    [Senate Hearing 106-821]
    [From the U.S. Government Publishing Office]

                                                S. Hrg. 106-821 Pt. 2 deg.

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                           ONE HUNDRED SIXTH CONGRESS

                                 SECOND SESSION

                                       on

                           H.R. 4811 and 5526/S. 2522

    AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING,
    AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2001, AND
                               FOR OTHER PURPOSES

                                   __________

                             Part 2 (Pages 1-113)

                             Department of Defense
                              Department of State
                           Department of the Treasury
                           Nondepartmental Witnesses
                    Department of Health and Human Services
                       Executive Office of the President
                    Overseas Private Investment Corporation
                               Export-Import Bank
                      U.S. Trade and Development Program

                                   __________

             Printed for the use of the Committee on Appropriations

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     senate

                                   __________

                        U.S. GOVERNMENT PRINTING OFFICE
    62-778                     WASHINGTON : 2001

    _______________________________________________________________________
                For sale by the U.S. Government Printing Office
    Superintendent of Documents, Congressional Sales Office, Washington, DC
                                     20402

                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    SLADE GORTON, Washington             FRANK R. LAUTENBERG, New Jersey
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    JON KYL, Arizona
                       Steven J. Cortese, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                   James H. English, Minority Staff Director
                                     ------

       Subcommittee on Foreign Operations, Export Financing, and Related
                                    Programs

                      MITCH McCONNELL, Kentucky, Chairman
    ARLEN SPECTER, Pennsylvania          PATRICK J. LEAHY, Vermont
    JUDD GREGG, New Hampshire            DANIEL K. INOUYE, Hawaii
    RICHARD C. SHELBY, Alabama           FRANK R. LAUTENBERG, New Jersey
    ROBERT F. BENNETT, Utah              TOM HARKIN, Iowa
    BEN NIGHTHORSE CAMPBELL, Colorado    BARBARA A. MIKULSKI, Maryland
    CHRISTOPHER S. BOND, Missouri        PATTY MURRAY, Washington
    TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginia
      (Ex officio)                         (Ex officio)

                               Professional Staff

                                Robin Cleveland
                               Jennifer Chartrand
                             Tim Rieser (Minority)

                             Administrative Support

                             Sonia King (Minority)

                                C O N T E N T S

                                  ----------

                          Thursday, February 24, 2000

                                                                       Page

    Department of State..............................................     1
    Department of Defense............................................    21
    Nondepartmental witnesses........................................    43

                            Thursday, March 23, 2000

    Department of State..............................................    71

                             Tuesday, April 4, 2000

    Department of State: Office of the Deputy Secretary..............    87
    Nondepartmental witnesses........................................   113

                            Thursday, April 6, 2000

    Department of the Treasury: Office of the Secretary..............   125

                            Tuesday, April 11, 2000

    Department of the Treasury: Office of the Secretary..............   153
    Nondepartmental witnesses........................................   169

                            Thursday, April 13, 2000

    Department of State: Office of the Secretary.....................   199
    Nondepartmental witnesses........................................   247

            JOINT HEARING ON SUPPLEMENTAL REQUEST FOR PLAN COLOMBIA

                                  ----------

                          THURSDAY, FEBRUARY 24, 2000

            U.S. Senate, Subcommittee on Foreign Operations,
                Export Financing, and Related Programs,
                Subcommittee on Defense, and Subcommittee on
                Military Construction, Committee on
                Appropriations,
                                                        Washington, DC.
        The subcommittees met at 10:36 a.m., in room SD-192,
    Dirksen Senate Office Building, Hon. Mitch McConnell (chairman
    of the Subcommittee on Foreign Operations, Export Financing,
    and Related Programs) presiding.
        Present: Senators Stevens, Specter, Domenici, McConnell,
    Gregg, Burns, Reid, Bennett, Inouye, Leahy, Lautenberg, and
    Feinstein.

                              DEPARTMENT OF STATE

          STATEMENT OF THOMAS R. PICKERING, UNDER SECRETARY OF STATE

                 Opening Statement of Senator Mitch Mc Connell

        Senator McConnell. The hearing will come to order. We are
    pleased to have with us the Chairman of the Full Committee,
    Senator Stevens.
        And I do not know, Senator, whether you have any statements
    you would like to make.
        Senator Stevens. Well, I know you have an opening
    statement. I would say, just for the record, that this proposal
    that is before us from the Administration affects three of our
    subcommittees, Foreign Operations, Defense, and Military
    Construction.
        I believe that--that as chairman of the Subcommittee on
    Foreign Operations, Senator McConnell should chair this and--
    and make the basic recommendations. But the other--members of
    the other subcommittees will be joining us too, Senator.
        This is a very important subject. I think probably the most
    important subject we are going to deal with in the first part
    of this year.
        I do have a statement after you finish yours. But I--I want
    to wait for your comments.
        Senator McConnell. OK. Thank you, Senator Stevens.
        Welcome, gentlemen. When I traveled to--to Colombia, Peru
    and Ecuador to examine U.S. support for regional
    counternarcotics programs, I was taught essentially four
    lessons.
        One, there is no substitute for aggressive political
    leadership in Colombia, Peru, Bolivia and Ecuador.
        Two, drug lords, guerrillas, and the paramilitaries are all
    profiting and part of the same problem. Our narco-security
    strategy must reflect that fact.
        Third, containing one country only shifts the problem
    elsewhere. We need a regional strategy.
        And, fourth, while it seems the most obvious, it seems the
    least observed, the American public must be told the truth
    about what lies ahead.
        I am not convinced that the Administration has learned
    these lessons or can pass this test.
        To determine how we proceed, I think it is worth taking a
    look around the region to consider what has worked.
        While the Administration likes to claim credit for Peru's
    success, the truth is they succeeded largely on their own. The
    United States suspended all assistance in 1991 and 1992.
    Nonetheless, President Fujimori launched an aggressive broad
    scale assault on both the traffickers and the guerrillas
    protecting their trade.
        I doubt anyone would be calling Peru a success today if
    traffickers were in jail, but the Sendero Luminoso had stepped
    in to take their place.
        Critics argue that Peru's success came at a very high human
    rights price. As a result, many now argue that we--we must
    carefully concentrate only on the Colombian drug war and avoid
    any involvement or support of efforts which target the
    paramilitaries or guerrillas. Hence, we must not step up
    military training, support or presence of U.S. troops.
        I am already hearing soothing Administration reassurances
    that Plan Colombia is a counternarcotics effort and we need not
    worry about the quagmire of a counter-insurgency or military
    campaign.
        Now, what exactly does this mean? What is the
    Administration really promising in Plan Colombia?
        It seems to me it is more, much more of the same thing we
    have been doing already. For several years, we have provided
    substantial support to the Colombia narcotics police (CNP) in
    their attack on coca crops and cartel.
        While the CNP deserves credit for arresting kingpins and
    shutting down trafficking routes, coca growth and cocaine
    production, as we know, have exploded. The more the
    Administration spends in Colombia, the more coca is grown.
        Now, we plan to offer more of the same support, but this
    time to the Colombia Army. We will train two counternarcotics
    battalions and provide counternarcotics helicopter gunships and
    weapons, all the while keeping a comfortable public distance
    from targeting the other two major threats to Colombia and our
    interests.
        If it has not worked so far, why will it now? I guess what
    I really want to say is: Who are we kidding? Our strategy will
    have to change to succeed. We cannot pretend the Revolutionary
    Armed Forces of Colombia (FARC) and the National Liberation
    Army (ELN) are not tied to traffickers.
        We cannot argue that a push into Southern Colombia will
    reduce drug production, as long as there is a policy of
    allowing the FARC and traffickers safe haven in a demilitarized
    zone (DMZ) the size of Switzerland.
        We cannot ignore the increase in paramilitary involvement
    in the drug trade. These are the same extremists with close
    ties to Colombian military, which we plan to train.
        If the Colombian government meets the test and demonstrates
    political will, the Administration should acknowledge that we
    are prepared to do whatever it takes to support a serious
    effort that goes after the entire problem, traffickers,
    guerrillas and paramilitaries.
        If we are not really committed, if we are uncertain about
    how involved we want to become, if we question the risks and
    are not confident of the results, we should quit now and save
    our $1.6 billion.
        If we proceed, the public deserves to know that we cannot
    succeed overnight. In fact, I believe we will be well past this
    election year before we can expect any results whatsoever. Not
    only should we avoid a half-hearted effort in Colombia, we
    should avoid a half-baked strategy in the region. The emphasis
    on Colombia must not overshadow requirements in Bolivia,
    Ecuador and Peru. Without a regional strategy, an attack on
    production in one country will only push the problem over to
    another country.
        Bolivia is a good case in point. In a few short years, the
    new government has executed a determined and effective effort
    to eradicate coca and substitute alternative crops. But
    recently when the vice president was in town, he made it clear
    that the job was not yet done.
        Any pressure on Colombia risks a resurgence in Bolivia, if
    alternative development, alternative opportunities are not
    better funded.
        We have invited leaders from Bolivia, Ecuador and Peru to
    address their national needs. I do not view this as a choice
    between support for Colombia or her neighbors. Each has
    important interest. All have a common stake in success.
        It is disappointing that the Administration's request does
    not support an approach which makes Colombia the anchor but
    recognizes that this is a broader partnership.
        I would hope this hearing achieves a consensus so that we
    can correct that course.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        When I traveled to Colombia, Peru and Ecuador to examine U.S.
    support for regional counter-narcotics programs, I was taught four
    lessons: (1) There is no substitute for aggressive political leadership
    in Colombia, Peru, Bolivia or Ecuador; (2) Drug lords, guerrillas, and
    the paramilitaries are all profiting and part of the same problem--our
    narco-security strategy must reflect that fact; (3) Containing one
    country, only shifts the problem elsewhere--we need a regional
    strategy; and the fourth lesson, while most obvious, seems least
    observed, (4) The American public must be told the truth about what
    lies ahead.
        I am not convinced that the Administration has learned these
    lessons or can pass this test.
        To determine how we proceed, I think it is worth taking a look
    around the region to consider what's worked. While the Administration
    likes to claim credit for Peru's success, the truth is they succeeded
    alone. The U.S. suspended all assistance in 1991 and 1992. Nonetheless,
    President Fujimori launched an aggressive, broad scale assault on both
    the traffickers and the guerrillas protecting their trade. I doubt
    anyone would be calling Peru a success today if traffickers were in
    jail, but the Sendero Luminoso had stepped in to take their place.
        Critics argue that Peru's success came at a very high human rights
    price. As a result, many now argue that we must carefully concentrate
    only on the Colombian drug war and avoid any involvement or support of
    efforts which target the paramilitaries or guerrillas. Hence, we must
    not step up military training, support or the presence of U.S. troops.
    I am already hearing soothing Administration reassurances that Plan
    Colombia is a counter-narcotics effort, and we need not worry about the
    quagmire of a counterinsurgency or military campaign.
        What exactly does this mean? What is the Administration really
    promising in Plan Colombia. It seems to me it's more--much more--of the
    same thing we have been doing. For several years, we have provided
    substantial support to the Colombian Narcotics Police in their attack
    on coca crops and cartels. While the CNP deserves credit for arresting
    king pins and shutting down trafficking routes, coca growth and cocaine
    production have exploded.
        The more the Administration spends in Colombia, the more coca is
    grown.
        Now, we plan to offer more of the same support, but this time to
    the Colombian Army. We will train two counter-narcotics battalions and
    provide counter-narcotics helicopter gun-ships and weapons, all the
    while keeping a comfortable public distance from targeting the other
    two major threats to Colombia and our interests.
        If it hasn't worked so far, why will it now? I guess what I really
    want to say is: Who are you kidding?
        Our strategy will have to change to succeed. We can't pretend the
    FARC and ELN are not tied to traffickers. We can't argue that a push
    into Southern Colombia will reduce drug production, as long as there is
    a policy of allowing the FARC and traffickers safe haven in a DMZ the
    size of Switzerland. We can't ignore the increase in paramilitary
    involvement in the drug trade. These are the same extremists with close
    ties to Colombian military which we plan to train.
        If the Colombian government meets the test and demonstrates
    political will, the Administration should acknowledge that we are
    prepared to do whatever it takes to support a serious effort that goes
    after the whole problem: traffickers, guerrillas and paramilitaries. If
    we are not really committed if we are uncertain about how involved we
    want to become if we question the risks and are not confident of the
    results we should quit now and save our $1.6 billion.
        If we proceed, the public deserves to know that we can not succeed
    over night--in fact, I believe we will be well past this election year
    before we can expect any results.
        Not only should we avoid a half-hearted effort in Colombia, we
    should avoid a half-baked strategy in the region. The emphasis on
    Colombia must not overshadow requirements in Bolivia, Ecuador and Peru.
    Without a regional strategy, an attack on production in one country
    will only push the problem elsewhere.
        Bolivia is a good case in point. In a few short years, the new
    government has executed a determined and effective effort to eradicate
    coca and substitute alternative crops. But, recently, when the Vice
    President was in town, he made clear that the job was not done. Any
    pressure on Colombia risks a resurgence in Bolivia if alternative
    development opportunities are not better funded.
        We have invited leaders from Bolivia, Ecuador and Peru to address
    their national needs. I do not view this as a choice between support
    for Colombia or her neighbors each has important interests--all have a
    common stake in success. It is disappointing that the Administration's
    request does not support an approach which makes Colombia the anchor,
    but recognizes that this is a broader partnership.
        I would hope that this hearing achieves a consensus so that we can
    correct that course.

        Senator McConnell. And with that, let me call on my friend
    and colleague, Pat Leahy, the ranking member.

                 Opening Statement of Senator Patrick J. Leahy

        Senator Leahy. Thank you very much, Mr. Chairman.
        Every 6 or 8 years, whichever Administration occupies the
    White House, they propose to dramatically increase military aid
    to fight drugs in South America.
        Each time, Congress is presented with wildly optimistic
    predictions. We do not get very many facts with which to make
    informed decisions. Each time, though, we do respond. We
    appropriate billions of dollars. But the flow of illegal drugs
    just continues unabated and even increases.
        I recognize the great challenges facing Colombia today. I
    have talked a number of times with the Ambassador from Colombia
    and also with President Pastrana. I think they make some
    persuasive arguments.
        There is no dispute that the 40-year civil war and the
    violence and the corruption associated with the drug trade has
    inflicted a terrible toll on that country. I agree with the
    Administration and many in Congress that the United States
    should try to help.
        But I have very serious doubts about the Administration's
    approach. They predict that by building up the Colombian Army
    and eradicating more coca, the guerrillas' source of income
    will dry up and they will negotiate peace.
        I suggest that it is just as likely that it will lead to a
    wider war, more innocent people killed, more refugees uprooted
    from their homes, and no appreciable change in the flow of
    cocaine into the United States.
        The Administration has requested $1.6 billion over 2 years.
    Seventy-nine percent of that is for the Colombian Armed Forces.
    This is an institution that has a sordid record of human rights
    violations, corruption and even involvement in drug
    trafficking.
        Today, while the Army's direct involvement in human rights
    violations has fallen sharply--I give them credit for that--
    there is abundant evidence that some in the Army regularly
    conspire with paramilitary death squads who, like the
    guerrillas, are also involved in drug trafficking.
        So I cannot support this military aid without strict
    conditions to ensure that military personnel who violate human
    rights or who aid or abet the paramilitaries are prosecuted in
    the civilian courts. The Colombia military courts have shown
    time and again that they are unwilling to punish their own. The
    Administration's proposal is for 2 years. Yet it is going to be
    at least that long before most of the equipment even gets to
    Colombia and that people are trained to use it.
        The Colombia government cannot possibly afford to maintain
    this equipment, most of which is sophisticated aircraft, so we
    can assume that this is only a down payment on a far longer,
    far more costly commitment.
        And like every previous Administration, this proposal comes
    with only the vaguest of justification. Nothing in the
    materials I have seen describes the Administration's goals with
    any specificity, what they expect to achieve in what period of
    time, at what cost, and what the risks are to civilians caught
    in the middle when the war intensifies, or for that matter, to
    our own military advisors.
        So in that regard, Mr. Chairman, I am glad that two of the
    witnesses we have here are General Wilhelm and Ambassador
    Pickering.
        Ambassador Pickering has been a friend and advisor to me
    for many years. General Wilhelm is one of the most respected
    military leaders that I have had the privilege to deal with in
    my 25 years here.
        So I look forward to what they have to say, but I must say,
    Mr. Chairman, that I am a skeptic.
        Senator McConnell. Thank you, Senator Leahy.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Every six or eight years, the administration that occupies
    the White House at the time proposes to dramatically increase
    military aid to fight drugs in South America.
        Each time, the Congress is presented with wildly optimistic
    predictions, but few facts with which to make informed
    decisions. Each time, we respond by appropriating billions of
    dollars, but the flow of illegal drugs into the United States
    is unchanged.
        I recognize the great challenges facing Colombia today.
    There is no dispute that a 40 year civil war and the violence
    and corruption associated with the drug trade have inflicted a
    terrible toll on that country.
        I agree with the Administration, and many in Congress, that
    the United States should try to help.
        But I have serious doubts about the Administration's
    approach. Today's prediction is that by building up the
    Colombian Army and eradicating more coca, the guerrillas'
    source of income will dry up, and they will negotiate peace.
        It is just as likely that it will lead to a wider war, more
    innocent people killed, more refugees uprooted from their
    homes, and no appreciable change in the flow of cocaine into
    the United States.
        The Administration has requested $1.6 billion over two
    years, 79 percent of which is for the Colombian Armed Forces,
    an institution that has a sordid record of human rights
    violations, corruption, and involvement in drug trafficking.
        Today, while the Army's direct involvement in human rights
    violations has fallen sharply, there is abundant evidence that
    Army personnel regularly conspire with paramilitary death
    squads, who like the guerrillas are also involved in drug
    trafficking.
        I cannot support this military aid without strict
    conditions to ensure that military personnel who violate human
    rights or who aid or abet the paramilitaries are prosecuted in
    the civilian courts. The Colombian military courts have shown
    time and again that they are unwilling to punish their own.
        The Administration's proposal is for two years, yet it will
    be that long before most of the equipment even gets to Colombia
    and their people are trained to use it.
        The Colombian Government cannot possibly afford to maintain
    this equipment, most of which is sophisticated aircraft, so
    this is a down-payment on a far longer, far more costly
    commitment.
        Like every previous administration, this proposal contains
    only the vaguest justification.
        Nothing in the materials I have seen describes the
    Administration's goals with any specificity, what they expect
    to achieve in what period of time, at what cost, and what the
    risks are to civilians caught in the middle when the war
    intensifies, or to our own military advisors.
        Maybe General Wilhelm and Ambassador Pickering, two men I
    admire greatly, can give us the details.

        Senator McConnell. Senator Stevens.

                    Opening Statement oF Senator Ted Stevens

        Senator Stevens. Oh, Mr. Chairman, I am going to put my
    statement fully in the record, if you will.
        I do want to point out this is a request for emergency
    money. As I said, it covers three subcommittees of our full
    Committee. It is a new initiative. It is a new direct role for
    U.S. military personnel on the ground in Colombia, and it
    involves the establishment of new permanent forward-operating
    locations, effectively bases, in Ecuador, Aruba and Curacao, a
    continued deployment of U.S. military forces at those sites.
        These may be the right steps to take, but they have severe
    consequences. I spent last week with Admiral Barrett at the
    Joint Interagency Task Force East Headquarters to review
    operational intelligence efforts underway to combat the flow of
    drugs from Latin America.
        In addition, I visited Special Operations Command to get
    General Schoomaker's perspective on these efforts. And I look
    forward to hearing from General Wilhelm today.
        Whatever steps we take I think that Senator McConnell is
    right. We must be prepared to address how these efforts will
    impact the neighboring countries of Ecuador, Venezuela, Panama
    and--and Bolivia. It does seem to me that we have some very,
    very serious problems to resolve here in the Committee if we
    are to expect this supplemental to survive on the floor.
        And I do hope you will call on Senator Inouye, and see if
    he has any comment about Defense.
        Senator McConnell. Yes.
        [The statement follows:]

                   Prepared Statement of Senator Ted Stevens

        Let me begin by thanking Sen. McConnell for convening this hearing
    to review the supplemental request for expanded counter-drug funding
    for fiscal year 2000. I also want to thank Gen. Wilhelm for appearing
    today, under very short notice.
        The request before the Committee proposes a significant fiscal,
    programmatic and human commitment to working with the government of
    Colombia to combat the growth of cocaine and heroin production and
    distribution.
        This Committee has consistently supported, and added to, funding
    requested for Department of State, Defense and intelligence community
    efforts to fight the war on drugs.
        This request comes to the Committee as an emergency increase for
    fiscal 2000. Our hearing today will identify how these funds would be
    spent, and the long term implications of this policy.
        In particular, this initiative envisions a new, direct role for
    U.S. military personnel on the ground in Colombia, to train and assist
    Colombian Army units in their combat role in fighting the counter-
    narcotics forces in Colombia.
        This initiative accelerates the establishment of new, permanent
    forward operating locations, effectively bases, in Ecuador, Aruba and
    Curacao, and the continuous deployment of U.S. military forces to
    operate from these sites.
        These may be exactly the right steps to take--but they will have
    consequences.
        Last week, I met with Adm. Barrett at the Joint Interagency Task
    Force East headquarters, to review the operational and intelligence
    efforts underway to combat the flow of drugs from Latin America. In
    addition, I visited the Special Operations Command, to get Gen.
    Skoomaker's perspective on these efforts.
        I look forward to hearing Gen. Wilhelm's perspective on these
    matters today.
        Whatever steps we take to increase the pressure on drug activity in
    Colombia, we must be prepared to address how these efforts will impact
    the neighboring countries of Ecuador, Venezuela and Panama.
        We need to understand the commitment of the government of Colombia
    this program--our Committee heard from President Pastrana last month,
    and I believe we were all impressed by his personal determination.
        Finally, we must decide how we will pay for this effort--not
    contemplated in the bills we completed just 3 months ago, but now
    before the Committee as an urgent, emergency priority.

        Senator McConnell. Senator Inouye, do you--Senator Burns.
        Staff. He is not----
        Senator McConnell. OK.
        Senator Specter.
        Senator Specter. Thank you very much, Mr. Chairman.
        Senator Burns. I am not about to step in front of a senior
    Senator.
        Senator McConnell. Well, I was calling on you because you
    are the Chairman of the Military Construction Subcommittee. We
    were going to get----
        Senator Burns. Oh, OK. My statement will be very short. Go
    ahead.
        Senator McConnell. Go ahead, Senator Specter.
        Senator Specter. So will mine, providing it gets started.

                   Opening Statement of Senator Arlen Specter

        Senator Specter. I want to make just a few comments about
    the issue of the impact on the drug problem in the United
    States.
        I have visited Peru, Ecuador, Venezuela, and Colombia on a
    number of occasions over the past decade and a half and have
    seen our efforts and co-sponsored the legislation to bring the
    military in, but all of the expenditures which have looked to
    try to cut down the supply of drugs from Latin America have
    been notably unsuccessful.
        When there is an effort made to curtail the supply coming
    out of a country like Colombia, it is like pushing air in a
    balloon. It goes to Peru or to Venezuela or to Ecuador or to
    some other country.
        When I look at $1.6 billion on an emergency supplemental,
    given the problems that we have in looking at our funding for
    next year when we are now in the budget process, it seems to me
    there has to be a very direct connection to our national
    interest.
        And I am concerned about the stability of Colombia. And I
    had a chance recently to visit President Pastrana in December
    and have talked at length with Ambassador Moreno, and applaud
    what they are doing. And it is a big advance since the Supreme
    Court Chambers were attacked by the guerrillas not too long ago
    in Colombia.
        But when you take a look at what will the impact on the use
    of drugs and the tremendous problems we have in this country, I
    want to candidly express my concern over this kind of an
    expenditure.
        We spent $18 billion a year on the drug problem. And $12
    billion of that is spent on fighting drugs on supply coming
    into this country, and street crime, which I used to
    participate in when I was district attorney of Philadelphia.
        And we spend $6 billion on demand on education and
    rehabilitation. And I have long thought that we ought to be
    spending more on the demand side, at least a 50/50 split in
    terms of a long-range solution.
        So that before I am authorized to cast my vote for $1.6
    billion, I want to see some direct effect on the serious
    problems of drugs in the United States. That is an aspect that
    concerns me first and foremost.
        I am also concerned about the Colombian Army and I am also
    concerned about the U.S. commitment.
        And we have two very expert witnesses here in
    Undersecretary Pickering, with whom we have all worked for many
    years, and General Wilhelm. So I am prepared to listen but,
    candidly, it is a high hurdle.
        Thank you, Mr. Chairman.
        Senator McConnell. Thank you, Senator Specter.
        Any of our colleagues on this side have an opening
    statement?
        Senator Feinstein.

