major drug producing and transit countries. We are intensifying our efforts within this framework. For instance, the Latin American and Caribbean countries have endorsed our Summit of the Americas proposal to develop and implement a multilateral counternarcotics monitoring and evaluation process as part of Western Hemisphere alliance against drugs. We are also working to create a multinational counternarcotics center in the hemisphere and we are in the process of establishing International Law Enforcement Academies around the world to provide antidrug and crime training for investigators and prosecutors. Finally, we are seeking greater levels of foreign counternarcotics assistance for the most important drug producing and trafficking countries that demonstrate a willingness to cooperate with us. We use certification judiciously but effectively to ensure that governments have the political will to abide by their international commitments and use the assistance we provide effectively. We have taken several steps in recent years to make the certification process increasingly transparent including identifying specific certification objectives for the governments of every major drug producing and transit country with whom we have relations and providing them a mid- term report on their progress. Our goal has been to give cooperating countries a greater sense of ownership for our common counternarcotics objectives and improve international cooperation. Question. What are the specific requirements or standards used to determine whether a country's cooperation merits certification? What are the measurable `'indicators'' for that determination? are they uniform country to country and region to region? If not, why? Where are these requirements spelled out? Answer. The Standards for determining whether a country's cooperation merits certification are set forth in a federal statute: Section 490 of the Foreign Assistance Act of 1961 as amended (``FAA''). That law establishes that the country must have fully cooperated with the United States or taken adequate steps on its own to achieve full compliance with the goals and objectives established in the 1988 UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (the ``Vienna Convention''). The determination of whether a country has ``fully cooperated'' is based on that country's record of compliance with the requirements of the Vienna Convention, of bilateral counternarcotics agreements with the United States, and measures taken to combat corruption. The ``fully cooperating'' standard can be a potentially broad requirement; its vagueness raised concerns by some countries that the United States was ``moving the goal posts'' from year to year. To overcome these concerns, the United States has taken several steps to make certification a more transparent and joint process. For instance, we now identify through demarches, meetings, and other contacts with major producer and transit countries, the counternarcotics areas and objectives we consider most important for certification. These objectives, such as crop eradication, criminal investigations, and drug interdiction, vary from country to country depending on their roles in the drug trade and the capabilities of their antidrug institutions. We also provide these countries a mid-year progress report that alerts them to any potential certification problems. The certification standard is fair. Countries are not asked to achieve more than they are capable of achieving. They are judged on the basis of their cooperation with the United States on common objectives and their willingness to abide by international agreements to which they are parties. Question. The Congressional Presentation refers to the importance of human rights in several places in the International Narcotics Section for Latin America. In fact, improving respect for human rights is mentioned prominently in several of the overarching strategy statements. If this is a major foreign policy goal for the region even within the context of our anti-drug programs, shouldn't our certification requirements include indicators of human rights? For example, if we are going to exert full court pressure on these governments to ``cooperate fully'' with us to stop drug activity, shouldn't we also make clear our expectation that their cooperation include fair, independent, timely, and uncorrupted adjudication? If it is a major part of the objective (as the CP states it is) do you believe we should add indicators for human rights to the certification process? Answer. Improving respect for human rights and the rule of law is an integral part of our international narcotics control program. The program includes and expectation, articulated explicit frequently through our embassies, that counternarcotics operations should take place within a timely, independent and uncorrupted administration of justice is a necessary component of an effective counternarcotics program. For that reason, we fund justice sector reform programs in many of the countries which receive our counternarcotics assistance, offering training to judges prosecutors and public defenders. The State Department already has a highly effective mechanism for evaluating the human rights performance of host nations in our annual Human Rights report. This report is comprehensive and covers the performance of all government entities involved in counternarcotics efforts. Through it, end-use monitoring mechanisms, and our ongoing human rights dialogue, we believe we are already adequately monitoring and providing feedback to host countries on human rights performance. Question. To build on the previous question, unfortunately, the message we may be sending through the INL programs may seem inconsistent to the countries we work so hard to influence. I think there are inherent conflicts of interests in our efforts. Not only do we insist on the highest levels of cooperation thought our strategy (p. 376, CP) to strengthen the political commitment of host government to counter-narcotics efforts,'' but we are also actively working with them to ``enact and improve'' their counternarcotics legislation. (p. 376, CP) I am concerned that that may present very clear expectations when it comes to the judiciary, especially when one of the indicators for success (p. 377) is the number of narcotics sentences. (To illustrate this point I can tell you that in Ecuador, for example, it has been found that up to 80 percent of prisoners have not been sentenced according to a New York Times article on August 22, 1997. The average waiting time for a trial is over 400 days, while Ecuadoran law places definitive (and short) time limits on time allowed to elapses before sentencing. About half of all prisoners there are held on drug-related charges.) Will you please respond to this concern about conflicting efforts? Answer. We see no inherent contradiction between a strong committment to an effective and aggressive counternarcotics law enforcement effort and respect for due process in implementing that effort. We continue to urge nations cooperating with us on counternarcotics to arrest, prosecute, and sentence drug traffickers and money launderers to sentences commensurate with the seriousness of their crimes. We also work with those nations to improve the effectiveness of their criminal laws against traffickers and launderers by strengthening, modernizing, and removing loopholes in their substantive law. Equally, we work with them to improve their codes of criminal procedure, to ensure that they conform to internationally recognized norms of legal and human rights. Question. I believe the United States should be very assertive, open, and unmistakable in communicating to countries that participate in our International Narcotics Control Program that protection of legal and human rights is equally important (to other aspects of cooperation) in the prosecution process. In fact, report language to that goal was included in last year's Foreign Operations Act at my request. I have been told directly by various Latin American officials that U.S. pressure to be tough on drugs is absolutely pervasive. However unfounded this view may seem to us, we seem to be dealing with a dangerous perception that we demand arrests and convictions above all other considerations. The perception may be much more influential than the reality. What steps has the Department of State taken since the enactment of the FY 98 legislation to make such clarifications on human/legal rights? Will the U.S. assert to ``host'' countries that we never have predisposed expectations on verdicts and sentencing (even though it is used as an official indication of success)? Answer. Section 570 of the FY 98 Foreign Operations Appropriation Act (FOAA) contains language similar to the human rights-related limitations on International Narcotics Control (INC) funds contained in the FY 97 Foreign Operations Appropriations Act. However, Section 570 applies to all FY 98 funds, not just INC funds. In implementing the legislation, U.S. missions abroad were instructed to establish specific and detailed procedures for reviewing reported incidents of human rights violations by ``host nation'' security forces, correlating that information with INC programs, and reporting all such information to the Department of State in order to ensure compliance with the law. In March of this year we directed U.S. missions abroad with such procedures already in place to ensure that they apply to all FY 98 FOAA funds, in addition to FY 97 INC funds. We also directed all other missions to develop such procedures. U.S. missions in the drug producing and transit countries emphasize three mutually reinforcing goals: promoting democracy, advancing human rights, and fighting illegal drugs. Our expectation is that such ``host nations'' will prosecute offenses vigorously within the bounds of the law and the rules of due process, and such expectation is communicated frequently to such nations' officials. However, we have always sought to make clear to ``host nations'' our concern that the rule of law should govern in all prosecutions, including those of drug traffickers and money launderers. We will remain alert for cases in which our goals are not understood and use diplomatic contacts, rule of law training programs, and other technical assistance to promote a better understanding. judicial reform in latin america Question. I have reviewed some of the State Department's country reports on Human Rights Practices for 1997 which outline the concerns I have about many Latin American judicial systems more specifically than I have here. What specific programs does the State Department/USAID implement to increase judicial independence in countries we work with through INC? What are the indicators of success for this? How have those programs helped alleviate the concerns about respect for legal and human rights which your reports describe? Answer. The State Department and USAID, often with the support of the Department of Justice or representatives of the Judicial Conference of the United States, are engaged in numerous activities throughout Latin America and the Caribbean to strengthen the administration of justice (AOJ), including the independence of judiciaries. While some of these projects are implemented with INC funds (e.g., USAID AOJ projects in Bolivia, Colombia and Mexico), most are funded directly by USAID or, in the case of the International Criminal Investigative Training Assistance Program (ICITAP), by the Department of the State. Over the last ten years, approximately $300 million has been invested throughout the region in projects of all kinds. With regard specifically to the issue of judicial independence, trends in the region that we have supported include the establishment of new and more open methods of judicial selection, strengthening of court administration to enable judiciaries to manage their own budgets and otherwise cease to depend upon executive agencies for administrative support, and the creation of judicial schools to provide training for judges and judicial personnel. USAID and ICITAP are working together in an increasing number of countries to bring together judges, prosecutors, police investigators and public defenders to improve the handling of investigations. An overall goal is to change the current police practice of first arresting a suspect and then beginning the investigation. If police worked instead with prosecutors to develop cases, and arrested suspects only when sufficient evidence existed to charge them with crimes, there would be a substantial drop in the number of pretrial detainees throughout Latin American jails. Indicators of success are required for each individual project. Examples of indicators currently in use are: citizen perception of fairness in the justice system, access to legal information/services in the criminal justice system, favorable rating by polls of due process under law, new judicial codes adopted by national assembly, percentage of judges reappointed on the basis of merit by the new judicial council, and number of cases handled by public defenders throughout the country. drug report to congress Question. The FY98 act also included bill language requiring a report from the Department of State containing a list of all countries in which the United States carries out international counternarcotics activities, the number, mission and agency affiliation of U.S. personnel assigned to each such country, and all costs and expenses obligated for each program, project or activity by each U.S. agency in each county within 60 days of enactment. This report is about seven weeks overdue. When will that report be submitted to Congress? Answer. The report was completed and delivered last month (March 1998) to the Senate and House Appropriations Committees, the Senate Foreign Relations Committee and House International Relations Committee. Please let us know if you need another copy from the State Department. Questions for the Record Submitted by Congresswoman Pelosi global aids Question. Many experts who focus on infectious diseases, particularly AIDS, are encouraged by recent reports that access to drugs and new technologies can, at a relatively low cost, make inroads into [reducing] the transmission [rate] of infectious diseases around the world. Does the State Department coordinate its efforts and activities to fight infectious diseases, including AIDS, with other U.S. agencies and departments including the Agency for International Development, the National Institutes of Health, the Centers for Disease Control and the Department of Defense? How can we ensure that our domestic and international efforts to develop effective and accessible technologies to fight epidemics are coordinated and taking advantage of the initiatives on which each agency is working? Answer. The Department of State has made the reduction of diseases one of its strategic foreign policy goals and coordinates the efforts of the National Institutes of Health and the Centers for Disease Control and Prevention in enhancing global preparedness in prevention, detection, research, surveillance and response to disease worldwide. In December 1997, I issued the first-ever statement by a U.S. Secretary of State on the World AIDS situation. In 1996 for the Lyon Summit, the Department of State successfully negotiated the inclusion of HIV/AIDS and other infectious diseases onto the global economic agenda in the G- 7 (now G-8) forum. Discussion of these issues was a centerpiece of the Denver Summit hosted by President Clinton last summer, and will continue to be important to our international discussions with leadership. The Department of State also chairs a U.S.-EU Task Force on Communicable Diseases which has developed a prototype network for the international reporting of foodborne diseases, and which we soon expect to be expanded to each of the other continents. Under the leadership of the Department, all major bilateral initiatives have a health component which focuses on HIV/AIDS and infectious diseases. The Department of State continues to support international organizations such as the World Health Organization, UNAIDS, and the World Bank, whose participation in addressing these issues is critical in the battle against these diseases and to our U.S. International Strategy for reducing the spread of diseases worldwide. The USG through the US Agency for International Development is one of the largest international donors for HIV/AIDS, providing nearly $1 billion since 1986 to fight HIV/AIDS around the world. Over the last 10 years, HIV/AIDS projects have been established in 42 countries, and have helped more than 600 private voluntary organizations implement HIV prevention programs that have reached more than 22 million people. In addition, more than 200,000 educators, counselors, and clinicians have been trained. With funding of $50 million recently made available to work on infectious diseases worldwide, USAID has developed a new strategy which concentrates on TB, malaria, antimicrobial resistance, and surveillance and response. This approach is consistent with the Department of State's International Affairs Strategic Plan and will complement USAID's on-going activities to improve child survival and the health of women worldwide. The strategy was developed in coordination with key partners such as the Centers for Disease Control and Prevention, the National Institutes of Defense, and the Department of State. In addition, the implementation of USAID's strategy will be coordinated with these agencies' own infectious disease efforts. mexico Question. The U.S. is reportedly currently training large numbers of Mexican military personnel in counternarcotics techniques. Mexico is also a nation with at least two significant insurgent groups, the Zapatista Army and the EPR (Popular Revolutionary Army). Some areas of the country, like the states of Chiapas, Oaxaca, and Guerrerro, have both insurgent activity and narcotics trafficking. What assurance is there that the soldiers who we have trained and are training do not use their new skills for counter-insurgency purposes? Is there any end-use monitoring of training? Answer. In responses to Mexico's interest in improving the skills and capabilities of military personnel being assigned to newly-created counter-drug units, the U.S. arrange for training by the U.S. Army Special Forces. This training has emphasize skills and discipline useful for personnel engaged in counter-drug activities. The Mexican Secretariat of National Defense selects personnel for U.S. training who are most likely to be assigned to counter-drug units, or to units which regularly perform counter-drug missions. Some of the Mexican states that have recently experienced insurgent activities are also major drug-trafficking and producing states. Therefore, it is likely that some of the personnel who receive U.S. training will, at some point, be assigned to units or missions in those states. However, we do not intend to attempt to direct the Government of Mexico where in its territory individual officials should be assigned. Recipients of U.S. Special Forces training are given thorough grounding in internationally-accepted concepts of protection of human and civil rights, the rule of law, and appropriate interaction between military forces and civilian populations in conflictive situations. A key aspects of such training is knowing when to refrain from use of force. The U.S. Government attempts to conduct post-training assessments or evaluations to determine the impact of the training and to be able to make changes in curriculum or training methods to make it more effective in the future. We are also very interested in ascertaining if personnel receiving specialized U.S. training are assigned to positions where they can make use of it. This will affect where we invest limited training resources in the future. We are not able, however, to follow up on each and every individual around the world who receives U.S. training. Question. On December 8, 1997, Mexico and the European Union signed the so-called ``democracy and human rights clause'' as a part of their growing commercial relations. The clause establishes democratic principles and respect of human rights as the cornerstone of the EU- Mexico relationship. How would you characterize the place that democracy and human rights have in U.S.-Mexico relations? Are we willing to make promotion of democracy and human rights a centerpiece of our relationship with enforceable standards? Answer. Promoting democracy and protecting human rights are major components of our Mexico policy. These issues were major themes during the President's May 1997 visit and our August 1997 high-level human rights consultation with the GOM. Our continuing dialogue on democracy and human rights is a visible manifestation on the breadth, depth, complexity and maturity of our relationship as well as of our ability to deal with issues in a cooperative manner. This continuing dialogue also demonstrates the importance of human rights in our bilateral relationship, as do our similar high-level human rights dialogues with Canada, Russia and the EU. Question. Over the last three years there has been an alarming growth in paramilitary groups like the one that carried out the December massacre of 45 peasants in Acteal, Chiapas. Leading Mexican non-governmental human rights organizations have reported collaboration between the Federal Army and these vigilante organizations. In its January 4, 1998, edition, the magazine ``Proceso'' published what it claimed was an Army document outlining a strategy to ``create and support paramilitary groups.'' The Army has vehemently denied these assertions and claims the published document is a sophisticated fake. Clearly, however, any evidence of linkage of Army support for these groups would be a matter of grave concern for the U.S. What evidence does the U.S. have regarding these serious charges? Answer. The evidence we have seen does not support the allegations that paramilitary groups in Chiapas were created or supported by the Mexican military. Many of these groups appear to have originated as ``self defense'' groups connected to one side or another in the multiple conflicts that divide Chiapas. The most recent interim report of the Mexican Attorney General's investigation of the Acteal massacre describes how local political leaders and public security officials-- not the Mexican military--collected weapons and provided them to these ``self defense'' groups. It was one such group, using weapons acquired legally and illegally as well as some home-made weapons, that carried out the Acteal massacre. congo and rwanda (human rights and africa growth act) Question. The Africa Growth and Investment Act, the centerpiece of the Administration's new Africa policy, was strengthened by Reps. Gilman and Smith who amended the bill to require that participating countries must respect the rule of law and that they would be ineligible to participate in programs or receive assistance or other benefits if the President determines that they engage in gross violations of human rights. Has the Administration endorsed this link between human rights and trade benefits in Africa? If not, why not? Answer. The Administration endorses the link, and we strongly support the bill as it was approved by the House of Representatives on March 11. As amended, the bill states: ``It is the sense of the Congress that a sub-Saharan African country should not be eligible to participate in programs, projects, or activities, or receive assistance or other benefits under this Act if the government of that country is determined by the President to engage in a consistent pattern of gross violations of internationally recognized human rights.'' A country must also observe the existing statutory criterion on internationally-recognized worker rights as a condition for eligibility for duty-free benefits under the Generalized System of Preferences program. bosnia--need for reconstruction funding Question. The Administration has based the renewal of the SFOR mission in Bosnia on a series of benchmarks, where continued U.S. and NATO troop involvement revolves around the benchmarks being met. Most of the benchmarks involve the reconstruction funds approved by this Subcommittee, such as establishing an effective judiciary and police, independent media, conduct of free and fair elections, free market reforms and cooperation in prosecution of war criminals. You are seeking $225 million for the continued reconstruction of Bosnia. Please comment on the need for these funds in relation to the benchmarks. Answer. The funding already provided by this Subcommittee, and that which we are requesting in FY 99, is critical to achievement of the benchmarks which will permit the departure of NATO forces from Bosnia. SEED programs in Bosnia, administered through USAID, Treasury, Justice, and USIS, give the U.S. the means to lead on police and judicial reform, reform of the media, the holding of free and fair elections, economic transition to a self-sustaining market economy, minority returns, and the resolution of Brcko. U.S. assistance has contributed significantly to the political success of moderate leaders in the Republika Srpska, leaders who have demonstrated their willingness to implement Dayton commitments, such as return of refugees and cooperation with the International Criminal Tribunal for the Former Yugoslavia. This funding is important because it also permits us to leverage money and support from other donors for key U.S. goals, including achievement of the benchmarks we have established. The U.S. provides only 17.5 percent of the total funding pledged for Bosnia's reconstruction. But our example helps prompt other donors to commit over four times as much money to these priorities as does the U.S. You identified in your question several of our most important benchmarks. Here is a brief update on the progress being made in each: War Criminals. Since March of 1997, the number of publicly-indicted war criminals in the Hague has gone from 8 to 31. Three are dead, and 32 remain at large. The U.S. is a major provider of funding to the Tribunal to insure that it is able to give those charged speedy and fair trials. Police Restructuring and Reform. In the Federation, 10,000 of the 12,000 authorized police have been certified by the International Police Task Force. In the Republika Srpska 7,000 out of the 8,500 police have been certified. In areas where police have undergone the certification process, human rights complaints against the police have dropped dramatically. Judicial Reform. In the Federation, a new criminal code has been drafted which contains clear human rights safeguards. It is expected that this law will go into effect before the end of June and we and other donors will train judges and prosecutors how to apply the new law. The RS has asked for similar assistance in redrafting its criminal