                 Opening Statement of Senator Dianne Feinstein

        Senator Feinstein. Thank you very much, Mr. Chairman. I am
    not a member of the subcommittee. I am a member of the general
    Committee.
        I have worked with Senator Coverdell on the drug issues for
    a substantial period of time. I come from a state heavily
    impacted. And I have met with the former Defense Minister of
    Colombia. And Senator Stevens was good enough to provide an
    opportunity for us to meet with President Pastrana.
        I do not believe there are any good options. Of course, we
    have got to fight drugs on both the demand side and the supply
    side. However, we provide money to local jurisdictions on the
    demand side to provide prevention treatment, education.
        The Federal Government itself does not do that. Our total
    responsibility is to maintain our borders, to provide Federal
    law enforcement and to interdict.
        The former defense minister pointed out to me how 30 to 40
    percent of the land mass of Colombia is today controlled by
    narcoterrorists; how 1,500 citizens are held as hostages; 250
    military, 250 soldiers.
        Eighty percent of the cocaine is grown in Colombia, is
    transported via, for the most part, Mexican cartels into this
    country. And I am one that believes something has to be done,
    that--that we have to provide the kind of aid to an ally who
    has been a stalwart ally of this country, to a president who is
    doing his utmost to prevent human rights abuses; to change a
    pattern of corruption; and to stand tall in a situation in
    which it is very difficult to stand tall.
        Everyone runs. And you cannot countenance running, and face
    these cartels and narcoterrorists. They understand one thing.
        More pronouncedly, what is happening on the borders of this
    country, the Southwest border, is the spread of the corruption
    from the Southwest through the border into the United States.
        With customs agents, with local public officials, the money
    for bribes is so enormous and I happen to believe that it is
    within our national interest to be helpful. It is not within
    our national interest to see the drug cartels and the narco-
    terrorists penetrate this country. And believe me, they will
    and they are trying now.
        So I have very strong feelings on this issue. And I have a
    very strong belief that the Federal Government's responsibility
    is enforcement, is forward placement, and is to stop this
    development.
        The cartels are more sophisticated than they have ever been
    before.
        Our intelligence intercepts are down because they utilize
    highly encrypted computer systems. They have the most updated
    military equipment. And they are on a march.
        Now, we either sit back and let this march take place
    because we are worried that there is not a 100 percent
    guarantee of success, or we are willing to play a role to back
    an ally that wants to be helpful; and the victims are right
    here on our side of the border.
        So I am in support of this. I feel very strongly that Mr.
    Pickering and the General will hopefully provide as much
    guarantee of success as they possibly can. And I am one that
    recognizes there is no guarantee.
        But I do think that the national interest is a clear one,
    that when you have arrests as we have had called busts, in the
    colloquial, of 5 tons of cocaine, this is brought in by Mexican
    cartels, produced in Colombia, and these arrests are
    commonplace, that we have a huge problem.
        And the supply is so great, the street price is dropping
    and continues to drop. And I agree, we must fight it on the
    demand side. I am certainly happy to do that. Some programs
    work. And some programs do not.
        But we also have to make it extraordinarily difficult and
    prevent its admission to this country, and so I am in support
    of this effort, and I look forward to hearing the particulars.
        Thank you, Mr. Chairman.
        Senator McConnell. Thank you, Senator Feinstein.
        Let me--normally, when it is just a hearing of our
    subcommittee, Senator Leahy and I restrict opening statements
    just to the Chairman and the ranking member.
        I am--since we have several different subcommittees today,
    we are being a little looser, but let me just remind everybody
    that anybody who--who does not feel the need to make an opening
    statement, that would not be frowned upon. And we do have a
    long list of witnesses.
        Senator Burns.

                   Opening Statement of Senator Conrad Burns

        Senator Burns. Thank you very much, Mr. Chairman, I will
    try to stay in my two-minute confine.
        Ambassador Pickering and General Wilhelm, nice to see you,
    and thank you for coming today.
        Just a short statement, I chair the Military Construction
    Subcommittee and we have been asked to provide some of the
    infrastructure that they will need in their forward
    positioning.
        I would have to say that as we move this along that we
    could sit down privately and talk about the situation and if it
    is well thought out, if it gets us to our mission, keeping in
    mind that I have some very serious reservations as the role of
    the military plays in this situation with drugs.
        I think the role of the military is much different in this
    country than what it is being asked to do. I would hope that we
    could sit down and just visit about that because we are going
    to make a sizeable investment in our areas down there.
        And with the drug situation, we are going--always going to
    have this drug situation in this country, folks, because we can
    buy--we have the money to buy the darn stuff.
        That is our biggest problem, so how do we combat that? What
    we are trying to do down there and the infrastructure we will
    need in order to--to carry out your mission.
        And Semper Fi, General.
        Senator McConnell. Thank you, Senator Burns.
        Does anyone else feel moved to make a statement on the
    Democratic side?
        Senator Inouye. Well, we feel moved, but we will respond to
    our kinder instincts and----
        Senator McConnell. Great.
        Anyone else on the Republican side feel moved to--to make
    an opening?
        Senator Domenici. I am also moved, but I am going to pass
    on it.
        Senator McConnell. Thank you. We will be happy to make any
    opening statements a part of the record.
        [The statement follows:]

               Prepared Statement of Senator Frank R. Lautenberg

        Mr. Chairman, thank you for holding this hearing on a
    subject of critical importance: how the United States can work
    with and support our partners in Latin America in our common
    fight against the scourge of illegal drugs.
        We will soon consider emergency supplemental funding for
    Assistance to Plan Colombia. The President has made this a high
    priority, requesting this funding within a responsible Budget
    which pays down America's debt.
        I would like to commend President Pastrana for developing a
    national strategy to free Colombia of the production and
    trafficking of drugs so he can reunify a country torn by
    decades of fighting. While he has asked the United States and
    other allies to help, Colombia itself will bear most of the
    cost to implement Plan Colombia. This comprehensive strategy
    includes the peace process, to bring leftist forces back into
    the political process; a forceful counter-drug strategy; reform
    of the justice system and protection of human rights, and
    democratization and social development.
        For these reasons, I would be inclined to support rapid
    American assistance to help Colombia bring this strategy to
    fruition.
        However, I have serious concerns and questions which I
    believe must first be addressed. I discussed some of these
    issues with Ambassador Moreno yesterday, and I will raise some
    of these questions here today.
        The Pastrana Government has made important strides in
    improving respect for human rights, not least by Columbia's
    military. Columbia must follow through by prosecuting military
    officers accused of extra-judicial killings and other crimes in
    civilian courts. Firm action must be taken to investigate and
    prosecute crimes carried out by paramilitary groups, which seem
    to have taken on some of the military's ``dirty work.'' In
    short, more needs to be done to protect human rights.
        I also wonder whether a counter-drug strategy that relies
    on fighting insurgents in the jungle is likely to succeed, or
    whether it might make more sense to first focus on interdiction
    efforts to cordon off drug-producing areas. I'm also not sure I
    understand how military counter-narcotics operations in
    southern Columbia can be separated from the political fight
    against leftist rebels with whom President Pastrana says he
    would like to negotiate.
        While Columbia's national commitment to the counter-drug
    effort is welcome, we also need to ensure that our support is
    part of a regional approach, so we do more than just move drug
    production and trafficking elsewhere in the region. And we need
    to ensure that alternative development programs are
    economically and environmentally sustainable, so we create a
    real future for those willing to give up producing drugs.
        Finally, and perhaps most importantly, I'm not sure we're
    doing enough here at home to reduce the demand for drugs. In
    particular, we need to ensure that everyone who wants help to
    escape drug addiction can get into a treatment program, and
    help educate our youth to stay free of drugs. Otherwise, our
    efforts in Latin America run the risk of simply raising the
    price addicts pay for drugs.
        I look forward to hearing from Under Secretary Pickering
    and General Wilhelm and Ambassador Moreno and our other
    witnesses so we can better understand how to use our resources
    effectively in a joint effort to free our hemisphere from the
    scourge of drugs.
        Thank you, Mr. Chairman.

              Summmary Statement of Ambassador Thomas R. Pickering

        Senator McConnell. And, gentlemen, why do you not proceed?
        Mr. Ambassador, are you leading off?
        Ambassador Pickering. I am, Mr. Chairman. And thank you
    very much. I have a statement for the record.
        Senator McConnell. We will make it part of the record.
        Ambassador Pickering. And I will try to deliver a summary
    of the important parts of the remarks that I have prepared.
        Let me begin by saying I was very appreciative of your
    statement of the four McConnell principles on dealing with
    drugs.
        I think that they both inform and energize the kinds of
    approaches that we can take. And I think that they represent a
    potentially very strong bipartisan consensus on how to deal
    with this problem.
        Mr. Chairman, members of the Committee, I appreciate the
    opportunity today to discuss the U.S. Government assistance for
    Plan Colombia. I know that we are all concerned about the
    ramifications of the situation in Colombia and its impact on
    the United States.
        The importance of fighting the scourge of illegal drugs as
    we have just heard from you is an issue on which we can all
    agree. The cost is of, on an annual basis, 52,000 dead and $110
    billion each year due to the health costs, accidental costs,
    lost time and so on. If my historical recollection is correct,
    these are the numbers respectively that we lost in Vietnam and
    Korea.
        These are a huge toll. And 75 percent to 80 percent of the
    cocaine in that terrible cocktail comes from----
        Senator Reid. Mr. Chairman----
        Ambassador Pickering [continuing]. From Colombia.
        Senator Reid. Mr. Chairman--Mr. Chairman.
        Would you explain the 52,000?
        Ambassador Pickering. My testimony says that we had--the
    cost to our society is 52,000 dead and nearly $110 billion each
    year. The $110 billion is each year. The 52,000 dead, I think,
    is a cumulative total.
        Senator Reid. 52,000 who died from drug use----
        Ambassador Pickering. Exactly.
        Senator Reid [continuing]. Or is that in the war against
    drugs?
        Ambassador Pickering. No. It is the people impacted by--by
    the--by the drugs in this country. That is the death toll.
        General Wilhelm. Drug-related violence.
        Ambassador Pickering. Yes. Drug-related violence----
        General Wilhelm. Overdoses.
        Ambassador Pickering [continuing]. Overdoses, all causes,
    but related to drugs.
        Senator Reid. Thank you, Mr. Chairman, and thank you, Mr.
    Ambassador.
        Ambassador Pickering. Although narcotics remain the key in
    our assistance to Colombia, strengthening the economy and
    Colombia institutions and supporting the peace process will
    also help to bring about an objective of stability to the
    entire region and aid in the struggle against narcotics. I am
    grateful, Mr. Chairman, for the support of the Congress on this
    issue.
        Our approach to Colombia can be one of the best examples of
    what might be achieved when there is a bipartisan consensus on
    pursuing our national interests abroad. I thank you all for
    that consideration.
        We are fortunate, as we have just heard, to be working with
    President Pastrana and his Administration. After the terrible
    relations with the Samper Administration, President Pastrana's
    tenure offers the United States and the rest of the
    international community a golden opportunity to work with
    Colombia in confronting these threats.
        President Pastrana's commitment to achieve peace is
    indisputable. He has also demonstrated his willingness to root
    out narcotics trafficking while remaining firmly committed to
    democratic values and principles.
        Colombia is currently enduring a critical societal,
    national security and economic series of problems that stem in
    great part from the drug trade and the internal conflict which
    is financed by that trade.
        This situation has limited the government of Colombia's
    sovereignty in large parts of the country. These areas have
    been becoming the prime coca and opium poppy producing zones.
        This problem directly affects the United States as drug
    trafficking and abuse cause the enormous social, health and
    financial damage to our communities, which I have just
    described.
        Over 80 percent of the world's supply of cocaine is grown,
    processed or transported through Colombia. The U.S. Drug
    Enforcement Agency estimates that up to 75 percent of the
    heroin consumed on the East Coast of the United States comes
    from Colombia, although Colombia produces less than 3 percent
    of the world's heroin.
        The government of Colombia has taken the initiative to
    confront the challenges it faces. With the development of a
    strategic approach to address its national challenge called
    Plan Colombia, a plan for peace, prosperity and the
    strengthening of the state.
        It is an ambitious, but we believe realistic, package of
    mutually reinforcing integrated policies.
        The plan itself was formulated, drafted and approved in
    Colombia by President Pastrana and his team. Without its
    Colombian origins and its Colombian stamp, it would not have
    the support and commitment of Colombia behind it. Colombian
    ownership and vigorous Colombia implementation are essential to
    the future success of the Plan.
        The U.S. Government shares the assessment that an
    integrated, comprehensive approach to Colombia's interlocking
    challenges holds the best promise for success.
        I had the honor of meeting with President Pastrana and his
    team February 13th and 14th in Colombia to discuss
    implementation. We reviewed the--with the Colombians a wide
    array of coordination and implementation issues.
        I believe with Colombia we have launched a process of
    continuous bilateral discussions that will refine and make more
    effective our capacity to contribute to the implementation of
    Colombia's policies.
        Before I describe for you our proposal to assist Plan
    Colombia, I want to remind you that the Plan cannot be
    understood simply in terms of a U.S. contribution.
        Plan Colombia is a $7.5 billion plan over 3 years, which
    President Pastrana has said Colombia will provide $4 billion of
    its scarce resources to support. He called on the international
    community to provide the remaining $3.5 billion.
        In response to this request, the Administration is now
    proposing, and it is before you, a $1.6 billion assistance
    package to Colombia of new monies and current funding for the
    years 2000 and 2001. Our request for new monies includes $954
    million in 2000 in an emergency supplemental and $318 million
    in 2001 funding.
        A significant share of our package will go to reduce the
    supply of drugs to the United States, by assisting the
    government of Colombia in its efforts to limit the production,
    refinement and transportation of cocaine and heroin.
        Building on current funding of over $330 million in fiscal
    year 2000 and 2001, the Administration's proposal includes an
    additional $818 million funded through the international
    affairs programs, the function 150 account, and $137 million
    through defense programs, the 050 function, in 2000; and $256
    million in 150; and $62 million through 050 in fiscal year
    2001.
        We are looking to the European Union and the International
    Financial Institutions to provide additional funding. Already,
    the International Financial Institutions have committed between
    $750 million and $1 billion, which is focused on Plan Colombia
    and its objectives.
        The Departments of State, Defense, Justice and Treasury, as
    well as the Agency for International Development, the Drug
    Enforcement Administration, the Office of National Drug Control
    Policy, all played very major roles in proposing and crafting
    the 2-year support package which is before you. They will play
    an essential role in the inter-agency implementation effort.
        I briefly would like now, Mr. Chairman, to focus on the key
    elements of the plan.
        The first is boosting governing capacity and respect for
    human rights. Here, the Administration proposes funding $93
    million over the next 2 years to fund a series of programs
    under the Agency for International Development and the
    Department of State and Justice to strengthen human rights and
    the administration of justice institutions.
        Expansion of counternarcotics operations into Southern
    Colombia: With this part of the package, the Administration
    proposes to fund $600 million over the next 2 years to help
    train and equip two additional special counternarcotics
    battalions, which will move into Southern Colombia to protect
    Colombian National Police as they carry out their counterdrug
    mission of eradication. The program will provide helicopters,
    training and intelligence support for that activity.
        The third area is alternative economic development. The
    Administration proposal includes new funding of $145 million
    over the next 2 years to provide economic alternatives for
    small farmers, who now grow coca and poppy, and to increase
    local government's ability to respond to the needs of their
    people.
        This is an integral part of the program based on the
    success which has been seen in Bolivia in its integrated
    program of eradicating crops and providing for alternative
    development.
        The fourth area is more aggressive interdiction. Building
    on Peru's success in aerial and riverine and ground-based
    interdiction, enhancing Colombia's ability to interdict air,
    water-borne and road trafficking is essential to decreasing the
    price paid to farmers for coca leaf and to decreasing the
    northward flow of drugs. The Administration proposes to spend
    $340 million on the interdiction programs.
        The fifth element is assistance to the Colombia National
    Police. The Administration proposes an additional funding of
    $96 million over the next 2 years to enhance the Colombia
    National Police's ability to eradicate coca and poppy fields,
    this in addition to the counternarcotics assistance of $158
    million provided to the CNP in fiscal year 1999.
        I would like now to mention just an important aspect of
    what we are dealing with in the human rights dimension. We have
    strongly supported the efforts of President Pastrana and his
    Administration to advance the protection of human rights and to
    prosecute those who abuse them.
        Complicity by elements of Colombia's security forces with
    the right wing militia groups called paramilitaries, remains a
    serious problem.
        Although the government of Colombia has taken important
    steps in holding senior military and police officers
    accountable for participating in human rights violations, we
    believe more must and can be done, however.
        And in my talks with President Pastrana, I had the
    opportunity to emphasize that and he tells me he believes that
    that can be accomplished.
        U.S. assistance to Colombian military and police forces is
    provided strictly in accordance with Section 563 of the Fiscal
    Year 2000 Foreign Operations Appropriations Act, the so-called
    Leahy Amendment.
        No assistance is provided to any unit of the security
    forces for which we have credible evidence of the commission
    and I quote from the act, ``of gross violations of human
    rights,'' unless the Secretary of State is able to certify that
    the government of Colombia has taken effective measures to
    bring those responsible to justice.
        We are firmly committed to the Leahy Amendment and have a
    rigorous process in place to screen those units being
    considered for assistance.
        A word, Mr. Chairman, on the peace process. President
    Pastrana has made bringing an end to Colombia's civil strife
    through a peace agreement with the various insurgent groups a
    central goal of his Administration. He was elected on that
    platform.
        Pastrana believes, and the U.S. Government agrees, that
    ending the civil conflict and eliminating all of that
    conflict's harmful side effects is central to solving
    Colombia's multi-faceted problems.
        Mr. Chairman, distinguished members, the Administration has
    been pleased by the support from both sides of the Congress
    that share our concern for Colombia's future.
        At this moment, Colombia is a partner which shares our
    counternarcotics concerns and possesses the will to execute the
    needed reforms and operations.
        Our challenge is as a neighbor and as a partner. And it is
    to identify the ways in which the U.S. Government can assist
    Colombia in resolving these problems.
        Concerted action now could, over time, stem the illicit
    narcotics flow to the United States. Action now can contribute
    to a peaceful resolution of a half-century of conflict. Action
    now could return Colombia to its rightful historical place as
    one of the hemisphere's strongest democracies.
        Mr. Chairman, with your permission, before I close, I would
    like very briefly to mention two other important supplemental
    requests for which the Administration is seeking funding.
        First, emergency supplemental funds are needed in Southeast
    Europe in Kosovo to support crucial economic and democratic
    reform in the region, promote law and order in Kosovo and
    provide much-needed assistance for the United Nations interim
    mission in Kosovo.
        Secondly, additional funding is also being requested for
    U.S. contributions to the Heavily Indebted Poor Countries Trust
    Fund. Our contribution is an essential component of this
    initiative, to provide necessary debt-relief for the world's
    poorest and most indebted countries.
        The debt relief will enable those recipients to fund
    crucial poverty reduction programs, and I urge the Committee to
    give these requests full and equal consideration with the
    support for Plan Colombia.
        Thank you, Mr. Chairman.

                               Prepared Statement

        Senator Stevens. Well, thank you very much, Mr. Ambassador.
    I want to make sure everyone understands. Those last two
    requests are not before the Committee this morning.
        [The statement follows:]

              Prepared Statement of Ambassador Thomas R. Pickering

        Mr. Chairman, members of the Committee, I appreciate the
    opportunity today to discuss U.S. Government assistance for Plan
    Colombia. I know that we are all very concerned about the ramifications
    of the situation in Colombia on the United States. The importance of
    fighting the scourge of illegal drugs is an issue on which we can all
    agree. The problems in Colombia affect the lives of Americans at home
    and abroad. Illegal drugs cost our society 52,000 dead and nearly $110
    billion each year due to health costs, accidents, and lost
    productivity. Narcotics also have a corrosive effect on the democratic
    institutions and economies of the region. Although counternarcotics
    remains key in our assistance to Colombia, strengthening the economy
    and institutions and supporting the peace process would help to bring
    stability to the entire region.
        I am very grateful for the support of Congress on this issue. Our
    approach to Colombia is one of the best examples of what can be
    achieved when there is a bipartisan consensus on pursuing American
    interests abroad. I thank you for that.
        We are fortunate to be working with President Pastrana and his
    Administration. After strained relations with the Samper
    Administration, President Pastrana's tenure offers the United States
    and the rest of the international community a golden opportunity to
    work with Colombia in confronting these threats. President Pastrana's
    commitment to achieve peace is indisputable. He has also demonstrated
    his willingness to root out narcotics trafficking while remaining
    firmly committed to democratic values and principles.
        Colombia is currently enduring critical societal, national
    security, and economic problems that stem in large part from the drug
    trade and the internal conflict that it finances. This situation has
    limited the Government of Colombia's sovereignty in large parts of the
    country. These areas have become the prime coca and opium poppy
    producing zones. This problem directly affects the United States as
    drug trafficking and abuse cause enormous social, health and financial
    damage in our communities. Over 80 percent of the world's supply of
    cocaine is grown, processed, or transported through Colombia. The U.S.
    Drug Enforcement Agency estimates that up to 75 percent of the heroin
    consumed on the East Coast of the United States comes from Colombia--
    although Colombia produces less than 3 percent of the world's heroin.
        Colombia's national sovereignty is increasingly threatened by well-
    armed and ruthless guerrillas, paramilitaries and the narcotrafficking
    interests to which they are inextricably linked. Although the
    Government is not directly at risk, these threats are slowly eroding
    the authority of the central government and depriving it of the ability
    to govern in outlying areas. It is in these lawless areas, where the
    guerrilla groups, paramilitaries and narcotics traffickers flourish,
    that the narcotics industry is finding refuge. As a result, large
    swathes of Colombia are in danger of being narco-districts for the
    production, transportation, processing, and marketing of these
    substances.
        These links between narcotics trafficking and the guerrilla and
    paramilitary movements are well documented. We estimate that the FARC
    now has 7,000-11,000 active members, the ELN between 3,000-6,000, and
    that there are an estimated 5,000-7,000 paramilitary members. They
    participate in this narcotics connection. Much of the recruiting
    success occurs in marginalized rural areas where the groups can offer
    salaries much higher than those paid by legitimate employers. Estimates
    of guerrilla income from narcotics trafficking and other illicit
    activities, such as kidnapping and extortion, are unreliable, but
    clearly exceed $100 million a year, and could be far greater. Of this,
    we estimate some 30-40 percent comes directly from the drug trade.
    Paramilitary groups also have clear ties to important narcotics
    traffickers, and paramilitary leaders have even publicly admitted their
    participation in the drug trade.
        This situation is worsened by the fact the Colombian economy is
    undergoing its first recession in 25 years, and its deepest recession
    of the last 70 years. Real gross domestic product is estimated to have
    fallen by 3.5 percent last year, the result of external shocks, fiscal
    imbalances, and a further weakening of confidences related to stepped
    up activity by insurgent groups. Unemployment has rocketed from under 9
    percent in 1995 to about 20 percent in 1999, adding to the pool of
    unemployed workers who can be drawn into the narcotics trade or into
    insurgent or paramilitary groups. This recession has also sapped the
    Colombian government of resources to address societal and political
    pressures, fight the narcotics trade, or respond to its thirty-five
    year internal conflict.

    Plan Colombia

        The Government of Colombia has taken the initiative to confront the
    challenges it faces with the development of a strategic approach to
    address its national challenges. The ``Plan Colombia--Plan for Peace,
    Prosperity, and Strengthening of the State'' is an ambitious, but
    realistic, package of mutually reinforcing policies to revive
    Colombia's battered economy, to strengthen the democratic pillars of
    the society, to promote the peace process and to eliminate
    ``sanctuaries'' for narcotics producers and traffickers. The strategy
    combines existing GOC policies with new initiatives to forge an
    integrated approach to resolving Colombia's most pressing national
    challenges.
        The USG consulted closely on the key elements that make up the Plan
    with Colombian leaders and senior officials. It ties together many
    individual approaches and strategies already being pursued in Colombia
    and elsewhere in the region. The Plan itself was formulated, drafted
    and approved in Colombia by President Pastrana and his team. Without
    its Colombian origins and its Colombian stamp, it would not have the
    support and commitment of Colombia behind it. Colombian ownership and
    vigorous GOC implementation are essential to the future success of the
    Plan.
        The USG shares the assessment that an integrated, comprehensive
    approach to Colombia's interlocking challenges holds the best promise
    of success. For example, counternarcotics efforts will be most
    effective when combined with rigorous GOC law enforcement/military
    cooperation, complementary alternative development programs and
    measures to assure human rights accountability. Similarly, promoting
    respect for the rule of law is just as essential for attracting foreign
    investors as it is for securing a durable peace agreement.
        I met with President Pastrana and his Plan Colombia team on
    February 13-14 to discuss the Plan's implementation. To underscore the
    importance of integrated planning, I brought a senior counterpart team
    including Rand Beers, Assistant Secretary Bureau of International
    Narcotics and Law Enforcement Affairs; Harold Koh, Assistant Secretary
    Bureau of Democracy, Human Rights, and Labor; Julia Taft, Assistant
    Secretary Bureau of Population, Refugees, and Migration; Brian
    Sheridan, Assistant Secretary of Defense Special Operations Low
    Intensity Conflicts; Mary Lee Warren, Deputy Assistant for the Attorney
    General; and William Brownfield, Deputy Assistant Secretary Bureau of
    Western Hemisphere Affairs. We reviewed with the Colombians a wide
    array of coordination and implementation issues. I believe we have
    launched a process of continuous bilateral discussions that will refine
    and make more effective our implementation policies.
        Before I describe for you our proposal to assist Plan Colombia, let
    me remind you that the Plan cannot be understood simply in terms of a
    U.S. contribution. Plan Colombia is a $7.5 billion plan of which
    President Pastrana has said Colombia will provide $4 billion of its
    scarce resources. He called on the international community to provide
    the remaining $3.5 billion. In response to this request, the
    Administration is proposing a $1.6 billion assistance package to
    Colombia of new monies and current funding. Our request for new monies
    includes a $954 million fiscal year 2000 emergency supplemental and
    $318 million in fiscal year 2001 funding. A significant share of our
    package will go to reduce the supply of drugs to the United States by
    assisting the Government of Colombia in its efforts to limit the
    production, refinement, and transportation of cocaine and heroin.
    Building on current funding of over $330 million in fiscal year 2000
    and fiscal year 2001, the Administration's proposal includes an
    additional $818 million funded through international affairs programs
    (function 150) and $137 million through defense programs (function 050)
    in fiscal year 2000, and $256 million funded through function 150 and
    $62 million through function 050 in fiscal year 2001. We are looking to
    the European Union and the International Financial Institutions to
    provide additional funding.
        The Departments of State, Defense, Justice, and Treasury, as well
    as the Agency for International Development, the Drug Enforcement
    Administration, and the Office of National Drug Control Policy all
    played major roles in proposing and crafting the Plan Colombia two year
    support package. They will all play essential roles in the interagency
    implementation effort.
        The Administration's proposal for support for Plan Colombia
    addresses the breadth of Colombia's challenges, and will help Colombia
    in its efforts to fight the drug trade, foster peace, increase the rule
    of law, improve human rights, expand economic development, and
    institute justice reform. Much of the assistance for social assistance
    programs will come from the International Financial Institutions (IFI),
    future potential bilateral donors and Colombia's own funds.
        There has been an explosive growth in the coca crop in Putumayo, in
    southern Colombia and, to a lesser extent, in Norte de Santander, in
    the northeast. Putumayo is an area that remains beyond the reach of the
    government's coca eradication operations. Strong guerrilla presence and
    weak state authority have contributed to the lawless situation in the
    Putumayo. As our success in Peru and Bolivia demonstrates, it is
    possible to combat narcotics production in the Andean region. This
    package will aid the Government of Colombia in their plans to launch a
    comprehensive step-by-step effort in Putumayo and Caqueta to counter
    the coca explosion, including eradication, interdiction, and
    alternative development over the next several years.
        The push into drug producing southern Colombia will give greater
    sovereignty over that region to the GOC, allowing the CNP to eradicate
    drug cultivation and destroy cocaine laboratories. Increased
    interdiction will make the entire drug business more dangerous for
    traffickers and less profitable. Meanwhile, funding for Plan Colombia
    will support internally displaced people with emergency relief in the
    short term and will fund alternative economic development to provide
    licit sources of income in the long term. USAID and DOJ will fund
    programs to improve human rights conditions and justice institutions
    giving the Colombian people greater access to the benefits of
    democratic institutions.
        Our counternarcotics package for Colombia was designed with the
    benefit of knowing what has worked in Bolivia and Peru. With USG
    assistance, both countries have been able to reduce dramatically coca
    production. This was achieved through successful efforts to re-
    establish government control and bring government services to former
    drug producing safe havens. Both Bolivia and Peru combined vigorous
    eradication and interdiction efforts and with incentives for small
    farmers to switch to legal crops. We aim to help Colombia accomplish a
    similar record of success.
        In doing this, we cannot, and will not, abandon our allies in
    Bolivia and Peru. Their successes are real and inspired with 66-73
    percent reductions of coca production in each country. But they are
    also tenuous against the seductive dangers of the narcotics trade. This
    is why our Plan Colombia support package includes $46 million for
    regional interdiction efforts and another $30 million for development
    in Peru, Bolivia and Ecuador. These countries deserve our continued
    support to solidify the gains they have striven so hard to obtain. We
    are not content to allow cultivation and production of narcotics to
    simply be displaced from one Andean country to another.

    Components of U.S. Assistance Package

        The proposed U.S. assistance has five components:

        Boosting Governing Capacity and Respect for Human Rights.--The
    Administration proposes funding $93 million over the next two years to
    fund a number of programs administered by the Agency for International
    Development (AID) and the Departments of State and Justice to
    strengthen human rights and administration of justice institutions.
    Specific initiatives include increasing protection of human rights
    NGOs, supporting human rights NGOs' information and education programs,
    creating and training special units of prosecutors and judicial police
    to investigate human rights cases involving GOC officials, and training
    public defenders and judges. We propose to allocate $15 million to
    support GOC and NGO entities specifically focused on protecting human
    rights. Boosting governing capacity also includes training and support
    for GOC anti-corruption, anti-money laundering and anti-kidnapping
    personnel.
        Expansion of Counternarcotics Operations into Southern Colombia.--
    The world's greatest expansion in narcotics cultivation is occurring in
    insurgent-dominated southern Colombia. With this package, the
    Administration proposes to fund $600 million over the next two years to
    help train and equip two additional special counternarcotics battalions
    (CNBN) which will move into southern Colombia to protect the Colombian
    National Police (CNP) as they carry out their counter-drug mission. The
    program will provide 30 Blackhawk helicopters and 33 Huey helicopters
    to make the CNBNs air mobile so they can access this remote and
    undeveloped region of Colombia. It will also provide intelligence for
    the Colombian CNBNs. These troops will accompany and backup police
    eradication and interdiction efforts. They will also provide secure
    conditions for the implementation of aid programs, including
    alternative development and relocation assistance, to those impacted by
    the ending of illegal narcotics cultivation.
        Alternative Economic Development.--The Administration includes new
    funding of $145 million over the next two years to provide economic
    alternatives for small farmers who now grow coca and poppy, and to
    increase local governments' ability to respond to the needs of their
    people. As interdiction and eradication make narcotics farming less
    profitable, these programs will assist communities in the transition to
    licit economic activity.
        More Aggressive Interdiction.--Coca and cocaine are produced in a
    relatively small area of Colombia, while the Central American/
    Caribbean/Eastern Pacific transit zone is approximately the size of the
    United States. Enhancing Colombia's ability to interdict air, water-
    borne, and road trafficking is essential to decreasing the price paid
    to farmers for coca leaf and to decreasing the northward flow of drugs.
    The Administration proposes to spend $340 million on interdiction. The
    program includes funding over the next two years for radar upgrades to
    give Colombia a greater ability to intercept traffickers, and also to
    provide intelligence to allow the Colombian police and military to
    respond quickly to narcotics activity. It will support the United
    States forward operating locations in Manta, Ecuador, which will be
    used for narcotics related missions. These funds will also provide $46
    million to enhance interdiction efforts in Peru, Bolivia, and Ecuador
    to prevent narcotics traffickers and growers from moving into
    neighboring countries.
        Assistance for the Colombian National Police (CNP).--The
    Administration proposes additional funding of $96 million over the next
    two years to enhance the CNP's ability to eradicate coca and poppy
    fields. This request builds upon our fiscal year 1999 counternarcotics
    assistance of $158 million to the CNP. Our additional assistance will
    upgrade existing aircraft, purchase additional spray aircraft, provide
    secure bases for increased operations in the coca-growing centers, and
    provide more intelligence on the narcotics traffickers.
        All U.S. counternarcotics assistance to Colombia will continue to
    be in the form of goods and services. The counternarcotics components
    of Plan Colombia will be implemented by the Colombian police and
    military, and there are no plans to commit U.S. forces to implement
    militarily any aspect of this Plan. On the ground, our military
    assistance will be limited to training vetted counternarcotics units
    through the temporary assignment of carefully picked U.S. military
    trainers.

    Human Rights Dimension

        We have also strongly supported the efforts of the Pastrana
    Administration to advance the protection of human rights and to
    prosecute those who abuse them. Complicity by elements of Colombia's
    security forces with the right wing militia groups remains a serious
    problem, although the GOC has taken important steps in holding senior
    military and police officials accountable for participation in human
    rights violations. Since assuming office in August of 1998, President
    Pastrana has demonstrated his Government's commitment to protecting
    human rights by the dismissal of four generals and numerous mid-level
    officers and NCO's for collaboration with paramilitaries or failure to
    confront them aggressively. There have also been repeated government
    declarations that collaboration between members of security forces and
    paramilitaries will not be tolerated. More must be done, however.
        U.S. assistance to Colombian military and police forces is provided
    strictly in accordance with Section 563 of the Fiscal Year 2000 Foreign
    Operations Appropriations Act--the so-called Leahy Amendment. No
    assistance is provided to any unit of the security forces for which we
    have credible evidence of commission of gross violations of human
    rights, unless the Secretary is able to certify that the Government of
    Colombia has taken effective measures to bring those responsible to
    justice. We are firmly committed to the Leahy Amendment, and have a
    rigorous process in place to screen those units being considered for
    assistance.
        The Government of Colombia also acknowledges the urgent need to
    improve physical security and protection for human rights workers and
    the NGOs to which they belong. Currently, the GOC has dedicated $5.6
    million to provide physical protection to approximately 80 human rights
    activists and their offices. The Plan outlines measures to strengthen
    the Human Rights Ombudsman's office, as well as to establish a
    Permanent National Commission on Human Rights and International
    Humanitarian Law.
        One of the most serious problems in Colombia, a ``silent crisis'',
    is the plight of its internally displaced persons (IDPs). The scope of
    the problem is enormous. The vicious conflict between paramilitaries
    and guerrillas is largely responsible for the forced displacement of
    Colombians. As many as 300,000 persons, mostly women and children, were
    driven from their homes in 1998 by rural violence. NGOs report that
    Colombia has the fourth largest population of displaced persons in the
    world. The USG provided, in fiscal year 1999, $5.8 million to the
    International Committee of the Red Cross's (ICRC) Western Hemisphere
    operations, with an additional $3 million earmarked for Colombia.
    Additionally, $4.7 million was contributed to the United Nations High
    Commissioner for Refugees' (UNHCR) general fund for the Western
    Hemisphere, a portion of which was used for institutional capacity
    building in Colombia. Responsibility for assistance to IDPs has been
    assigned to the Colombian government's Red de Solidaridad (Solidarity
    Network) which will work closely with the U.N. system, NGOs, and other
    Colombian agencies to coordinate services for IDPs throughout the
    country.

    Peace Process

        President Pastrana has made bringing an end to Colombia's civil
    strife through a peace agreement with the various insurgent groups a
    central goal of his Administration. Pastrana believes, and the United
    States Government agrees, that ending the civil conflict and
    eliminating all of that conflict's harmful side effects is central to
    solving Colombia's multi-faceted problems.
        A peace agreement would stabilize the nation, help Colombia's
    economy to recover and allow for further improvement in the protection
    of human rights. A successful peace process would also restore
    Colombian government authority and control in the coca-growing region.
    We hope the peace negotiations going on now between the GOC and the
    FARC and the GOC and the ELN prove successful. We applaud the Colombian
    Government's determination to press the guerrillas to cease their
    practices of kidnapping, forced recruitment of children, and attacks
    against the civilian population.
        Mr. Chairman, distinguished members, the Administration has been
    pleased by the bipartisan support from both houses that share our
    concern for Colombia's future. At this moment, Colombia is a partner
    who shares our counternarcotics concerns and possesses the will to
    execute the needed reforms and operations. Our challenge, as a neighbor
    and a partner, is to identify ways in which the U.S. Government can
    assist Colombia in resolving these problems. Concerted action now could
    help over time to stem the illicit narcotics flow to the United States.
    Action now can contribute to a peaceful resolution of a half-century of
    conflict. Action now could return Colombia to its rightful historical
    place as one of the hemisphere's strongest democracies.

                             DEPARTMENT OF DEFENSE

    STATEMENT OF GEN. CHARLES WILHELM, COMMANDER IN CHIEF, U.S. SOUTHERN COMMAND

        Senator McConnell. General, go right ahead.
        General Wilhelm. Mr. Chairman, distinguished members of the
    Committee, I welcome this opportunity to discuss with you Plan
    Colombia, the Colombia Supplemental Request and our past,
    present and future initiatives to assist Colombia and its
    neighbors in their struggle against illegal drugs and the
    threats the drug trade poses to their societies and to our own.
        The counter-drug struggle provides the underpinning for
    most of our military engagement activities in the Andean
    region. With regard to Colombia, I am encouraged by the
    progress that is being made.

                           COUNTERNARCOTICS BATTALION

        During 1999, we created--we created the first of the
    Colombia counternarcotics battalions. This 931-member unit is
    composed of professional soldiers, all of whom have been vetted
    to avoid human rights abusers.
        The battalion has been trained by members of the U.S.
    Seventh Special Forces Group and is designed to interact with
    and provide security for elements of the Colombian National
    Police during counter-drug operations.
        Tactical mobility has long been the Achilles heel of
    Colombia's Armed Forces. This battalion will be supported by an
    aviation element consisting initially of 18 refurbished UH-1N
    helicopters provided through our cooperative effort involving
    INL at our State Department and the U.S. Southern Command
    representing the Department of Defense (DOD).
        These new units will focus their operations in the southern
    departments of Colombia, which have been the sites of recent
    wholesale increases in drug cultivation and production.
        To assure that combined police and military units
    conducting counterdrug operations have the best, most recent
    and most accurate intelligence, we have worked closely with
    Colombia while developing The Colombia Joint Intelligence
    Center, or COJIC as it is commonly referred to, at the Tres
    Esquinas Military Complex that abuts the southern departments.
    This computerized facility attained its initial operating
    capability on 18 December of last year.
        Deliberately and without fanfare, these new organizations
    have commenced operations. Their two initial forays into drug
    cultivation and production areas near Tres Esquinas resulted in
    arrests, seizures of drugs, destruction of laboratories,
    confiscation of precursor chemicals and identification and
    subsequent eradication of new cultivation sites.

                                  ACTION PLAN

        The initiatives that I have just described, we refer to
    collectively as Action Plan 99. The follow-on effort, Action
    Plan 2000 builds on these first-phase efforts.
        If--if additional funds are provided during the coming
    year, we will build two additional counternarcotics battalion
    and a brigade headquarters.
        With a well-trained and a fully equipped counternarcotics
    brigade consisting of more than 3,000 professional soldiers,
    the Colombian Armed Forces will be prepared to join forces with
    Air Mobile elements of the National Police and reassert control
    over the narcotics-rich departments of southern Colombia.

                                  HELICOPTERS

        Continuing to focus on mobility and intelligence, we will
    provide 15 additional UH-1N helicopters, rounding out the
    aviation battalion.
        The UH-1Ns will ultimately be replaced by UH-60 Blackhawks,
    which have the range, payload, high altitude capability and
    survivability required by Colombia's Armed Forces to cripple
    the narcotics industry and bring the remainder of the country
    under government control.
        On the intelligence side, we will continue to develop and
    refine the Colombia Joint Intelligence Center and pursue a
    broad range of initiatives to improve our interdiction
    capabilities.

                          FORWARD OPERATING LOCATIONS

        A key component of the interdiction plan, which was
    mentioned by Senator Stevens, is first-phase development of the
    forward operating location at Manta, Ecuador.
        As I had previously testified before Senator Stevens and
    Senator Inouye's Committee, this test--this facility is
    urgently required to replace the capabilities that we lost when
    we left Panama and closed Howard Air Force Base.
        Manta's importance stems from the fact that it is the sole
    operating site that will give us the operational reach we need
    to cover all of Colombia, all of Peru and the coca cultivation
    areas of Bolivia.
        Looking beyond the year 2000, we have engaged the services
    of the Military Professional Research Institute (MPRI); hand-
    picked and highly experienced MPRI analysts will assess
    Colombia's security force requirements beyond the counterdrug
    battalions and their supporting organizations.
        The contract tasks MPRI to develop an operating concept for
    the Armed Forces force structures to implement the concept and
    supporting and related doctrine.
        In recent months, I have become increasingly concerned
    about Colombia's neighbors. The adverse social, economic and
    political conditions spawned wholly or in part by drug
    trafficking and the other corrupting activities it breeds are
    weakening the fabric of democracies in other nations in the
    region.
        For this reason, while I endorse a Colombia-centric
    approach to the drug problem, I caution against a Colombia-
    exclusive approach.
        As we assist Colombia in making important strides to
    reassert its sovereignty over its territory and to curb growing
    cultivation, we should also take appropriate steps to preserve
    the noteworthy success--successes achieved by Peru and Bolivia.
    And we should be sensitive to emerging needs in the bordering
    countries of Ecuador, Panama, Venezuela and Brazil.
        This is by every measurement a regional problem. As such, I
    think we must pursue regional solutions.
        In summary, I am convinced that the Supplemental Funding
    Initiative is an important step in the right direction and not
    a minute too soon.
        To seize the initiative in a struggle, which according to
    the Director of the Office of National Drug Control Policy,
    claims as many as 52,000 lives per year, which Ambassador
    Pickering has already mentioned, I urge speedy approval of the
    Colombia Supplemental and increased support for the other
    nations in the region.
        I will be pleased to answer your questions. Thank you.
        Senator McConnell. Thank you, General.
        We are going to have 5-minute questioning rounds. And let
    me just begin with a kind of overview statement of the last few
    years.
        From 1985 to 1992, why do we not just call these the
    ``Just-say-no'' years--if you would put this chart up?
        Senator McConnell. During the ``Just-say-no'' years, both
    the production and use of drugs in this country declined. Then
    in 1992, about the time the President when asked with regard to
    inhaling, if he would have--had--if he had it to do over again,
    would he have inhaled, and he said, ``Sure, if I could.''
        We have the--those years in which both the production and
    the use--if you could hold that up a little higher--continues
    to go up.
        Now, excuse my skepticism, gentlemen, but here we are in an
    election year in 2000. And the Administration comes up here
    with a massive request, which I must say parenthetically, I am
    likely to support with some revisions, but where have you been
    for the last 7 years?
        Mr. Ambassador?
        Ambassador Pickering. Let me say that the results in both
    Bolivia and Peru, some of which you already cited, show you
    some of where we have been for the last 7 years or the last
    whatever years.
        In the last 3 years, the Banzer Administration through real
    dedication has reduced cocaine production 50 to 60 percent, and
    that is a conservative figure. Some say more like 70. That
    similar reduction levels have been----
        Senator McConnell. OK. You are taking credit for what
    happened in Peru, are you?
        Ambassador Pickering. We are, for some of it, because we
    had provided assistance for it. But you are entirely right. It
    does not work if the countries themselves are not prepared to
    gear up and do the job.
        And that is precisely what we compliment President Banzer
    and President Fujimori for doing. It is not something the
    United States would do alone, but it is something we can make a
    major contribution to.
        Now, both of those successes are now being applied to
    Colombia, but we share with you the concern, the balloon
    effect, that successes in Bolivia and Peru have helped to push
    some of this problem in the direction of Colombia.
        Colombia is there. Why have we not done more in Colombia
    sooner? Well, we have done a lot with the Colombia National
    Police, but you and I know that until 1 year ago, there was a
    president by the name of Samper in Colombia, whose least
    interest was in cooperating and taking that personal
    responsibility or the national responsibility to work on drugs.
        And so as a result, what has changed in Colombia is two
    things: A rapid increase in production but a new president and
    a new team that are willing to work on this particular problem,
    the way President Banzer and President Fujimori have led their
    countries to work on.
        So I believe, in fact, we now have a successful series of
    ingredients in place to work on this particular problem, and
    obviously you know and I know that it takes two. It takes the
    country concerned, as well as the willingness on the part of
    the United States to do that. And that is why we are before you
    today.
        Senator McConnell. Well, I am a little more--and I am not
    as concerned about their President as I am ours. I mean, the
    question is: Where has this Administration been for the last 7
    years on this problem?
        We see the statistics. They are off the charts. Now, you
    are--you are telling me, Mr. Ambassador, that--that we did--we
    were making a significant request before this year. Well, I am
    looking here at----
        Ambassador Pickering. I am not. I am saying that, in fact,
    there have been significant successes within the requests that
    we had made before this year----
        Senator McConnell. But there----
        Ambassador Pickering [continuing]. That there was a reason
    why we did not go into Colombia.
        Senator McConnell. But in Peru, Bolivia and Ecuador, you--
    you gave me a--a rationale for not making a huge request for
    Colombia before. But you were seeking to take credit for what
    has happened in Peru and Bolivia and Ecuador.
        These figures just pale in comparison to what has been
    dropped on us here in an election year in an attempt obviously
    to--to try to obscure what is the--the--the weakest imaginable
    record on--on fighting drugs that you could conceive of over
    the last 7 years.
        General, you are not in politics here, but you are also
    sitting at the table. I wonder if you have some rationale for
    why all of a sudden, right now, we are getting a massive
    request like this to go after a problem that--that--that--that
    the chart indicates has been worsening over the last 7 years.
        Ambassador Pickering. With all respect, Mr. Chairman, the
    reason why we are now up with a very large request is both the
    character of the problem in Colombia, after many years of the
    Samper Administration, a guerrilla movement and now a
    paramilitary movement that are deriving enormous benefits, and
    so they are seeking to spread this as widely as possible.
        The unlimited capacity they have had to transport these
    drugs through Colombia and the change in Colombian
    Administration, I think, all produced very clear and self-
    evident reasons why we should be putting a significant amount
    of money into Colombia now to deal with this issue.
        Senator McConnell. Well, I--as I said, I may well support
    this with modifications. The--the question remains, and you
    have done the best you can with a question that simply cannot
    be answered, which is: Where has this Administration been for
    the--for the last 7 years?
        The truth of the matter is there has been little or no
    interest in the war on drugs. And both the production and the
    use of it here in the United States, the figures are
    indisputable.
        Now, during his visit, President Pastrana made a commitment
    to break the links between the military and paramilitary groups
    to assure any soldier engaged in human rights abuses is brought
    before a civilian court.
        Unfortunately, a panel known as the Supreme Judicial
    Council continues to have the right to intervene and direct
    that cases be removed from the civilian courts and considered
    only by the--by the military courts.
        The record shows the military justice system invariably
    drops charges or fails to prosecute serious cases of abuses. I
    know there are a few officers who have lost their positions,
    but that falls far short of appropriate legal action.
        Now, I understand that President Pastrana could issue an
    executive order which would forbid this Council from
    undermining investigation and prosecution of cases of human
    rights abuse. He could do that.
        I am considering language which conditions assistance on
    just such an executive order. And I wonder, Mr. Ambassador, how
    you would feel about that kind of stipulation in the bill?
        Ambassador Pickering. I believe that President Pastrana
    will keep his commitment to us and move in that particular
    direction.
        I think as a result, it makes it unnecessary to condition
    the legislation. And many countries around the world find it
    easier to take initiatives than to be told by us exactly what
    they have to do.
        They are all in the common interest and they are moving
    ahead. And as you have said, President Pastrana has already
    begun to take actions in dealing with this nexus between the
    military and the paramilitaries, and I believe he will continue
    to do so.
        Within the last 2 days, two more paramilitaries who occupy
    significant positions in their structure have been arrested in
    Colombia.
        I also believe that the President is very serious when he
    has not only relieved individuals but looked into the record of
    finding ways to bring those individuals to justice if the
    evidence and the information is available to do so.
        When I was there last week, I talked to him, as I know
    General McCaffrey is talking to him this week, about taking
    that step that he has committed to take, to us, to move these
    cases into the civilian courts.
        Senator McConnell. So the answer is no, you--you would
    oppose that language.
        Ambassador Pickering. I would.
        Senator McConnell. Yes. One quick question before going to
    Senator Leahy. Mr. Ambassador and General, there is strong
    evidence that the paramilitaries with known ties to the
    traditional Armed Forces are also profiting from the drug
    trade.
        Although you acknowledge the paramilitaries are a problem,
    I have heard no concrete discussion of how you plan to target
    their trafficking or break their ties to the regular military.
    What should the Pastrana government be doing to break that tie?
        Ambassador Pickering. Would you like me to start with that,
    if I may?
        We believe that the paramilitaries are deeply involved in
    the drug trade. And that is only one of a number of reasons why
    they need to be opposed and why President Pastrana should move
    against them.
        When I was in Colombia last week, it was made clear that in
    the southern area, on which we intend to target the newly
    trained units and to use them as a basis for reestablishing the
    government authority that is necessary to eliminate the coca
    production in that area either through fumigation or
    eradication by the people themselves, the paramilitaries have
    increased their strength, increased their position, and
    increased their control and operation of the trade.
        So they are directly in the line of the government advance.
    To be able to do this--and there is nothing that I have seen
    that in any way, eliminates their role or indeed the effort to
    do that.
        We have as part of our proposal before you a continuation
    and expansion of a program we have undertaken with President
    Pastrana to deal with the ever-present and very difficult
    question of corruption.
        It is also a serious problem in Colombia. I think that as
    you look around there is not any problem that anybody else has
    that Colombia does not seem to have in one way or another. But
    this is important and this is within and part of the budget
    proposals that we have before you.
        And President Pastrana has also made it clear that he is
    committed in moving in this area.