code. Conduct of Free and Fair Elections. The OSCE has supervised three sets of elections and will supervise a fourth set of elections for most major national and entity offices this Fall. With each set of elections has come increased democracy, as evidenced by the steady losses of the former nationalist political parties. In the November, 1997 RS Assembly elections, the Pale hard-liners lost their Parliamentary. Development of Independent Media. Considerable progress has been made in the development of independent media and media standards. Extremist nationalist broadcast media have been taken off the air, an FCC-type licensing and standards board is being established by the Office of the High Representative with U.S. and other donor funding. State-run T.V. is being severed from party control. The Open Broadcast Network, the only truly independent cross-entity television station which is supported by the international donor community, is increasing its footprint over the next several weeks to reach 80 percent of the country, and recent polls show that it has become one of the most trusted sources of news in Bosnia. Privatization and a Free Market Economy. Agreement has been reached between the IMF and the Government of Bosnia which will shortly provide funding to back a single Bosnian currency which will serve to unify the economies of the two Entities. The IMF Agreement will open the way for Paris Club settlement, which will pave the way for full international creditworthiness for Bosnia. With considerable U.S. technical assistance, the Federation has prepared and passed all major privatization laws and could begin privatizing small state enterprises this summer. The RS has scrapped its flawed privatization law and should pass the necessary Entity laws on privatization this summer. bosnia--legislative prohibition on housing reconstruction Question. Last year, Congress again prohibited the use of our funds for housing reconstruction in Bosnia, with some exceptions. How has this prohibition affected our reconstruction efforts? Should the restriction be lifted? Answer. The Administration has consistently opposed this restriction on the use of SEED funds. It limits our ability to lead on this issued, which is one of the keys to large-scale returns of refugees and displaced persons. The damage to housing in Bosnia during the war was extensive, with nearly half of all housing either severely damaged or totally destroyed. This lack of housing greatly exacerbates ethnic tensions and prevents return of refugees and displaced person to their homes. In FY 1996, prior to the imposition of the legislative restriction, USAID put together an innovative program, working through NGOs, to repair over 2,500 private houses in Bosnia. It was an enormously successful program implemented ahead of schedule and under budget. At that time, no other donor was willing to tackle private housing repair, due to the difficulties caused by ethnic cleansing, which meant that much of Bosnia's housing was occupied by families other than owners (privately-owned housing made up 80 percent of the pre-war housing stock in Bosnia). USAID, by requiring the agreement of the local authorities, the current residents and the legal owners before agreeing to fund repairs, established a model for dealing with ownership problems. By showing the way, the U.S. program spurred other donors to tackle the housing problem. In a few crucial areas, such as Brcko, the legislated restriction has probably delayed progress by some measurable amount. It is critical to restore Brcko to a multi-ethnic city, but it took the U.S. precious time to find other donors willing to repair housing there. Even now, there is a serious problem with a lack of transitional housing for Bosnian Serbs, which would permit ethnic Croats and Muslims to return to their homes in Brcko city. It has been difficult to recruit individuals to serve in the multi-ethnic city government, in the absence of this housing. We have, over time, been able to work our arrangements with other donors for them to repair housing while we repair related infrastructure, such as water and electricity. bosnia--krajisnik veto Question. What is the role of Bosnian Co-President Momcilo Krajisnik and representatives of the Pale government in determining where any portion of international financial institution loans of other economic assistance goes within Republika Srpska? What is the statue of the so-called ``Krajisnik veto,'' which allows Krajisnik to dictate that a certain portion of all loans to the RS goes to Karadzic- controlled towns? Answer. Details of the Entity component for IFI loans are negotiated with the respective Entity Prime Ministers, usually accompanied by their Finance and other relevant Ministers. While in theory any member of the Tripartite Presidency, including President Krajisnik, could block World Bank or EBRD loans out of dissatisfaction with the location of projects, they have never done so. We have never been able to confirm the exercise of the ``Krajisnik veto.'' The World Bank, which certain human rights non-governmental organizations allege was subject to this type of coercion, vehemently denies that such attempts were ever made. The Bank insists that the municipalities in the Republika Srpska which have benefited from Bank assistance were chosen solely on the basis of objective economic or humanitarian criteria. The NGOs who insist that Krajisnik has dictated that a certain portion of all loans to the RS go to Kraradzic-controlled towns have never presents any evidence to support their claim. assistance for palestinians and menabank Question. The Administration has requested an increase in assistance to the Palestinian Authority, from $75 million to $100 million, along with $52 million for the first U.S. contributions to the Middle East Development bank. Why is this increase needed? Is the Middle East Development bank ready for funding, and what priority does it occupy for the Administration? Answer. The Administration is requesting an increase from $75 million to $100 million for USAID assistance programs in the West Bank and Gaza because economic development for the Palestinians is key to building peace in the Middle East. Neither the current $75 million nor the contemplated increase involves direct financial assistance to the Palestinian Authority or to the PLO. The increase in USAID funds would maintain the aid level established when the U.S. pledged $100 million per year to the international donor effort for the Palestinians for 1993-98. The original five-year pledge comprised $75 million per year for USAID activities in West Bank/Gaza and $25 million per year for OPIC project finance and loan guarantees. Unfortunately, the OPIC component has been underused by American business, and, for this reason, the Administration seeks to replace it with expanded USAID assistance. The additional USAID funds would be used for water projects and private sector activities. These initiatives will help build a constituency for peace in the Middle East while maintaining American leadership in the international donor effort for the Palestinians. The Middle East Development Bank (MENABANK) is ready for funding; it is a high priority for the Administration. Over the last year, an international transition team in Cairo has completed most of the work necessary to get the bank up and running. The team has prepared operational and financial policies and identified an impressive pipeline of potential projects. With other members looking to the U.S.--by far the largest shareholder in the bank--to fund its first year of capital contributions, the Administration is seeking the money necessary to enable MENABANK to meet key regional economic needs. The bank will provide capital--and political cover--for important regional projects, thus creating a forum for regional economic dialogue and cooperation. MENABANK will offer equity and loans for undercapitalized sectors, resulting in the creation of new jobs and promotion of economic growth. new independent states Question. The Administration is requesting an increase of $155 million for the NIS. Most of the increase would go for Russia, which would go from $129 million this year to $225 million in 1999. What is the rationale for an increase of this magnitude? Answer. The straightforward rationale for increased assistance to Russia is that our national security is dramatically enhanced if Russia is a market-based democracy; our engagement with Russia is among the highest foreign policy priorities of this Administration. Beyond our diplomatic contacts, our assistance activities help us stay engaged with Russians as they continue the generational, historic and difficult transformation of their society. Congressional earmarks for other parts of the NIS in the last three appropriations have resulted in dramatic underfunding of our assistance to Russia and Central Asia. Last year the NIS appropriation was so low and the earmarks so high that assistance to Russia was the same as to Armenia. Per capita assistance to Armenia this year is $25 per Armenian; per Russian it is 86 cents. It is this anomaly that we are trying to remedy with our FY99 request. Further, we have restructured our assistance to Russia to focus nearly exclusively on Partnership for Freedom activities: exchanges, partnerships, support for non-government organizations, emphasis on small business, trade and investment, grass roots activities that build support for economic and democratic reform from the bottom up. We have begun an important effort to encourage investment and economic growth in the regions of Russia, away from Moscow, in Novgorod, Samara and Khabarovsk. Through these activities, we seek to build lasting and healthy relationships between Russians and Americans so as to enhance our national security and pursue our national interests. Question. How much of the $900 million you have requested for the NIS will go for programs for Health, Population and the Environment and what level of increase does this represent? Given the vast needs in this area, particularly in the family planning area, why have these programs occupied such a low priority in the past? And, to what extent will health, population and environment programs be a priority if Congress only provides $770 million for the NIS program, the same as in FY 98? Answer. Assuming Congress approves our budget request of $925 million for the NIS in FY 99, we have budgeted $149 million for health, population and environment, which represents an increase of $50 million or 51 percent over the FY 98 budget of $99 million (which is itself up from the $80 million budgeted in FY 97). We agree that the needs are vast in these areas, and that is why we have increased the amounts budgeted for these programs over the last two years. USAID's reproductive health programs in the NIS, for example, are trying to address problems ranging from poor quality of services and inadequate client counseling to limited choice of family planning methods and ignorance of how to avoid sexually transmitted diseases, including HIV/AIDS. One of our major goals is to reduce the high rates of abortion--and the associated maternal deaths, infertility and other physical damage to women--in the NIS. If Congress does not approve the $925 million request for NIS assistance in FY 99, budgeting for these programs would have to be reduced, as it would for all other programs. That said, we will continue to support activities in these areas because we believe they can have an important impact at the grassroots level, which is central to the goals of the President's Partnership for Freedom initiative. Our support for these programs was highlighted recently during the First Lady's trip to Russia, Ukraine and Central Asia, where she paid particular attention to programs in the health and family planning sectors. ukraine Question. I understand that you will travel to Ukraine soon to discuss the status of economic reform and the treatment of American investors there. What can you tell us of this situation and do you anticipate being able to certify by April 30, 1998 that the government of Ukraine has made significant progress toward resolving the complaints of American investors, as required by law? Answer. We remain very concerned about the slow pace of economic reform in Ukraine and about its poor investment climate. During my March 6 visit to Kiev, I met with a group representing the U.S. business community in Ukraine, including a number of businesses that have raised complaints with the U.S. Government about problems they are having in Ukraine, such as Gala Radio and R&J Trading. The businessmen reviewed for me both company-specific problems and broader systemic obstacles to doing business in Ukraine. This meeting followed my meeting with President Kuchma, at which I raised directly our concern over the treatment of U.S. businesses and investors and the need for action to improve the investment climate in Ukraine and the pace of economic reform. As you know, on April 29 I announced my decision to certify that the government of Ukraine had made significant progress toward resolving U.S. investor complaints. We have worked very closely with the Government of Ukraine over the past year to push for resolution of investor complaints, including the twelve specific complaints covered by the legislation. Seven of the cases were resolved or there was significant progress toward their resolution. Since I announced my decision to certify, the government of Ukraine has continued to work with us to resolve the remaining cases, and we continue to make progress. We remain concerned, however, about the remaining investor problems, and more generally about Ukraine's poor investment climate and the slow pace of economic reform. In conjunction with my decision to certify I directed the withholding of certain assistance funds to the government of Ukraine in areas where reforms have stalled and such assistance cannot be used effectively. These funds will be redirected to the private and nongovernmental sectors in Ukraine unless the Government of Ukraine implements the necessary reforms in these sectors and takes additional steps to resolve outstanding business cases in Ukraine. indonesian labor leader muchtar pakpahan Question. Has Muchtar Pakpahan's case been raised with President Soeharto during U.S. bilateral discussions with President Soeharto? If not, why not? If so, to what result? Answer. President Clinton and Secretary Albright raised Pakpahan's case with President Soeharto and Foreign Minister Alatas, respectively, at the November 1997 APEC Leaders Meeting in Vancouver, and urged that he be permitted to receive medical treatment overseas. Foreign Minister Alatas gave Secretary Albright explicit assurances that a Canadian medical team would be allowed to examine Pakpahan and, if the doctors recommended it, Pakpahan could be treated overseas. In December the team of Canadian doctors examined Pakpahan and concluded that Pakpahan's treatment in Indonesia was adequate for his condition. Ambassador Roy and the American Embassy in Jakarta are active in their support for Pakpahan and regularly raise the issue of his imprisonment with senior Indonesian officials, up to and including Foreign Minister Alatas and Coordinating Minister for Politics and Security Feisal Tanjung. Embassy officials regularly attend Pakpahan's weekly trial sessions and are able to communicate with him and his supporters. Assistant Secretary of State Stanley Roth has also met with Pakpahan during his visits to Indonesia. The Embassy's Labor Attache discusses the Pakpahan case in frequent meetings with Ministry of Manpower officials, the Red Cross, and other embassies in Jakarta. thailand Question. Please describe the new bilateral aid package to Thailand. Answer. U.S. assistance to Thailand will be worth $1.7 billion and involves nine U.S. agencies. We hope it will strengthen business confidence and demonstrate our support for the Thai people. To increase bilateral trade flows, the U.S. Export-Import bank (EX- IM) has announced its intention to increase short-term trade financing by up to $1 billion. The United States also is seeking to assure that other official export credit agencies, including those of the G-7, remain open to Thailand. The U.S. Overseas Private Investment Corporation also will provide $400 million in support of two Thai electric power projects and will make available $45 million in OPIC guarantee investment funds for equity investment in Thai companies. The U.S. Trade Development Agency (TDA) will finance feasibility studies for State Railways of Thailand and provide technical assistance to upgrade communications networks. The TDA also will afford technical assistance to Thailand's National Electronics and Computer Technology Center to assist in developing a nation-wide, high capacity information network for government services. The United States will relieve the Thai government of its remaining financial liability for the 1996 contract to purchase eight F/A-18 aircraft. The United States will provide scholarships for 165 Thai students to come to the United States for university studies. The U.S. Information Agency (USIA) will enhance its Fulbright program in Thailand. The U.S. Immigration and Naturalization Service (INS) will relax its rules to temporarily permit students from Thailand (and other countries affected by the economic crisis) to finance their studies through employment in the United States. The United States will provide immunization shots for children and assist in the operations of rural health programs in Thailand. The United States will consider favorably a Thai request for the United States to join the humanitarian de-mining program along the Thai-Cambodian border. In cooperation with the Thai government, we are prepared to help establish an international law enforcement academy in Bangkok to enhance regional cooperation on legal assistance matters, extradition and the administration of justice. The academy will be open to law enforcement officials from throughout the Southeast Asia region and will offer programs to train officials to combat transnational crime, including narcotics trafficking, money laundering and other financial crimes, counterfeiting, firearms trafficking, vehicle theft, and alien smuggling. Questions for the Record Submitted by Congressman Yates swiss bank holocaust fund restitution payments Question. Are you aware of the February 6 Washington Post story that the Swiss banks' Holocaust Fund is paying 400 elderly Jews, out of 19,000 eligible, about $400? Answer. The major commercial Swiss banks, together with other private sector firms and the Swiss National Bank, have so far contributed nearly $200 million to a Special Holocaust Fund to assist needy survivors. Representatives of prominent Jewish organizations are on its board. Since November of 1997, the Fund has been making initial distributions to victims in Latvia and Hugary. Since February 6, the pace of distribution has accelerated. By now, assistance has been provided to around 15,000 Holocaust survivors, primarily in Latvia and Hungary. As many as 20,000 Hungarian survivors may eventually be eligible for assistance. The Fund expects to grant many victims about $1,000 each. The Fund's priority was to take care of ``double victims''--Nazi victims who have lived behind the Iron Curtain. Now the Fund is poised to start making payments to American survivors as well. insurance benefits for holocaust victims Question. Can you tell me what State is doing, if anything, to help the rightful owners recover lost art or collect benefits on insurance policies? Answer. The State Department attaches great importance to the restitution of property to rightful owners. We have encouraged states to restitute property swiftly and in a non-discriminatory manner. We have also encouraged all countries to open their archives covering this period. This is an on-going effort. The Department of State will co-host, with the United States Holocaust Memorial Museum, an international conference on Holocaust assets next fall that will focus attention on both art restitution and Holocaust related insurance issues. We are in close contact with a number of expert groups and regulatory agencies on these issues. restitution to holocaust survivors Question. Are you working with other departments and international institutions? Answer. Under Secretary Eizenstat has led an interagency effort, which includes the Departments of Treasury, Commerce, Justice, the CIA, the Department of Defense, the NSC, the National Archives and the Holocust Memorial Museum, to declassify and publicize materials in the U.S. archives pertaining to Holocaust-related assets, including art and insurance. There has also been close consultation on this with Senate and House principals and staff. role of the state department Question. Can you envision a role for the Department of State and the whole United States Government? Answer. The State Department will remain engaged in pursuing the just restitution, including compensation and reparations, for Americans and others who suffered egregiously from the Holocaust. We will continue to address the art restitution and insurance issues within this framework. suggestion on how to proceed Question. How would you suggest we proceed in this matter? Answer. Our principal strategy has been to focus attention on restitution issues and to encourage opening of archives and full disclosure regarding the disposition and handling of Holocaust-related assets. The upcoming Washington Conference on Holocaust Assets will provide an important opportunity for us to advance these objectives. We must recognize, however, that coming to terms with these issues is a difficult and painful process for states which have only recently emerged from years of communist rule and are still going through both political and economic reform. Countries in the West also have great difficulty in coming to terms with this difficult period in their history. g-7 involvement Question. Because we have enormous influence on banks in our bill, is it not an appropriate subject for the major banks or the G7 members themselves to get involved? Can the G7 get involved? Answer. Under Secretary for Economic Affairs Stuart Eizenstat has sought to engage the parties in the Swiss banking dispute in constructive discussion on a possible settlement. We believe that further sanctions or threats of sanctions are not appropriate at this time when the parties to the dispute are seeking in good faith to reach a settlement. We have encouraged all parties and entities to closely review their role during this period and to provide full disclosure regarding dormant accounts, insurance claims, or other asset questions. These issues are best dealt with through bilateral relations that take into account the specific situation in each country. holocaust survivors Question. I would think that, just as the United States wants to bring some help to these people who suffered these insufferable pains and discrimination at the hands of the Nazis, that there ought to be pressure brought by all U.S. Government agencies as well as by the Department of State? What do you think? Answer. Our objective continues to be to bring a measure of justice and assistance to the Holocaust survivors in this country and elsewhere. We believe that the best approach is one that recognizes the complexities of the issues and the difficulties that each country must face in dealing with this tragic period. Our best role is to encourage these countries to address Holocaust-asset related claims in an equitable and non-discriminatory manner. post-air strike plans Question. Let's assume that United Nations Secretary General was unable to reach an agreement with Saddam Hussein. We would have launched air strikes to reduce Iraq's ability to produce weapons of mass destruction. What would we do then? Answer. Active diplomacy and the credible threat of force were the key factors in persuading Saddam to agree to cooperate with UNSCOM and IAEA inspectors, so we achieved our goals without the necessity of launching air strikes. If Iraq had continued to violate its obligations and we had launched air strikes our further actions would have depended, to a great extent, on how Saddam responded to the air strikes. He could have responded in innumerable ways. We considered his options and identified a variety of military and other options open to the coalition, depending on his response. post-air strike diplomatic strategy Question. I assume Saddam Hussein would not allow UNSCOM to come back into Iraq and keep looking for these weapons. What would be the diplomatic tack that you and the Administration would take? Answer. I am reluctant to speculate about actions we would have taken if Saddam had continued to defy the international community, if we then launched air strikes and if Saddam then refused to permit UNSCOM to continue its work. Iraq has, in fact, agreed to cooperate with the weapons inspectors. The UN is now testing that agreement. We were prepared to use force had Iraq not so agreed. The goals of air strikes would have been to diminish the threat posed by Iraq's weapons of mass destruction program and reduce Iraq's capacity to threaten its neighbors. We cannot assume that Saddam would have refused to permit UNSCOM to return to Iraq following air strikes. post-air strike sympathy dividends for iraq Question. Wouldn't air strikes play into the hands of Saddam Hussein, because of the sympathy generated throughout the world? Plus, he could then continue his weapons program without having to be concerned with UNSCOM. Answer. The goal of the air strikes would have been to diminish the threat posed by Iraq's weapons of mass destruction program and to reduce Iraq's capacity to threaten its neighbors. Air strikes would have significantly reduced Iraq's capacity to develop weapons of mass destruction and threaten its neighbors. We cannot assume that Saddam would have refused to permit UNSCOM to return to Iraq following air strikes. Air strikes might have generated some publicity adverse to the coalition and favorable to Saddam, but Saddam appears to have decided that the cost to him of military action outweighed any such advantage. ongoing air strikes Question. Would we be committed to continuing revolving air strikes against Iraq? Answer. I am reluctant to speculate about our military options had we launched air strikes against Iraq. In fact, we did not have to because Iraq agreed to cooperate with weapons inspections. Had we commenced air strikes we would not have been committed to continuing them indefinitely, but neither could we rule it out. Our subsequent actions would have depended, in large part, on the Iraqi government's reaction to the initial strikes. Our goals, obtaining Iraqi cooperation with weapons inspections and reducing Iraq's capacity to threaten its neighbors, would remain the same. If we determined