                                 PARAMILITARIES

        General Wilhelm. Senator McConnell, if I could pick up
    where the Ambassador left off, I think there can be absolutely
    no doubt that the paramilitaries are directly involved in the
    narcotics trafficking enterprise.
        I think we can deduce that from their own admission. They
    have openly acknowledged their involvements and their links
    with drug traffickers.
        In terms of the Colombian government's approach to address
    this linkage between the paramilitaries--the paramilitaries and
    the narco-traffickers, I think it has been clearly defined by
    the Chief of Defense, the Commander of the Armed Forces,
    General Tapias.
        Sir, General Tapias has developed a 6-year strategy, which
    supports Plan Colombia. This is the overarching Colombia
    Military Strategy. It is a regional strategy. The first 2 years
    target the southern departments where the majority of
    cultivation and production takes place. Years 3 and 4 target
    the----
        Senator McConnell. Sorry to interrupt you, but how does
    that help, if you still have a safe haven the size of
    Switzerland?

                              COLOMBIA'S STRATEGY

        General Wilhelm. OK, sir. You are discussing the Despeje
    region, which has--was created to provide a negotiating space
    with the FARC.
        Sir, the Dispeja region is not a major drug cultivation or
    production area in Colombia. Estimates of the total amount of
    coca being grown there hover around the 10 to 12 percent range
    of the total national area being cultivated.
        When we consider that in the context of the growing regions
    in Putumayo and Caqueta provinces, the two southern
    departments, it is probable that we would target the vast
    majority of our efforts to Putumayo and Caqueta anyway. It is
    not a primary drug cultivation area.
        Sir, if I could return very briefly to General Tapias's
    strategy, the 3rd and 4th years would target the central
    portion of the country.
        And during years 5 and 6, General Tapias would then seek to
    reassert control over the rest of Colombia's national land
    mass.
        In the process, he would seek to reduce drug production by
    50 percent. That strategy is actually more ambitious than the
    goals stated in our own national drug control strategy, where
    we say that by the year 2002, we would like to reduce the
    amount of narcotics flowing through the transit zone by 10
    percent and produced in the Source Zone by 15 percent; and by
    the year 2007, reduce the amount in the Transit Zone by 20
    percent and in the Source Zone by 30 percent. General Tapias's
    figure, again, is 50 percent.
        In putting his strategy together, General Tapias--and I
    discussed this in great detail during many visits. I average
    about a visit every 6 weeks to Colombia. We agreed that there
    were two ways that he could go with this, and these were his
    decisions.
        He could target two modes of the apparatus that is visiting
    these ills on Colombia. He could take on the paramilitaries and
    the insurgents directly. This would involve primarily targeting
    the fronts and the mobile columns of the FARC and the 5,000 to
    7,000 paramilitaries.
        That would result in pitched battles. I think history
    proves that it is very, very difficult to resolve insurgency
    strictly on the battlefield. Insurgents tend to fight at times
    and places of their own choosing when the advantage is clearly
    theirs. We learned that in 10 years in Vietnam.
        Instead, he went an alternate path, which was to target the
    FARCs and the paramilitaries' primary line of sustainment, the
    narcotics trafficking industry.
        We know that fully one half of the FARC fronts derive their
    principal financial support from their links with
    narcotraffickers.
        The other insurgency, the ELN, about 25 percent of their
    operating elements have their--that same linkage.
        The Tapias strategy involves attacking their lines of
    sustainment and logistics, drying up the funds available from
    narcotrafficking industry, which then in turn, I think, would
    disable the insurgency.
        So that was his approach. That is the Colombian
    government's approach. I believe it will work.
        Senator McConnell. Thank you, General.
        Senator Leahy. Thank you, Mr. Chairman.
        I should note for the record when we talk about whether the
    Administration has done anything or not, this Administration
    has spent far, far more money on law enforcement than any
    Administration in history in combating drugs.
        They have done it at the state, local and Federal level. I
    mention that just so the record will be clear, and we have
    steadily increased our aid to Colombia.
        I would also note that law enforcement does not seem to be
    the answer. We build a lot more prisons than we do schools in
    this country to combat drugs, but it does not seem to do a
    great deal.
        ``Just say no'' may be the answer, but I doubt it. I will
    not embarrass everybody by asking those, Republicans and
    Democrats alike in the room, who have never used drugs
    illegally to stand up.
        Now, Mr. Pickering, what I do worry about, is--just like
    with some of the money we spend on law enforcement, which has
    not done a great deal of good other than giving us the largest
    prison population of just about any country in the world--it
    looks to me like we are embarking on an open-ended multi-
    million dollar commitment without benchmarks to say whether we
    are successful or not successful.
        I think of our past experience in Central America in the
    1980s when we spent billions of dollars without anybody saying
    whether we were ahead or not.
        Now, you said the Colombian Army is doing its best to purge
    itself of human rights violators. Well, I see only about 15 or
    so Army officers in 10 years that have been either prosecuted
    or purged compared to, I think, thousands in the National
    Police.
        Yesterday, Human Rights Watch released a report documenting
    links between the Colombian Army and the paramilitary groups,
    saying what a lot of reputable journalists have been saying for
    a very long time.
        When I asked the State Department a couple of years ago
    about these links, they said there was no evidence to support
    it. Then about a month ago, the State Department said the
    Colombian Army has made a lot of progress severing these links
    for which they had no evidence before.
        The links are there. Why should we not condition any aid on
    the Army's assurances that its members who violate human rights
    or aid or abet the paramilitaries will be prosecuted, and
    prosecuted in a civilian court where they are not protected?
        Ambassador Pickering. That is what we have said. Of course,
    as you know, Senator, and that is what we are pushing to get
    accomplished. It is, I think, important to note that the
    military record has improved markedly.
        Their responsibility has diminished into low single figures
    in the reports of others for human rights violations. It is
    also, I think, important to note that the bulk of the evidence
    relied upon by the excellent human rights report came from
    Colombia investigators themselves, which I think is a real
    advance. The fact that people at their own peril are able, in
    the Colombia government, to investigate these activities and--
    --
        Senator Leahy. But generally----
        Ambassador Pickering. Such important reports is a
    significant forward step; and it leads, I think, to the basis
    for the next steps, which you and we both share, which is the
    dismissal and----
        Senator Leahy. But----
        Ambassador Pickering [continuing]. Prosecution of people so
    involved.
        Senator Leahy. As far as the excellent human rights report
    you just referred to, General Tapias said yesterday that Human
    Rights Watch conspires with drug traffickers to defame the
    Army. This does not show that this commitment is foremost in
    his mind.
        Ambassador Pickering. I have not seen the report from
    General Tapias, but I have talked to President Pastrana, who
    happily is still Commander in Chief in Colombia.
        Senator Leahy. Well, I hope so. As I said before, I have a
    great deal of respect for President Pastrana, as I do for you,
    and for General Wilhelm.
        But I am worried that some people down there may give lip
    service, but then when pushed to actually do something, are
    unwilling to do it. And that is what worries me.
        Let me ask General Wilhelm. General, if General Tapias says
    that Human Rights Watch conspires with drug traffickers to
    defame the Army, does that show--or does that say anything
    about his own commitment to human rights?

                                  HUMAN RIGHTS

        General Wilhelm. Senator Leahy, I have not talked to
    General Tapias since the report was announced, but I have
    talked to him about this subject on many occasions.
        I know him well. I am personally convinced that he is
    absolutely committed to reducing these abuses. So rather than
    engage in generalities, let me give you a couple of specifics.
        About a month ago when I was down in Bogota, General Tapias
    gave me the--a list of 400 people by name, paramilitaries who
    had been arrested, detained, turned over for judicial action.
        Senator Leahy. To the civilian court or to the military
    courts?
        General Wilhelm. Some of both, sir, some of both.
        Senator Leahy. The reason I ask is that military courts
    have generally not done anything.
        General Wilhelm. Sir, that is--I think--I cannot really
    comment precisely on the statistics concerning judicial
    impunity, but I have heard the same thing.
        But in an operational sense, the point is that they have
    undertaken these operations. And as a matter again of
    operational fact, more than 100 operations were mounted by the
    security forces in the last year against paramilitary
    organizations.
        I cannot confirm it right now, but I received a report this
    morning that the Colombian Marines had mounted an operation
    against paramilitaries near Salado, one of the recent sites of
    paramilitary atrocities and that they had killed 2 and had
    captured 11 paramilitaries.
        I am personally convinced that there are not institutional
    linkages between the Armed Forces of Colombia and the
    paramilitaries. Having said that, I cannot rule out local
    collusion.
        Senator Leahy. General and Ambassador, one of the problems
    we have in this Committee, on both sides of the aisle--there is
    enormous respect for both of you, respect that you have both
    earned in your long and distinguished careers--is that we have
    to rely on you, both of you, to be as careful in the scrutiny
    of what is going on here as anybody. Because there is a concern
    among many of us--and this has nothing to do with political
    ideology--that we are buying ourselves into a never-ending tar-
    baby, where ultimately we do not stop drugs and we tarnish our
    own reputation.
        Thank you, Mr. Chairman.
        Senator Stevens [presiding]. Thank you very much.
        President Pastrana came and visited with the Committee. We
    were very pleased at that and have a very high respect for him
    and the changes he is trying to bring about in Colombia.
        However, in the visits I have just made to the two commands
    I mentioned, I found out that Colombia law prohibits sending
    high school graduates or above into combat.
        Now, you say you--they are training the finest soldiers in
    the world. We do not train people for combat unless they have
    high school degrees.

                                  BACHILLERES

        General, how can you support your statement to us that they
    are the finest trained people that you have seen?
        General Wilhelm. OK. Senator Stevens, all right, you are
    making direct reference to the bachilleres, and that is
    correct.
        As best I have been able to determine within the structure
    of the Colombian Armed Forces, there have been somewhere in the
    neighborhood of 30,000 young Colombians who by virtue of their
    educational level have been exempted from military service that
    involved direct combat operations.
        Senator Stevens. Are you training them for this combat?
        General Wilhelm. Sir, we are training other--no, sir. We
    are not training bachilleres, if I----
        Senator Stevens. Well, they are training conscripts, and
    they stay for 12 months to 18 months, I am told. They are
    conscripts.
        General Wilhelm. No, sir.
        Senator Stevens. Sir, am I informed incorrectly that they
    are not conscripts that are being trained in these Army units?
        General Wilhelm. The young Colombian soldiers who are being
    trained in the counterdrug battalions are changed--are required
    to change their status from--from conscript to professional
    volunteer soldiers before entering the units.
        Senator Stevens. And they--they all--what about those who--
    that have the high school diplomas?
        General Wilhelm. All right, sir. If I could continue with
    my----
        Senator Stevens. I have only got 5 minutes, General. I hate
    to be short with you, but I am going to go vote here in a few
    minutes. What about the ones that are--have the high school
    diplomas?
        General Wilhelm. OK. This is a part of the military
    structure that Colombia is moving right now to reform and have
    been moving on since Mr. Rodrigo Lloreda was the Minister of
    Defense.
        Senator Stevens. All right.
        General Wilhelm. One of their proposals is to eliminate the
    bachilleres, convert a portion of that 30,000-member structure
    to professional soldiers and upgrade the quality of their Armed
    Forces across the board and eliminate that particular segment
    of the Armed Forces, which I think we all agree, Colombians and
    U.S. friends, is a non-productive segment of the military.
        Senator Stevens. All right. Let us go on to another subject
    here.
        On the Defense side, this request asks for $439 million to
    refurbish and support the helicopters. I am told $85 million of
    that will refurbish helicopters; $350 million is to buy
    Blackhawks.
        In our own Army, we are now--in the Army, the National
    Guard and Marines flying older UH-1s that--than this model UH-
    60.
        It would be much more cost-effective to continue to modify
    the UH-1s. Why are we buying these Blackhawks, if this is the
    commencement of a program where we need the others immediately?

                                     UH-60S

        General Wilhelm. First of all, sir, the Colombians
    considered four options as a means to address their mobility
    needs.
        They considered the Blackhawk option. They considered a mix
    of Bell products, which would have been remanufactured UH-1s
    and the AH-1W gunship. They considered a Russian option that
    involved MI17s and MI35s and Carmine 50s. And they considered
    an option involving European aircraft built around the Augusta
    129.
        The Blackhawk option was felt to be best for the near and
    long term for some of the reasons that I cited in my opening
    statement, but----
        Senator Stevens. I agree with that too, but we are--this
    Committee is putting up money for our Army, our National Guard,
    our Reserve to refurbish existing helicopters. What you are
    saying is this operation is going to be better equipped than
    our own military.
        General Wilhelm. Well, sir, there are some limitations on
    what we could do with the UH-1 inventory. To produce the Huey 2
    aircraft that I think you are referring to, one of the first
    ingredients is a serviceable UH-1, normally UH-1H base frame to
    work on.
        Our inventory of those aircraft is just about exhausted.
    And for the long term, when we look at life cycle maintenance
    and life cycle cost, a single family of aircraft in two
    configurations armed in troop carriers will be more economical
    for the long-term.
        That is what led to the Blackhawk decision. And as I
    mentioned, sir, the characteristics of their operating area,
    the ranges required, the altitudes needed to confront, after
    the coca problem is solved, the heroin problem.
        Senator Stevens. I have to tell you, both of you, I join
    Senator Leahy to say I have great respect for both of you and
    in your careers.
        But we are dealing with an industry--I am told to ask for
    these figures. These are estimates that--that on the drug
    traffic, U.S. traffickers get about $80 billion to $100 billion
    from this industry, this drug industry. And the Colombian
    traffickers get $3 to $6 billion a year. The FARC guerrillas
    get $100 to $600 million a year.
        I am told that those insurgents do not have a restriction
    on not having people who have got higher degrees in their
    midst, that they are probably the best equipped, the best
    trained, even to their modernization in terms of communications
    and command and control, they are probably the best in South
    America today.
        Now, we have got one--we are going to equip one brigade to
    take on what I was told is about 25,000 of those insurgents.
        Now, my one question to you is: Who goes in if this thing
    blows up? Who goes in if those hand-held weapons knock down
    these helicopters, and we have a bunch of American-trained
    Colombian forces right there in the midst of these guerrillas,
    these insurgents?
        Who is going to get them out, General?
        General Wilhelm. Senator Stevens, first I need to clarify
    one point. The counterdrug brigade does not target the
    insurgents. It targets the----
        Senator Stevens. I understand.
        General Wilhelm [continuing]. Narcotraffickers who support
    it.
        Senator Stevens. Do you think they are just going there--
    and let me--25,000 trained insurgents are going to sit there
    and let them pick off--cherry pick the operating arm of the
    drug traffickers? Oh, come on now. Who is going to go in if
    this blows up?
        General Wilhelm. That is----
        Senator Stevens. There are 800 people on the ground. Tell
    me this is not a Vietnam again.

                                    VIETNAM

        General Wilhelm. Sir, it is not a Vietnam again. I spent
    1965, 1966, 1969 and 1970 in Vietnam, and I think I will know
    it when I see it happening again. When I go to Colombia, I do
    not feel a quagmire sucking at my boots.
        Senator Stevens. I am----
        General Wilhelm. I think we have a good----
        Senator Stevens. The guerrillas control 70 percent of the
    land mass now.
        General Wilhelm. No, sir.
        Senator Stevens. How much would you say?
        General Wilhelm. Between 40 and 50 percent, and I would not
    say the guerrillas control it. I would say that the government
    does not control it. It is contested territory.
        Senator Stevens. Well, that was Vietnam, was it not?
        General Wilhelm. No, sir.
        Senator Stevens. Well, we have got to go vote, but I have
    to tell you, if you do not get the drift, we are probably your
    best supporters in the Senate on this issue.
        I want to help this President, but I do want to see a plan
    come to us that is survivable and tells us what is going to
    happen if something goes wrong. I do not see this here. I
    really do not.
        And I think we are going to have stand in recess.
        General Wilhelm. Senator, I know that our time is short,
    but----
        Senator Stevens. I know, General. We have to vote. Thank
    you very much.

                                COLOMBIAN PILOTS

        General Wilhelm. They will become the pilots in command,
    and then we will back fill the loveseats with new Colombian
    pilots. To get this program underway and to really
    operationalize a plan in Colombia in a responsive way, contract
    pilots are the right way to go.
        There are only three U.S. contract pilots involved in this,
    and there is very, very clear guidance that they will not
    participate in tactical missions. They oversee, what we call,
    safety and standardization to make sure that the training of
    all the flight crews is conducted to our standards and that at
    the end of the day, we emerge with well-qualified and capable
    air crews. But we have, I think, a good, progressive program
    that will fill those cockpits with Colombian aviators in a very
    efficient and short period of time.
        Senator McConnell [presiding]. Thank you, General. And
    finally, Ambassador Pickering, you know, we certainly agree
    that Colombia has a horrible problem. It came about in part
    because of the aggressive efforts in Peru and Bolivia, which
    achieved some level of success. And so I get back to, in
    closing here, with sort of how we began.
        Are you concerned--I guess you are not or you would not be
    here, but ease my concern that this $600 million hammer on
    Colombia does not just make a problem re-emerge in other
    countries and reassure me that somehow in all of this, there is
    a regional strategy that deals with the entire area.
        Ambassador Pickering. There is, Senator. And there is a
    regional component in the plan. I, frankly, would have hoped it
    would have been larger, but we all operate under constraints
    and you know what those are as well as I do. But there is a
    regional piece, obviously, because of the pressure being put on
    the problem in Colombia. We do not want that to move back to
    Peru or Bolivia or Ecuador.
        So, there is an early piece, I will put it that way. At the
    same time, we are building up to deal with the problem, and we
    are talking in the build-up in Colombia. Not in days or weeks
    or months even, but probably years. The General cited some
    benchmark figures out 2 to 5 years from now.
        But we do think we need to have an immediate and important
    input of additional funding over and above the base, which they
    already received, to continue their activities now for Bolivia,
    Peru, Ecuador and perhaps others. And I was just down to the
    region and talked to a number of people about it. We all share
    exactly your concern.
        There is a regional strategy. The regional strategy is to
    fight this on a regional basis. To increase cooperation. To
    make sure that all the left hands and all the right hands know
    what is going on and are working together to try to deal with
    this problem; and that our funding assistance gets targeted
    first where the problem is worst, but then next is second order
    of priority to where it might go.
        And the Andean Region, unfortunately, has the climate, the
    disparities in economic status and all the other things that
    you know that make it a convenient and very productive area for
    this kind of activity. So, we have to work it on a regional
    basis.
        General Wilhelm. Now, Senator McConnell, might I add just a
    couple of comments to the Ambassador's response? We are very
    sensitive to that, as well, so the question is what next. And
    in the military, we always look at a cycle that we call action,
    reaction and counteraction. We always want to control the first
    one and the last one.
        We have developed what we call a counter-narcotics campaign
    plan, which is a regional plan. Phase one, which is about 2
    years in length, we call the regionalization and stabilization
    phase.
        During that phase, we would work not just with Colombia,
    but with the other nations in the Andean region to help them to
    develop the capabilities that they would need to successfully
    contend with the drug threat.
        Phase two we call the decisive operations phase. That is
    when the nations and the region, working in a coordinated way,
    would strive to drive a wedge between the various operating
    modes of a narco trafficking industry. Be it cultivation, be it
    production or be it transport.
        Then in phase three, we would go to what we call a
    sustainment phase which would emphasize intelligence collection
    and sharing where the security forces of the region, both
    military and police, would demonstrate the ability to adapt to
    the changing patterns of activity that the narco trafficking
    industry has demonstrated it is capable of doing.
        This is a formal campaign plan, which has been submitted to
    the Joint Staff. It is well understood, sir, and has as its
    foundation a regional approach.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator McConnell. Well, thank you both very much. I
    appreciate your coming up, and as you know, it is our plan to
    deal with this request rather expeditiously. Thank you very
    much.
        Ambassador Pickering. Thank you very much, Mr. Chairman.
        [The following questions were not asked at the hearing, but
    were submitted to the Departments for response subsequent to
    the hearing:]

               Questions Submitted by Senator Frank R. Lautenberg

        Question. President Pastrana says he wants to fight against the
    drug lords while seeking to negotiate a solution to the political
    insurrection which has divided Colombia for decades. Is the war on
    drugs separable from the guerrilla war? Doesn't the ``push into the
    South'' in Plan Colombia really mean stepped-up military attacks on the
    left-wing guerrillas?
        Answer. Drugs and the insurgency are linked financially. Narcotics
    money funds the guerrillas, funds the paramilitaries, and fuels the
    violence that is tearing at the fiber of Colombia. One added benefit to
    the increased counternarcotics efforts could be the breaking of these
    financial links.
        The plan's push into southern Colombia is an effort to step-up
    operations against the narcotics industry in that part of the country.
    Because of their links to narcotraffickers, the guerrillas may be
    subject to increased police and military action. The same is true for
    paramilitary groups and other criminal groups who are involved in the
    illegal drug industry.
        Question. Right-wing paramilitaries, like leftist guerrillas,
    reportedly have ties to drug producers and traffickers. Aren't you
    concerned that military action against the leftists will only
    strengthen the drug lords' ties to paramilitary organizations which
    might also allow them to ply their deadly trade?
        Answer. The objective of Plan Colombia's ccunternarcotics component
    is to confront and disrupt the narcotics trade. As long as they
    maintain connections to the narcotics trade, the paramilitaries are
    valid targets for counternarcotics units, as are the guerrillas. The
    plan aims to sever the financial ties between traffickers and all
    illegal armed groups, regardless of the political orientation they may
    claim. The paramilitaries are present protecting trafficking in the
    South along with the FARC.
        Question. Mr. Secretary, since you are here as the Administration's
    representative, I hope you won't mind if I ask you a question outside
    the purview of the State Department. In the multi-front ``war on
    drugs,'' are we devoting sufficient resources to demand reduction? In
    particular, I am concerned that we may not be adequately funding drug
    treatment programs to help those who would like to free themselves of
    drug addiction. Shouldn't we be doing more here at home as well as
    abroad?
        Answer. I refer you to the Office of National Drug Control Policy
    (ONDCP) for a discussion of domestic drug policy. However, there are
    some telling statistics on this matter. According to information from
    ONDCP, one third of the fiscal year 1999 National Drug Control Budget,
    roughly $5.4 billion, went towards demand reduction in the United
    States. The fiscal year 2001 budget contains $6 billion for demand
    reduction. Clearly, these efforts in Colombia are not a trade-off.
    Rather, they are complementary. It is important that the United States
    maintain efforts against both supply and demand if the problem is to be
    brought under control.
        Indications are that domestic demand reduction programs are
    working. In August 1999, ONDCP reported that youth drug use had dropped
    13 percent in a one-year span. The decline over that period was even
    more pronounced for the use of inhalants (45 percent) and cocaine (20
    percent). ONDCP also reported that drug-related murders were at a ten-
    year low. In short, we are doing more.
        Question. While I respect President Pastranals efforts to develop a
    comprehensive plan to bring peace and unity to Colombia, starting by
    ending the narcotraffickers' grip on the country, can a solely national
    strategy truly succeed? Won't the drug business simply move to
    Venezuela or Ecuador or Brazil, just as it moved to Colombia from
    Bolivia and Peru?
        Answer. Concerns over narcotics industry relocation are the reason
    that the package includes additional funds to support Colombia's
    neighbors. There is also a cultural factor that mitigates the threat of
    large-scale migration of drug crops to those specific countries. Like
    Bolivia and Peru, Colombia already had a history of coca cultivation
    when the industry shifted there. The shift of cultivation represented
    the expansion of an existing practice; not the introduction of a new
    one as it would in Brazil, Venezuela and Ecuador.
        Question. I understand the United Nations Drug Control Program
    (UNDCP) is eager to begin testing in Colombia of microherbicides (sic)
    which could wipe out drug crops while leaving other plant and animal
    life unaffected. Has Colombia signed the proposal to allow this U.S.-
    funded project to go forward? Do you consider this a promising approach
    to narcotics, the ``magic bullet'' we all are hoping for?
        Answer. Colombia has not yet signed the agreement to allow testing,
    but preliminary testing has been conducted elsewhere under other
    auspices. I believe that the Government of Colombia understandably
    wants a high degree of confidence regarding the environmental impact of
    the project before moving to the next level.
        The Department of State is encouraged by the early results of the
    mycoherbicide project, and we believe that this is indeed a promising
    approach. That said, we resist labeling anything as a ``magic bullet,''
    as that term can build unrealistic expectations.
                                     ______

                  Questions Submitted to Gen. Charles Wilhelm
                Questions Submitted by Senator Daniel K. Inouye

                          FORWARD OPERATING LOCATIONS

        Question. General Wilhelm, the request includes $38.6 million in
    military construction funds to support your new base, or forward
    operating location, in Manta, Ecuador. Can you tell us how many U.S.
    military will be assigned to it on a permanent and temporary duty
    status and for how long the base will be used by the U.S. military?
        Answer. We have a 10-year access agreement with Ecuador for a
    Forward Operating Location on the Ecuadorian Air Force Base in Manta.
    We have no plans for a permanent U.S. Base. We will have 10-12
    permanent military personnel on the ground. The number of temporary
    duty personnel will normally range from 100-250 depending on the
    counterdrug operations being conducted.
        Question. General Wilhelm, last year in a similar hearing, I
    questioned what it would cost to build a fully operating military base
    in Ecuador. Can you now tell us what those costs would be?
        Answer. We do not have any plans to build a U.S. military base in
    Ecuador. We have, however, concluded a ten year access agreement with
    Ecuador for a Forward Operating Location (FOL) on the Ecuadorian Air
    Force Base in Manta. We require $67.4 million in facility improvements
    to meet U.S. operational and safety standards at Manta. This amount
    includes $5.6 million for planning and design and $38.6 million for the
    runway, taxiway and ramp construction this year. An additional $23.2
    million is required in fiscal year 2001 for vertical construction
    including the rescue station, operations center, hangar, maintenance
    facility, and a lodging facility.