that continuing air strikes were necessary to achieve those goals, they might have continued. nuclear deterrent to chemical and biological weapons Question. During the Gulf War it was stated that, ``it is the position of the U.S. that if any country uses chemical weapons against the US they will be met with a prompt and overwhelming response.'' I know that was our public position, but does that remain our response today? Answer. Yes, that remains our position today. If any nation were to attack the U.S., our allies, or our forces with chemical or biological weapons, our response would be swift, devastating, and overwhelming. We have worked hard to fashion non-nuclear responses to the threat or use of weapons of mass destruction, in order to give military commanders and the President a range of options from which to choose. Question. Would you assess the effectiveness of this policy as a deterrent. How has this type of possible response been applied toward Iraq? Answer. Effective deterrence depends on a combination of our ability to respond to the use of chemical or biological weapons (CBW) against U.S. or coalition forces with a devastating retaliatory blow, and our ability to carry out military operations successfully, even in the face of widespread enemy CBW use. In deterring the threat of CBW use against U.S. or coalition forces, we depend on military forces that are trained and equipped to operate effectively in a CBW environment, and on a powerful, flexible force employment capability. Effective counterforce combined with improving active and passive defenses can deny the tactical, battlefield advantages than an adversary might otherwise perceive it could gain by employing chemical or biological weapons. We have worked hard to make available to military commanders and the President a broad spectrum of credible force options. From these we can choose the appropriate option for delivering a devastating and overwhelming response to NBC use against us. We have made it clear to Iraq and the rest of the world that if it used chemical, biological, or nuclear weapons against our forces, we would deliver a response that is overwhelming and devastating. nuclear deterrent to chemical and biological weapons Question. How can we assist our allies in deterring ``rogue nations'' from developing chemical, biological and other weapons of mass destruction? Answer. We currently engage in a variety of activities to help our allies deter rogue states from developing chemical, biological, and other weapons of mass destruction. In particular, we: Work with our allies to encourage all nations to join all multilateral agreements related to weapons of mass destruction (WMD), such as the Chemical Weapons Convention, the Biological Weapons Convention, and the Nuclear Nonproliferation Treaty, with a view to establishing international legal norms and isolating the few who wish to maintain such options; Work with our allies to develop comprehensive and effective export controls to prevent proliferators from acquiring dual-use materials and technology for WMD programs; Work through regimes like the Australia Group and the Missile Technology Control Regime to harmonize export controls on sensitive dual-use materials and technology; Inform allies about transactions of concern, to enable them to take appropriate action to prevent items from reaching WMD programs; Share information on trends in proliferation, procurement networks, and procurement practices; and Work through entities like the International Science and Technology Center (ISTC) to employ scientists in civilian fields to dissuade them from providing their technical know-how and expertise to countries or programs of concern. Question. What is our first, last, and best line of defense in dealing with the proliferation of chemical, biological, and other weapons of mass destruction? Answer. There is no single, simple counter to the proliferation of chemical, biological, and other weapons of mass destruction (WMD). Our primary objective is to prevent countries from acquiring WMD, and to make their procurement efforts harder, more expensive, and more time consuming. We encourage countries to adopt responsible nonproliferation policies and practices by joining arms control and nonproliferation regimes such as the Nuclear Nonproliferation Treaty, the Biological Weapons Convention, and the Australia Group. Through export controls we seek to deny proliferators key materials and technology needed to acquire or advance their WMD program. The international harmonization of these controls--through the Australia Group, for example--helps achieve this goal. Finally, the availability of accurate and timely information about procurement activities and programs of concern is invaluable to all our nonproliferation efforts. russia Question. Although the former Soviet Union signed and ratified the 1972 biological weapons ban, it has been reported by the New York Times on 25 February, 1998, that the one time second in command of the Soviet Union biological Weapons program, Kenajtan Alibekov, who defected to the United States in 1992 and now goes by the name Ken Alibek, believes that the Russians are continuing to develop new biological weapons. The Russian Foreign Ministry has stated that the Russian Government was ``strictly'' fulfilling all its obligations. Even as the United Nations inspectors have uncovered circumstantial evidence that there is a connection between the Russian and Iraqi weapons program. Can you answer these claims. Answer. Dr. Alibek, who came to the U.S. in 1992, was last actively engaged in the Soviet program in 1991 when he was Deputy Director of BioPreparat. His statements are personal assessments--he has no direct information pertaining to current Russian activities. Regarding the alleged connection between the Russian and Iraqi weapons programs, we have no information indicating that Russia entered into an agreement to provide either technical knowledge or equipment that would advance the Iraqi biological warfare program. Question. Why did the Russian Ministry of Foreign Affairs make a point that they are ``strictly'' fulfilling their obligations? Answer. The Ministry of Foreign Affairs was responding to allegations made, including in the U.S. press, that the Russian Government has been involved in activities contrary to the Biological Weapons Convention. Question. Is there wiggle room in the 1972 Treaty which could allow them to continue an offensive biological weapons program under the guise of defensive policy? Answer. The Biological Weapons Convention (BWC) is clear: State Parties are committed not to develop, produce, stockpile, or otherwise acquire or retain biological weapons (BW) for offensive purposes. However, the BWC currently provides no mechanism to help detect and deter cheating. Since 1995, the U.S. has been involved in negotiations to develop a compliance and transparency mechanism to the BWC. In January 1998, President Clinton announced that the U.S. would seek to conclude the framework of a protocol by the end of 1998. Such a protocol could assist in detecting and deterring violations of the BWC. Question. What are we doing to safeguard our people from the continuing threat posed by Weapons of Mass Destruction? Answer. We are engaged in a variety of activities to deter states from developing chemical, biological, and other weapons of mass destruction (WMD), and to safeguard U.S. citizens from the threat of WMD. In particular, we: Work with our allies to encourage all nations to join all multilateral agreements related to weapons of mass destruction (WMD), such as the Chemical Weapons Convention, the Biological Weapons Convention, and the Nuclear Nonproliferation Treaty, with a view to establishing international legal norms and isolating the few who wish to maintain such options; Work with our allies to develop comprehensive and effective export controls to prevent proliferators from acquiring dual-use materials and technology for WMD programs; Work through regimes like the Australia Group and the Missile Technology Control Regime to harmonize export controls on sensitive dual-use materials and technology; Inform allies about transactions of concern, to enable them to take appropriate action to prevent items from reaching WMD programs; Share information on trends in proliferation, procurement networks, and procurement practices; Work through entities like the International Science and Technology Center (ISTC) to employ scientists in civilian fields to dissuade them from providing their technical know-how and expertise to countries or programs of concern; Educate our personnel throughout the world and teach them how to respond to WMD attacks; and Work with other agencies to prepare our medical and emergency personnel to address threats in a prophylactic manner. Question. What is the Administration's position with regard to President Yeltsin's outspoken opposition toward our policy in Iraq and his statements that military action could trigger World War III? Answer. While we differ over tactics, senior Russian officials have assured us that Russia shares our goals of keeping Iraq from developing weapons of mass destruction. In February, the United States and Russia were able to come together on a set of principles that UN Secretary General Annan could take with him to Baghdad. Both Russia and the United States, along with other members of the UN Security Council, supported the agreement Secretary General Annan worked out with Iraq officials, and called upon Baghdad to comply with the terms of that agreement. However, Russian officials, including President Yeltsin and Foreign Minister Primakov, publicly stated their opposition to the use of force against Iraq. They stated the Russian view that no country or countries has the authority to use force against Iraq to bring about Iraqi compliance with UNSCOM without a new review and authorization by the Security Council. The U.S. does not share Russia's interpretation of UN Security Council resolutions (UNSCR's) and the need for a new review by the Security Council. The U.S. believes strongly that resolutions already in effect authorize the use of force. The use of force might prove necessary now or in the future, if Iraq's failure to comply with UNSCR's intended to impede Iraq's development of weapons of mass destruction and to compel Iraq's full compliance with all Security Council resolutions would constitute a serious violation of the cease- fire agreement. Frankly, we do not agree that military action taken against Iraq to secure its compliance with relevant UNSCR's would trigger a world war. iran: nonproliferation Question. Has Iran acquired weapons of mass destruction and does it have the missile technology to deliver them? Answer. Iran continues its efforts to develop a nuclear weapons capability, but has made little progress to date due to the reluctance of most nuclear suppliers to provide any assistance to Iran. Multilaterally, through the Nuclear Supplier's Group and bilaterally through discussions with supplier governments, notably Russia and China, we are working to end cooperation with Iran's nuclear programs. We object to any nuclear cooperation with Iran on the grounds that any cooperation, even for peaceful, civilian uses, will add to the pool of Iranian knowledge and experience and provide Iran with commercial access to more sensitive nuclear technologies that the Iranian government may draw on to further its weapons program. China informed the U.S. in October 1997 that it would not engage in any new nuclear cooperation with Iran, had terminated assistance to Iran on a uranium conversion facility, and would complete work on its two remaining Iranian nuclear projects--neither of which raises proliferation concerns--in a relatively short period of time. We continue to encourage Moscow and other suppliers to terminate nuclear cooperation with Iran. Iran continues to develop its chemical and biological weapons programs. We believe these programs have progressed much further than the nuclear program. Through the Australia Group, the Biological Weapons Convention and the Chemical Weapons Convention, we seek to limit Iran's access to the components, equipment and technology necessary to develop these weapons. The Administration uses other tools, such as sanctions to combat proliferation. Most recently, in May 1997, the U.S., in accordance with the Chemical and Biological Weapons and Warfare Elimination Act of 1991, sanctioned seven Chinese entities and one Hong Kong company for knowingly selling CW-related materials to Iran's CW program. Iran is pursuing a multi-track effort to develop both liquid--and solid--propellant missile systems. We believe Iran possesses an extensive inventory of 300-kilometer range and 500-kilometer range Scud missiles. Iran purchased Scud missiles and related technology from North Korea and is probably close to achieving Scud production capability, if it has not already done so. Iran also is developing a medium-range ballistic missile. Once Iran's indigenous missile production capability is fully developed, Iran would pose a new proliferation risk if it were to begin to export Iranian produced Scuds and production technology. Question. Does the Administration support the Iran Missile Proliferation Sanctions Act as passed by the House? Answer. No, the Administration does not support this legislation. Current law provides an adequate basis for the United States to impose sanctions on foreign entities that contribute to Iranian ballistic missile capabilities. The Administration is committed to fighting terrorism and taking steps to halt the transfer of missile technology to countries of concern, such as Iran. We believe, however, that the bill in its current form would weaken the U.S. ability to persuade the international community to halt such transfers to Iran. Because of the bill's requirement to impose sanctions based on an unworkable, low standard of evidence, its broad scope of covered transactions and lack of a meaningful waiver provision, we believe the President would be required to impose sanctions worldwide in a manner likely to undermine U.S. nonproliferation goals and objectives. We believe the bill would be counterproductive in convincing foreign governments to control missile-related trade with Iran. For example, the standard of evidence is so low it could result in the imposition of an untold number of erroneous sanctions on individuals or business entities. Imposition of erroneous sanctions on a large scale could dissuade foreign governments or persons from cooperating with the U.S. to prevent the transfer of missile technology to Iran and harm U.S. foreign policy goals and U.S. commercial interests with other nations. Although the proposed sanctions law is of global scope, it is intended to deal with Russian entities involved with Iran's missile program. We have made progress with the Russian government on key aspects of its companies' cooperation with the Iranian missile program. Then Prime Minister Chernomyrdin signed an executive order on January 22 substantially strengthening the Russian export control process, providing new authority to stop transfers of dual-use goods and services to missile programs and programs for weapons of mass destruction. We have been discussing with the Russians steps necessary to implement the order and ideas for U.S.-Russian cooperation in the development of export control systems. We have received assurances that the new government will honor Chernomyrdin's commitment. Some concerns remain and we will continue to press our case at the highest levels of the Russian government. european moves toward iran Question. The European Union moved to normalize relations with Iran. Is this move seen as an attempt to challenge our policy toward Iran? Answer. There is general agreement among the industrialized nations on the need to change Iran's unacceptable policies, but we differ on how to reach this goal. Until the Mykonos verdict in April 1997, the EU pursued a policy of limited engagement, through continued trade and the ``Critical Dialogue.'' In the wake of Mykonos, the EU suspended the Critical Dialogue; reiterated its commitment to banning arms sales to Iran; suspended official bilateral ministerial visits; and agreed to work together to curtail Iranian intelligence presence in EU states. This year, the EU lifted its ban on bilateral ministerial visits and decided to initiate an official dialogue with iran at the sub-ministerial level. The Iranian government has not yet agreed to have an official dialogue with the EU. Other measures remain in effect. We have stressed to the EU at the highest levels the need to coordinate a multilateral approach toward Iran. We continue to meet with the EU and Canada to explore ways to harmonize our policies toward Iran. We generally agree on the areas of concern; we are working on identifying additional measures to constrain WMD and counter-terrorism policies. middle east: iran Question. Has the Administration decided if the $2 billion gas development deal between France and Iran is sanctionable under current law? Answer. The issues raised by the Total deal are complex and require careful and thorough consideration. It would not be appropriate to speculate when our review will be complete. However, it is important to note that we are investigating the impact of the Asia financial crisis on the continued viability of the Total deal. We will factor the findings of that investigation into our ultimate determination of this case. khatami's desire for dialogue with american people Question. The Iranian President Mohammed Khatami, recently spoke on CNN of his desire for an open dialogue with the American people. Have you seen any tangible proof of this? Answer. Yes. While private exchanges among Americans and Iranians have taken place for the past ten years, the Iranian government has taken a more active role in orchestrating academic, athletic and cultural exchanges since the election of President Khatami. For example, in February, the Iranian government hosted the U.S. national wrestling team in Tehran for an international tournament, and a group of American Scholars and ex-officials for a conference on Gulf security. Both visits went well. The U.S. wrestling team is due to return to Iran in the fall for the World Cup tournament. The Iranian wrestling team and several Iranian scholars have visited the United States. The Iranian wrestling team will return to the United States in July. fracture between khamenei and khatami Question. The Supreme Leader Ayatollah Khamenei has continued his anti-American rhetoric. Is there any sign that there is a fracture in relations between Khamenei and Khatami? Answer. It was apparent from the conflicting messages Khamenei and Khatami delivered at the Organization of Islamic Conference Summit in Tehran in December that there are differences between the two, particularly regarding Iran's relations with the West. The divergence between the fractions they head was most recently seen in the arrest of the mayor of Tehran, a supporter of Khatami, by the head of the judiciary, who supported Khatami's conservative opponent in the presidential elections last year. khatami's power to redirect iranian foreign policy Question. Assuming that President Khatami wanted to, is there proof that he can redirect Iranian foreign policy? Answer. No, there is no proof that Khatami can redirect Iran's foreign policy, particularly in the sensitive areas of relations with the United States and Israel, which remain under the control of the Supreme Leader, Khamenei. There are, however, signs that Khatami and his Foreign Minister are attempting to exert greater control over foreign policy in other areas, and have had some success. For example, one of Khatami's foreign policy goals is to improve Iran's stature in the international community and reduce tensions with neighboring states, particularly the Gulf monarchies. To this end, the Iranian government worked hard to ensure that the summit meeting of the Organization of Islamic Conference held in Tehran in December would be a success, and has initiated several high-level official visits with Saudi Arabia and other Gulf governments. iranian support of terrorism Question. is there any sign that Iran is not supporting and exporting terrorism? Answer. No, the government of Iran continues to sponsor terrorism. The Iranian government conducted at least 13 assassinations in 1997, mostly in Northern Iraq against members of the regime's main opposition groups. Iran supplies training, funding and other means of support to violent opponents of the Middle East peace process, including Hamas. Iran provides similar assistance, as well as weapons, to the Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine-General Command and the Lebanese Hizballah. We are working to convince the international community to focus pressure on Iran to end its support for international terrorism. iranian support for hamas, hizballah and islamic jihad Question. Does Iran still provide support to Hamas, Hizballah and Islamic Jihad? If so, what kind of support? Answer. Iran supplies training, funding and other means of support to violent opponents of the Middle East peace process, including Hamas. Iran provides similar assistance, as well as weapons, to the Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine-General Command and the Lebanese Hizballah. general foreign aid Question. The purpose of American foreign policy and the purpose of our investments in USAID programs is to keep America strong and respected. Our goal is to protect the interests of our citizens in an age when national borders are porous, markets are global, and many of the threats to our security cannot be dealt with by any one nation acting alone. How have these programs improved the security of our allies, our partners in the Middle East Peace Process, and our friends in the states of Eastern Europe and throughout the world? Answer. Deadly conflict and crisis within countries represent the main threats to security in the post Cold War era. Foreign assistance programs have improved security by successfully addressing some of the factors that increase the likelihood of deadly conflict and crisis. Aid programs have promoted economic, social, and political progress. They have attempted to strengthen institutions and enhance human resources, so that countries can better deal with internal conflicts without falling into crisis and deadly conflict. In the Middle East, where conflicts are indeed deep-seated and bitter, our aid has contributed to significant economic, social, and political progress. For instance: According to the Fraser Institute, economic freedom increased between 1975 and 1995 in Israel (from 2.2 to 4.2); in Egypt (2.7 to 4.4); and in Jordan (4.3 to 4.8). The improvements for Israel and Egypt were relatively large compared with other countries. These higher scores represent significant strengthening of policies and institutions, in many cases supported by foreign assistance. Both Israel and Egypt achieved clearly positive average annual growth in real per capita income over the 1985-95 period (2.5 percent and 1.1 percent, respectively). While per capita income growth for Jordan was negative over the same period, real gross domestic product has increased at a rapid rate (8 percent annually) since the Gulf War. This sort of economic progress does not guarantee security and stability, but it surely helps. On the social side, there have been major improvements in life expectancy, and sharp declines in infant mortality and fertility in Egypt, Israel, and Jordan. More generally, people's well-being in terms of health, education, status of women, and other social dimensions has clearly improved on average in each of these countries. On the political side, Israel has long been classified as ``Free'' by Freedom House, and its ratings within that category have improved. Jordan has made significant progress, from ``Not Free'' to ``Partially Free.'' Egypt has remained classified as ``Not Free.'' For Jordan and Egypt, Internal threats posed by fundamentalists have undoubtedly contributed to limits on political freedom. Similarly, in Eastern Europe foreign assistance is supporting economic, political, and social progress, including more effective institutions. While most Eastern European aid recipients are relatively advanced by development standards (looking at per capita income and social indicators), they are undergoing a profound institutional transition, which challenges their capacity to manage conflict. In most cases we are seeing significant improvements in economic growth performance, democracy, and in the performance of underlying institutions. Helping Russia, Ukraine, Armenia, Georgia, the Central Asian states and other states of the former Soviet Union become fully stable market democracies continues as much in the U.S. national interest as it was when the Soviet Union disintegrated. We are helping these nations create democratic societies and market economies which are increasingly based on Western values, and linked to us through trade and investment and through people-to-people, grassroots relationships. In some cases, particularly parts of the former Yugoslavia, avoiding deadly conflict and crisis will take considerably more than the broad economic, social, and political progress that foreign assistance aims to support. Nonetheless, there and elsewhere this sort of progress will enhance security by improving the odds that conflict and crisis can be avoided. U.S. foreign assistance programs have improved the United States' ability to function in the world by promoting economic and political freedom; by supporting economic and social progress, and by helping to foster a more cooperative global order. Question. The purpose of American foreign policy and the purpose of our investments in USAID programs is to keep America strong and respected. Our goal is to protect the interests of our citizens in an age when national borders are porous, markets are global, and many of the threats to our security cannot be dealt with by any one nation acting alone. In general, how do these programs support freedom, security and strengthen the security of the United States of America? Answer. Deadly conflict and crisis within countries represent the main threats to security in the post Cold War era. Foreign assistance programs have improved security by successfully addressing some of the factors that increase the likelihood of deadly conflict and crisis. Aid programs have promoted economic, social, and political progress. They have attempted to strengthen institutions and enhance human resources, so that countries can better deal with internal conflicts without falling into crisis and deadly conflict. While successful development does not guarantee security, it significantly improves the odds of avoiding deadly conflict and crisis. Within the traditional developing world over