                              SUPPORT TO COLOMBIA

        Question. General Wilhelm, this budget includes $98 million in DOD
    funds to support the Colombian Plan. This is in addition to the milcon
    money for Manta. Can you tell us, is this the totality of DOD's funding
    to support the counterdrug program in Colombia, or are you using other
    funds to carry out this effort?
        Answer. The $98 million does not reflect the total Department of
    Defense (DOD) fiscal year 2000 funding requirement to support our
    counterdrug efforts in Colombia. DOD has additionally budgeted $76
    million in fiscal year 2000 to support the counterdrug program in
    Colombia.
        Question. What is DOD's involvement today in the counter-drug
    efforts in Colombia?
        Answer. Department of Defense (DOD) involvement in counterdrug
    efforts in Colombia falls within two broad categories. We deploy
    aircraft and crews to Forward Operating Locations and sites, frequently
    outside Colombia, to conduct detection, monitoring and tracking
    missions in support of Source Zone air interdiction efforts. We also
    deploy DOD personnel to conduct training missions in Colombia.
    [Deleted.] Today we have a total of 26 DOD personnel deployed to
    Colombia providing training support to Colombian counterdrug forces in
    Bogata, Tres Esquinas, and Mariquita. These personnel are members of
    Joint Planning and Assistance Teams, Mobile Training Teams, Technical
    Assistance Teams, and Riverine Training Teams. We also have a three-man
    Subject Matter Expert team that is providing technical advice and
    assistance to Colombian Intelligence Specialists at the recently
    established Colombian Joint Intelligence Center in Tres Esquinas. This
    is a snapshot. Our presence varies from day to day based on the
    missions that are being performed in support of the counterdrug
    struggle.
        Question. What is SOUTHCOM's total counterdrug budget for fiscal
    year 2000 (in addition to the amounts you are requesting in this
    supplemental)?
        Answer. Our total counterdrug budget for fiscal year 2000 is
    approximately $357 million. This amount is separate from the
    Supplemental request.

                          MILITARY COUNTERDRUG EFFORTS

        Question. General Wilhelm, some argue that this $955 million will
    be ineffective in stopping production of cocaine in the Southern
    Hemisphere. They argue we would be better spending the funds educating
    Americans on the dangers of drug use and treating those who are already
    using drugs. How do you respond to that argument?
        Answer. The National Drug Control Strategy states ``demand and
    supply reduction efforts complement and support one another.'' Efforts
    to reduce the demand for illegal drugs in the U.S. must be supported by
    efforts to reduce illegal drug production as well as the supply that
    reaches the U.S. This supplemental will support United States Southern
    Command's efforts to achieve Goals 4 and 5 of the National Drug Control
    Strategy by significantly strengthening our Source and Transit Zone
    counterdrug programs.
        The Supplemental will provide the means to build partner nation
    capabilities and enhance their efforts to eliminate cultivation,
    processing, manufacturing, and trafficking of illegal drugs in the
    Source Zone. At the same time, it will enable United States Southern
    Command to continue to support counterdrug operations in the Transit
    Zone. With expanded education for Americans at home, we will have
    effectively put a full court press on the illicit drug industry.
                                     ______

               Questions Submitted by Senator Frank R. Lautenberg

                   MILITARY EFFECTIVENESS AGAINST GUERRILLAS

        Question. General Wilhelm, can a military force--even one we've
    trained and which has helicopter mobility--really be effective against
    entrenched guerrillas fighting in remote jungle areas?
        Answer. I must first emphasize that we recognize clearly the limits
    of our involvement in Colombia. Our roles are limited to providing
    training, technical advice and equipment support to Colombia's security
    forces exclusively for counterdrug operations. The strict prohibition
    against involvement by U.S. forces in field operations will continue in
    the future. That said, there is no question that given the right
    resources and proper training, the Colombian military can be effective
    against the narcotraffickers which increasingly have symbiotic links to
    the Revolutionary Armed Forces of Colombia (FARC), National Liberation
    Army (ELN), and paramilitary organizations. Timely intelligence,
    aggressive planning and execution, superior mobility, and effective
    leadership can collectively unhinge the narcotrafficking operations and
    cede the initiative to Colombian authorities. Specifically, the
    Government of Colombia (GOC) must increase its offensive military
    capability and clearly demonstrate tactical and operational superiority
    on the battlefield. The GOC must also redress the needs of more than
    three and a half million rural and displaced Colombians by developing
    the infrastructure of rural areas, providing viable economic
    alternatives to illicit drug production, and simultaneously occupying,
    securing, and establishing sovereignty over contested areas of the
    countryside on a permanent basis. This is a fight that can be won.
                       plan colombia funding allocations
        Question. The proposed assistance to Plan Colombia seems to devote
    much more resources to counter-insurgency efforts in remote areas than
    to interdiction on roads and in the air. Wouldn't it make sense to
    allocate more assets to create an effective cordon around the drug-
    producing areas, cutting off funds for narco-traffickers while reducing
    supplies to the United States?
        Answer. Plan Colombia comprehensively addresses the counterdrug
    (CD) problem in a coordinated, mutually supportive manner. Attempts to
    cordon drug-producing areas in Colombia by interdiction alone will not
    achieve a long-term solution to the illicit drug problem. As we have
    learned, the drug trafficking organizations adapt rapidly when we put
    pressure on key distribution nodes. Accordingly, increased emphasis to
    destroy the crops and labs must be accompanied by comprehensive
    measures to challenge the movement of drugs and precursor chemicals by
    land, air, sea, or over the vast river network. A balanced, flexible,
    broad-based response, like that proposed in Plan Colombia, is required;
    one that best uses available resources to apply pressure by
    interdiction, eradication, alternative crop development, and expanded
    government control in the growing and processing areas of Colombia.

                      PLAN COLOMBIA HELICOPTER ASSISTANCE

        Question. Much of the proposed U.S. assistance would be in the form
    of helicopters to ferry counter-narcotics units to remote locations.
    Don't the narco-traffickers or associated forces have the weapons to
    shoot them down? Aren't they likely to obtain them if they don't
    already have them?
        Answer. [Deleted.]
        Through this combination of training, employment and countermeasure
    suites, coupled with common sense threat avoidance measures, Colombia's
    armed forces will be able to operate effectively when and if the FARC
    acquire surface to air missiles.
                                     ______

                Questions Submitted by Senator Dianne Feinstein

                                  FARC CONTROL

        Question. According to reports, the FARC now controls an area
    within Colombia the size of Switzerland. The government has removed
    itself from that area as a gesture of peace, and now has little hope of
    returning without FARC approval. In the meantime, the FARC earns by
    some accounts as much as $3 million every day from drug traffickers in
    that region, and uses their territory as a staging ground for attacks
    on surrounding areas.
        Why would the FARC ever negotiate to give up this area given the
    incredible benefits they now reap from it?
        Answer. The FARC will not negotiate away the Despeje while
    operating from a position of strength. Only tactical and operational
    success on the battlefield by Colombian security forces, combined with
    Government of Colombia (GOC) comprehensive social and economic reform,
    will set the conditions for a negotiated end to the Despeje. To
    eliminate the Despeje at the negotiating table, the GOC must increase
    its offensive military capability and clearly demonstrate tactical and
    operational superiority on the battlefield. The GOC must also redress
    the needs of more than three and a half million rural and displaced
    Colombians by developing the infrastructure of rural areas, providing
    viable economic alternatives to illicit drug production, and
    simultaneously occupying and securing the contested area on a permanent
    basis.
        Question. The FARC has often claimed that it supports eradication
    efforts, while at the same time earning millions from drugs.
        Is there evidence that the FARC is cooperating with any eradication
    efforts?
        Answer. I am unaware of any evidence that the FARC is cooperating
    with eradication efforts.

                           ERADICATION IN FARC AREAS

        Question. What incentive can we give the FARC to cooperate with
    eradication within FARC-controlled territory?
        Answer. The FARC has consistently demonstrated their unwillingness
    to cooperate with the Government of Colombia against the
    narcotraffickers. More than half of the FARC fronts receive support
    from, and provide protection to, Drug Trafficking Organizations (DTOs).
    Drug money provides a major portion of the FARC's war chest and is the
    FARC's primary source for sustaining forces, conducting combat
    operations, and purchasing weapons. Despite the symbiotic links of the
    FARC to DTOs, Plan Colombia contains the following incentives to reduce
    the increasing cultivation of coca throughout the country:
        Elements 1 and 6 of Plan Colombia.--Proposes an alternative
    development strategy promoting agricultural and other profitable
    economic activity for rural farmers. This approach is dependent on the
    Government of Colombia (GOC) re-establishing the rule of law and
    providing security (Element 3 of Plan Colombia) in the affected
    agricultural areas.
        Element 1 of Plan Colombia.--Proposes increased spending by the GOC
    to modernize the economic base and create jobs.
        Element 5 of Plan Colombia.--Funds interdiction and counterdrug
    (CD) programs to effectively obstruct the flow of resources from the
    drug traffickers to the insurgency. FARC claims of support for
    interdiction efforts have been just that claims. As Plan Colombia
    transitions to execution the FARC will have abundant opportunities to
    demonstrate their sincerity.

                              COLOMBIAN DRUG TRADE

        Question. In the past, Colombia's drug trade was controlled by a
    small number of very large, very powerful cartels. Now, the manufacture
    and distribution of cocaine and heroin in Colombia is far more
    decentralized.
        How does the Supplemental Request for Colombia attempt to address
    the new challenge of going after a much more decentralized group of
    growers, manufacturers and distributors of illegal narcotics?
        Answer. The difficulty of locating, tracking, and intercepting drug
    traffickers throughout the Andean Ridge is exacerbated by the
    proliferation of sophisticated Drug Trafficking Organizations (DTOs).
    The DTOs are smaller, more adaptable, and more mobile than traditional
    cartels, complicating intelligence collection efforts and making them
    more difficult to target. In addition, many DTOs have symbiotic links
    to the Revolutionary Armed Forces of Colombia (FARC) and National
    Liberation Army (ELN), and para-military organizations. More than half
    of the FARC fronts and roughly one-fourth of the ELN fronts receive
    support from, and provide protection to, DTOs. The key to attacking the
    decentralized illicit drug trade is to target specific nodes that, when
    removed, will have a negative impact on the industry as a whole. The
    supplemental spending bill supports this strategy by assisting the
    Colombians in establishing and enhancing basic military and police
    capabilities such as tactical air lift; ground, air, and riverine
    interdiction, and intelligence collection and dissemination. U.S.
    Southern Command, in conjunction with the Defense Intelligence Agency
    and the Joint Warfare Analysis Center, is currently conducting an
    analysis of the decentralized illicit drug industry to determine
    vulnerable critical nodes. Results of this analysis will form the basis
    of the U.S. Government's ``way ahead'' in advising Colombia on the most
    effective use of the new capabilities provided through the supplemental
    funding bill.

                             ALTERNATIVE PRODUCTION

        Question. The country of Peru used to be the world's number one
    cocaine producer, but in recent years production has fallen quite a
    bit--down 26 percent in 1998 alone, down 56 percent overall between
    1995 and 1998. Now, however, prices for coca leaves have skyrocketed
    and some are worried that the temptation for farmers will be too great.
        Similarly, the Bolivian government has targeted coca production
    with serious eradication efforts in recent years, and the State
    Department now predicts that illegal coca production in that country
    may have fallen below 10,000 hectares in 1999, from almost four times
    that amount just a year before.
        Question. What alternatives have been provided to Peruvian and
    Bolivian farmers to ensure that they will not now return to growing
    high priced coca leaves, and what will we do in Colombia to provide
    those alternative crops?
        Answer. The United States Department of State (DoS) administers the
    Alternative Crop Development Program, and I defer to them to address
    the specific incentives provided to Peruvian, Bolivian and Colombian
    coca growers. However, I can assure you that this program is extremely
    important to our regional counterdrug effort. Alternative crop
    development programs have complemented aggressive eradication efforts
    in the successful reduction of coca cultivation in Peru and Bolivia
    over the past five years. Despite the increased price of coca leaf from
    new drug markets in Europe and elsewhere, Peru was able to reduce total
    area under coca cultivation by over 12,000 hectares during 1999. Much
    of this success is attributable to a successful alternative development
    program. These programs are also important because they reduce the
    number of violent confrontations among displaced coca farmers and
    provide families legitimate economic opportunities.

                        HUMAN RIGHTS ABUSES IN COLOMBIA

        Question. Many of us are concerned about the potential for human
    rights abuses in Colombia. I understand that the situation is getting
    better, but at the same time a number of human rights groups have
    alerted us that there are still significant problems--particularly with
    continuing links between drug-financed paramilitary groups and members
    of the military. According to the Human Rights Watch World Report 2000,
    ``cooperation between army units and paramilitaries remained
    commonplace'' in late 1999. The Report claims that paramilitaries kill
    suspected guerillas, delivering them to the army in return for weapons.
        How much progress has been made in ensuring that the military is
    separate from the rogue paramilitaries throughout Colombia?
        Answer. While Colombia's political and military leaders openly
    acknowledge evidence of some security force cooperation with the
    paramilitaries, they attest that cooperation is neither prevalent,
    institutionalized, or tolerated. President Pastrana, Minister of
    Defense Ramirez, and Armed Forces Commander General Tapias have
    publicly pledged to combat the illegal self-defense groups and punish
    all Government of Colombia (GOC) security force members found guilty of
    collaborating with them. We continue to see evidence of this
    commitment. In February, Vice-President Bell formed a minister-level
    commission to coordinate the state's efforts against the self-defense
    groups. The President will soon sign a decree authorizing summary
    dismissal of any military person implicated in paramilitary
    collaboration. In April 1999, two general officers were forcibly
    retired for alleged links to paramilitary groups and a third general
    officer was suspended from duty for alleged links to a paramilitary
    massacre and forcibly retired in November 1999. In August 1999 another
    general officer was relieved for failure to prevent a paramilitary
    massacre. Finally, from January through September 1999, in operations
    against paramilitary forces, Colombian security forces killed 37,
    captured 188 and netted numerous caches of illegal weapons. The U.S.
    Department of State has documented in its annual human rights report
    significant progress by the Colombian military in steadily reducing the
    number of reported violations by Government security forces.
    Specifically, the number of confirmed human rights abuses attributed to
    the Colombian Security Forces has declined from 54 percent in 1993 to 2
    percent in 1999. Plan Colombia ensures that the Colombian military will
    have the required resources and government support to sustain their
    efforts to eliminate human rights violations.

                                 FOURTH BRIGADE

        Question. Can you comment specifically on allegations that the
    Medellin-based Fourth Brigade has improper dealings with the
    paramilitaries commanded by Carlos Castano, who has apparently admitted
    to financing his operations from the coca trade?
        Answer. I do not have the facts to comment authoritatively on these
    allegations nor can I confirm their reliability. [Deleted] about Fourth
    Brigade's relationship with illegal self-defense groups comes from the
    press, human rights organizations, and the Government of Colombia.

                          COCA PRODUCTION IN COLOMBIA

        Question. Coca production in Colombia has doubled in the past
    decade, and recent estimates have indicated that production may be
    increasing at even higher rates due to the increased productivity of
    new crops and a lack of eradication capability.
        One of the reasons eradication efforts are falling short may be the
    continuing delays in opening the Tres Esquinas airfield in Southern
    Colombia.
        Do you have any idea when that airfield will be ready to open for
    eradication operations?
        Answer. The airfield at Tres Esquinas is open and eradication
    operations are being conducted; however, the Government of Colombia's
    (GOC) eradication efforts are hampered by three factors:
      --Lack of organic capability to effectively locate and attack fields
            under cultivation
      --New strains of coca with increased potency that can be harvested
            multiple times in a growing season
      --Inadequate security in support of eradication operations,
            particularly in the Putumayo and Caqueta regions.
        The proposed supplemental will significantly enhance GOC
    eradication efforts by funding the training and equipping of the
    Counternarcotics Brigade. The mission of the Brigade will be to conduct
    offensive ground and air mobile counterdrug operations in conjuction
    with the Colombian National Police (CNP). These operations will be
    focused on the principal coca producing regions of Putumayo and
    Caqueta. To improve the effectiveness of aerial eradication operations
    from Tres Esquinas airfield, the GOC is expanding the aircraft parking
    ramp, increasing the number of helicopter pads, and extending the
    runway by 480 meters. These improvements will be incrementally
    completed by April 2001.

                            AIR INTERDICTION EFFORTS

        Question. When the U.S. assisted in a concerted effort to stop the
    ``air bridge'' between Peru and Colombia, which provided much of the
    raw coca used in cocaine production, that air bridge was decimated.
    However, the delays in the Tres Esquinas airfield, the lack of progress
    outfitting planes for interdiction efforts, and a large gap that may
    allow planes to skirt current controls and simply re-route through
    Brazil may have so far rendered similar efforts in Colombia fruitless.
        What is being done, in this plan and in general, to move forward on
    air interdiction efforts similar to those that were so successful in
    Peru?
        Answer. We are not satisfied with the level of U.S. support to air
    interdiction operations throughout the Source Zone. Since 1998, three
    Department of Defense (DOD) Citation aircraft have flown [deleted]. We
    have to do better. The number one limitation to providing optimum air
    interdiction support to Colombia is a shortage of the right assets.
    Since January 1999, only one E-3 AWACS [deleted] has been available to
    USSOUTHCOM, due to competing higher priorities in other theaters. We
    need more than two times this number of missions. USCS provides P-3
    Airborne Early Warning (AEW) aircraft for approximately [deleted]
    missions in the Source Zone per month, again inadequate for consistent
    and effective interdiction. The closing of Howard Air Force Base also
    affects our level of support to Colombia's interdiction program.
    Currently, only the Curacao Forward Operating Location (FOL) is capable
    of supporting the AWACS which geographically precludes full coverage of
    the Source Zone. Once additional operational and safety improvements
    are made at our FOL in Manta, we will be able to operate the AWACS out
    of it and effectively extend detection and monitoring coverage into the
    Source Zone. USSOUTHCOM has several other initiatives underway to
    provide more effective U.S. support to Source Zone interdiction
    efforts:
        Forward Operating Sites (FOS).--We are surveying airfields in
    Colombia and Peru next month (April 2000) to identify possible forward
    operating sites. These sites will allow highly capable D&M aircraft to
    deploy for short expeditionary operations with minimum personnel and
    equipment footprints.
        USCS Deployments.--Since August 1999, USCS has deployed P-3 AEW
    aircraft three times to Peru in support of air interdiction operations.
    [Deleted.]
        Focused Air Interdiction Program.--In February of this year, we
    commenced a focused southern Colombia air interdiction program that
    will continue through June 2000. This program is designed to work
    specifically with Partner Nations. We will review lessons learned in
    June and develop a sustained program to capitalize on the coordinated
    efforts of DOD, the Interagency, and our Partner Nations.
        Colombia Aircraft Upgrades.--The proposed supplemental funds air-
    to-air radar and upgrades the communications package for two of the
    Colombian Air Force's (COLAF) C-26 Merlin aircraft. These modified
    aircraft will provide the COLAF the capability to track and intercept
    aircraft moving cocaine from inland laboratories to the Colombian
    coasts for transshipment to the United States. The supplemental also
    improves COLAF tactical surveillance and intelligence capabilities by
    providing Forward-Looking Infrared Radar (FLIR) for low-altitude, long-
    duration reconnaissance aircraft.
        Ground Based Radars.--TPS-43 radar systems at Iquitos, Peru and
    Leticia, Colombia transmit critical position and altitude information
    on suspected drug trafficking aircraft. The proposed supplemental
    improves collection from ground-based radars (GBR) by funding upgrades
    to current GBR's and fielding an additional one at Tres Esquinas.
    Additionally, the Relocatable Over the Horizon Radar (ROTHR) in Puerto
    Rico comes on line this spring and will complement the above systems in
    detecting and tracking suspicious aircraft.

                           NONDEPARTMENTAL WITNESSES

                  STATEMENT OF AMBASSADOR LUIS ALBERTO MORENO,
                   COLOMBIAN AMBASSADOR TO THE UNITED STATES

        Senator McConnell. Our next witness is Ambassador Moreno,
    Luis Alberto Moreno, the Ambassador of Colombia to the United
    States.
        We welcome you here, Mr. Ambassador. I hope we can--since
    we are kind of running late here, I hope we can keep your
    statement rather short. And we will put the entire statement in
    the record.
        Ambassador Moreno. Thank you very much, Mr. Chairman and
    distinguished members of the committee. I am pleased to appear
    before you today to express my government's views on the
    administration's proposed program of emergency supplemental
    assistance to Colombia.
        This morning I would like to urge your support of this
    proposal, to hear your views and to answer any questions you
    may have. I plan to emphasize the following key factors that
    merit your consideration: the proposed assistance is urgently
    needed. The increased assistance supports a well conceived
    comprehensive strategy. We are asking the United States to help
    provide us with tools to do the job of fighting drugs, not to
    intervene under internal conflict.
        U.S. assistance will supplement the much larger commitment
    of resources by Colombia and other members of the international
    community.
        This assistance would also support a strategy that is
    accurate, equally on commitments to reduce drug production and
    trafficking, to achieve peace, to protect human rights and to
    promote the rule of law in our country.
        I am certain you have read reports in today's press
    regarding alleged links between the military and illegal arms
    groups in Colombia. My government is confronting this issue
    directly. In fact, much of the data from our human rights
    report cited in these articles comes from the Colombian's
    prosecutor's office. We are investigating these allegations of
    links between military personnel and illegal arms groups. And
    we will continue to take strong legal action against any
    individuals found to have such links.
        Since President Pastrana entered office in late 1988, we
    have take aggressive steps to protect human rights, including
    the dismissing of senior military officials with poor human
    rights records; selecting a chief of the armed forces with a
    strong commitment to fighting human rights abuses; and
    declaring and enforcing a strict human rights policy that does
    not tolerate any links between the military and the illegal
    arms groups.
        President Pastrana was elected on a platform to achieve
    peace in Colombia. But upon entering office, he faced the
    challenges of restoring economic growth and confronting a
    booming drug trade. President Pastrana has taken bold steps to
    address these inter-related problems.
        First, we have embarked on a path towards peace. We hope to
    achieve peace by showing the guerrillas a non-violent way to
    enter Colombian society. At the same time, our negotiating
    position will be backed by the strength of our country's
    institutions, including the military.
        Secondly, and equally important, we have moved with
    determination to restore the trustworthiness of our military
    leadership and the effectiveness and the morale of the troops.
        Third, we have expanded Colombia's commitment to combating
    the drug trade. And President Pastrana has also attacked the
    economic ills that are afflicting Colombia.
        Finally, to consolidate and preserve all of the expected
    result of our strategy, we must focus on strengthening
    Colombia's democratic institutions. We are working to improve
    the accountability and effectiveness of our courts, make local
    governments more responsive to citizen's needs, and to expand
    educational and economic opportunities throughout Colombian
    society.
        In spite of the gravity of our problems, we are very
    optimistic. We see the problems clearly and have the will to
    find and implement necessary solutions. These solutions are
    embodied in Plan Colombia, a comprehensive, integrated strategy
    to address Colombia's inter-related problems.
        Plan Colombia seeks to advance to peace process, improve
    the protection of human rights, strengthen the economy, enhance
    counter-drug programs, and promote democratization and social
    development.
        The Plan also calls for a total expenditure of $.75 billion
    over 3 years. The larger portion of this cost will be borne by
    Colombia--$4 billion directly by its resources and an
    additional $800 million in loans from the international
    financial institutions. The Clinton Administration's proposal
    of $1.6 billion in assistance, and we are also seeking funds
    from the international community.
        In this regard, I am pleased to announce that early this
    summer in Spain, there will be a donor's conference of European
    Union members. We are confident that we will also attract a
    level of the support that we require.
        The assistance package proposed by the Clinton
    Administration is weighted heavily in favor of the kind of
    assistance the United States alone can provide. In large part,
    the assistance package is designed to give Colombia the tools
    we need to more effectively fight drug production and
    trafficking.
        It will enable the Colombian government to bolster counter-
    drug activities in southern Colombia. And with U.S. assistance,
    we will establish two new counter-narcotics battalions in the
    Colombian military.
        We are seeking aid from the United States to bolster our
    counter-drug programs, not to help us combat guerrillas.
    President Pastrana has repeatedly made it clear that Colombia
    is not seeking and will not accept any direct U.S. military
    intervention in our internal conflict.
        The U.S. assistance we need to implement Plan Colombia is
    broader than counter-drug assistance alone. The aid package
    provides for humanitarian assistance to displace persons,
    funding for alternative economic development programs, and
    assistance to help the Colombian government improve human
    rights and other rule of law programs.
        Before I conclude, I would like to explain why we believe
    this Committee should support the administration's proposals.
    The war on drugs is not a war in Colombia. It is a war that is
    being fought, and must be fought, throughout the world.
        It is true that much of the cocaine and heroine consumed in
    the United States is produced in Colombia. No one regrets this
    more than the nearly 40 million law-abiding and peace-loving
    citizens of Colombia.
        We have a responsibility to ourselves, to our children, and
    to our neighbors, such as the United States, to stop the
    scourge of illegal drugs. It can also be said that most of the
    cocaine and heroine we are talking about is purchased and
    consumed illegally here in the United States.
        We know that this reality is no less regrettable for the
    United States than it is for Colombia to be a source for drugs.
    And we recognize and appreciate the costs and sacrifices made
    in the United States in the name of treatment, prevention, and
    law enforcement.
        Our countries share the terrible burdens that illegal drugs
    place on our people. General McCaffrey stated recently that
    over 50,000 Americans die each year due to drug abuse. At the
    same time, successive generations of Colombian children are
    growing up in a country where profits from illegal drugs fuel
    daily violence, weaken government institutions, and finance
    terrorist activities that threaten human rights and the future
    of our democracy.