the past decade,, almost all of the countries that have fallen into crisis are least-developed countries where development progress has been at best sporadic and uneven (e.g., Somalia, Sudan, Zarie, Burma, Liberia, Rwanda, Haiti, and Ethiopia). Conversely, almost all of the countries that have reached middle-income or advanced status, as well as most poor countries that are making steady development progress (e.g., India, Bangladesh, Ghana and Uganda since the late 1980's) have largely avoided crisis and deadly conflict. A well-publicized study of failed states sponsored by the CIA reported that high infant mortality and low levels of openness to foreign trade were the most reliable predictors of state failure. We believe that these indicators are best seen as proxies for low levels of development. The implication is that with broad economic and social progress, the odds of state failure diminish. U.S. foreign assistance programs have improved the United States' ability to function in the world by promoting economic and political freedom; by supporting economic and social progress, and by helping to foster a more cooperative global order. First, USAID and other foreign assistance programs have successfully promoted economic and political freedom. Of 66 aid recipient countries covered by the Fraser Institute survey of economic freedom for 1975 and 1995, economic freedom clearly improved in 50 countries; was substantially unchanged in 6; and clearly declined in only 10. Of 86 aid recipient countries covered by the Freedom House surveys of political freedom for 1975 and 1996, freedom clearly improved in 40; was substantially unchanged in 23; and clearly declined in only 13. For both economic and political freedom, the average change over all of the countries surveyed has been significantly positive. These sorts of improvements mean that the global community in which the United States operates is increasingly one of shared values where private markets and democracy are concerned. Second, USAID and other foreign assistance programs have successfully promoted economic and social progress. USAID recently reviewed the development performance of 90 aid recipients, a group that absorbed the bulk of U.S. (and other) foreign assistance over the 1965- 90 period and which today includes over 3 billion people. Forty-one countries, accounting for over two-thirds of the group population, achieved significantly positive economic growth over the 1965-90 period (Looking at the more recent 1985-95 period, another sixteen countries join that group). Progress in terms of social indicators (infant mortality, life expectancy, literacy, and fertility) has been nearly universal. Question. The purpose of American foreign policy and the purpose of our investments in USAID programs is to keep America strong and respected. Our goal is to protect the interests of our citizens in an age when national borders are porous, markets are global, and many of the threats to our security cannot be dealt with by any one nation acting alone. How has our foreign assistance improved our ability to function in the world? Answer. Deadly conflict and crisis within countries represent the main threats to security in the post Cold War era. Foreign assistance programs have improved security by successfully addressing some of the factors that increase the likelihood of deadly conflict and crisis. Aid programs have promoted economic, social, and political progress. They have attempted to strengthen institutions and enhance human resources, so that countries can better deal with internal conflicts without falling into crisis and deadly conflict. While successful development does not guarantee security, it significantly improves the odds of avoiding deadly conflict and crisis. Within the traditional developing world over the past decade, almost all of the countries that have fallen into crisis are least-developed countries where development progress has been at best sporadic and uneven (e.g., Somalia, Sudan, Zaire, Burma, Liberia, Rwanda, Haiti, and Ethiopia). Conversely, almost all of the countries that have reached middle-income or advanced status, as well as most poor countries that are making steady development progress (e.g., India, Bangladesh, Ghana and Uganda since the late 1980's) have largely avoided crisis and deadly conflict. U.S. foreign assistance programs have improved the United States' ability to function in the world by promoting economic progress, and by helping to foster a more cooperative global order. First, USAID and other foreign assistance programs have successfully promoted economic and political freedom. Of 66 aid recipient countries covered by the Fraser Institute survey of economic freedom for 1975 and 1995, economic freedom clearly improved in 50 countries; was substantially unchanged in 6; and clearly declined in only 10. Of 86 aid recipient countries covered by the Freedom House surveys of political freedom for 1975 and 1996, freedom clearly improved in 40; was substantially unchanged in 23; and clearly declined in only 14. For both economic and political freedom, the average change over all of the countries surveyed has been significantly positive. These sorts of improvements mean that the global community in which the United States operates is increasingly one of shared values where private markets and democracy are concerned. Second, USAID and other foreign assistance programs have successfully promoted economic and social progress. USAID recently reviewed the development performance of 90 aid recipients, a group that absorbed the bulk of U.S. (and other) foreign assistance over the 1965- 90 period and which today includes over 3 billion people. Forty-one countries, accounting for over two-thirds of the group population, achieved significantly positive economic growth over the 1965-90 period (Looking at the more recent 1985-95 period, another sixteen countries join that group). Progress in terms of social indicators (infant mortality, life expectancy, literacy, and fertility) has been nearly universal. These sorts of improvements mean that the global community in which the United States functions is not only freer, but also significantly healthier and better educated, with higher incomes and less widespread poverty. As articulated in the International Affairs Strategic Plan, this clearly serves U.S. national interests. Finally, U.S. foreign assistance programs are part of a larger donor effort that developed under U.AS. leadership, and has represented a major, unprecedented example of voluntary global cooperation. The idea that rich countries as a group would provide aid to poor countries represented a major step forward for the global community in the early 1960's. While the Cold War helped stimulate and justify development cooperation then, President Kennedy made it clear that the U.S. was providing aid (and was encouraging other countries to do the same) because it was the right thing to do. Since then, the number of donors has increased rapidly (including some 13 countries that have been aid recipients), as has the share of overall aid provided by donors other than the U.S. This unprecedented example of voluntary cooperation under enlightened U.S. leadership (including aid to formerly communist countries) has surely made an important contribution to a global order that functions increasingly as a cooperative community of nations. It has enhanced the ability of the U.S. to function in the world as a global leader. Returning to the premise of the question, foreign assistance has helped build a more cooperative international order under U.S. leadership. Question. How has our foreign aid improved our ability to function in the world? More specifically, how has it helped us in our recent troubles with Saddam Hussein? Answer. During the Iraq crisis, we forged a coalition of like- minded nations determined to see the UNSC's resolutions enforced and to counter the threat posed by Iraqi weapons of mass destruction. Not one country reversed its commitment to us. Our allies understood that our combined resolve and steadfastness brought us to the point of agreement. U.S. foreign assistance plays a role in maintaining strong, comprehensive, and mutually beneficial relationships with key regional partners. Foreign assistance helps enable our partners to participate in international peacekeeping efforts, as well as combating terrorism. Question. Did our former coalition allies and recipients of security assistance reduce the drain on our own resources, physical and financial, during the recent build up in the Arabian Gulf? Answer. Eighteen countries offered military assets for the coalition and another twelve offered basing and overflight rights. More than 70 governments spoke out about the need for Iraq compliance with the obligations they accepted at the end of the Gulf War as part of the UN cease-fire resolution. With our coalition partners standing by, the robust force currently deployed in the region will stay in place until we are confident that Iraq will comply fully with its obligations. Question. Could we depend on Egypt, Jordan and other Middle East nations or was our access limited? Answer. Our Middle East partners played an important role in the Iraq coalition. We worked closely with Bahrain both in the region and on the UN Security Council to address the threat to the security of the Gulf and the authority of the United Nations posed by Saddam's pursuit of weapons of mass destruction. King Hussein of Jordan called repeatedly for full Iraqi compliance with all relevant UN resolutions. Egypt provided timely critical assistance in providing Suez Canal transit, overflight clearances, and refueling services. We consulted closely with the Saudis during the Iraq crisis and were confident of their support. We have a cooperative defense relationship with Qatar and several other regional partners. holocaust victims' trust fund Question. Could you explain what the $10 million in the Holocaust Victims' Trust Fund will be used for? Answer. The ten million dollars represents the second tranche of a three-year commitment by the U.S. to the Nazi Persecutee Relief Fund. The Fund is tasked to provide relief to the aging survivors of Nazi Persecution. The Fund can also be used to support education and other awareness programs related to the Holocaust. Question. How did you arrive at the sum of $10 million? Answer. Congress authorized a total U.S. contribution of up to $25 million in the ``Holocaust Victims Redress Act,'' which was signed by the President in mid-February. Given the complexity of this new program, a multi-year funding stream is a prudent and realistic estimate of the rate of implementation and expenditure. origin of trust fund contribution Question. Where did you get this money from? Did it come out of another account? Answer. Money for the U.S. contribution has been identified within the Economic Support Fund (ESF). $4 million has been identified in FY 98, $10 million has been added to the President's budget for FY 99, and we expect to request an additional $10 million from FY 2000. debt relief for poorest countries Question. Will the Administration take action to relieve the debt burden of the poorest of the poor countries? Would it be appropriate for the Department of State to use its influence with the other nations that make up the G-7? Answer. The Administration recognizes the importance of reducing to sustainable levels the debt burdens of poor countries that are implementing economic reforms. Acting with the other creditor governments that make up the Paris Club, we have reduced the burden of government-to government debts of some of the poorest countries by up to 67%. We have also been a strong advocate of the Heavily Indebted Poor Countries (HIPC) debt relief initiative, through which reforming countries receive reductions of up to 80% of their debts to Paris Club governments and, for the first time, relief on their debts to the International Monetary Fund (IMF), the World Bank, and other international financial institutions. Both of these efforts are aimed at reducing countries' debt burdens to manageable levels. Our FY99 budget contains funding for continued debt relief for the poorest countries through the Paris Club. It also contains funding for us to forgive the concessional (low-interest-rate) bilateral debts owed to the U.S. by those African governments undertaking strong economic reforms. The two funding items will allow us to reduce debt with a face value of up to $1.6 billion. Our debt relief efforts benefit countries that are reforming their economic policies, because debt relief alone will not lead to sustainable growth and development unless governments implement responsible economic policies. The Administration is continuing to work with our G-7 counterparts, who participate in the Paris Club, on debt relief. We are encouraging those who have not done so to join us in forgiving bilateral concessional debts owed by reforming African countries. We plan to discuss continued efforts on debt relief with our counterparts at the upcoming Birmingham Summit. demining program increase Question. Demining is an area of utmost importance to many of us on this subcommittee. The removal of landmines is a major challenge requiring a very long term commitment. It is, indeed, one of the most important initiatives in the world today. The United States recently failed to sign the international agreement banning landmines, which was very disappointing to me and many of my colleagues. However, the Administration's request for demining programs has been increased from $20 million last year to $50 million for FY'99. Would you please comment briefly on why the United States failed to sign this agreement, and explain the increase for the program. Answer. The United States is committed to the elimination of anti- personnel landmines (APL). In September 1994, President Clinton became the first world leader to publicly call for a global ban on landmines. The U.S. UNGA resolution on APL, passed overwhelmingly in 1996, has consistently been cited by Ottawa Process supporters and others as the basis for their work in establishing an APL ban. In 1996, the United States led negotiation of the Amended Mines Protocol (Protocol II) to the Convention on Conventional Weapons (CCW), including creating the requirement that unmarked APL self-destruct and self-deactivate. On January 17, 1997, the President announced that the United States would observe a permanent ban on the export and transfer of APL. Also in 1997, the United States worked vigorously to establish negotiations for an APL ban in the Conference on Disarmament (CD), the preeminent multilateral forum for arms control negotiations. Unable to achieve hoped for progress in the CD at that time, we attended the Oslo Conference in September 1997 determined to make every effort to negotiate an effective, comprehensive global APL ban that would also address the security concerns of participants. At Oslo, we attempted-- and failed--to negotiate two changes that would have allowed us to sign the Ottawa Convention: A nine-year transition period to phase out the APL (not including anti-personnel submunitions in mixed anti-tank systems) we now use to protect our troops, giving us time to devise alternatives; and A provision permitting continued use of our mixed anti-tank munitions systems. (These systems have self-destructing anti-personnel submunitions which protect anti-tank munitions from being easily breached, but which are deemed APL under the treaty.) Our self-destructing, self-deactivating mixed anti-tank munitions systems are the safest anti-tank systems from the perspective of protecting civilians. They are also the most militarily effective. They are set to self-destruct in as little as 4 hours, at most in 15 days. The mechanism is extremely reliable: in more than 32,000 tests, all except one destroyed itself on schedule or earlier; one was one hour late. Self-destruction leaves these mines completely harmless after hostilities have ceased. At the same time, these weapons are essential to protect American forces where they may be greatly outnumbered and facing attack by enemy armored forces. We estimate our casualties to be as much as 30% higher if we are denied the use of these devices. Despite our best efforts to negotiate an exemption for our self- destructing mixed anti-tank munitions systems, we were unsuccessful, even though the Ottawa Convention permits continued use of non self- destructing mines (anti-tank mines with anti-handling devices) which will explode upon contact with a human being and are a humanitarian problem. Rather than expose our troops and the civilians they may be sent to protect to additional risk by banning self-destructing mixed anti-tank munitions that do not cause a humanitarian problem, we have not signed the Ottawa Convention. (Part II: Demining) As President Clinton, the Canadian Prime Minister and Foreign Minister, and the United Nations Secretary General have said, a ban on anti-personnel landmines is only a first step. The critical task before us is to remove the mines currently emplaced and threatening innocent civilians. Even if an international ban takes effect today, landmines will continue to remain in the ground in some 60 countries worldwide. These hidden killers need to be removed in order for the land and infrastructure to be returned to peaceful civilian use and economic development and progress. For that reason, the Secretaries of State and Defense announced on October 31, 1997, the President's Demining 2010 Initiative, designed to accelerate global humanitarian demining operations, including landmine survivor assistance, to eliminate the threat of anti-personnel landmines to civilians by the year 2010. Working with others, the U.S. aims to create an effective international coordinating mechanism to ensure that sustained public and private resources for demining are directed, in an organized and rational manner, to programs in the mine-affected countries. We have requested $50 million for FY 99 to expand the program into additional countries, and to enhance and sustain ongoing indigenous demining efforts in nineteen countries, including the five countries added to the program in FY 97 and FY 98. Question. What is the next step? Answer. In addition to our extensive efforts in demining, the United States has taken many steps toward ending the APL problem. The CCW Amended Mines Protocol, a treaty which ensures responsible use of APL, was submitted in January 1997 to the Senate for advice and consent. The major historical APL producers and exporters who have the majority of the world's APL stockpiles and have not participated in Ottawa have approved adoption of this protocol. The President announced on September 17, 1997 that we would redouble our efforts to establish serious negotiations for a global APL ban in the CD. We will start by seeking an export ban on APL to capture the major mine producing countries in order to stop the spread of landmines which are causing the humanitarian problem. The President also directed the Department of Defense to develop alternatives to APL (not including anti-personnel submunitions in mixed anti-tank systems) so that by the year 2003 we can end the use of these weapons outside Korea. As for Korea, the objective is to have alternatives to APL ready by 2006. In addition, in January 1997, the President announced that the United States would observe a permanent ban on the export and transfer of APL and would cap its APL stockpile at current levels in May 1996, the administration announced the destruction of non-self-destructing (NSD) APL not designated for the defense of Korea or for training. Since May 1996, we have now destroyed 3 million such weapons and are expected to destroy the remaining stocks by the end of 1998. Question. How can we get a truly effective global ban on landmines? How do we negotiate a realistic ban? Answer. We share a common goal with Ottawa Process supporters: the elimination of landmines worldwide. While the Ottawa Process is to be commended for the progress it has made, there is much left to be done. A truly effective global ban on APL would have to capture both those states who are most affected by the scourge of APL and the principal producers and exporters of APL. We hope to make progress toward this end in 1998 by negotiating an export ban on APL in the CD. It is our belief that the CD offers the best possibility of capturing those major APL exporting and producing states who have not signed the Ottawa Convention. In order to stem the supply of APL worldwide, not just to states but to non-state parties in civil conflicts, it is critically important to bring in the major producers and exporters. The U.S. was also a leader in negotiating the Convention on Conventional Weapons Amended Mines Protocol. Once it enters into force (possibly this year), it will address the humanitarian problem caused by APL by strengthening restrictions on landmine use and transfer and by also capturing key landmine states that are not party to the Ottawa Convention. Specifically, CCW mandates that one self-destructing APL-- the true ``hidden killers'' which are responsible for civilian casualties worldwide--must be marked and monitored wherever they are used. Those who willfully violate and cause death to civilians will be subject to penal sanctions and/or extradition. CCW also bans the transfer of APL to non-state parties--who make up a large proportion of the humanitarian problem in zones of civil conflict--and carries strict proscriptions against the use of non-detectable mines. The CCW Amended Mines Protocol goes directly to the heart of the humanitarian problem associated with APL. It is certain that if it had been observed by all the key states for the past 40 years, the number of post-combat civilian casualties from the indiscriminate use of APL would be very dramatically reduced. The CCW Amended Mines Protocol was submitted to the Senate for advice and consent to ratification in January 1997. Question. Does the United States intend to commit to working for a global ban on landmines? Answer. Again, the United States is and has long been committed to working for a global ban on anti-personnel landmines. Since 1994, when President Clinton called for the comprehensive global elimination of APL at the United Nations, the United States has been at the forefront of active efforts to ban them. The United States led efforts to adopt the Convention on Conventional Weapons Amended Mines Protocol (Protocol II). The U.S. UNGA resolution urging states to pursue an agreement to ban anti-personnel landmines passed overwhelmingly (155-0) on December 10, 1996, helped set the Ottawa Process in motion. On September 17, 1997, President Clinton committed the United States to redoubling efforts to establish serious negotiations for a global APL ban in the CD, beginning with an export ban. It is important to note that U.S. APLs are not causing the humanitarian problem. Long before the Ottawa Process began, the United States developed and began using self-destruction, self-deactivating short-duration mines in order to eliminate residual casualties from emplaced APL. These U.S. mines self-destruct within 4 hours to 15 days after activation with a reliability rate better than 99.99%. On May 16, 1996, the President banned U.S. use, production, and export of non- self-destructing APL (the type which can last for decades and which is almost exclusively responsible for the humanitarian problem) worldwide except for training purposes and for the Korean Peninsula, where NSD APL are imperative to the security of U.S. and Korean forces. Since then, we have unilaterally destroyed 3 million such weapons and are expected to destroy the remaining stocks by the end of 1998. On January 17, 1997, the President announced that the United States would observe a permanent ban on the export and transfer of all APL (including even self-destructing/self-deactivating APL) and would cap its APL stockpile at current levels. On September 17, 1997, the President directed the Department of Defense to develop alternatives to APL (not including anti-personnel submunitions in mixed anti-tank systems) so that by the year 2003 we can end even the use of our self-destructing APL outside of Korea. As for Korea, the objective is to have alternatives ready by 2006. In 1997, the U.S. actively pursued a comprehensive and global APL ban in the CD. Also in 1997, the U.S. was a leading sponsor of a UNGA resolution calling on the CG to ``intensify its efforts'' on APL. We are continuing these efforts during the current CD session, working to establish a mandate for negotiation of an export ban. Question. How far off in the future do you expect such a ban could take place? Answer. It is difficult to predict how long it would take to establish an effective comprehensive global ban. The CD has agreed to establish a Special Coordinator for APL for the '98 session, and we hope to begin negotiations for an export ban this year. The CCW Amended Mines Protocol requires 20 nations to ratify in order to enter into force and may reach 20 within a few months (it has been submitted to the Senate for advice and consent to ratification). A principal reason the U.S. is not signatory to the Ottawa Convention is that it prohibits U.S. mixed anti-tank systems, which are necessary to protect our forces and which pose virtually no risk to non-combatants. We have made clear that the U.S. reserves the right to use mixed systems indefinitely. However, this could change if we find a viable and affordable concept for replacing these systems with an alternative that is comparable in terms of military effectiveness, safety of use, and minimal risks for non-combatants. As of now, we have not identified any operationally viable concept. We will keep Congress informed as administration policy develops in this area. Question. To follow up on my initial question, wouldn't it have been easier for the United States to sign the Treaty and work from the inside, that is if we are trying to reach the same goals Answer. Our nation has unique responsibilities for preserving security and defending peace and freedom around the globe. As Commander-in-Chief, the President will not send our soldiers to defend the freedom or our people and the freedom of others without doing everything he can to make them as secure as possible. For that reason, the United States insisted in the treaty negotiations in Oslo that two provisions be included in the treaty. First, we needed an adequate transition period to phase out the APL we now use to protect our troops, giving us time to devise alternative technologies. Second, we needed to preserve the self-destructing mixed anti-tank munitions systems we rely on to slow down an enemy's armor in a battle situation. In neither case was there a willingness on the part of the Ottawa process nations to accept these provisions. If we have become a