                               PREPARED STATEMENT

        I urge you to support the administration's proposal. I
    appreciate to have the attention to all the views, and I am
    happy to answer any of your questions.
        [The statement follows:]

              Prepared Statement of Ambassador Luis Alberto Moreno

    Introduction

        Chairman McConnell, Senator Leahy, distinguished Members of the
    Subcommittee, I am pleased to appear before you today to express my
    government's views on the Administration's proposed program of
    emergency supplemental assistance to Colombia. This morning I would
    like to urge your support of this proposal, to hear your views, and to
    answer any questions you may have. I plan to emphasize the following
    key factors that merit your consideration:

      --The proposed assistance is urgently needed to address the problems
            and responsibilities our countries share due to drug
            trafficking and consumption of illegal drugs;
      --The increased assistance supports a well-conceived, comprehensive
            strategy based on the strong cooperation of our governments;
      --We are asking the United States to help provide us with tools to do
            the job of fighting drugs, not to intervene in our internal
            conflict;
      --The U.S. assistance will supplement a much larger commitment of
            resources by Colombia and other members of the international
            community; and, most importantly:
      --The assistance will support a strategy that is anchored equally on
            commitments to reduce drug production and trafficking, to
            achieve peace, to protect human rights, and to promote the rule
            of law in our country.

        First, however, I would like to address a related issue. I am
    certain you have read reports in today's press regarding alleged links
    between the military and illegal armed groups in Colombia. My
    government is confronting this issue directly. In fact, much of the
    data from a human rights report cited in these articles comes from the
    Colombian government's prosecutor's office. We are investigating these
    allegations of links between military personnel and illegal armed
    groups. And we will continue to take strong legal action against any
    individuals found to have such links.
        Since President Pastrana entered office in late 1998 we have taken
    aggressive steps to protect human rights, including: (1) dismissing
    senior military officials with poor human rights records; (2) selecting
    a chief of the armed forces with a strong commitment to human fights;
    and (3) declaring and enforcing a strict human rights policy that does
    not tolerate any links between the military and illegal armed groups.
    Conditions Confronting Colombia Today
        President Pastrana was elected on a platform to achieve peace in
    Colombia. But upon entering office he faced the challenges of restoring
    economic growth and confronting a booming drug trade. President
    Pastrana has taken bold steps to address these inter-related problems.
        First, we have embarked on a path toward peace. For the first time
    in forty years, we have a framework and agenda for the negotiations. We
    hope to achieve peace by showing the guerrillas a non-violent way to
    enter Colombian society. At the same time, our negotiating position
    will be backed by the strength of our country's institutions, including
    the military.
        Second, and equally important, we have moved with determination to
    restore the trustworthiness of our military leadership and the
    effectiveness and morale of our troops. I have already discussed my
    government's strong commitment to human rights enforcement. This policy
    has had results. Allegations of human rights abuses against the
    military have decreased dramatically. Still, we recognize that we must
    continue to do more to protect human rights.
        Third, we have expanded Colombia's commitment to combating the drug
    trade. We have continued eradication and interdiction efforts in close
    cooperation with the United States. We have begun to extradite drug
    traffickers to the United States. We will continue to do so. Important
    successes, however, such as the eradication of nearly 130,000 acres in
    1999 and arrest of several major traffickers as part of Operation
    Millennium do not obscure the fact that there is no miracle cure. We
    need a sustained, comprehensive approach and we have a long way to go.
        President Pastrana has also attacked the economic ills that afflict
    Colombia. With unemployment rising and investment flows threatened, our
    government has made difficult but necessary choices to stabilize the
    economy. We have reduced spending, instituted banking sector reforms,
    accelerated privatization programs, strengthened our pension programs,
    and adopted targeted stimulus programs to create jobs and secure the
    social safety net. These measures, coupled with a strategy to increase
    trade and investment, will provide needed opportunities for the poorest
    Colombians and those displaced by internal violence.
        Finally, to consolidate and preserve all of the expected results of
    our strategy, we must focus on strengthening Colombia's democratic
    institutions. We are working to improve the accountability and
    effectiveness of our courts, make local governments more responsive to
    citizen's needs, and to expand educational and economic opportunities
    throughout Colombian society.

    The Need for U.S. Assistance and International Help

        In spite of the gravity of our problems, we are very optimistic. We
    see the problems clearly and have the will to find and implement
    necessary solutions. These solutions are embodied in Plan Colombia, a
    comprehensive, integrated strategy to address Colombia's interrelated
    problems. Plan Colombia seeks to advance the peace process, improve the
    protection of human rights, strengthen the economy, enhance counter-
    drug programs, and promote democratization and social development.
        President Pastrana's Plan Colombia calls for a total expenditure of
    $7.5 billion over 3 years. The larger part of this cost will be borne
    by Colombia--$4 billion directly from Colombia's resources and an
    additional $800 million in loans from international financial
    institutions. The Clinton Administration has proposed $1.6 billion in
    assistance, and we are seeking additional funds from the international
    community. In this regard, I am pleased to announce that Spain will
    host a donor's conference for European Union members this June. We are
    confident that we will attract the level of support required.
    The Nature of U.S. Assistance Needed
        The assistance package proposed by the Clinton Administration is
    weighted heavily in favor of the kind of assistance the United States
    alone can provide. In large part, the assistance package is designed to
    give Colombia the tools we need to more effectively fight drug
    production and trafficking. It will enable the Colombian Government to
    bolster counter-drug activities in southern Colombia. With U.S.
    assistance, we will establish two new counternarcotics battalions in
    the Colombian military. These special military units, together with an
    existing, counter-narcotics battalion, will move into southern Colombia
    to protect Colombian National Police (CNP) forces as they undertake
    counter-drug missions. Members of these counter-narcotics battalions
    will receive extensive human rights education and training. The aid
    package provides additional funding to enhance the counter-drug efforts
    of the CNP.
        We are seeking aid from the United States to bolster our counter-
    drug programs, not to help us combat guerrilla forces. Our success
    against drug production and trafficking will weaken these guerrilla
    forces, as they rely upon the drug trade for equipment and other
    support. But President Pastrana has repeatedly made clear that Colombia
    is not seeking and will not accept any direct U.S. military
    intervention in our internal conflict.
        The U.S. assistance we need to implement Plan Colombia is broader
    than counter-drug assistance alone. The aid package also provides
    humanitarian assistance to displaced persons, funding for alternative
    economic developments programs, and assistance to help the Colombian
    Government improve human rights and other rule of law programs. The
    Colombian Government and other members of the international community
    will provide additional assistance in these areas. As a result, the
    profile of proposed U.S. assistance does not accurately reflect the
    overall profile of Plan Colombia or the relative budgetary emphasis
    given to each function under the Plan.
    Why the Congress Should Approve the Package
        Before I conclude, I would like to explain why we believe this
    Committee should support the Administration's proposal. The war on
    drugs is not a war in Colombia. It is a war that is being fought and
    must be fought throughout the world.
        It is true that much of the cocaine and heroine consumed in the
    United States is produced in Colombia. No one regrets this more than
    the nearly 40 million law-abiding and peace-loving citizens of
    Colombia. We have a responsibility to ourselves, to our children, and
    to our neighbors such as the United States to stop the scourge of
    illegal drugs. It also must be said that most of the cocaine and
    heroine we are talking about is purchased and consumed illegally here
    in the United States. We know that this reality is no less regrettable
    for the United States than it is for Colombia to be the source of the
    drugs. And we recognize and appreciate the costs and sacrifices made in
    the United States in the name of treatment, prevention, and law
    enforcement.
        It does illustrate that our countries share the terrible burdens
    that illegal drugs place on our people. General McCaffrey stated
    recently that over 50,000 Americans die each year due to drug abuse. At
    the same time, successive generations of Colombian children are growing
    up in a country where profits from illegal drugs fuel daily violence,
    weaken government institutions, and finance terrorist activities that
    threaten human rights and the future of our democracy.
        I urge you to support the Administration's proposal.
        I appreciate your attention to my views. I would be pleased to
    answer your questions.

        Senator McConnell. Thank you, Mr. Ambassador. Your
    president has courageously declared the war on narco-
    traffickers and certainly we all applaud that. Last year, in an
    effort to encourage the FARC to participate in a peace process,
    your president agreed to a demilitarized zone.
        The effect of which was to concede control of a region the
    size of Switzerland to the guerrillas. Do you believe the
    guerrillas used this region as a base for drug production and
    trafficking, and would the push into southern Colombia after
    that decision, and if not, what is the likelihood that the DMZ
    simply becomes a safe haven for traffickers?
        Ambassador Moreno. Let me begin by saying that as General
    Wilhelm said here, the cocaine that is reportedly grown in the
    demilitarized zone is no more than 12 percent of the total
    cocaine grown in Colombia. Secondly, this area, and it is
    important to note the size of our country.
        Colombia is about the size of Texas and California
    combined. This area is a very remote area where there has been
    very limited government presence, and it is basically an area
    where the guerrillas have typically moved.
        There is one thing President Pastrana offered during the
    campaign. It is a unilateral concession, to bring the
    insurgents to the table of negotiations. And it was a bold move
    and a risky move, but this was something that Colombian people
    voted upon. Since that happened, I am happy to say that the
    negotiations with the FARC insurgents have been moving along in
    a positive way.
        We all know that making peace is more difficult than making
    war. But the fact of the matter is that there were two or three
    occasions that we identified labs in the demilitarized zone
    which were later taken by our national police. And we will
    continue to monitor any such events.
        But the purpose of our government is to keep this zone
    inasmuch as the negotiations proceed, as they have been
    proceeding. This is, again, as I said initially, a unilateral
    concession. The government can take it away any minute it
    wants, and that is what is really important, Senator.
        Senator McConnell. Speaking of insurgencies, moving to a
    different one. Last week your government announced a safe haven
    policy for the ELN. How does that decision fit into an
    aggressive counter-narcotics strategy?
        Ambassador Moreno. Well, the area that has been discussed
    with the ELN, first of all, there is not an agreement with ELN,
    and I am not prepared to answer any of the specifics on any of
    the negotiations. As you well know, any kind of peace
    negotiations, to be successful, must be treated in a secret
    fashion.
        However, what occurred last week was basically a
    negotiation, or rather an agreement, between the population in
    the north of Colombia where initially there had been a
    discussion where a demilitarized zone or transition zone will
    take place.
        And basically what was agreed here was that there would be
    inputs from the society here, and also that there would be
    international monitoring units as well as Colombian. So, it is
    basically having much more than what exists today in the south
    of Colombia, where the FARC has this zone.
        Senator McConnell. I am just going to take one more
    question, because we have other Senators here who want to
    propound questions to you, Mr. Ambassador. Plan Colombia calls
    for a total of $7.5 billion, $4 billion of which comes from
    your government.
        What portion of the $4 billion from your government are
    actually funds from the Inner-American Development Bank and the
    other international financial institutions to which the United
    States is a big contributor?
        Ambassador Moreno. Basically, as I explained earlier in my
    comments, the $4 billion is a direct appropriation over the 3
    years, and there's $800 million that comes from the
    international financial institutions. One of the possibilities
    we are looking right now is to precisely increase that to about
    $900 million, which was something that Colombia negotiated, an
    International Monetary Fund (IMF) agreement, to invest in a
    social safety net.
        Senator McConnell. Thank you, Mr. Ambassador. Senator
    Inouye.
        Senator Inouye. Thank you very much. Mr. Ambassador, I can
    assure you that all of us are quite concerned with your plight,
    and we will do our best to be of assistance. But I was quite
    intrigued by a question asked by my Chairman, Senator Stevens.
    Is it true that high school graduates are deferred from
    entering into combat situations?
        Ambassador Moreno. That is a very important question, sir,
    and let me try to explain it. We have a total army of about
    120,000 men, of which about 40,000 are called conscripts.
        These conscripts normally serve a period of no more than a
    year. In fact, at times, they are exempt if they have voted in,
    or participated in, an election. That means that there is a
    tremendous rotation.
        Under President Pastrana's leadership, he has undertaken
    the commitment to take away these conscript soldiers and change
    them for professional soldiers. However, this cannot be done in
    a years time. So, the plan is that it will be 10,000 soldiers
    of the conscripts going out every year and 10,000 professional
    soldiers entering every year.
        Secondly, we also changed the fact that soldiers under 18
    could not be part of the Colombian armed forces and whoever
    were under 18 were dismissed from the Colombian armed forces.
    So, we are moving to have a professional army and there is a
    lot of work being done through fast track legislation,
    precisely to be able to fire and hire people inside our
    military; also, to have a lot of work in the anti-corruption
    area; and finally, all of the modernization.
        These are some of the building blocks that we have been
    instituting, as well as putting human rights offices inside the
    military. There used to be, when President Pastrana entered
    government, about 100 human rights offices inside the military.
    They are now up to 181.
        Senator Inouye. But if one has a high school diploma, he is
    deferred from combat activities?
        Ambassador Moreno. That has been the case, and this is
    exactly what we are changing, sir. Yes.
        Senator Inouye. With all the new equipment, sophisticated
    equipment, you would need men and women who have training or
    are trainable, with some degree of educational background, do
    you not think so?
        Ambassador Moreno. Absolutely, Senator. And the case with
    these three counter-narcotics battalions is that they are
    varied units, that they are professional soldiers with at least
    5 years experience, precisely to work in this area. And of
    course, when it comes to helicopters, it means that you need to
    train at least three different crews for each of the
    helicopters to serve in their different nations.
        Senator Inouye. I have other questions, if I may submit
    them.
        Senator McConnell. Thank you, Senator.
        Senator Stevens.
        Senator Stevens. Mr. Chairman, I will have some other
    questions, also, to submit to the formal panel.
        Mr. Ambassador, as a friend, and you are a good friend,
    personally and to our country, I was very impressed with your
    President Pastrana and the presentation you made to our
    committee. You made it, as I said at the time, a great many
    friends. The deeper we go into our plan to help you, the more
    some of us think that it is flawed.
        Tell me about the time frame for these battalions. How soon
    do you expect those battalions to be ready to start this
    eradication of these areas?
        Ambassador Moreno. Thank you, Mr. Chairman. And thank you
    again for the wonderful meeting you hosted for us early in
    January when President Pastrana was here. There's already a
    counter-narcotics battalion that has finished training, and it
    is ready to go. It is, today, located near the area of
    Tracicenas in the south of Colombia. And there are an
    additional two more battalions on their way.
        When President Pastrana entered office, he made a very
    tough decision, and that was that upon looking at the numbers
    of cocaine explosion, really, in the growth of cocaine, we
    went, basically, 5 years ago from about 30,000 hectors to about
    120,000 today. And if you look at the numbers of cocaine, that
    is basically the reverse of what used to be the case between
    Peru and Colombia.
        So, what President Pastrana did was to make the tough
    decision of involving our military. This is not an easy
    decision. It would not be an easy decision in any military, but
    we have no choice.
        Today, of the total budget of our country, about one-third
    is spent on military spending. Forty percent of that is devoted
    for counter-narcotics alone. So, we are also using our air
    force to do an air interdiction. And we have already started
    working on this front to be able to down planes that are
    carrying cocaine.
        And secondly, we deployed in August of last year, a very
    strong navy operation to do rivering to protect the rivers from
    where they come with the chemicals that are used to make
    cocaine itself. And also, to be able to patrol these rivers
    effectively when the cocaine paste is later taken out and flown
    out of the areas.
        So, the answer is yes, we have one battalion already
    trained, and two are in the process of being trained now, Mr.
    Chairman. And we have two more boats. I'm sorry.
        Senator Stevens. Mr. Ambassador, as you look at this
    operation, the president told us that your military has gone
    through a substantial change also. And he selected a new
    general, right?
        Ambassador Moreno. Yes, sir.
        Senator Stevens. Can you tell us anything about the
    modernization of your own military during this period?
        Ambassador Moreno. Yes, sir. Some of the things I just
    mentioned a little while ago. First of all is the change of the
    conscripts to professional soldiers to have a totally
    professional military by the time President Pastrana's term is
    over. That means taking away 40,000 conscripts into
    professional soldiers, which implies a substantial budget
    increase.
        Senator Stevens. Yes. We know about that. The difference
    between conscripts and volunteers.
        Ambassador Moreno. Yes. So, that's one. Secondly, in anti-
    corruption, there is a whole program of anti-corruption taking
    place inside the military.
        Third, we have contracted a study with National Public
    Research Institute (NPRI) to do a lot of the modernization and
    changes in command and control that need to take place. And
    last, but not least, is the human rights training that every
    soldier in the Colombian military is undergoing. And in this we
    have trained close to 78,000 members of our military in doing
    this precise training. And also to, for instance, in the
    counter-narcotics battalions, they went through a very
    impressive program of human rights training as well.
        Senator Stevens. One last question. Senator McConnell
    mentioned something that many other senators have talked to me
    about, and that is the possibility of an area-wide plan that
    would put the pressure on the narcotic traffickers in your
    country.
        The feeling is they will go back to Peru or go somewhere
    else, and we are going to see a kaleidoscope. What do they call
    it? I'm thinking of the thing down at the beach where you try
    to hit that----
        Staff. Wack-o-mo.
        Senator Stevens. Wack-o-mo. You hit there, it pops up
    there.
        Staff. Yes.
        Senator Stevens. You never can get them all down. But is
    there any plan for an area-wide agreement? Is your country
    trying to seek area-wide participation in this attempt to
    eradicate this scourge down there?
        Ambassador Moreno. Well, we will definitely work very
    closely with our neighbors, and especially in the area of
    interdiction. It is critical to work with all of the countries.
    Especially we are working with Ecuador. And most of the high
    growing area that we have today is pushed to the south involves
    very much the monitoring on the Ecuadorian side.
        It is not easy to quickly transplant the cocaine crops from
    one place to the next, because it takes about 18 months before
    any one crop begins. So, the monitoring is in place. We cannot
    prevent this kind of situation from occurring, but I agree with
    you that the regional concept is very important.
        Senator Stevens. Thank you.
        [The information follows:]

    Proposal for the Increase of Financial Aid From the U.S. Government to
                       Ecuador in the Fight Against Drugs

        Ecuador, located between Colombia and Peru, suffers from somewhat
    different aspects of the drug problem. Due to its very low production,
    Ecuador has been considered as a ``transit'' country and not regarded
    as a priority. Nevertheless, the data does not support this approach.
        Recent data suggests that unfortunately Ecuador is becoming active
    in money laundering, deviation of chemicals used in drug production and
    as a collection point for internal and external distribution.
        The drug problem today reveals that crimes such as money
    laundering, drug trafficking are connected and simultaneous. Therefore,
    it may be misleading to brand some countries as producers and others as
    transit or consumers. To recognize the responsibility of each is
    important, but insufficient if the burden is not appropriately shared.
        The drug problem has never been about frontiers or Nations. This
    illegal activity has always been international, dynamic and innovative
    in the use of technology, and it may move from one location to another.
    Therefore, we should not single out one country as the source of the
    problem, nor should we expect its solution to come from just one
    Nation, but rather from the combined efforts of the countries involved.
        Ecuador's Law 108 reiterates the will and determination to meet the
    formidable challenges to fight drugs; the National Plan constitutes the
    main operative strategy to identify the actions to be implemented in
    order to reduce drug supply and demand. It has guidelines for each
    sector and as well as parameters for foreign aid and cooperation. It is
    also the basic reference for the National Council to Control Drugs,
    CONSEP.
        In its drafting process this law required an active participation
    and consensus of all institutions involved in the fight against drugs.
    Thus, apart from being a document outlining principles and policies,
    the law constitutes an effective working tool for all public and
    private institutions engaged in the fight against drug trafficking.
        It is essential to acknowledge the principle of shared
    responsibility as the most effective and fair element to face this
    transnational phenomenon.
        For the 1999-2003 five year period, through its National Anti-Drugs
    Plan, Ecuador will develop programs aimed at: preventing and reducing
    drug consumption; controlling illegal drug production, processing and
    trafficking; promoting research and raising awareness of drug related
    issues; curbing money laundering, managing assets seized in drug
    operations.
        The CONSEP, integrated by representatives of government and private
    institutions involved in the fight against drugs, has requested aid
    from the Inter-American Commission for Drug Abuse Control, to convene a
    Consultative Group and a Donors Conference to obtain funding for the
    National Anti-Narcotics Plan.
        The support of the United States is crucial for the full
    implementation of the Plan, as part of the burden-sharing response of
    the international community. This support should be proportionate to
    the magnitude of the challenges faced by the region and its members.

                           A NEW APPROACH IN ECUADOR

        The northern frontier, which runs for approximately 580 km through
    the Provinces of Esmeraldas, Carchi and Sucumbios, and mostly along the
    Putumayo River, has very particular characteristics that demand a
    specific strategy. The strategy should include activities for a
    sustained and sustainable development.
        The region is open 24 hours for border crossing, with patrol points
    in the international bridge of Rumichaca and in the near future in San
    Miguel bridge. However, along the border there are many informal
    crossing points used for legitimate trade, but that may also be used by
    groups linked to drug operations and related crimes.
        Drugs such as heroine, cocaine in its various forms, and marihuana
    enter the Ecuadorian territory through land, air and sea.
        The jungle in the northeastern section of the country, is used by
    drug cartels, mainly foreign, to evade police control. The influence of
    the guerrillas from Colombia has limited police action in the area. It
    has also been detected that due to a more severe control of chemicals
    used in the production of drugs, the criminal organizations use
    chemicals not subject to control that undergo a process to obtain
    controlled substances.