party to the Ottawa Convention, from that moment on we would have been unable to use self-destructing mixed anti- tank munitions and our troops would have been exposed to additional risk despite the fact that self-destructing mixed anti-tank munitions do not cause a humanitarian problem. Despite our best negotiating efforts, the United States could not sign the Ottawa Convention. In the Oslo negotiations of the Ottawa Convention, we went the extra mile and beyond in an attempt to negotiate an effective agreement that would protect our forces. As the President has said, there is a line that simply cannot be crossed, and that line is the safety and security of our men and women in uniform. The offer we made at Oslo remains on the table. Question. It is my impression that some of the embassies are not taking the ``Leahy Language'' seriously. For example, in Bolivia. The State Department's Bolivian section of the ``Country Reports on Human Rights Practices for 1997'' raises questions about the U.S. Embassy's human rights reporting and its implementation of the amendment. The report states that ``* * * 14 civilians were killed in the course of law enforcement operations that encountered armed resistance. The precise causes and circumstances of these deaths have not been officially determined, but it appeared that some resulted from the use of excessive force by authorities.'' I would like to know what was the Embassy's conclusion about these deaths? How were these 14 people killed? What information did the U.S. Embassy use to evaluate and reach its conclusions? Were any of those security forces receiving U.S. counternarcotics aid? It is my understanding that there is credible evidence regarding human rights violations and abuses provided to the Bolivian Embassy by the Andean Information Network, an NGO on the ground in Bolivia. This is very important to note, because our ambassador to Bolivia has moved on to Colombia, a country where this committee has expressed its grave concerns in the past with regard to human rights violations, and if this policy is not fully embraced on the ground then the will of Congress, as expressed in the ``Leahy Amendment,'' is being disregarded. Madame Secretary, could you please investigate this and report back to this committee at the earliest possible chance. Answer. Nine of the 14 civilians, and one police officer, were killed in December 1996 after police and military forces were ordered to the Amayapampa area in Potosi department to dislodge miners who have seized a privately owned mine in a dispute with the mine's management. The Bolivian Government requested an investigation by the Inter- American Commission on Human Rights (IACHR). The IACHR reported that five civilians died of gunshot wounds, one from a crushed skull, one bled to death from an untreated bullet wound and the other two deaths were not explained. The IACHR concluded that some of the civilians killed in the Amayapamapa area were not active in the conflict. It called upon the Government of Bolivia to complete a full investigation, punish those officials responsible and make fair compensation to the victims or their survivors. The U.S. Embassy reviewed the IACHR and police reports, had conversations with government officials and reported this information to the Department. In a February 1997 meeting with the Bolivian Minister of Government, Assistant Secretary Gelbard raised the potential implications of unresolved investigations of human rights abuses and echoed Ambassador Kamman's concerns over the Bolivian government's handling of the Amayapampa incidents. None of the police or military units involved in the Amayapama violence receive U.S. counternarcotics aid or funds appropriated under the FY-98 Foreign Operations Appropriations Act, nor are we considering providing such assistance to these units. As such, no further actions were necessary under either the Leahy Amendment or section 570. The remaining five of 14 civilian deaths occurred at the time of clashes, which began on April 17, 1997 in the Chapare region, between coca farmers and Bolivian government coca eradication units. A 300-man force from the Ecological Police and UMOPAR (the specialized police unit that enforces counternarcotics laws) was ambushed by a mob of about 1,500 peasants, wielding firearms, stones and dynamite. Three civilians and one policeman died of gunshot wounds. Justice Ministry human rights investigators found that the fourth civilian death, which had initially been attributed to gunfire, was caused by the victim falling from a roof. The fifth civilian death, that of an infant allegedly overcome by tear gas fumes, was attributed to a severe infection, undernourishment, and dehydration. The Embassy used police reports and conversations with government officials and the Andean Information Network to investigate this case. From this information it appears that the Chapare deaths were a result of the police protecting themselves in the course of a legitimate law enforcement operation from a coca growers' ambush and that the police did not use excessive force. There are no neutral or objective eyewitness accounts of this incident and we have encouraged the Bolivian government to carry out a thorough and professional investigation. The Ecological Police and UMOPAR receive U.S. counternarcotics aid. These incidents were reported to the Department, and we have pressed the Government of Bolivia to more thoroughly investigate this and any other such incidents. Pending receipt of any further information developed in this case as a result of the GOB's or our own investigations, the Department concurs with the Embassy's conclusion. We note that the information initially received in this case was not processed strictly in accordance with established procedures. The Department has since established a committee for the purpose of regularizing the mechanism for review of such incidents. latin america Question. What part of these funds goes to training and what for equipment? Answer. The funds identified for the military will go primarily for training, fuel and POL with some monies for minor repairs, aviation and boat spare parts and operational support. The support provided to the police will mostly fund commodities, air support costs, Training, telecommunication equipment and operational costs. Question. During the past two fiscal years, which countries benefited from INL Interregional aviation programs? How much equipment was used in each country? Answer. INL interregional aviation programs benefited the countries of Colombia, Peru, Bolivia, and Guatemala during the past two fiscal years. The number of INL owned aircraft used in each country was as follows: Colombia: Early in the period in question, seven T-65 aircraft and one Cessna 208 were employed in Colombia. This has expanded to where today there are 8 T-65s, 2 Casa 212's, 5 OV-10's, one Cessna 208, 6 Bell 212's and UH-1's in Colombia being supported by the INL contract. Peru: 16 UH-1 helicopters. Bolivia: In FY 97, there were 22 UH-1 helicopters employed in country, As of FY 98, this number has been reduced to 16. Guatemala: Previously 5 Bell 212 helicopters were employed in Guatemala, but these have since been relocated to Colombia. Question. Could you please provide the funding levels for the INL interregional aviation programs by country? Answer. The following approximate amounts are provided for FY 1998. Please note that these amounts include a prorata share of Main Operating Base (Patrick AFB) costs which are all incurred for the ultimate benefit of overseas country programs. [Dollars in millions] ------------------------------------------------------------------------ FY 1999 FY 1998 planned ------------------------------------------------------------------------ Colombia.......................................... 23.7 29.5 Bolivia........................................... 6.4 5.5 Peru.............................................. 7.9 6.0 --------------------- Total....................................... 38.0 41.0 ------------------------------------------------------------------------ Question. Much of our military assistance to Mexico is for counternarcotics training. How do we know that those troops that we help train for counternarcotics are not used instead for counter- insurgency? Answer. In response to Mexico's interest in improving the skills and capabilities of military personnel being assigned to newly-created counter-drug units, the US arranged for training by the US Army Special Forces. This training has emphasized skills and discipline useful for personnel engaged in counter-drug activities. The Mexican Secretariat of National Defense selects personnel for US training who are most likely to be assigned to counter-drug units, or to units which regularly perform counter-drug missions. Some of the Mexican states that have recently experienced insurgent activities are also major drug-trafficking and producing states. Therefore, it is likely that some of the personnel who receive US training will, at some point, be assigned to units or missions in those states. However, we do not intend to attempt to direct the Government of Mexico where in its territory individual officials should be assigned. Recipients of US Special Forces training are given thorough grounding in internationally-accepted concepts of protection of human and civil rights, the rule of law, and appropriate interaction between military forces and civilian populations in conflictive situations. A key aspect of such training is knowing when to refrain from use of force. Question. Is there any ``End Use Monitoring'' of the counternarcotics training programs? Answer. The U.S. Government attempts to conduct post-training assessments or evaluations to determine the impact of the training and to be able to make changes in curriculum or training methods to make it more effective in the future. We are also very interested in ascertaining if personnel receiving specialized U.S. training are assigned to positions where they can make use of it. This will affect where we invest limited training resources in the future. We are not able, however, to follow up on each and every individual around the world who receives U.S. training. fmf pipeline Question. Why is there still so much old money in the pipeline for foreign military financing? Answer.We define ``pipeline'' as being uncommitted funds, that is, the amount of monies not programmed for a specific defense article or defense service. Since the early 1960's, a total of $96.279 billion in FMF has been apportioned among 141 countries and international organizations. Of that amount, $751 million (or) .78% remains uncommitted to date, and only $427 million (or) .44% represents funds apportioned in FY96 and prior. Moreover, $288 million of the $427 million in prior year uncommitted funds relates to loans apportioned for Greece. We do not believe a program that has been over 99% committed is under-utilized. A total of 23 countries/organizations have not received any new FMF apportionments since FY85 and five countries are restricted from using FMF (e.g., Brooke Sanctions). Question. Is that money ever transferred from other sources and what are those uses? Answer. Legally, the money could be transferred to another account/ agency as long as the funds were uncommitted, undisbursed (meaning bills have not been paid from the FMF account) and were apportioned within five years of the transfer date (ref: Sec. 632 FAA and 31 USC 1551). In practice, however, funds have not been transferred to other accounts. Moreover, the transfer of FMF funds among countries has occurred only once: in FY94, $2.190 million of FY90 funds were deobligated from Guatemala and reobligated to Bolivia. We are currently prohibited from exercising ``deob-reob'' authority (ref: sec. 510, P.L. 105-118). Question. Can you please supply this Committee with a new estimate on FMF monies still in the pipeline? Answer. A report identifying current uncommitted FMF monies is attached. [Pages 502 - 505--The official Committee record contains additional material here.] nato enlargement and the partnership for peace (pfp) Question. Please explain the extent of our military assistance to Poland, the Czech Republic, and Hungary? Answer. Since the beginning of PfP funding in FY1995, the USG has provided $98.6 million in Foreign Military Financing (FMF) to Poland, the Czech Republic, and Hungary. Since FY1991, we have also provided approximately $19 million in International Military Education and Training (IMET) funds to these three countries. The total for direct military assistance to these three countries is just under $120 million. [In millions of dollars] ------------------------------------------------------------------------ FMF IMET ------------------------------------------------------------------------ Poland............................................ $45.7 $6.9 Czech Rep......................................... 24.1 4.4 Hungary........................................... 28.8 6.7 ------------------------------------------------------------------------ These countries have used FMF primarily for the purchase of defense equipment and training to improve their militaries' interoperability with NATO forces. For example, funds have supported the Regional Airspace Initiative, English language labs, Search and Rescue Equipment, NATO-standard mapping equipment, tactical field radios, navigation and safety aids and similar uses. IMET funds have provided training for officers, NCOs, and civilians from these countries at U.S. military education institutions in the areas of defense resource planning, doctrine, civil-military relations, language, leadership, and other core military science disciplines. In addition, we have offered these countries low-cost loans under the Central European Defense Loan (CEDL) program. Although none of the three took advantage of the loan program in FY1997, they have expressed interest in the program and we will offer them loans again in FY1998. We obligated $18.24 million in FY1997 subsidy for loans to Poland and the Czech Republic and have set aside $20 million for the program in FY1998. The above levels do not include DOD programs and funding in support of Partnership for Peace (PfP) program. Because most of these programs are open to all Partners, DOD is unable to provide country-specific costs for the participation of the three states invited to join NATO. Examples of the DOD programs include the Joint Contact Team Program, which puts military liaison teams in Partner country MODs; the Partnership Information Management System (PIMS); the Defense Resource Management System (DRMS); Marshall Center programs; Exercise Support Funds; and other programs designed to maximize interaction between Partner militaries, U.S., and NATO forces, as well as to promote familiarity and interoperability with NATO forces. Other USG programs, such as cooperation between the militaries of these three countries and National Guard units in the U.S., have exposed thousands of Central European soldiers to U.S. military personnel, procedures, and perspectives. Poland, Hungary and the Czech Republic have taken only limited advantage of the Excess Defense Articles program, largely due to the cost of transporting, upgrading, and maintaining EDA equipment. Question. What is the out-year plan for our military assistance? Answer. The President's budget requests $80 million for FY1999 to support the Partnership for Peace (PfP) program. Of this, we plan to allocate $25.0 million to assist Hungary, Poland, and the Czech Republic in achieving NATO standards and improving their interoperability with NATO forces as they prepare for membership. We are also requesting $4.45 million in IMET funds for these three countries to continue U.S. military training opportunities for an expanded number of military and civilian personnel. Finally, we are requesting a $20 million in loan subsidies to support the Central European Defense Loan (CEDL) program, which will allow those countries to address deeper infrastructure needs. Beyond FY1999, we intend to continue providing FMF grants to Poland, the Czech Republic, and Hungary at reduced levels to facilitate their integration with NATO. We regard to IMET, we intend to maintain current levels for the next several years to ensure that critical training needs are met. Question. What is the status of military loans to these countries and what are they being used for? Answer. The Central European Defense Loan (CEDL) program was designed to assist creditworthy Central European nations in improving their NATO interoperability by providing low-cost loans to remedy military infrastructure deficiencies. Fiscal Year 1997 was the first year of the CEDL program. We offered loans to Poland, Hungary, and the Czech Republic. Both Poland and the Czech Republic stated their desire to take out loans of $100 million and $80 million, respectively, to finance procurement of advanced radar, air defense systems, and safety and navigation upgrades for military airfields. However, last- minute problems in gaining parliamentary approval in the Czech Republic and a sensitive political climate in the lead-up to the Polish parliamentary elections prevented both governments from signing a loan agreement before the end of FY97. Hungary withdrew its request for loan assistance in August 1997. We intend to use the remaining FY97 funds, in conjunction with the FY98 funds, to offer comprehensive loan packages to the Czech Republic, Hungary, Poland and Slovenia. A joint State Department/Defense Security Assistance Agency (DSAA) team will visit Poland, Hungary, and the Czech Republic in April 1998. The team will brief the governments on the CEDL program, alert them to changes in the program (specifically a decrease in the loans' interest rate), and answer technical questions on procurement procedures and financing under the program. We are optimistic that these countries will find the CEDL program a sound mechanism to help themselves prepare for NATO membership. Question. Explain the reasons for the military grants to the PFP countries. What purposes are these funds used for? Answer. The State Department provides grant Foreign Military Financing (FMF) funds to support the Partnership for Peace (PFP) program under the President's Warsaw Initiative, which has enjoyed strong, bipartisan support in Congress. PFP's primary objective is to establish strong, enduring security ties between NATO and all its PFP Partners, and to assist those Partners interested in joining NATO to meet the obligations of membership. PFP strengthens the forces of Partner countries, and thus their contributions toward our common goals of securing peace and stability throughout Europe, deterring aggression, preventing, defusing and managing crises, and supporting the new democracies in Central Europe and the NIS. State's FMF program funds the purchase of defense articles, services, and training to assist Partners in improving their compatibility with and understanding of NATO practices and terminology, strengthening democratic control of the military, and improving defense planning, structure, and budgeting processes. It facilitates military preparedness, and provides critical English language training--the baseline requirement for functioning in a NATO environment--for thousands of soldiers. Additionally, PFP has: Helped Poland, Hungary and the Czech Republic prepare for NATO membership through the purchase of equipment, services, and training to improve interoperability with NATO; Provided continued support for the Baltic Peacekeeping Battalion; Helped the newly created Central Asian Peacekeeping Battalion (Centrasbat) gain crucial experience and equipment; Prepared and equipped national forces to participate in PFP exercises and NATO peace support, humanitarian, search and rescue, and peacekeeping operations; Taught partners how to participate more actively in European security matters, including new operations or crisis management efforts; Trained PFP states to become active and engaged partners with the United States and other NATO Allies on critical issues of Euro-Atlantic security; Funded the Regional Airspace Initiative in the NATO selectee countries, Romania, Slovakia, Bulgaria, the Former Yugoslav Republic of Macedonia, and the Baltics; Increased the size, depth and complexity of PFP and ``in the spirit of'' exercises, leading to interoperability and even deployability with NATO forces; Trained partners for real life operations including IFOR/ SFOR/SFOR II and the Iraq Deployments; and Provided the technical wherewithal for cooperation (such as tactical radios, search and rescue equipment) that permit NATO interoperability for exercises and real world operations. georgia: responsibility for assassination attempt Question. What can you tell the Committee about the recent assassination attempt on President Shevardnadze of Georgia in terms of who might be responsible? Answer. The evidence indicates that the assassination attempt was perpetrated by supporters of former Georgian President Gamsakhurdia and Chechen mercenaries. On March 19, Russia extradited to Tbilisi Guram Absnadze, a former Georgian finance minister under Gamsakhurdia. Georgian authorities are currently holding Absnadze, who is accused of organizing and financing the February 9 terrorist act against President Shevardnadze, as well as assisting the infiltration of terrorist groups into Georgia. Others involved with the attack are also under detention. Question. With regard to the recent assassination attempt on President Shevardnadze on March 2, 1998, President Schevardnadze assured his countrymen that recent assaults on him and UN officers had failed to disrupt or, diminish Georgia's reliability as a transit route for Caspian oil. My staff tells me that in discussions with groups from the Caucasus region that their impression is that Mother Russia was involved in order to assure that oil pipelines head north to Russia instead of west toward Europe. As you know, the committee vastly increased resources to Georgia last year partly to help them bolster border security. What is the status of these programs.? Is the United States exploring other ways to help the Georgians with their security? Answer. In FY 1998, under the FREEDOM Support Act, the U.S. Government will allocate up to $20.1 million for programs to enhance Georgia's border security, law enforcement and export control capabilities by providing equipment, training, and services to Georgia's Border Guards, Customs Service and other law enforcement officials. The priority objectives of this assistance program are to: Assist Georgia in gaining control of its seacoast, particularly the Poti Port; establish a transparent land border regime, focusing on the Azeri and Armenian borders; and then on the Russian and the Turkish borders; Enhance the Georgian Border Guard and Customs export control capabilities to prevent, deter, and detect potential weapons of mass destruction smuggling; Improve capabilities of the Georgian national law enforcement and legal authorities to investigate and prosecute internal and translational criminal activity; and Develop the law enforcement, legal and regulatory infrastructure in Georgia to help establish a society based on the rule of law and respect for individual human rights. The Special Georgia Border Security and Related Law Enforcement program will be implemented through two program elements. First, the United States Customs Service will implement the majority of the program including almost all equipment procurement, delivery, support and related training, with policy oversight by the Department of State's Bureau of Political Military Affairs Arms Transfer and Export Controls office (PM/ATEC) and the International Law Enforcement and Narcotics Bureau (State/INL) respectively, subject to overall coordination by the U.S. NIS Assistance Coordinator (S/NISC) to ensure no duplication of programmatic efforts. The Coordinator will rely on the Department of State, Defense, Commerce, Energy, the U.S. Embassy in Tbilisi, and other USG agency experts for guidance as appropriate. Other U.S. Government programs that focus on assisting Georgians with their security include: The DOD Cooperative Threat Reduction (CTR) program, the U.S. is purchasing two patrol boats for Georgia (delivery expected in mid-1998) to help the Georgian border guards patrol the Black Sea coast and independently assume more control of Georgia's maritime borders. Georgian officials also participated in a Nuclear Defense Fund funded legal, regulatory and enforcement forum organized by the Department of Commerce. The DOD/FBI Counterproliferation program will focus on training law enforcement officials including the police, judiciary, procuracy, customs officials, appropriate parliamentary entities, defense and foreign affairs officials. Georgian officials are expected to be invited for a two-week basic course on weapons of mass destruction (WMD) smuggling issues, probably at the Budapest International Law Enforcement Academy (ILEA). The DOD/Customs Counterproliferation program plans to provide training to assist Georgia's customs service and border guards over the next two years. The program includes training, both in-country and in the U.S., as well as provision of appropriate equipment to enhance Georgia's border security. The Department of Energy/Export Control is working with multilateral partners to develop a regional workshop which will focus on nuclear export control issues in the region, including Georgia. The Department of State/Export Control assistance plans to provide an automated export licensing system which will improve the abilities of export licensing officials to control the transit and export of strategic materials from the territory of Georgia. Questions for the Record Submitted by Congresswoman Lowey gaza airport Question. I have received reports that Yasser Arafat is blocking a final agreement on the establishment of an airport in Gaza, yet has had continued to point to the lack of a resolution on this issue as one on which the Israelis have not fulfilled their commitments under the Oslo Accords. Perhaps he believes that leaving this issue unresolved will increase external pressure on Israel. Can you comment on this matter? Have we indicated to him that such a strategy will not work? Answer. Although there has been a significant narrowing of differences between the Palestinians and Israelis on matters related to an airport agreement, outstanding issues remain over some details of airport operations. The items of concern apply to both sides. The U.S. has made clear to the negotiating parties that it will work to ensure that their flexibility yields workable outcomes with regard to all issues in the peace process. Our practice is to avoid a scorecard approach affixing blame on specific aspects of the negotiations. jerusalem as place of birth in u.s. passports Question. I am disappointed