               THE ECUADORIAN OUTLOOK IN THE REDUCTION OF SUPPLY

        The data collected by the Anti-Narcotics Division of the National
    Police, a recently created unit, shows that in recent years the volumes
    of drugs seized have increased, as well as the number of arrests
    related to drugs. However, it is difficult to assess if the drug
    available for export has decreased correspondingly.
        We require a regional approach to this issue, supported by
    agreements, allowing coordination among the various countries involved
    in this fight.
        The final stage of the international drug trafficking culminates
    with money laundering, which impacts not only the economy but also the
    entire society and de-stabilizes the democratic institutions.
        In the area of money laundering, the CONSEP established the
    National Division for the Processing of Financial Information. Since
    1995, 827 individuals have been investigated for financial transactions
    judged to be unusual and reported by banking institutions. The
    investigations on the reported irregularities are being conducted by
    the Public Prosecutor.
        Given this background, Ecuador expects that the Government of the
    United States will consider an additional $32,390,000 in aid to be used
    in the implementation of the projects attached to this document which
    are part of the National Plan and constitute a priority among the
    measures to be taken by the National Police and Armed Forces of Ecuador
    in their fight against drugs in their effort to eliminate supply to the
    United States and other countries. In keeping with the principles
    outlined at the beginning of my statement, referring to the burden
    sharing approach to this hemispheric problem.
        I would like to conclude by noting that the Government of Ecuador
    fully cooperates with the Government of the United States in the fight
    against drug trafficking. The agreement signed by both Governments to
    establish the American Forward Operating Location in Manta was a
    crucial step in the hemispheric fight against drug trafficking. We are
    confident that this contribution of the Ecuadorian Government to the
    regional effort against this common threat will be dully recognized by
    both the U.S. Government and the U.S. Congress.
    Problems
        Ecuador's main drug related problems are:
        Loosely-monitored airports, seaports, and road networks.
        Low capacity to control money laundering.
        Northeastern border area with Colombia is a matter of great
    concern. It is used by traffickers to move both drugs and chemicals.
    Colombian guerrilla is present near that country side of the border,
    encouraging and participating in these activities.
        This situation threatens the stability and security of the region,
    and especially Ecuador's security due to its current economic crisis
    and its closeness to guerrilla and drug trafficking operation centers
    in Putumayo region.
        The U.S. aide to Colombia will be more effective if at the same
    time it considers to reduce the risk that the problem be moved into
    Ecuadorian territory, which could be occupied by farmers to re-situate
    its coca crop fields and by producers to build up new laboratories.
        Besides that, due to its economic problems, the efforts of the
    Government of Ecuador has been not sufficient to attend the basic needs
    of the Ecuadorian population in the Putumayo region, so there is an
    increasing risk of support to the traffickers' activities from the
    Ecuadorian population living in that area.

    Necessities

        Therefore, Ecuador needs aid to:
        Develop its security institutional capabilities to interdict
    illegal drugs and control chemicals deviation.
        Get equipment to interdiction operations.
        Develop counter-narcotic training programs to its police and
    military forces, as well as custom agents.
        Improve its intelligence network.
        Strengthen airport and seaport enforcement, fixed and mobile
    roadblocks, and aerial reconnaissance.
        Strengthen its judicial system and its financial investigation
    units to prosecute traffickers, seize drug assets and reduce money
    laundering.
        Implement alternative development programs, especially in the
    Putumayo region.
        Implement prevention and consumption reduction programs.

                       PROPOSAL TO INCREASE U.S. ASSISTANCE TO ECUADOR'S DRUG ENFORCEMENT AGENCIES
                          [IN ADDITION TO AID PACKAGE PRESENTED TO CONGRESS BY U.S. GOVERNMENT]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                             U.S.
                    PROJECT                                      BRIEF DESCRIPTION                         DOLLARS
    ----------------------------------------------------------------------------------------------------------------
              REDUCTION OF DEMAND

    PREVENTION NETWORK....................  Implement government and non-government organizations in       1,500,000
                                             order to address drug consumption.
    TREATMENT AND REHABILITATION OF DRUG    Offer specialized therapeutical treatment to addicts,            120,000
     ADDICTS.                                regardless of social status.
    DRUG MONITORING.......................  Collect data and statistics on reduction of supply and           150,000
                                             demand of drugs.
    COMMUNITY AWARENESS...................  Information campaigns through the media to raise awareness;      120,000
                                             establish an Information Center.
                                                                                                        ------------
          SUBTOTAL........................  ...........................................................    1,890,000
                                                                                                        ============
              REDUCTION OF SUPPLY

    SUPPORT TO THE ANTI-NARCOTICS DIVISION  Provide support to the Anti-Narcotics Division of the          6,000,000
     OF THE NATIONAL POLICE.                 National Police, with a more efficient use of resources
                                             (financial, material and technological) aimed at
                                             fulfilling its duties and maintaining a standard of
                                             excellence.
                                            Provide infrastructure, equipment to the Anti-Narcotics
                                             Division, Precincts. Provide communication equipment, IT
                                             and computers, air, land and sea mobility, weapons and
                                             ammunition.
    ANTI-NARCOTICS TRAINING CENTER........  Develop a training and specialization program for the          1,000,000
                                             operative and administrative levels.
                                            Implement the departments of Training Counseling,
                                             Multimedia and IT systems.
                                            Integrate educational programs with Police Academies and
                                             rank and file of the Police.
    COMMUNICATIONS AND IT.................  Provide and test hardware and software to connect to the         500,000
                                             information system of the Joint Intelligence and
                                             Coordination Center, JICC.
                                            Develop and implement training in IT for police personnel..
    CONTROL DE PRESURSORES QUIMICOS Y       Implements a system to control and track the kind, quality       500,000
     PRODUCTOS QUIMICOS ESPECIFICOS.         and amount of precursores quimicos and their use.
                                            Develop guidelines and rules for autoridades y ejecutores..
    CANINE TRAINING CENTER................  Establish canine units in the North border, Provinces of       1,000,000
                                             Esmeraldas, Tulcan, Sucumbios, Controles Integrados,
                                             Puerto de Manta, Baeza y Loja.
                                            Refurbishing of canine units nationwide....................
                                            Replacement and increase of drug detecting dogs.
                                            Implement the system of passive dogs.
                                            Include a budget to feed and care dogs.
                                            Technical training to officers and troop in working with
                                             drug detecting dogs.
    REINFORCEMENT OF THE INTELLIGENCE AND   Consolidate the Intelligence and Coordination Center as the    1,000,000
     COORDINATION CENTER.                    governing entity at the national level of the anti-
                                             narcotics intelligence.
                                            Implement an information network that would allow the
                                             management of strategic information in a timely fashion at
                                             the national level.
                                            Implement a process for the selection of personnel.........
                                            Carry out programs for updating and training of personnel..
    REINFORCEMENT OF THE SPECIAL ANTI-      Reinforce interdiction operations in roads and highways....    1,000,000
     DRUGS MOBIL GROUP--GEMA.               Renovation of premises and supply of equipment for the
                                             Special Anti-drugs Mobil Group.
                                            Establish special anti-drug mobil groups in each district..
                                            Training in interdiction operations in roads and highways..
    REINFORCEMENT FOR THE MONEY LAUNDERING  Implement financial analysis units in Cuenca, Tulcan,            500,000
     PREVENTION UNITS.                       Guayaquil and Loja.
                                            National and International link via electronic mail with
                                             private and public institutions in charge of money
                                             laundering.
    REINFORCEMENT OF THE ANTI NARCOTICS     Consolidate air surveillance operations....................    6,000,000
     POLICE AIR OPERATIONS.                 Planes, helicopters, radar equipment and heliports in
                                             Sucumbios, Tulcan and Esmeraldas.
                                            Training of air personnel.
    REINFORCEMENT FOR LABORATORY..........  Implement two laboratories: Cuenca and Guayaquil...........    2,000,000
                                            Provision of chemical reactives for field analysis of drugs
                                             and precursos seized in police operatives.
                                            Technological improvement of the chemical laboratory.......
                                            Training of laboratory personnel and anti-drugs operative
                                             units.
    Alternative Social and Economic         Reinforcement of government actions to discourage              6,000,000
     Development.                            participation of local population in any of the drug
                                             trafficking activities by improving social, economic,
                                             education and health conditions in the Putumayo region.
    Security Measures.....................  Security operations for the support of counter narcotics       5,000,000
                                             operations in the border region.
                                                                                                        ------------
          TOTAL...........................  ...........................................................   32,390,000
    ----------------------------------------------------------------------------------------------------------------

        Senator McConnell. OK. The limit we have--I am sorry to you
    witnesses, if you will just be patient. We have two stack
    votes. What I am going to recommend we do is recess the hearing
    and go catch one vote at the end, the next one at the
    beginning, and then we will come back. And it is my intention
    to finish up. So, please----
        Ambassador Moreno. Thank you, Mr. Chairman.
        Senator McConnell. Does anybody want to come back and ask
    further questions of the Ambassador from Colombia? If not, we
    will dismiss him.
        Senator Feinstein. Well, I had some questions, but I am
    happy to submit them.
        Senator McConnell. OK. Submit them for the record.
        Senator McConnell. Senator Domenici.
        Senator Domenici. OK. I have one and I will submit it.
        Senator McConnell. Fine.
        And, Mr. Ambassador, thank you for being here. And we will
    get to the next witness as soon as I return.
        Ambassador Moreno. Thank you, Mr. Chairman.
        Senator McConnell. My apologies. Again, Senate business is
    getting in the way of this hearing. All right. We have the
    attorney general from Ecuador and the Bolivia minister of
    agriculture.
        And we appreciate, very much, both of you gentlemen being
    with us. And why don't you go ahead with your statement in
    whichever order you determine?

    STATEMENT OF DR. RAMON JIMENEZ, ATTORNEY GENERAL FOR ECUADOR

        Attorney General Jimenez. Thank you, Mr. Chairman,
    distinguished members of the panel, committee. It is a
    pleasure, and an honor, to be here. I would like to start this
    short talk.
        They have told me it is about 5 minutes. It is not enough
    time to talk about the problems that are our problems, economic
    problems, social problems, with Ecuador or of any country, but
    I would like to start this by recalling the words of the late
    Senator of the United States of America, Robert Kennedy, when
    he said something like this.
        I'm translating directly from Spanish into English. ``I
    feel the things as they are, and I ask why. I dream of the
    things that are not, and I ask why not.''
        If things were as we dream they are, probably we would not
    be here discussing the drug dealing problems of the world.
    Thank you, Mr. Chairman.
        Ecuador is a country which has had, and which is having,
    very, very serious economical and social problems during the
    last 2 years. There is poverty. There is unemployment and under
    unemployment which goes up to 70 percent of the population,
    including unemployment; 14 percent of unemployment and--and the
    rest of unemployment.
        There are many causes for that, and I am not going to
    repeat them. They are well known to everybody. During the last
    years, the tragedy called the Nino Current, et cetera, many,
    many problems in that sense.
        There is a per capita income of about $1,000 per year, and
    the gross domestic product goes up to $13.6 million, which is
    less than the external debt of Ecuador. Inflation has been,
    during the last 2 years, about 64 percent and the government is
    doing a lot of efforts in order to control these things. And
    recently with the new dollarization, as we call it, dollar
    recession system of economic and monetary system.
        In effect, still, that regarding the drug problems, Ecuador
    is only a transit country. Not only various data, enough data,
    that reflects that Ecuador at present has a big problem in
    laundering, processing and distribution to the consumption
    countries of the world. And by the way, speaking about the
    consumption countries of the world, I do not think that the
    consumer countries should be only blamed for the problems of
    drugs in the world.
        They say, and I do not agree, that if there were no
    consumption, there would be no processing and there would be no
    trafficking, and there would be no plants, crops. I say that if
    there were no crops, if there were no traffic, there would be
    no consumption.
        It is a cycle. And we have to consider it as a cycle. We
    cannot individualize. We cannot put aside the countries which
    produce, and we cannot put aside the countries which,
    apparently, are only a transit country. And we cannot put aside
    the countries which only consume or which mostly consume, like
    the United States of America and Europe.
        I would say that this has to be a coordinated activity all
    over the world. Consumers, producers and transit countries.
        The government of Ecuador, all the people of Ecuador, are
    doing a lot of effort in order to fight drug dealings. There is
    the so-called law 108, which has been in effect for about 10
    years, and now it is being reformed to bring it up to date.
    Review problems that we are having, especially the great input
    into the laundering problems in Ecuador. This has been done by
    the National Council for the Control of Narcotic Drugs and
    Psychotropic Substances (CONSEP), Consejo Nacional,
    Desustoncias Estupefaciente Eficotropica, the National Council
    for drug combat.
        There is a prevention, rehabilitation and very, very strong
    control and interdiction activities. And this, in the control
    and interdiction activities, is where Ecuador needs the
    international assistance.
        And we are very, very thankful for the international
    assistance that we get from the UNDCP, the United Nations
    International Drug Control Program, and from the Inter American
    Commission for the Control of the Abuse of Drugs (SICAD) of the
    Organization of American States. But we need the help of our
    neighbors, Colombia. We need the help of Peru.
        We are finished, as you know already, about 3 years ago all
    the problems which we had were the frontier in Peru. And all
    the money that was supposed to be in the hands of the people to
    fight with Peru, we are now using it to build roads in Peru. To
    build roads between Peru and Ecuador, I mean, in joint
    programs.
        Senator McConnell. All right.
        Attorney General Jimenez. There is another frontier which
    is a problem where we have about 580 kilometers which is open
    24 hours with Colombia around the Putumayo region, which you
    already have heard about it. Some more data, Mr. Chairman.
    Important data of about 1,000 tons of cocaine production, and
    all the cycle from Colombia, 50 percent goes through Ecuador.
    And where does it go? It goes to the United States of America.
    It goes to Europe. To poison the young people of America, of
    the Americas. North America, Central America, South America.
    But especially in the consumer countries.
        In 4 years, about 1,000 persons in Ecuador, which is a lot,
    and corporations have been investigated and they have been
    sentenced, because of unusual banking transactions. And there
    we have the Unidad Para Procesamiento de Informacious Reservata
    (UPIR) or Commission of Processing of Confidential Information,
    which also belongs to the CONSEP, of which I am the president
    as attorney general, which is the special investigations
    commission for banking transactions.
        I have 24 prosecutions a year regarding drug dealings,
    which is enhanced or which are enhanced of the prosecutor
    general.
        Senator McConnell. Could I interrupt you a minute, Mr.
    Attorney General? The administration has only requested $2
    million in this supplemental that we're talking about today,
    for your country, on top of $11 million already in the budget.
        Attorney General Jimenez. Yes, Mr. Chairman.
        Senator McConnell. Yet you just testified 50 percent of the
    cocaine is going through Ecuador. Do you share my view that it
    might be appropriate to deal with this issue in a more regional
    way than the current bill that we are having the testimony on?
        Attorney General Jimenez. Definitely. I believe that it has
    to be taken as a context, as a general context. I believe in
    the dream of General Simon Bolivar--or they call him Simon
    Bolivar here in the States. The guy in Colombia is called the
    Grand Colombian, as you know, before 1830, before we got
    separated in different countries.
        I am not saying that we have made effusion, a merge between
    the countries. No. Although mergers are up-to-date in Ecuador
    now, but banking mergers in order to avoid bankruptcies. But I
    think that this has to be taken as a whole strategy, as a
    coordinated strategy.
        But everything we do in only one country, because it is the
    big producer, and I am for our, as we call it, the sister
    republic of Colombia. Everything we do, everything the
    international organizations do in order to increase the drug
    fights in Colombia will be dropping to the southern countries.
    Especially to Ecuador and Bolivia.
        And why do I say especially to Ecuador and Bolivia? Because
    in Peru, there is a very strong government run by President
    Fujimori. And he went out of the international commission of
    human rights. He decided to do so. He is not part of the
    international commission of human rights anymore. He decided to
    do so.
        We are part of the International Commission of Human
    Rights, and we, at the attorney general's office of Ecuador,
    have about 20, between 20 and 25, cases of human rights. And we
    work for human rights in all the aspects. Not only in the drug
    dealing, drug trafficking, drug fighting situation, but in all
    aspects.
        Senator McConnell. Mr. Attorney General, I apologize that
    we are running so late, but if you could wrap it up so we could
    hear from----
        Attorney General Jimenez. Sure.
        Senator McConnell [continuing]. The minister in Bolivia,
    and then we will get a few questions then.
        Attorney General Jimenez. Thank you, Mr. Chairman.
        Senator McConnell. Thank you so much. Mr. Minister.

    STATEMENT OF OSWALDO ANTEZANA, MINISTER OF AGRICULTURE FOR BOLIVIA

        Minister Antezana. Let me begin by thanking you, Mr.
    Chairman, for conducting this timely hearing on the U.S. anti-
    narcotics policy in the Andean region and for allowing my
    country to express its views regarding this very important
    matter. Bolivia, a country that was, until very recently, the
    second largest producer of cocaine in the world, undertook, in
    August of 1997, upon the swearing in of President Gonzalo
    Sanchez De Lozada, the solemn commitment to eliminate illegal
    coca production in the country by the year 2002.
        Since Bolivia began implementing its counter-narcotics
    strategy, the Dignity Plan, through education, interdiction
    operation and a broad array of law enforcement programs in
    combination with our alternative economic development projects,
    we have seen a reduction of more than 70 percent of illegal
    coca production. Progress was even faster than anticipated.
    From 33,800 hectors of illegal coca plantations in 1997 to
    9,800 hectors today.
        This translates into 250 metric tons of cocaine that will
    not be produced or exported.
        Senator McConnell. You said you think you can achieve
    complete elimination by what date?
        Minister Antezana. 2002. My country has clearly shown that
    once uncapable of victory in the war against drugs is
    attainable. That our goals seen as utopian when first
    announced, is today within reach. At this vital juncture,
    enhanced cooperation and assistance from the international
    community in support of Bolivia's continued progress is key to
    the successful completion of these efforts.
        We are entering into the most critical and complex phase of
    the Dignity Plan. After 29 months of record breaking levels of
    eradication, we are about to initiate an eradication operation
    in the Yungas, the second largest coca production area in
    Bolivia; an insulated region with a long standing tradition of
    coca use and a strong anti-government sentiment.
        It is serving the Yungas culture and religious traditions
    in regards to coca use, it will be a daunting task demanding
    increased results.
        Despite the fact that in 1999, eradication and interdiction
    efforts were conducted, we cannot discard possible flare-ups of
    social unrest in Chapare and Yungas. For example, already this
    year, there was killed a Bolivian soldier in Chapare. And in
    just in the past weeks, two more anti-narcotics officers were
    again downed in the line of duty.
        Our vigorous eradication and interdiction efforts, along
    with incentives for coca growers to switch to legal crops are
    clearly working. We, indeed, have been able to dramatically
    reduce vigorous coca production. Now we must finish the job.
        In his request for supplemental aid for the Andean
    countries, President Clinton proposed $18 million in assistance
    for Bolivia for the years 2000 and 2001. We greatly appreciate
    the administration's recognition that our partnership with the
    United States requires additional resources. At the same time,
    even the General Accounting Office of the U.S. Government
    concluded in its February 18th report that the Andean
    government continued to lack the resources and capabilities
    necessary to perform effect counter-narcotic operations.
        To complete, and make permanent, the gains of the Dignity
    Plan, Bolivia estimates a need of $111.5 million for fiscal
    year----
        Senator McConnell. If I could interrupt on that point, Mr.
    Minister, just like I did the Attorney General. Is it your view
    that this package that we are currently having the hearing on,
    is not sufficiently regional in nature and would it be your
    view that it would be more successful if greater assistance
    were provided to Bolivia and to Ecuador?
        Minister Antezana. Ecuador? Yes. It is true. We can work
    together with--all the countries of the Andean region. Of
    course. Yes.
        Senator McConnell. In other words, the current amount for
    Bolivia is not adequate for you to finish the job?
        Minister Antezana. No. It's not sufficient.
        Senator McConnell. OK. Go right ahead. I'm sorry.
        Minister Antezana. Bolivia estimates a need of $111.5
    million for fiscal year 2000, and $106.5 million for fiscal
    year 2001. As part of the regular budget, the United States has
    already provided $48 million to Bolivia in fiscal year 2000,
    and proposed $52 million for fiscal year 2001. This means that
    there is a shortfall of at least $50 million each year. In the
    strongest terms possible, we respectfully request that Congress
    consider increasing the money set for Bolivia in the
    supplemental aid package for a total of $50 million per year.
        The bulk of these funds will be used in alternative
    development projects and balance of payments. Integrating coca
    farmers into the legal economy is the most urgent priority for
    Bolivia's counter-narcotics efforts. If the government is not
    able to give an answer to more than 38,000 families that will
    be displaced as a result of the counter-narcotics strategy,
    there is a danger of serious backsliding on the immense
    progress to date. Already the dramatic reduction of coca
    availability has quadrupled the price of the leaf in only one
    year.
        The farmers of the Chapare region are just beginning to
    enjoy the promise of a sustainable legal economy. There are
    already 105,000 examples of legal substitute crops, but much
    remains to be done and achieved. The next 2 years are crucial.
        The key to our sustained success in eradicating illegal
    coca crops is tangible progress and development, new sources of
    legal products.
        If the assistance proposed for Bolivian, the package is not
    proportionate to the success in eradication that we have
    achieved, there will be enormous pressure on Bolivians to
    return to illicit coca production.
        With current resources, we are not able to thwart such
    pressure. We are not asking for open-ended assistance, but we
    disparately need the amounts we requested for the next 2 years
    to complete our goal. Then Bolivia and the United States can
    raise our hands together as we celebrate complete victory
    against drug trafficking.
        I would like to submit, for the record, a short detailing
    of the funding request for Bolivia for the next 2 years. I am
    now open to any questions you or any members of this committee
    might have on this issue.
        Thank you very much, Mr. Chairman.
        Senator McConnell. Thank you, Mr. Minister. We will put
    your additional material in the record.
        [The information follows:]
              Dignity Plan Supplemental Assistance Funding Request

                                       FISCAL YEAR 2000 SUPPLEMENTAL FUNDING NEEDS
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                       U.S. regular    Supplemental        Total
                                 Program                                  funding       requirement     assistance
    ----------------------------------------------------------------------------------------------------------------
    Alternative development.........................................            14.0            53.0            67.0
    Prevention and justice..........................................             2.8  ..............             2.8
    Eradication.....................................................             4.5             8.5            13.0
    Interdiction....................................................            24.0             2.0            26.0
    Others..........................................................             2.7  ..............             2.7
                                                                     -----------------------------------------------
          Total.....................................................            48.0            63.5           111.5
    ----------------------------------------------------------------------------------------------------------------

                            [In millions of dollars]

                                                                Share within
                                                                supplemental
                                                                 requirement

    Alternative development:
        Projects:
            Chapare-Yungas Social and Productive Infrastructure.......   7.0
            Assistance Production Fund................................   4.0
            Investment and Credit for Rural Enterprises...............   5.0
            Assistance for Agrarian Production........................   8.0
            Technical Assistance Fund.................................   3.0
                                                                      ______
              Subtotal................................................  27.0
                            =================================================================
                            ________________________________________________
        Balance of payments:
            Community Compensation....................................  10.0
            Alternative Development Activities USAID..................  10.7
            Road Infrastructure.......................................   5.3
                                                                      ______
              Subtotal................................................  26.0
                            =================================================================
                            ________________________________________________
              Total...................................................  53.0
                            =================================================================
                            ________________________________________________
    Eradication:
        Assistance for Eradication: Personnel and equipment for DIRECO   7.0
        Investment: Equipment, infrastructure and topographic material
          for DIRECO..................................................   1.1
        Institutional Strengthening Projects..........................   0.2
        Public Awareness Campaigns....................................   0.2
                                                                      ______
          Total.......................................................   8.5
                            =================================================================
                            ________________________________________________
    Interdiction:
        UMOPAR--Border Security.......................................   1.1
        Canine Program................................................   0.3
        Communications Unit...........................................   0.6
                                                                      ______
          Total.......................................................   2.0

                                     FISCAL YEAR 2001 SUPPLEMENTAL FUNDING NEEDS \1\
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                       U.S. regular    Supplemental        Total
                                 Program                                  funding       requirement     assistance
    ----------------------------------------------------------------------------------------------------------------
    Alternative development.........................................            14.0            50.0            64.0
    Prevention and justice..........................................             2.8  ..............             2.8
    Eradication.....................................................             4.5             7.5            12.0
    Interdiction....................................................            24.0             1.0            25.0
    Others..........................................................             2.7  ..............             2.7
                                                                     -----------------------------------------------
          Total.....................................................            48.0            58.5           106.5
    ----------------------------------------------------------------------------------------------------------------
    \1\ INL requested $52 million of regular funding for fiscal year 2001; if approved, then Bolivia's supplemental
      requirement would be $54.5 million, instead of the $58.5 million quoted in the chart.

                            [In millions of dollars]

                                                                Share within
                                                                supplemental
                                                                 requirement

    Alternative development:
        Projects:
            Chapare-Yungas Social and Productive Infrastructure.............
            Assistance Production Fund......................................
            Investment and Credit for Rural Enterprises.....................
            Assistance for Agrarian Production..............................
            Technical Assistance Fund.......................................
                                                                      ______
              Subtotal................................................  24.0
                            =================================================================
                            ________________________________________________
        Balance of payments:
            Community Compensation..........................................
            Alternative Development Activities USAID........................
            Road Infrastructure.............................................
                                                                      ______
              Subtotal................................................  26.0
                            =================================================================
                            ________________________________________________
              Total...................................................  50.0
                            =================================================================
                            ________________________________________________
    Eradication:
        Assistance for Eradication: Personnel and equipment for ............
        Investment: Equipment, infrastructure and topographic material
          for DIRECO........................................................
        Institutional Strengthening Projects................................
        Public Awareness Campaigns..........................................
                                                                      ______
          Total.............................................................
                            =================================================================
                            ________________________________________________
    Interdiction:
        UMOPAR--Border Security.............................................
        Canine Program......................................................
        Communications Unit.................................................
                                                                      ______
          Total.............................................................