that passports issued to U.S. citizens born in Jerusalem still list their place of birth as Jerusalem only without listing a country of birth. Is it the position of the USG that an American born in a hospital in West Jerusalem is born in disputed territory and not in Israel? Answer. The practice of entering ``Jerusalem'' only in the passport is a long-standing one. This is a very difficult issue. However, given the agreement by Israel and the Palestinians themselves to leave discussion of Jerusalem to the permanent status talks and our determination not to take steps that could undermine permanent status negotiations between the parties, we do not believe that this is an appropriate time to change that practice. israel's membership in the weog Question. Israel is the only country in the UN that is denied access to a regional grouping--the mechanism by which UN member states are chosen to sit on powerful committees, including the Security Council. What is holding up Israel's efforts to gain admittance to the Western Europe and Others Group? What are we doing to correct this situation? Answer. The United States strongly supports Israel's bid for temporary membership in the WEOG and will continue to do so. Israel, like all others members of the United Nations, should have the right to belong a regional grouping, which enables members to participate fully in all activities of the UN. One point of contention among current WEOG members is concern over what impact Israel's membership will have on WEOG members' electoral prospects within UN bodies. Israel has offered various guarantees to allay these concerns. We believe those guarantees should be sufficient. We will continue to seek every opportunity to make our views clear to WEOG members, and we will press the case of Israeli membership in WEOG in all appropriate UN and other fora. administration's position on iran Question. I am pleased that Iranian President Khatami has made more conciliatory comments about Iranian-U.S. relations than his predecessors. But other clerical leaders in Iran, including Supreme Leader Ayatollah Khamenei, continue their hostility to the United States and to policies that would allow Iran to be accepted in the international community. I am deeply concerned by statements from some members of the foreign policy community calling for a more moderate U.S. stance toward Iran. Iran continues to be the world's leading sponsor of terrorism and is actively pursuing dangerous nuclear and ballistic missile technology. Now is not the time to be moderating our position on this international pariah. Could you update us on the Administration's position regarding Iran? What effect, if any, has the ongoing crisis with Iraq had on your thinking about Iran? Answer. The United States objects to Iranian policies in several keys areas, particularly its pursuit of weapons of mass destruction and the means to deliver them, its support for terrorism including the violent opposition to the Middle East Peace Process, and its abuses of the human rights of its citizens. Our strategy aims to induce the government to change these policies by exerting steady pressure--through economic sanctions, diplomatic efforts with our allies and our military presence in the Gulf. This pressure is designed to make Iran realize that its interest is not served by continuing these policies. It is also designed to make it as difficult as possible, in the interim, for Iran to carry out those policies. The Iranian government has publicly called on Iraq to comply with UN Security Council Resolutions. There are signs that Iran stepped up enforcement of UN sanctions against Iraq. In December, Iran refused to allow a Russian aid flight to overfly Iranian territory without obtaining prior permission from the UN Sanctions Committee. In March, Iran stepped up enforcement of sanctions against smugglers of Iraq gasoil. We welcome these developments. iranian support for hamas, hizballah and islamic jihad Question. Does Iran still provide support to Hamas, Hizballah and Islamic Jihad? If Iran is successful in gaining nuclear, chemical and biological weapons, it could change the face of modern terrorism. Is it possible that Iran will use these weapons in terrorist attacks? Answer. Iran supplies training, funding and other means of support to violent opponents of the Middle East peace process, including Hamas. Iran provides similar assistance, as well as weapons, to the Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine-General Command and the Lebanese Hizballah. We have no evidence suggesting that Iran intends to use nuclear, chemical or biological weapons in terrorist attacks. Question. Despite the awarding of the 1996 Nobel Peace Prize to two East Timorese activists, the Indonesian government continued its widespread violation of human rights in East Timor last year. The State Department's 1997 Human Rights Report for Indonesia lists an atrocious array of abuses in East Timor, including murder, torture, and disappearances. This is absolutely disgraceful. And, frankly, our continued support of President Suharto as he thumbs his nose at our demands for improvements in his human rights and economic policies, is unacceptable. What are you doing about this? Answer. The Administration remains committed to finding a just, equitable, and peaceful solution to the situation in East Timor, and the current economic crisis in Indonesia has in no way diminished our efforts on behalf of that goal. We strongly support the efforts of the United Nations and those of the UN Secretary General's Personal Representative Amb. Marker in facilitating direct talks between Indonesia and Portugal. On February 6, Deputy Assistant Secretary Aurelia Brazeal traveled to New York to meet with Amb. Marker, and on March 12, Amb. Marker met with Assistant Secretary Stanley Roth in Washington. From President Clinton's discussion of East Timor with President Soeharto at the APEC summit in November on down, all levels of the administration have been engaged on this issue. In just the past two months, State Department officials have had a number of meetings which dealt with our concerns on East Timor. Those meetings include: My March 7 meeting with Portuguese Foreign Minister Gama, Under Secretary Pickering's March 19 meeting with Foreign Minister Gama, Assistant Secretary Roth's February 27 meeting with Nobel Laureate Jose Ramos Horta, Assistant Secretary Roth's February 3 meeting with Indonesia Foreign Minister Alatas, and Assistant Secretary Roth's meeting with the Portuguese Special Envoy for East Timor, Ambassador Fernando Neves on March 11. Our Embassy in Jakarta of course continues to closely monitor the overall and human rights situations in East Timor with frequent visits and is in regular contact with the Government of Indonesia on East Timor. When there are reports of abuses in East Timor, our Embassy is quick to raise them with Indonesian authorities. Additionally, the U.S. delegation at the current session of the UN Human Rights Commission in Geneva is actively engaged with the governments of Indonesia and Portugal and with European Union representatives on this issue. The Administration is also very concerned with the humanitarian situation on the ground in East Timor. Over the years, we have been the largest international aid donor to East Timor. Our aid programs are designed to improve the lives of average Timorese, while helping them achieve more control over their own lives. Question. I would like to pose a question about the fundamental benefits of the International Military Education and Training Program: The Administration has testified time and again that the IMET program, and especially the Expanded IMET component, is intended to teach human rights, civilian control of the military, and democracy building. We have been providing IMET and Expanded IMET to Indonesia for many years, but that country's military is still categorized by atrocious human rights violations. When will we see this supposed pay-off for our military assistance? When can be expect the millions of dollars we have put into IMET to result in a greater respect for human rights in Indonesia? And I might add that Indonesia is just one of several countries that this question can apply to. Answer. In general we would note that greater respect for human rights, professionalism, and proper conduct are among the many benefits that we have seen flowing from the IMET program. While it is impossible to quantify the human rights ``pay-off'' from IMET, we believe that engagement with the Indonesian military through IMET has produced some progress in this regard. IMET has provided the opportunity for Indonesian military personnel to be educated in the United States, to observe our commitment to rule of law and American values, and to acquire additional skills. IMET graduates are more professional, more committed to improving their own armed forces, and more likely to be at the forefront in reforming their own services. Indonesian IMET graduates return home with an understanding of what we Americans stand for and what we stand against. IMET graduates have been prominent in investigating and punishing the failures of discipline that cause human rights abuses. We would also note that an example of IMET's pay-off in providing access to the Indonesian military was their prompt response to our recent request for security to protect the evacuation of Americans from Jakarta. Question. I was extremely disappointed at the Administration's decision last year to lift the twenty-year-old ban on high technology arms sales to Latin America. This ban has served U.S. interests well in Latin America by helping promote stability and democracy in the region. Now is not the time to flood that region with expensive weapons systems that will divert scarce resources from poverty eradication and provoke a regional arms race. I have introduced legislation to codify this ban, but it is not too late for the Administration to reverse its ill- advised decision to lift the ban. What is the current status of this policy? What potential arms sales are currently being discussed and what is the timetable for these sales? Answer. On August 1, 1997, the Administration decided after a two- year review of security policy in Latin America to establish a process for case-by-case consideration of requests for advanced arms transfers. That process is in place today. This decision puts U.S. arms transfer policy toward Latin America on par with the rest of the world and reflects the significant political, economic, and military transformation that has occurred in the region. It also reflects the new level of maturity, cooperation and dialogue we have reached in our partnership with the countries of the region. Our former policy of presumption of denial on advanced arms transfers to Latin America, while appropriate and successful for its time, is, in the Administration's view, no longer the right policy for today's situation in the hemisphere. Nonetheless, restraint remains the fundamental principle of U.S. arms export policy. In considering arms transfer to Latin America we take into consideration our guiding goals of strengthening democracy (including civilian control of the military), encouraging concentration of resources on economic and social development, avoiding an arms race, supporting transparency and confidence-building, and ensuring that responsible defense modernization occurs in a manner appropriate to each country's legitimate security requirements. Our change in policy has not resulted in a significant increase in advanced arms sales to the region to date. The only significant sales of advanced weaponry currently under consideration are the possible sale of fighter aircraft and associated weapons systems to Chile and of two used F-16B models to Venezuela to replace lost aircraft. The Government of Chile has yet to decide if it will choose a U.S. fighter (F-16 or F/A-18) over competing Swedish and French aircraft. The current modernization plans underway in some Latin American countries are a result of aged and obsolete inventories of weapon systems. We do not believe the decision by some civilian elected leaders in South America to modernize their defense forces represents the beginning of an arms race nor do we believe that a unilateral U.S. ban on advanced arms transfers would alter modernization plans as non- U.S. suppliers are ready and eager to sell. microcredit funding Question. One of the reasons why there is such wide-spread support for microcredit in Congress is its effectiveness and cost-efficiency at giving the poorest people the means to help themselves out of poverty. I would like to see the Administration invest further in microcredit, and I am concerned that despite the fact that this Subcommittee and this Congress has prioritized this program, funding for microcredit within USAID declined between 1994 and 1996 from $137 million to $111 million (the last year for which we have numbers available). Last summer, USAID projected that it would spend $120 million for microcredit in 1998. This is $15 million less than the $135 million Congress recommended for 1998. Is the Administration planning to invest the full $135 million, with half to the poorest, which Congress recommended for microcredit in 1998? Answer. USAID is currently completing its analysis for its microenterprise programs for FY 1997. As expected, the funding level is significantly higher than reported in FY 1996--$161 million in FY 1997 compared to our reported $111 million for FY 1996. Due to delayed passage of the FY 1996 appropriations bill, some funding budgeted for FY 1996 was obligated in FY 1997. On average, these two funding years keep USAID's microenterprise funding at approximately $134 million, which is just below what we are planning for FY 1998 and FY 1999. In its July 1997 Statement of Renewal of the Microenterprise Initiative which was signed by USAID Administrator Atwood, First Lady Hillary Clinton and many Members of Congress, USAID committed itself to a target of $120 million for FY 1997 and FY 1998. It also set a target of providing half of the funds directed at microcredit for poverty lending, as agreed to with the Microenterprise Coalition, an association of microenterprise practitioners. Subsequently, in an effort to be responsive to congressional directives for FY 1998, USAID has committed itself to reaching $135 million goal. We expect that half of the funds for microcredit will be targeted towards poverty lending. For FY 1999, USAID is again planning an $135 million level, but these levels will necessarily depend on the availability of funds. In general, microenterprise programs work best where there are complementary USAID programs involving economic reforms and development. Cuts in these complementary programs can temper the potential of microenterprise programs, therefore, USAID must maintain a balance among all. Question. One of the reasons why there is such wide-spread support for microcredit in Congress is its effectiveness and cost-efficiency at giving the poorest people the means to help themselves out of poverty. I would like to see the Administration invest further in microcredit, and I am concerned that despite the fact that this Subcommittee and this Congress has prioritized this program, funding for microcredit within USAID declined between 1994 and 1996 from $137 million to $111 million (the last year for which we have numbers available). Last summer, USAID projected that it would spend $120 million for microcredit in 1998. This is $15 million less than the $135 million Congress recommended for 1998. Is the Administration planning to invest the full $135 million, with half to the poorest, which Congress recommended for microcredit in 1998? Can you tell me if USAID is planning to significantly expand investment for microcredit for 1999? Answer. USAID is currently completing its analysis for its microenterprise programs for FY 1997. As expected, the funding level is significantly higher than reported in FY 1996--$161 million in FY 1997 compared to our reported $111 million for FY 1996. Due to delayed passage of the FY 1996 appropriations bill, some funding budgeted for FY 1996 was obligated in FY 1997. On average, these two funding years keep USAID's microenterprise funding at approximately $134 million, which is just below what we are planning for FY 1998 and FY 1999. In its July 1997 Statement of Renewal of the Microenterprise Initiative which was signed by USAID Administrator Atwood, First Lady Hillary Clinton and many Members of Congress, USAID committed itself to a target of $120 million for FY 1997 and FY 1998. It also set a target of providing half of the funds directed at microcredit for poverty lending, as agreed to with the Microenterprise Coalition, an association of microenterprise practitioners. Subsequently, in an effort to be responsive to congressional directives for FY 1998, USAID has committed itself to reaching $135 million goal. We expect that half of the funds for microcredit will be targeted towards poverty lending. For FY 1999, USAID is again planning an $135 million level, but these levels will necessarily depend on the availability of funds. In general, microenterprise programs work best where there are complementary USAID programs involving economic reforms and development. Cuts in these complementary programs can temper the potential of microenterprise programs, therefore, USAID must maintain a balance among all. Questions for the Record Submitted by Congressman Torres the united states and unesco Question. Madame Secretary, would you please provide this Subcommittee with a status report on the prospects of the US. rejoining UNESCO during this year. Would you also state for the record whether you will be exerting, and exercising your personal leadership to re- affiliate the U.S. with UNESCO? Answer: We are please with many of the changes that have taken place at UNESCO since we withdrew in 1984, including depoliticization of its work, management reforms and thirty percent reduction in personnel. We also recognize that UNESCO is doing good work in a number of areas that reflect policy priorities of this administration. Re-entry into UNESCO will be costly. The cost to the CIO account would be about $67 million annually. Given the severe funding restrictions we face, funds for re-entry into UNESCO would not be available within the CIO account without withdrawal from another major agency. Nonetheless, as President Clinton stated in his November 1995 letter to Director General Mayor, ``U.S. membership remains on our list of priorities, and we will continue to explore ways to identify the necessary resources to make this wish a reality.'' the united states and cuba Question. Just this week, the Department of State denied entry visas to Cuban academics, professionals and government officials who were invited by the University of California at Berkeley to a historic academic conference called: ``A Dialogue With Cuba''. In spite of the fact the Cuba Democracy Act of 1992 encourages legitimate academic and cultural exchanges, the U.S. Department of State rejected the visa requests of Cubans who are members of the Cuban National Assembly and key heads of government departments. These visas were rejected by the Department of State citing Presidential Proclamation 5377, which was issued by former President Reagan. We understand that the Department has the legal authority, under this Proclamation, to deny these visas, but would like to inquire as to the justification for invoking this law, at this time. Even if these Cuban government officials were to make presentations which were purely propagandistic in content, what is their threat to the U.S.? Doesn't the U.S. have a long, inalienable tradition of free speech which is being compromised by denying the University of California the right to have their invited guests permitted into this country? Are we not acting in the very same manner for which we criticize the Castro government? Would we not be in a stronger position if we permitted the free speech which we claim their government denies? Isn't the Department of State setting itself up for charges of denial of free speech at the very University where the Free Speech Movement began in 1964? Is this wise? Answer. Presidential Proclamation 5377 of October 4, 1985 suspends entry to the United States of the following classes of Cuban nationals as nonimmigrants: ``[a] officers or employees of the Government of Cuba or the Communist Party of Cuba holding diplomatic or official passports; and [b] individuals who, notwithstanding the type of passport that they hold, are considered by the Secretary of State or his designee to be officers or employees of the Government of Cuba or the Communist Party of Cuba.'' This Proclamation is part of the overall U.S. effort to maintain pressure on the Cuban government for change. It is most useful when enforced against high-ranking members of that government, such as members of the Cuban National Assembly and key heads of Cuban government departments. All nonimmigrant visa applications received from Cubans subject to the Proclamation are forwarded to the Department. The Proclamation allows the Department to approve exceptions on a case-by-case basis and each case is given careful consideration, but applications from higher- level Cuban officials are given greater scrutiny. In general, Cubans who are rewarded with high positions in the government have demonstrated their political loyalty. They support official Cuban government policy and therefore are unlikely to serve as anything more than mouthpieces of the Castro regime in any setting. We worked with the organizers of the Berkeley conference and approved the applications of eight of the invited Cuban participants. We suggested that other well-qualified Cubans of slightly lower political prominence could be invited to substitute for those very high-ranking invitees that would not be given visas. We also suggested that the viewpoints of Cuban officials could be effectively shared in a number of ways, such as distributing writings or videotapes from Cuba at the conference, utilizing voice or video teleconferencing with participants in Cuba, or inviting other participants from Cuba. Indeed, the Principal Officer of the Cuban Interests Section in Washington, D.C., spoke at the conference and several other officials from the Cuban Interests Section also attended. We do not want to inhibit the free flow of information. The Presidential Proclamation is a prohibition on travel to the U.S. by certain Cubans who are officers or employees of the Cuban government or Cuban Communist Party, not a prohibition on the exchange of information. Questions for the Record Submitted by Congressman Kaptur human rights Question. What is being done to curb the slave trade in prostitution emanating from NIS countries? Answer. The U.S. is committed to combating trafficking in women and girls worldwide. The President's Interagency Council on Women established a senior governmental working group on trafficking to coordinate the USG response on trafficking in women and girls. The group focuses on the areas of prevention, victim assistance and protection, and enforcement. The working group consults closely with NGOs and members of Congress. Theresa Loar, Director of the President's Interagency Council on Women and Senior Coordinator for International Women's Issues, leads the working group. We are working jointly with the European Union, the Group of Eight, and the UN, as well as the Governments of Israel, Italy, and Ukraine. As directed by President Clinton in an Executive Memorandum on March 11, 1998, we are responding to the Government of Ukraine's request to jointly develop and implement a comprehensive strategy to combat trafficking from and to Ukraine. This U.S.-Ukraine cooperation will become a model for combating trafficking in women and girls. The Government of Ukraine requested that we work jointly on this initiative and has actively pursued its development. Secretary Albright discussed the U.S.-Ukraine initiative with the Government of Ukraine during her March 6 Visit to Ukraine. First Lady Hillary Rodham Clinton also addressed this issue with Ukrainian officials on her last visit to Ukraine. On April 13, 1998, President Leonid Kuchma signed legislation prescribing criminal charges for trafficking in human beings. The U.S. and European Union are currently sponsoring a joint information campaign to combat trafficking in women and girls and to warn potential victims of methods used by traffickers. The U.S. public awareness campaign is in Ukraine and the European Union supports a similar campaign in Poland. In July 1998, the U.S. will sponsor a workshop in Ukraine to evaluate the effectiveness of the dissemination campaign. If our campaign is deemed successful, it could be adapted and expanded to other critical source and transit countries worldwide. The State Department developed a brochure which focuses on warning young women about the methods of traffickers and the consequences of accepting their offers. The U.S. embassies in Poland and Ukraine distribute these brochures, which have been translated into Polish, Russian, and Ukrainian, in the consular waiting areas and beyond. The State Department's Bureau for International Narcotics and Law Enforcement (INL) allocated FY 1998 funding to the Immigration and Naturalization Service (INS) to conduct immigration training to deter migrant trafficking, including trafficking in women and children, in the former Soviet Union, Central America, and South Africa. INL also allocated funding to the INS attaches in Vienna and Moscow to conduct two conferences for immigration officials in the region on migrant trafficking and trafficking in women and children. As directed by President Clinton in an Executive Memorandum on March 11, 1998, the President's Interagency Council on Women will organize a conference for governmental and non-governmental representatives from source, transit, and destination countries and representatives from international organizations to call attention to the issue of trafficking in women and girls and to develop strategies from combating this egregious human rights violation. Participants from the NIS will be invited to this conference. State Department consular presence worldwide works with source, transit, and destination countries to develop strategies for protecting victims and expanding and enhancing anti-fraud training to stop the international movement of trafficked women and girls. china resolution at un human rights commission Question. The UN Commission on Human Rights convenes its 54th session next month. Will the Administration use this forum to secure support from other nations to press China on its horrendous human rights record? Answer. The United States decided not to sponsor a resolution at the UN Human Rights Commission in Geneva this year. We made this decision because of steps China has taken and in anticipation of further progress. Among the steps taken are: (1) its decision to sign the International Covenant on Civil and Political Rights, which codifies the principles of the Universal Declaration on Human Rights; (2) its signature of the International Covenant on Economic, Social and Cultural Rights this past fall; (3) the release of a number of prominent political prisoners whose cases we have highlighted to the Chinese government; (4) its invitation to the UN Arbitrary Detention Working Group which visited Chinese prisons, and its agreement in principle to an exchange of U.S. and Chinese prison officials; (5) its agreement to create a U.S.-China NGO forum for discussion of human rights issues. The decision to sign the covenant on civil and political rights is particularly welcome, since this will create a multilateral process for scrutiny of China's human rights record. Our decision does not mean that we accept that China's human rights record is satisfactory; it is not. We continue to speak out publicly about that record including at the UN Human Rights Commission in Geneva, where Ambassador Richardson delivered a strong speech detailing our concerns; we will advocate forcefully through diplomatic channels as well. Question. What steps are you taking to ensure that the funds designated to fight drug trafficking, which we support, are not being used to commit human rights violations in such places as Colombia and Mexico? Answer. In response to provisions in the 1997 Foreign Operations Appropriations Act (FOAA), our embassies in countries where we provided or are providing 1997 International Narcotics Control (INC) funds have implemented and follow specific and detailed procedures to review reported incidents of human rights violations by security forces, correlate that information with INC-funded programs, and report such information to the Department of State to ensure that INC funds do not reach units responsible for abuse. In compliance with section 570 of the 1998 FOAA which applies to all funds made available by the FOAA (not just INC funds), we have instructed all overseas posts to develop and implement similar procedures. We have also set up a mechanism in the Department of State to provide a thorough review of reports of human rights abuse and monitor the distribution of assistance. U.S. counternarcotics aid to the Colombian military is provided in accordance with the provisions of Section 570 of the FOAA, as applicable, and of the ``End-Use Monitoring'' Memorandum of Understanding (MOU) we signed with the Colombian Government August 1, 1997. Under the terms of this MOU, we will not provide assistance to any unit of a Colombian security force if we have credible evidence of gross human rights violations by that unit's members, unless we can determine that the Colombian government is taking steps to bring the responsible members of the unit to justice. In addition, the slightly different requirements of Section 570 are applied with respect to assistance subject to that section. Our embassy in Mexico City has also developed procedures in compliance with Section 570 of the FOAA. In addition, where required by our legislation, the Government of Mexico has provided us with binding assurances that equipment transferred to Mexico will be used only for the purposes for which it is intended--in this case counternarcotics. Question. Beyond current policy, what can the U.S. do to stem the continuous uprisings in Chiapas? Answer. In the final analysis, there is little that the U.S. can do to directly affect the situation in Chiapas. The complex conflict in that state is an internal Mexican affair, which Mexicans will have to resolve for themselves. The level of violence and polarization in Chiapas has escalated to the point that any resolution of the situation will be a long-term process. A peace and conciliation settlement to which all parties can agree is the first necessary step. We have consistently supported efforts to find such a settlement and opposed continuing violence. Beyond peace and conciliation, Chiapas--as one of the poorest states in Mexico--will require extensive economic development and social restructuring to give all of the inhabitants a greater stake in society, thereby reducing the potential for violence. Question. In the Administration's opinion, what fuels this unrest? Answer. The conflicts in Chiapas are very complex and have a number of overlapping causes. The primary roots of unrest in the state, however, are centuries of extreme poverty and oppression of the indigenous inhabitants by a mestizo minority. Political conflict is also prominent among the causes of unrest, pitting supporters of the historically governing Institutional Revolutionary Party (PRI) against the Zapatista rebels and their supporters and/or adherents of the Party of the Democratic Revolution. Other factors, such as land conflicts, religious and ethnic differences, and family feuds, tend to reinforce the major elements and contribute to an atmosphere of polarization and violence. Question. How significant a role does agriculture play in contributing to instability? Answer. If by ``agriculture'' one means land conflicts, certainly competition for land and other scarce economic resources contributes to instability and conflict in a poor area such as Chiapas. As we have indicated, however, land distribution is but one of the many factors contributing to polarization and violence in Chiapas. An intensive and long-term program of economic development and social reform--including changes in land distribution and local government--will be required to reduce the instability we see today in Chiapas. international narcotics Question. We have been fighting the ``war on drugs'' since the early 1980's. Has there been any study or information you can provide on the effectiveness of U.S. counternarcotics aid? Answer. The congressionally-mandated International Narcotics Control Strategy Report (INCSR), produced every year since 1987 by the Department of State, is the most comprehensive assessment of our global antinarcotics program. This document assesses global trends and provides a detailed assessment of the narcotics trade and the effectiveness of antidrug programs in more than 150 countries, including every country to which the United States provides counternarcotics assistance. We publish this report by March 1 every year and send a copy at that time to every member of Congress. The INCSR provides a balanced assessment of our global antidrug efforts. It is clear, however, that our programs have achieved significant gains whenever host nation governments have had the political commitment to support antinarcotics efforts and we have had the funds to sustain these initiatives. Question. How exactly can these funds be used? Answer. Our counternarcotics assistance--$210 million in FY 98--is used to develop and strengthen host nation capabilities to target a wide variety of drug threats. With these funds, we provide equipment, training, technical, and other assistance to create or strengthen police and judicial systems to investigate and prosecute major traffickers; to develop and implement alternative development and eradication programs to eliminate illicit drug crop cultivation; and to promote drug awareness and demand reduction programs to garner increased public and political commitment to narcotics control. We also contribute to multilateral organizations to foster enhanced multilateral cooperation against narcotics trafficking and to support programs by multilateral organization in important drug producing and trafficking areas where U.S. Government access is limited. Question. What is the penalty for the misuse of these funds? Answer. There is a standard provision clause in each Letter of Agreement (LOA) that is signed with a foreign government offering them counternarcotics assistance which states ``Any property not used for the intended purpose will be returned to the USG.'' If warranted, the foreign assistance funds could be frozen and withdrawn, depending on the circumstances of misuse. The embassy also has the right to inspect or audit any portion of the program at any time to ensure that goods and funds are used in accordance with intended purposes. Question. How do we keep track of the funds given to countries to stop drug trafficking? Answer. The funds are tracked through two separate financial management systems. The first is operated by the embassy budget and fiscal office and officially establishes the initial obligation of counternarcotics funds and tracks the subsequent spending of these monies. A second Financial Management System, maintained by the Embassy's Narcotics Affairs Section, prepares quarterly Financial Management Activity Reports which are more descriptive and also keep track of expenditures on an accrual basis. Question. Given that drug trafficking and cultivation in Colombia has increased, yearly cultivation grew by 10% last year even as it declined in other Andean countries, how effective has our counternarcotics aid to Colombia really been? Answer. The growth in Colombian coca cultivation this year (18%), occurred almost entirely in areas outside the zone where U.S.-financed eradication efforts have been taking place. In the Guaviare region, where the vast majority of our spray activity has been concentrated cultivation actually decreased by 25%. This demonstrates that the eradication program is effective. Our challenge now is to work with the Colombian government to expand our joint eradication efforts into the new cultivation areas in southern Colombia. greece, cyprus and turkey Question. The Administration has taken a vigorous, clear and proper stand on the implementation of the UN Security Council Resolutions on Iraq. However, the Security Council has adopted many unanimous resolutions on Cyprus that have specific provisions for their implementation. Is the lack of a vigorous, clear, and proper stand on these many resolutions detrimental to the credibility of our foreign policy? Answer. The position of this Administration on the Cyprus issue is clear: we support the UN settlement process and the goal of a bizonal, bicommunal federation. There should be no doubt that this Administration places a high priority on resolving the Cyprus dispute. The President and Secretary are actively engaged. They have assembled a strong negotiating team, led by Ambassadors Richard Holbrooke (Special Presidential Emissary) and Tom Miller (Special Cyprus Coordinator). Holbrooke and Miller are in intensive contact with the leaders of the two communities, the Greek and Turkish governments, the UN, and other key players, including the European Union. The leaders of both communities have stated repeatedly that the U.S. has a key role to play in resolving the Cyprus dispute. Question. While you were U.S. Ambassador to the UN, you affirmed the territorial integrity of Cyprus and spoke about the ``illegality of the Turkish army's occupation.'' Do you feel this statement is true today? Answer. The U.S. remains committed to the territorial integrity of Cyprus and to UN efforts to reunify the island on the basis of a bizonal, bicommunal federal solution. In the context of an overall settlement, it is our goal to see that the security needs of all the people of the island are addressed. Question. Why had the Administration remained silent regarding Turkey's action in Cyprus and the Aegean? Answer. The U.S. has not been hesitant to criticize actions by any party in the region, including but by no means limited to Turkey, that we view to be detrimental to regional stability and that might impede efforts to lower tensions. nato and the u.n. Question. With future expansion of NATO, can you tell me if our European allies have increased their contributions to aid in this effort? Answer. At the Madrid summit in July 1997, the NATO allies agreed that the costs of enlargement would be manageable and would be met. At the North Atlantic Council Defense Ministers' meeting last December, all 16 allies reaffirmed this view, stating that ``costs associated with the accession of the three invitees will be manageable, and that the resources necessary to meet these costs will be provided in accordance with our agreed procedures under which each ally bears its fair share. While the U.S. has the largest direct funding of assistance to NATO partners, many NATO allies have their own active programs of cooperation with partners. The Nordic countries have been active with the Baltic states, the Netherlands has a cooperative program with the Czech Republic, Italy runs training and exchange program with Albania and Slovenia, and there are many other examples. NATO has an internal clearinghouse for cooperative programs with partners, but the process does not compare contributions in monetary terms. Question. What is NATO's purpose, in the next century, since the threat of the old Soviet Union has diminished? Answer. NATO's purpose is stated precisely in its 1949 founding treaty: to safeguard the freedom of the peoples of the allied countries; to promote stability and well-being in the trans-atlantic area; and to unite our efforts for collective defense and the preservation of security. Clearly, we are no longer preparing for a Soviet invasion, but threats remain: NATO must be able to provide political reassurance that we are prepared to defend current and future allies as required by Article V. It must have the ability to build back up over a period of years in case Europe's security environment changes for the worse. As agreed in the 1991 strategic concept, NATO should be able to deal with threats, to Allies' security from local or regional instability, as has been the case in Bosnia. It must be able to promote others' contributions to coalitions of the willing, together with NATO partners, to respond to crises anywhere that threaten transatlantic interests. These missions will require a strong and dynamic Alliance with a dedicated membership in the years to come. Question. Do you foresee a time when the Europeans will be able to defend themselves without our financial contributions to NATO? Answer. The United States has long maintained that American and European security interests are integrally related. We have repeatedly emphasized that it is in our national interest to remain fully engaged in the European security structure. In fact, maintaining the trans- atlantic link in NATO continues to be one of our major policy objectives. Thus, we do not look for a time when the Europeans will be able to defend themselves without United States support, rather we focus our attention on ensuring that our European allies continue to improve their defense capabilities and that they continue to bear their fair share of the financial costs of trans-atlantic security. In this context, I can report that our European allies do in fact play a larger role in their own defense than they did in the past. Since the end of the Cold War, American troop levels in Europe have been reduced by two-thirds, and the U.S. pays only approximately 25 percent of the NATO common-funded budgets total costs. Our European allies make up the remaining 75 percent of the common-funded costs, which amounted to approximately $1.3 billion last year. Our allies have made considerable progress over the past six years toward building the needed capabilities to accomplish NATO's mission: The U.K., for example, makes substantial contributions; its troops form the core of the ACE Rapid Reaction Corps, and it has the capability to deploy and sustain a division-sized force of 20-25,000 personnel in a Gulf War-style scenario. They recently had an aircraft carrier, the HMS Invincible, deployed to the Persian Gulf in support of U.S. forces. France is establishing a Rapid Reaction Force designed for rapid response in both European and overseas contingencies. With nearly 10,000 troops in Bosnia, France is the third largest force contributor to SFOR after the U.S. and Britain. Italy is also upgrading its ability to project forces to areas of need as evidenced by their recent leadership role in the Albania crisis. Germany is also increasing its capability to deploy forces. A 53,000 strong Crisis Reaction Force is being formed and will be fully operational by the end of 1998. It is significant to note that Germany has 2,500 troops in Bosnia, making this the first time since joining NATO, that Germany has deployed troops outside its borders. Our smaller European allies are also making significant improvements. For example, the Netherlands navy and air force improved their transport and air defense capabilities by procuring air-to-air tankers; acquiring an amphibious-lift ship for their marines; and by upgrading their F-16s and Patriot missile systems. European commitment to their own security is clearly reflected with regard to operations in Bosnia, where Europeans comprised more than 90 percent of the United Nations Protection Force (UNPROFOR) several years before the U.S. participation in the current NATO operation. Even today, our NATO allies and other non-NATO troop contributing nations comprise more than 70 percent of the forces operating in and around Bosnia. It is clear that more work needs to be done to improve the capability of the European forces for mobility, deployability and sustainability, and senior U.S. officials in Washington and at NATO continuously press allies to make these improvements. We will continue to emphasize the need for these improvements in the future. iraq/u.n. Question. Would you say that our arrears to the U.N. played any role in our inability to persuade other nations to participate in the continual Iraqi disregard for U.N. Security [Council] resolutions? Answer. The Security Council has in fact responded firmly to Iraq's violation of its obligations under Security Council resolutions, most recently in its resolution 1154 of March 2, 1998, which made clear that further Iraqi violations of the relevant resolutions would have the ``severest consequences'' for Iraq. This resolution passed unanimously. Having said that, it is also clear that our ability successfully to conduct multilateral diplomacy of the type necessary to bring about consensus on such a serious issue is complicated by a number of factors, including the arrears situation. Question. With the latest United Nations-brokered deal with Iraq, many of our citizens have questioned whether the U.S. has become a subordinate to U.N. policies. Would you comment? Answer. The United States conducted an active diplomatic campaign, centered on the United Nations, designed to compel Iraqi compliance with its own commitments under Security Council resolutions and bolster the central goal of our policy toward Iraq: to make certain that Iraq is not in a position, now or in the future, to threaten its neighbors or U.S. interests in the region. The agreement reached in Baghdad by the Secretary-General is a win-win situation for the United States and the United Nations. UNSCOM has said cooperation from Iraq under the Annan-Aziz MOU so far has been good. If that continues, it will mark an important victory for the international community. But if Iraq violates the MOU, it will be clear to all that Iraq has reneged once more on its commitments under Security Council resolutions and reneged on the terms of the 1991 ceasefire. And the Council has made it clear that that will have the severest consequences. The United States is prepared to take whatever actions necessary, including military action, to respond to the breach of the ceasefire established by the Security Council. bosnia Question. How much money has the United States expended from all accounts for Bosnia-related activities? How much have other nations expended? Answer. The set of financial benchmarks used in accounting for expenditures in support of nonmilitary Bosnia-related activities is complex. The World Bank has the most comprehensive database for the international effort. That database is broken out into committed, under implementation, disbursed and expended categories. Under expenditures, by yearend 1997 the United States had expended $347.45 million, approximately 20.3 percent of the international total of $1.7 billion. For military expenditures, the calculation uses fiscal rather than calendar year, but the numbers are more clear. The Department of Defense Comptroller reports the FY96 cost for U.S. support operations in and around Bosnia to have been $2.5 billion. The FY97 cost for IFOR/SFOR operations was approximately $2.3 billion. FY98 costs for SFOR are projected to be $2.0 billion. (Note: The President's $1.5 billion FY98 budget request for Bosnia assumed a reduction from 8,500 to 5,000 in U.S. troops by the end of FY97. Higher force levels were required due to the delay in municipal elections to September 1997. The extension of the 8,500 troop level through June 1998 added $487 million to the projected budget.) The FY99 estimate to maintain 6,900 troops in Bosnia as a follow-on force is $1.9 billion. This FY99 requirement was identified to Congress as a non-offset emergency budget amendment for FY99. Calculating the expenditures of other nations' support of IFOR/SFOR peacekeeping activities in Bosnia is problematic. There is little relevant public information on such spending and few of the participating nations use comparable accounting methods. Nevertheless, we can state that U.S. troops today comprise less than 25 percent of the international forces in Bosnia and Herzegovina overall and that that percentage will decline as our troop strength drops. Question. What percentage of all troops in Bosnia are U.S. forces? What percentage of troops in Bosnia are deployed by other nations? Answer. U.S. troops comprise approximately 24 percent of the military force deployed in support of peacekeeping operations in Bosnia and Herzegovina. The balance is provided by the other nations participating in this international effort. Question. How many US Volunteers are being recruited from a number of experienced or retired Americans of different skills versus younger, less experienced Americans? Answer. Currently, the average Volunteer is 29 years of age. About 24% are over 29 years old, and 7% are over 50 years old. As health indicators and life expectancy improve in the U.S., the Peace Corps will continue to recruit older Americans who often possess, in relative terms, a more broad range of life skills, education, and expertise. It should be noted, however, that despite their relative youth, the average Peace Corps Volunteer brings with him/her education and experience that prove essential to successful service. Ninety-seven percent of Volunteers hold bachelor's degrees, and 18% have graduate experience or degrees. Twenty six percent possess one or more years of work experience. Question. How will proposals for increased funding either augment or change the profile of current Peace Corps Volunteers? Answer. Current Profile: Gender--59% female, 41% male. Minorities--14% of Peace Corps Volunteers. Age--Average is 29 years old, median is 25 years old. Peace Corps will continue recruiting a diversity of skills, ages, genders, and ethnic backgrounds. It will offer increased opportunities to ethnic minorities and older Volunteers, and enhance recruitment of Volunteers who can respond to countries' emerging needs for ``scarce skills'' which include support of nonprofit organizations, environmental protection, and business development. The largest number of new Volunteers will remain recent college graduates. nonproliferation Question. How confident are you with the safety and security of NIS nuclear plants and the material associated with them? Answer. We are concerned about the security of nuclear materials in the nations of the former Soviet Union, but are making great strides. This continues to be a high priority area for U.S. assistance. We have been working cooperatively with these countries to prevent the loss, theft, and proliferation of nuclear materials since 1992. Together we have already made substantial improvements, and must continue to provide support through completion of these projects several years from now. Several Administration programs are involved. The Department of Energy's Material Protection, Control and Accounting Program (MPC&A) is working with eight NIS countries at over 50 facilities to implement upgrades to improve security and physical protection of weapons-usable nuclear materials not contained in weapons, as the first line of defense against nuclear smuggling. In FY 1998-98, approximately $250 million was appropriated to support these activities. Upgrades have been completed in Uzbekistan, Belarus, Latvia, Lithuania, and Georgia, and completion of the scope of work originally identified in 1994 will be complete by the end of CY 2002. The DOE also works with NIS countries to improve the safety at Soviet-designed reactors by strengthening the condition of the plants, enhancing host country safety practices, and supporting developing of host country nuclear safety infrastructure. DOE has close working relationships with 15 nuclear power plant facilities and 30 scientific institutes and governmental agencies. The U.S. Nuclear Regulatory Commission assists in strengthening nuclear regulatory institutions and practices for countries with Soviet-designed nuclear reactors, including Russia, Ukraine, Armenia, and Kazakhstan. It has trained over 600 regulators since 1992. The NRC also provides MPC&A assistance for safeguarding and elimination of nuclear weapons and weapons-usable materials in Russia, Ukraine, and Kazakhstan. The Department of State-administered Nonproliferation and Disarmament Fund provides grants that support a variety of efforts, including strengthening export control regimes to prevent illicit trafficking of nuclear materials. The Department of Defense Cooperative Threat Reduction (CTR) Program works to enhance the security, safety, control, accounting and centralization of nuclear weapons and fissile materials to prevent their proliferation and encourage dismantlement. The CTR program was critical in helping Belarus, Kazakhstan, and Ukraine become non-nuclear weapons states. CTR funds have also contributed to DOE's MPC&A effort. In selective cases where weapons-usable nuclear material has been at particular risk, we have worked with our allies and the NIS government involved to remove the material. In recent weeks, we completed the removal of several kilograms of highly-enriched uranium (HEU) from a nuclear research reactor site in Tbilisi, Georgia, to the UK for safe storage. Several years ago, we worked with Kazakhstan on Project Sapphire which removed nuclear fuel to the US for storage and reprocessing. Question. How confident are you with the containment and remediation of the Chornobyl reactor and site? Answer. U.S. concerns at Chornobyl rest largely with the 20-story steel and concrete ``Shelter'' built to cover the radioactive remains of the destroyed Chornobyl-4 reactor. Built in just seven months, under difficult and hazardous conditions, the shelter was never intended to serve as a long-term solution for the problems posed by the destroyed reactor. The unstable condition of the shelter is now a source of serious concern and requires prompt international attention. In the 1995 Memorandum of Understanding (MOU) between the G-7 and Ukraine on Chornobyl Closure, Ukraine agreed to permanently close the remaining operational units at Chornobyl by the year 2000. To help Ukraine develop a plan to stabilize the shelter over the destroyed reactor, Ukraine and the G-7 nations approved the internationally prepared Shelter Implementation Plan (SIP). At the G-7 Denver Summit in June 1997, the G-7 nations pledged to contribute $300 million toward the $760 million SIP project cost. The U.S. share of this pledge is $78 million. Ukraine has pledged $50 million in kind. As of March 23, 1998, countries have agreed to provide over $400 million over the next 5-6 years to implement the SIP. This total is sufficient to initiate work while additional pledges are sought. Public sector fundraising will continue, and the private sector fundraising effort is expected to kick off within a year. Bilateral funding by the European Union and by the United States was also provided in 1996 to enable early work on the shelter to take place. U.S. bilateral assistance are focused on improving safety at the site, and include provision of a nuclear safety monitoring system, provision of occupational safety equipment, and provision of equipment for shelter operations. The U.S. is working to strengthen the capabilities of Ukraine's Nuclear Regulatory Authority, which plays an important role in reviewing and approving implementation of the SIP. In addition to our bilateral activities at the Chornobyl shelter, the U.S. has contributed funds through the Nuclear Safety Account (NSA) at the EBRD to construct two facilities (for liquid radioactive waste management and safe spent fuel storage) which will support decommissioning of the Chornobyl plant. The NSA is also funding four small projects to improve the near-term safety of Chornobyl Unit 3 prior to its closure in 2000. As a contributor to the NSA, the U.S. sits on the NSA Assembly of Contributors and has a vote in determining how projects are implemented. The U.S. is also funding completion of a partially-built heat plant at Chornobyl which will support the site during decommissioning activities, after the last Chornobyl reactor is closed. Question. How confident are you with the safety and security of Newly Independent States (NIS) nuclear power plants built to the Chornobyl design? Answer. The Chornobyl-style RBMK reactor is a Soviet-designed boiling water, graphite-moderated, pressure-tube reactor which contains fundamental uncorrectable safety deficiencies which would prevent these reactors from ever being licensed to operate in the U.S. These deficiencies include a susceptibility to power instabilities; lack of a modern containment system to prevent release of radioactivity to the environment; and inadequacies in the emergency core-cooling systems, fire protection systems, and electronic control-and-protection systems. There are a total of 14 RBMKs operating in Russia, Lithuania and Ukraine. The U.S. has strongly urged these countries to close them down as soon as possible. In Ukraine, we have seen excellent progress with the closure of Chornobyl Unit 1 in 1996 and Ukraine's commitment to close the remaining operational reactor at Unit 3 by 2000. In Ukraine, Russia, and Lithuania, the U.S. Agency for International Development (AID) is working with the host country to identify safe, environmentally acceptable and least cost options which will permit other RBMK reactors to close. The programs of DOE and the Nuclear Regulatory Commission to reduce the risks of a serious accident at these RBMK reactors and to strengthen the nuclear regulatory authority in the countries continue. Question. With the many questions of biological weapons proliferation, who has the final say if a country should get the possible ingredients that could be used for military purpose? I asked this question, because I watched one of the news shows and was stunned to hear a former DOD official say that ingredients that were eventually shipped to Iraq, which he had blocked, were overridden by the State Department and the Commerce Department. Answer. All export licenses for Commerce-controlled dual-use biological weapons-related items are reviewed by the interagency, including the Departments of State, Defense, and the Arms Control and Disarmament Agency. Each agency provides the Commerce Department with a recommendation to approve or deny a license application. Taking into account interagency views, the Department of Commerce determines whether a license should be approved or denied. On those occasions when agencies disagree with the disposition of a license, they may appeal the decision to Commerce-chaired interagency review board. A mechanism exists--but it is rarely used--whereby an agency may continue to appeal a license decision to the Export Administration Review Board--which is composed of Cabinet-level officials--and ultimately to the President. Question. What is the current procedure? Answer. Licenses for Commerce-controlled dual-use items are referred to the interagency for review. Agencies, including the Departments of State, Defense, and the Arms Control and Disarmament Agency provide the Commerce Department with a recommendation to approve or deny a license application. Should an agency disagree with the Commerce Department's disposition of a license, it may appeal the decision to the Commerce- chaired interagency review board. demining Question. Your budget shows a 700% increase over the last two years for humanitarian demining. I recognize the importance of this work, but can such a rapid ramp-up actually be used effectively? Answer. Within the last year, we have expanded the program from fourteen to nineteen countries and are seriously examining several additional countries. We are also continuing our support to existing country programs which continue to remove landmines from the ground. Commitments to sustaining existing country programs, and expanding into new country programs, have already utilized the $20 million received for FY 98. The worldwide U.S. Government Humanitarian Demining Program is managed and monitored by the Interagency Working Group (IWG) on Humanitarian Demining which ensures effective use of the funds. Actions within the State Department are increasing our oversight and program management which we believe will effectively monitor and manage these resources. In addition, with the announcement of the President's Demining 2010 Initiative on October 31, 1997, we will be working to accelerate all global humanitarian demining operations, including the U.S. program, to eliminate the threat to civilians of anti-personnel landmines by the year 2010. Question. What commitments do we have for similar contributions from our allies? Answer. We estimate that approximately half of all international demining assistance comes from the U.S. with the European Union as the next largest donor. Other major donors include Norway, which has committed $100 million over five years, Japan ($80 million over five years), Canada ($100 million Canadian over five years), Sweden ($23 million in 1998), the United Kingdom (10 million British Pounds per year for the next three years and Finland ($6 million in 1998). The 1998 edition of the State Department report Hidden Killers will include information on international contributions to the worldwide humanitarian demining effort. With the announcement of the President's Demining 2010 Initiative on October 31, 1997, the U.S. will be hosting a conference in May, bringing together key donor governments and others to create an effective international coordination mechanism to ensure that sustained public and private resources for demining are directed, in an organized and rational manner, to programs in the mine-affected countries, with the goal of eliminating the threat to civilians of anti-personnel landmines by the year 2010. The Demining 2010 Initiative has challenged the international community--public and private sectors--to raise $1 billion annually for global humanitarian demining. Question. Who administers international demining programs? Answer. The U.S. Government Humanitarian Demining Program is administered by the Interagency Working Group (IWG) on Humanitarian Demining, chaired by State. The Department of Defense designates the Vice Chair. A recent Congressional Report (copy attached) explains the IWG process. [Pages 523 - 532--The official Committee record contains additional material here.] Question. Do we directly fund demining operations or is the funding funneled through NGOs? Answer. In most cases, our goal is the establishment of a sustainable, indigenous demining capability to manage and conduct demining operations in a landmine-affected nation, rather than funding ongoing demining operations. The first step is to establish a Mine Action Center, which is an office of the host nation government responsible for solving the landmine problem in that country. U.S. Government assistance is provided in-kind through the host government Mine Action Center. Where a direct, government-to-government military relationship is not appropriate, we have functioned through the United Nations (in Afghanistan and Angola) and through USAID (in Angola and Rwanda). In the future, new funding through the Nonproliferation, Antiterrorism, Demining and Related Programs (NADR) account will provide additional resources and administrative flexibility to consider accomplishing overall objectives through NGOs as well. Question. Can you please explain to what extent Laos and Cambodia will benefit this year and succeeding years from this program? Answer. We plan to provide Cambodia with $2.0 million in NADR funds in FY 98 and $3.0 million in FY 99 (out of the $50 million requested). We plan to provide Laos with $2.0 million in NADR funds in FY 98 and the same amount in FY 99. In both cases, the program has successfully established a sustainable, indigenous demining and unexploded ordnance (UXO) clearance capability in each country. Ongoing funding provides additional equipment to sustain and expand the program. Question. How does this compare to the past support? Answer. In FY 97, we provided both Cambodia and Laos with $1.0 million each in NADR funds. We have increased our support together with increased managerial capability in each country. Questions for the Record Submitted by Congressman Obey unhcr children's fund Question. In the fiscal year 1998 Foreign Operation conference report the conferees included report language supporting the establishment of a fund to assist unaccompanied refugee children. The report language states: ``The conferees believe the United States should play a leadership role in helping to establish a fund through the United Nations High Commissioner for Refugees for vulnerable refugee children, particularly those separated from their parents. The conferees recommended that approximately $5,000,000 in fiscal year 1998 funds be made available for this purpose.'' I understand that the Refugee Bureau of State has been moving forward on this fund. Can you tell me when you anticipate the UNHCR will receive this funding? Answer. We are committed to improving the protection of and assistance to refugee children who make up 50% of the world's refugees. This is a major priority for the USG and we are working closely with the United Nations High Commissioner for Refugees to ensure that programs are designed to recognize and meet the special needs of refugee children. We appreciate the strong Congressional support of our efforts to promote greater appreciation of the need to focus programs on the special needs of refugee children. The recommendation in the report language in our 1998 appropriation that some $5 million 1998 fiscal year funds should be made available for the special needs of refugee children in a reinforcement of this commitment. We are working actively with UNHCR on the programming of this funding to augment UNHCR's programs for refugee children, including implementing the principal recommendations of the Graca Machel study which focused on unaccompanied minors, adolescents, education, sexual exploitation, and children caught up in armed conflict; building up UNHCR's partnership with NGOs to provide further assistance to refugee children; and training both UNHCR staff and implementing partners in the special needs of refugee children. Last year, PRM provided $1,367,000 to UNHCR to support new regional coordinator positions for refugee children for Central Asia, Turkey, West Africa, and the Horn of Africa, to fund training workshops on the protection and special assistance needs of refugee children, and for a pilot project in peace education. W I T N E S S E S ---------- Page Albright, Hon. M. K.............................................. 297 Holum, John...................................................... 127 Lipton, David.................................................... 1 Rubin, Hon. R. E................................................. 1 Slocombe, W. B................................................... 127 I N D E X ---------- Secretary of the Treasury (Hon. Robert E. Rubin) Page Abortion Linkage to IMF.......................................... 34 Africa Initiative................................................ 63 African Development Fund......................................... 9 Arrears..........................................................9, 116 Asia.......................................................10, 118, 122 Austerity Programs............................................... 94 Authorization Request............................................ 66 Budget Outlays................................................... 74 Cancellation of Some Pending Loans............................... 110 Chairman Callahan's Opening Statement............................ 1 Commitments to Reform in Thailand, Indonesia and Korea........... 78 Corruption....................................................... 88 Debt Reduction...................................................65, 66 Debt Relief...................................................... 123 Default.......................................................... 24 East Timor.......................................................26, 28 Educating the American Public.................................... 7 Foreign Credit Reporting System.................................. 70 Fund for the Special Operations of the IDB....................... 43 GDP.............................................................. 47 GEF...........................................................9, 59, 73 Geographic Focus................................................. 72 Global Deforestation............................................. 73 Global Economy...................................................36, 40 Global Environment Facility...................................... 71 Global Financial Architecture.................................... 91 Group of Seven................................................... 119 Health and Education Programs.................................... 34 Holocaust Survivors.............................................. 57 Human Rights..................................................... 33 IDA.............................................................. 10 IMF.....................18, 22, 36, 44, 52, 75, 89, 91, 92, 94, 96, 117 Impact of Forest Fires on Environment and Human Health........... 71 Indonesia.......................................................26, 119 Interagency Cooperation.......................................... 119 Inter-American Development Bank................................112, 125 International Affairs Technical Assistance Program............... 66 International Finance Corporation................................ 111 Japan............................................................ 50 Korea............................................................ 119 Labor Support.................................................... 78 Leverage......................................................... 90 Linkage Factor................................................... 60 Market-Demanded Reform........................................... 77 MDBs--Bilateral vs Multilateral Aid............................115, 116 Mexico City Language.........................................17, 22, 48 Micro Lending....................................................35, 42 Middle East Peace Process........................................ 78 Mr. Obey's Opening Statement..................................... 6 Ms. Pelosi's Opening Statement................................... 3 Needs Assessment................................................. 39 New Arrangements to Borrow..............................61, 74, 96, 116 North American Development Bank.................................. 41 Opening Up Markets............................................... 20 Reestablishing Financial Stability............................... 25 Reform........................................................... 8 Restrictions on Future Indebtedness.............................. 65 Source of Funding................................................ 93 Special Drawn Account............................................ 38 Statement of Mr. Rubin........................................... 13 Success Stories.................................................. 72 Sudan............................................................ 29 Suharto Family Projects.......................................... 103 Swiss Bank Fund Payments......................................... 114 Technical Assistance Funding Summary............................. 68 Thailand......................................................... 119 Transparency of Information...................................... 111 Treasury International Affairs Technical Assistance.............. 67 U.S. Commitment to IFIS.......................................... 114 U.S. Exports..................................................... 71 U.S. National Interests.......................................... 117 U.S. Workers..................................................... 59 World Bank Information........................................... 112 Security Assistance John Holum, Acting Under Secretary of State for Arms Control and International Security Affairs Walter B. Slocombe, Under Secretary of Defense for Policy African Crises................................................... 271 Blackhawk Helicopters for Colombia............................... 287 Bosnia....................................................177, 245, 292 Cambodia......................................................... 259 Chairman Callahan's Opening Statement............................ 127 Chemical Weapons................................................. 243 Chiapas.......................................................... 193 Colombia.............................................184, 209, 258, 287 Comprehensive Test Ban Treaty..................................207, 283 Counternarcotics................................................. 272 Cyprus.........................................................203, 263 Demining..................................................267, 276, 294 East Timor....................................................... 175 Economic Support Fund............................................ 266 Egypt..........................................................262, 265 End Use Monitoring Report........................................ 290 Foreign Military Financing................................216, 274, 285 Georgia.......................................................... 284 Greece.........................................................203, 272 Guatemala.................................................244, 258, 280 Haiti................................................206, 207, 262, 267 Human Rights..................................................... 280 IMET.......................................178, 184, 209, 220, 244, 286 IMF............................................................175, 184 Indonesia......................................................175, 261 International Law Enforcement Academy............................ 291 Israel........................................................... 265 KEDO......................................................181, 261, 263 Latin America.................................................... 279 Leahy Amendment................................................280, 288 Mexico........................................................... 271 Middle East...............................................179, 181, 198 Middle East Development Bank..................................... 171 Mr. Holum's Opening Statement.................................... 136 Mr. Slocombe's Opening Statement................................. 160 Mr. Yates Opening Statement...................................... 132 NATO.......................................173, 196, 203, 210, 247, 281 NIS.............................................................. 201 Nonproliferation................................................. 293 Nuclear Weapons.................................................. 199 Pakistan.......................................................244, 268 Persian Gulf Crises.............................................. 194 Proliferation of Military Technology............................. 179 Russia........................................................... 260 School of the Americas....................................211, 247, 266 Security Assistance.............................................. 243 Turkey....................................................203, 210, 272 U.S. Military Training.........................................257, 291 Vietnam.......................................................... 262 Weapons of Mass Destruction...................................... 243 Weapons Proliferation............................................ 264 Secretary of the State Department (Hon. Madeleine K. Albright) Africa........................................................... 369 Andean Eradication............................................... 461 Asian Financial Crises........................................... 466 Blackhawk Helicopters............................................ 354 Bosnia...............................................372, 463, 480, 519 Caucasus......................................................... 468 Chiapas.......................................................... 341 Colombia......................................................... 464 Cuba............................................................. 513 Cyprus....................................................351, 468, 517 Debt Relief for Poorest Countries................................ 495 Demining..................................................352, 496, 522 Drug Report to Congress.......................................... 478 Ecuador........................................................368, 371 Egypt............................................................ 473 Family Planning.................................................. 371 FMF Pipeline..................................................... 501 General Foreign Aid.............................................. 492 Georgia.......................................................... 508 Global AIDS...................................................... 478 Greece........................................................... 517 Haiti..........................................................335, 338 Herzegovina...................................................... 468 Holocaust Survivors............................................462, 485 Human Rights..............................................368, 369, 514 IMF............................................................336, 372 Indonesia......................................................484, 510 International Family Planning.................................... 365 International Narcotics.......................................... 476 Iran............................................................. 490 Iraq..............336, 339, 342, 346, 361, 367, 369, 371, 471, 474, 519 Ireland.......................................................... 471 Judicial Reform.................................................. 478 KEDO............................................................. 335 Korean Peninsula................................................. 473 Latin America..................................................359, 500 Mexico........................................................... 479 Mircocredit Funding.............................................. 512 Middle East..........................................356, 363, 372, 509 Middle East Development Bank..................................... 480 Monetary Support................................................. 337 Mr. Callahan's Opening Statement................................. 297 Mr. Livingston's Opening Statement............................... 299 Mr. Obey's Opening Statement..................................... 300 Ms. Pelosi's Opening Statement................................... 301 Multiregional Activities......................................... 461 Nagorno-Karabakh..........................................344, 355, 369 NATO......................................................357, 363, 517 New Independent States........................................... 483 Nonproliferation................................................. 490 Nuclear Deterrent................................................ 487 Post-Air Strike Plans............................................ 486 Results Act...................................................... 475 Russia.........................................................366, 488 Saddam Hussein................................................... 470 Secretary Albright's Opening Statement........................... 303 Sub-Saharan Africa............................................... 465 Supplemental Budget Request...................................... 362 Thailand......................................................... 484 Turkey.........................................................343, 517 Ukraine..............................................349, 352, 469, 484 UN Human Rights Commission....................................... 340 UNESCO........................................................... 513 UNHCR Children's Fund............................................ 533 UNSCOM........................................................... 471 Weapon Proliferation............................................. 472 Weapons of Mass Destruction...................................... 339