        Senator McConnell. I have just a couple of questions.
    First, with regard to Ecuador, Mr. Attorney General.
        Attorney General Jimenez. Mr. Chairman.
        Senator McConnell. Thanks. First, how successful is your
    judicial system in prosecuting and incarcerating if found
    guilty these drug traffickers that you find in your courts?
        Attorney General Jimenez. Well, we are doing a lot of
    effort in bettering the judicial system of Ecuador. There are
    many, many problems in the judicial system. It is not perfect.
    Nothing is perfect in the world, except in heaven.
        But institutions, non-government and non-profit
    organizations of the world are working very hard. For instance,
    the world bank in bettering the judicial system of Ecuador.
        We have an agreement between the judicial power of Ecuador
    and the so-called pro justicia, pro justice organization which
    is sponsored by the world bank. And we are doing a great
    effort. I would say we are not completely successful, but we
    are working towards being successful.
        Senator McConnell. One other question. You, of course,
    mentioned the transit problem through your country, and I am
    curious as to how active efforts are to monitor airports,
    seaports and roads in Ecuador to deal with this transit
    problem.
        Attorney General Jimenez. Well, we try to be as efficient
    as we can, but unfortunately we do not count on the necessary
    elements, material elements to do it. That is where we need
    more assistance.
        One more word, Mr. Chairman, just one word. One of the big
    efforts of the government of Ecuador is the national anti-drug
    plan, 1999, 2003, which was approved last year and which has
    had the endorsement of UNCDP, seek out from the Organization of
    American States and many other international organizations.
        And one more effort, which has been very, very important is
    this I have here, the agreement of the National Congress, the
    agreement of the National Government of Ecuador with the United
    States Air Force for the Manta Air Base which is working very
    well.
        And people are very happy to have the air base there,
    because there is more work today in the Manave Province where
    they needed a lot of work. So, there are efforts that are being
    made, but we need assistance. Thank you.
        Senator McConnell. Thank you. Just one final. Senator Leahy
    is going to handle the final witness who is going to be
    discussing details from today's front page Washington Post
    story, but I want to conclude my part of the hearing by asking
    the minister from Bolivia, even though I know agriculture is
    your portfolio and not justice. I'm also curious, if you know,
    how successful you have been in Bolivia in arresting and
    incarcerating drug traffickers.
        Minister Antezana. Well, we have good results. This is a
    matter that I do not know. I do not know except the number of
    people, because I have my responsibility in the area of world
    development and alternative development----
        Senator McConnell. Right.
        Minister Antezana [continuing]. In eradication. But in the
    last year, I think we catch around 40 tons of the cocaine in
    Bolivia, and many, many people were arrested. I do not know
    exactly the number.
        Senator McConnell. Let me just conclude by saying to both
    of you how much I appreciate your being here, and also I want
    to make an observation to the minister of agriculture from
    Bolivia, because I understand the problem of agricultural
    transition.
        The most unpopular thing you can do in America, that is
    legal, is smoke a cigarette. I used to have 100,000 tobacco
    growers in my State. We have lost about 25 percent of them
    since President Clinton came to office, and it is dropping
    daily because of the effort to crack down on cigarette smoking
    in our country.
        Regretfully, in the Appalachian Mountains, the most
    profitable thing you can do is grow marijuana. And so we have
    our ongoing efforts in my State to discourage this kind of
    illegal activity. The root cause of the problem, of course, is
    the profitability of the plant.
        So, I want to particularly commend Bolivia for the
    extraordinary success that you have had in a really tough area.
    It is very, very difficult to, with rural people who are
    otherwise rather poor, to discourage this kind of activity when
    it is so lucrative. So, my hat is off. I salute you for the
    extraordinary success you have had in Bolivia. I hope you can
    keep it up, and I hope you can meet the eradication date of
    2002.
        So, with that, Senator Leahy is going to handle our last
    witness, and I am sure his stomach is growling intensely. But
    if he will hold on, Senator Leahy will be here momentarily I am
    told.
        I want to thank you, Mr. Attorney General and you, Mr.
    Minister, for joining us today, and let me just say that I
    share your view that we ought to take a more regional approach
    to the request of the Clinton Administration.
        And I am hopeful that our final product, which we send down
    to the President, will more accurately meet the needs that you
    have expressed here. And there, as if on cue, Senator Leahy
    arrives to handle our last witness. Thank you both very much.
        Attorney General Jimenez. Thank you, Mr. Chairman.
        Senator McConnell. You are up.
        Senator Leahy [presiding]. If I have any questions of these
    witnesses, I will put them in the record, but thank you all for
    being here.
        Attorney General Jimenez. Thank you.
        Senator Leahy. Why don't we have the next witness come
    forward, please. Ms. Kirk, I am delighted to have you here. You
    and Human Rights Watch have been referred to on more than one
    occasion today, as I do not need to tell you. Why don't you go
    ahead.

    STATEMENT OF ROBIN KIRK, AMERICAS DIVISION, HUMAN RIGHTS WATCH

        Ms. Kirk. Well, thank you very much.
        Senator Leahy. I know you have waited a long time for this.
        Ms. Kirk. It has been very interesting. First, I want to
    thank the subcommittee for inviting me, Chairman McConnell,
    Senator Leahy. It is a pleasure to come here and talk with you
    about the proposed aid plan to Colombia. I have a written
    statement that I have submitted for the record, but I would
    like to just comment briefly on a couple of things that have
    been said today during this hearing.
        I think I would like to make it very clear that I agree
    that Colombia is a matter of serious concern, not only for the
    United States, but also for the international community. We
    believe that this policy needs to be scrutinized very
    carefully, and it needs to be scrutinized based on the facts.
    And that is what I would like to discuss today.
        I would like to comment on a couple of things that were
    said earlier today in the testimony. Three basic points. Number
    one, this idea that human rights problems in Colombia, and
    specifically the relationship between the military and
    paramilitary groups, are simply the result of some bad apples.
    General Wilhelm used the phrase local collusion with
    paramilitary groups.
        With a great deal of respect to the General, I would simply
    like to say that that is not supported by the facts. We
    released a report yesterday that shows that far from local
    collusion, what we were able to document is continuing ties
    between the military and paramilitary groups, and specifically,
    ties that go right through the whole structure of the army.
        We were able to document ties between paramilitaries and
    the military in half of the 18 brigades that now function
    within the Colombian army. This is not history, this is
    reality. This is present day.
        It is clear that President Pastrana has made a commitment
    to human rights. He has made that commitment to us in meetings.
    Ambassador Moreno has also made the same commitments. We
    understand that there is a will, at least in terms of what
    Colombian officials will say, to do more for human rights. But
    what we do not see are actions on the ground.
        There are two things that have been cited as proof that the
    Colombian government has made progress in combating these ties
    between the military and paramilitary groups, and specifically
    military involvement in abuses. Ambassador Pickering mentioned
    the question of statistics.
        That, in fact, the number of human rights violations that
    are directly attributable to the army, to the military in
    general, have decreased in recent years. That is absolutely
    correct.
        We would agree that direct ties between the military and
    human rights violations have decreased, but that does take into
    account the whole question of open collaboration, collusion and
    support for paramilitary groups. There are no statistics that
    measure that. What there are are cases. The kinds of cases that
    we included in our report that show that this collusion, this
    collaboration, and indeed even an open creation of paramilitary
    groups, continues to occur in Colombia.
        In our report, we looked into the behavior of three
    brigades, and I think it is important to note that those three
    brigades are based in Colombia's largest cities. We are not
    talking about brigades that are in rural areas. We are not
    talking about far away places. We are talking about the capital
    of Colombia, Bogota. We are talking about Medellin and we are
    talking about Cali.
        This is far from something that is out there in the woods
    that cannot be controlled or cannot be supervised. This is
    happening in the heart of the Colombian army.
        Secondly, both Ambassador Pickering and Ambassador Moreno
    cited our report and said that it was actually a good sign for
    the Colombian government and its progress on human rights,
    because much of our information was based on the work of
    Colombia's own investigators. Prosecutors who work for the
    Attorney General's Office.
        But I would like to point out that many of those
    investigators have been threatened because of their work, and
    have been forced to leave Colombia. There is not an effort on
    the part of the Colombian government to protect them.
        Secondly, I would like to comment on the question of
    conditions. We welcome statements that have been made by the
    Colombian government that they will support human rights, but I
    think it is key to match will with measurable benchmarks that
    the United States can use to see exactly what the facts are on
    the ground. We cannot simply be satisfied with expressions of
    good will. We have to be able to match that with real progress.
        I have covered Colombia now since 1992, and every year we
    get expressions of good will. Every year we get intentions, but
    those intentions are not backed up by real progress on human
    rights. Let me just cite one example. I think it is especially
    appropriate for this hearing, because it has to do with the
    case of a Colombian senator.
        This Colombian senator, Manuel Sepeda was murdered in 1994
    in the capital of Colombia, in Bogota. And the investigation
    done by the Attorney General's Office showed that this murder
    had been carried out by the military, by military officers, in
    collusion with paramilitary groups.
        Until Human Rights Watch protested the fact that these
    officers remained on active duty only 3 months ago, those
    officers continued on the payroll of the Colombian army and
    also continued in working in military intelligence. And it was
    only until we protested that, in fact, the investigation showed
    that these Colombian army officers had killed a Colombian
    senator. It was only then that these two individuals were
    discharged from the army. That is the kind of progress----
        Senator Leahy. What else happened?
        Ms. Kirk. Well, now they are put at the disposition of a
    civilian court, but the fact is that they remained on active
    duty. They remained on the payroll until this became public.
        Senator Leahy. Are they before the civilian courts now?
        Ms. Kirk. They are before the civilian courts, but let me
    just say that these two individuals are low ranking officers.
    They are at the sergeant level and what we have seen again and
    again is that the Colombian government will cite statistics of
    officers sent to civilian courts for trial and those officers
    are almost always privates or sergeants.
        Senator Leahy. Do you remember what the rank was of these
    two?
        Ms. Kirk. They were both sergeants.
        Senator Leahy. And was anybody else either sent to military
    courts or suspended as a result?
        Ms. Kirk. In this particular case, these officers told
    investigators that they were acting under the orders of a
    general, who at that time was the head of the ninth brigade,
    and that general actually died of a heart attack in 1996. So,
    the case stopped investigating him at that point. But it is
    clear that there was, it was not just the actions of these
    sergeants, it was clear that they were acting on orders from
    their commanding officer.
        Senator Leahy. I note that Human Rights Watch is well-
    respected and that your work has been widely quoted, by both
    Democrats and Republicans.
        I understand that yesterday, on a Colombian radio broadcast
    General Tapias accused Human Rights Watch of conspiring with
    drug traffickers to defame the Army. Would you respond to that?
        Ms. Kirk. Well, I think----
        Senator Leahy. Because you know I raised this question
    earlier.
        Ms. Kirk. Yes. No. Thank you for raising it. I think it
    speaks for itself. Because they do not attack us on the facts.
    They try to suggest that we are acting for other motives other
    than simply documenting the truth, but they never question our
    facts. And I think that, I would like that to speak for itself.
        Senator Leahy. When you work in Colombia, what type of
    freedom do you have to operate? You are down there
    investigating gross human rights violations. I can think of
    other countries in Central and South America where people have
    been killed for doing similar work. Is this a concern for Human
    Rights Watch?
        Ms. Kirk. Well, I think it is mainly a concern because of
    our Colombian colleagues, because we consider Colombia the most
    dangerous country in the world now for human rights defenders.
    Luckily, people like myself, who work for international
    organizations, have not lost anyone, but we have lost many of
    our Colombian colleagues. And in fact, Monday is the
    anniversary of the date of the murder of one of the human
    rights defenders that I worked most closely with in Colombia,
    Jesus Valle.
        So, we are extremely concerned about the safety of our
    colleagues in Colombia, and their ability to do just the kind
    of work that is needed to document continuing human rights
    abuses in the country. We do face a serious problem, because
    these human rights workers continue to receive threats, and
    continue to feel that they jeopardize their lives, especially
    when they speak publicly. I feel very fortunate, myself, to be
    able to speak publicly here without being afraid when I walk
    out of the room. I am afraid that my Colombian colleagues, with
    all due respect to the Colombian ambassador, do not feel the
    same freedom.
        Senator Leahy. You heard Ambassador Pickering mention the
    work the Army is doing to purge itself of human rights
    violators. Some have noted the dismissal of 15 officers as a
    sign of progress. How would you respond to that, is that a real
    sign of progress?
        Ms. Kirk. I think we were looking at that figure the other
    day, 15 officers, and the only way we could kind of account for
    each of the officers was to go back as far as 1990 to find
    exactly who they meant by being discharged. So, in other words,
    in the past 10 years, 15 officers have been discharged. Most of
    them simply discharged.
        In other words, not prosecuted for the human rights abuses
    that they have been accused of doing. So, no, we do not see
    that as a sign of great progress. Certainly it is welcome when
    officers who commit human rights violations are discharged, but
    we also want to see them prosecuted.
        Senator Leahy. How does that contrast with the National
    Police?
        Ms. Kirk. That is an important contrast, I think, because,
    for instance, since General Serrano took charge of the
    Colombian police in 1994, he has discharged an average of 1,000
    officers every year. That is for human rights violations, but
    also because of corruption and other criminal activity.
        But I think it is clear the lesson that we take from that
    is, number one, it is possible when there is political will to
    make great advances on human rights. And second, that is it
    possible in Colombia if the Colombian government and the
    commanders of the army and the navy and the air force decide to
    apply the same kinds of measures that General Serrano has done
    within the police.
        Senator Leahy. But I am told that prosecutors,
    investigators, human rights monitors and others have had to
    flee Colombia, even today, because of concern for their own
    safety. Is that your understanding?
        Ms. Kirk. That is correct. And it is very disturbing to us.
    Just at the time when, especially the United States, wants to
    have this aid monitored and wants to be able to collect the
    human rights information that it needs, for instance, to apply
    the Leahy Amendment, to find that even the government's own
    investigators, the people in the Attorney General's Office that
    we depend on to forward these cases, are having to flee the
    country.
        And in fact, much of the information that we collected for
    this report was taken from prosecutors who are out of Colombia
    and who wanted, because they are committed to their jobs and
    committed to doing their duty, they wanted to see some
    accountability.
        And unfortunately, their only recourse was to go to
    international organizations like Human Rights Watch and see if
    they could not, by talking to us about their cases, forward
    them within the Colombian judicial system, because most of
    these cases that are summarized in this report are stopped. Are
    essentially frozen, because the prosecutors who were
    shepherding them through the judicial system have had to flee
    the country.
        Senator Leahy. Is the Colombian Attorney General's Office
    the major source of your information?
        Ms. Kirk. We match our interviews with Colombian
    prosecutors with our own interviews with eyewitnesses and other
    information that we have collected from victims of violations.
        Senator Leahy. I want to make sure I fully understand this.
    You have spoken about General Serrano. You spoke about the
    National Police and what they have done. Are you suggesting
    that if the will was there, the same could be done in the
    military?
        Ms. Kirk. I think that is unquestionable. That the military
    can take measures today that would begin to produce real
    results in terms of human rights protections. One of them is
    simply purging officers that have a proven record of support
    for paramilitary groups.
        One of the things that you will note from our report is
    that many of the officers who were in charge of these units
    that we have tied to paramilitary activity, not only remain on
    active service, but have been promoted. In essence, rewarded
    for their collusion with paramilitary groups.
        That is something that I think would be very evident to
    General Tapias if he decided to appoint a review committee.
    That is one of the conditions that we are supporting. To have
    an outside review committee look at some of these cases and see
    who is it that really needs to be out of uniform.
        Senator Leahy. And so to anticipate questions, would it be
    naive to suggest that the Army take this on while fighting the
    guerrillas? Does it diminish their ability to fight? Does it
    make any difference in their ability to protect the nation?
        Ms. Kirk. I think to the contrary. It would strengthen
    their fight against guerrillas, because it is clear that the
    Colombian military has a duty, an obligation, to protect the
    nation. Has a duty to fight threats against Colombian
    democracy. There is no question about that. But the only way
    they can protect democracy is by observing democracy, and
    observing the rule of law.

                               PREPARED STATEMENT

        When the government itself, through its military, violates
    law, violates the rule of law by committing human rights
    violations, they lose credibility. And I think that they would
    be a stronger army, they would be more effective at defending
    Colombia if they, themselves, obeyed the law.
        Senator Leahy. Thank you, Ms. Kirk. We will put your full
    statement in the record.
        [The statement follows:]

                        Prepared Statement of Robin Kirk

        Chairman McConnell, Senator Leahy, Members of the
    Subcommittee: Thank you for inviting me to convey to the
    Subcommittee our concerns about the human rights implications
    of U.S. security assistance to Colombia.
        I would like to thank the Subcommittee for taking the time
    to examine in detail the proposed aid package to the Andean
    countries and specifically Colombia.
        No one disagrees that Colombia faces a difficult challenge.
    A decades-long war and entrenched drug trafficking have exacted
    a high toll. Human Rights Watch has fully documented the
    abusive behavior of Colombia's guerrillas, who kill, kidnap,
    and extort money from the population they claim to represent.
        At the same time, however, forces from within the state
    itself threaten democracy. Paramilitary groups operating with
    the acquiescence or open support of the military account for
    most political violence in Colombia today. Yet Colombia's
    military leaders have yet to take the firm, clear steps
    necessary to purge human rights abusers from their ranks.
        This is not history, but today's reality. Human Rights
    Watch has detailed, abundant, and compelling evidence of
    continuing ties between the Colombian Army and paramilitary
    groups responsible for gross human rights violations, which we
    have submitted to this Subcommittee. Our information implicates
    Colombian Army brigades operating in Colombia's three largest
    cities, including the capital, Bogota.
        Together, evidence collected so far by Human Rights Watch
    links half of Colombia's eighteen brigade-level army units to
    paramilitary activity. In other words, military support for
    paramilitaries remains national in scope and includes areas
    where units receiving or scheduled to receive U.S. military aid
    operate.
        For that reason, it is crucial for the Congress to place
    strict conditions on all security assistance to Colombia to
    ensure that the Colombian Government severs links, at all
    levels, between the Colombian military and paramilitary groups
    and prosecutes in civilian courts those who violate human
    rights or support or work with paramilitaries.
        I have submitted for the record additional recommendations
    for actions that Human Rights Watch believes the U.S. should
    require the Colombian Government to take before receiving
    security assistance.
        The 28th of February marks the two-year anniversary of the
    murder of Jesus Valle, a courageous human rights defender
    gunned down in his Medell'n office precisely because he worked
    to document links between paramilitaries and the Colombian
    Army. The gunmen paid to kill him are in prison. But the
    individuals who planned and paid for his murder remain at
    large.
        Even the government's own investigators are under threat.
    Dozens of prosecutors who have worked on these cases have been
    forced to flee Colombia because of death threats. In 1998 and
    1999, several investigators who worked for the Attorney General
    were murdered because of their work on human rights-related
    cases.
        The United States has a positive message to send Colombia
    and should respond to President Pastrana's call for help. But I
    urge the members of this Subcommittee to recognize that
    continued collusion between Colombia's military and
    paramilitary groups will only undermine the effectiveness of
    the aid you send and sabotage efforts to rebuild democracy.
        Thank you. I would be pleased to answer any questions.

        Senator Leahy. And if there are other questions, we will
    provide that for the record.
        I am sorry you had to be here so long, but I hope you found
    this interesting. I had to go to the floor to get a couple of
    judges confirmed, and we did.
        Nevertheless, I was able to follow the hearing. I think it
    has been worthwhile, especially as the whole Appropriations
    Committee will have to consider the Administration's request.
        I have some real concerns. The Administration's plan has
    not been well thought out.
        It is too open ended. It guarantees that there will be U.S.
    troops involved, at least indirectly, in Colombia.

                             CONCLUSION OF HEARING

        Ms. Kirk, I appreciate you taking the time. I think you
    have helped us with our deliberations.
        Ms. Kirk. Thank you very much.
        [Whereupon, at 1:37 p.m., Thursday, February 24, the
    hearing was concluded, and the subcommittee was recessed, to
    reconvene subject to the call of the Chair.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

                                  ----------

                            THURSDAY, MARCH 23, 2000

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:40 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell and Leahy.

                              DEPARTMENT OF STATE

    STATEMENT OF AMBASSADOR DONALD K. STEINBERG, SPECIAL HAITI COORDINATOR

                 OPENING STATEMENT OF SENATOR MITCH Mc CONNELL

        Senator McConnell. All right. We will commence the hearing.
        Mr. Ambassador, welcome.
        Ambassador Steinberg. Thank you.
        Senator McConnell. We have spent a fortune in Haiti; by my
    estimate, $2.2 billion. Yet by any standard, there is little to
    show for it. Privatization has stalled. The economy and
    standard of living have cratered.
        Procrastination and stonewalling are the hallmarks of
    investigations of political murders. Clean water, a decent
    education and basic health care are inaccessible to most of the
    population.
        Law enforcement and justice are incompetent at best, and
    malicious at--at their worst. The political process is
    deadlocked. Frankly, the only indicators that are on the rise
    are unemployment and the drug trade.
        One of the largest investments we made in Haiti is a good
    illustration of the weakness of our track record. We have spent
    more than $66 million to train and patrol with the Haiti
    National Police.
        A State Department document says, ``In a country that has
    never had a professional and apolitical security service, the
    HNP, despite numerous problems and its relative inexperience,
    is considered a success story.''
        Let me describe how the Haiti--Haitian police officers who
    are assigned to one of the poorest areas of Port-au-Prince
    feel. They are inadequately armed, inexperienced, lack
    competent supervision and are incapable of basic law
    enforcement missions.
        They do not have ammunition. They are uncertain of basic
    policing skills, because there is no coherence to their
    training program. They have been offered a hodge-podge of
    training. The Americans came in and told them to get out on the
    street and engage in community policing.
        Six months later, the French showed up, threw up barb wire
    around their tiny compound and told them never to venture on
    the street. In January, the Canadians showed up with more new
    ideas.
        They have yet to prove they can engage in effective crowd
    control; in fact, senior United States and Haitian officials
    acknowledge they run away from any sign of trouble with a
    crowd. Furthermore, there continues to be regular complaints
    about their use of excessive force during routine arrests.
        This, Ambassador Steinberg, is not a success story by my
    standards and probably not yours either.
        Adding to this bleak picture, the elections scheduled for
    March 19 have been postponed amid allegations of incompetence,
    abuse, harassment and violence. Registration facilities have
    been attacked and destroyed. The basic materials for producing
    registration cards, which USAID helped to pay for, have been
    slow to arrive out in the field.
        While the process has been marred, the people have clearly
    been eager to participate. I gather record numbers have turned
    out to be registered, a small hopeful sign in light of the 5
    percent turnout in the last elections.
        Many observers argue that the delays and destruction are
    part of the Preval-Aristide strategy to stifle voter interest
    and postpone the parliamentary elections to a point that they
    would have to be combined with the presidential elections
    scheduled for December.
        If the elections were held today, polling shows that it is
    likely an opposition party or a coalition of parties would gain
    control of the legislation, an outcome that Aristide and Preval
    hope to avoid if the elections are merged later in the year.
        So let me be clear: I would strongly oppose any
    continuation of bilateral or multilateral aid to Haiti if the
    sitting government collaborates with Aristide to manipulate the
    election schedule to secure a political advantage.
        Ambassador Steinberg, no doubt you can point to a project
    or two managed by AID that has achieved some result. Let me be
    the first to suggest AID has reason to be proud of a number of
    well-run activities.
        The agriculture and coffee cooperative projects are
    excellent examples of programs having meaningful local economic
    impact.
        But the $6 million we spent we have spent well to improve
    agricultural productivity has to be considered in the context
    of a $2 billion failure, which the administration seems to have
    walked away from.
        Before we discuss conditions in Haiti and where we go from
    here, let me make one final observation. This is one of three
    hearings that I want to hold to evaluate the progress made over
    the last eight years in countries where the Administration has
    launched major new political and economic commitments. Haiti,
    Russia and Bosnia lead the pack.
        Other nations have received more aid, but they have not
    been the focus of intense diplomacy and political effort that
    these three have been. It is the combined and considerable
    expenditure of political and economic capital that makes these
    cases interesting.
        Our next hearing will be on Russia, although we are having
    a difficult time setting a date, since Secretary Talbott has
    not been especially inclined to appear. We have offered him any
    date of his choosing, but he seems reluctant to testify.
        For those of you from the State Department here today,
    please renew my personal invitation to the principal architect
    of our Russia policy to appear before the subcommittee at his
    earliest convenience.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        Ambassador Steinberg, we have spent a fortune in Haiti. By my
    estimate we have spent $2.2 billion, yet, by any standard there is
    little to show for it. Privatization has stalled, the economy and
    standard of living have cratered. Procrastination and stonewalling are
    the hallmarks of investigations of political murders. Clean water, a
    decent education and basic health care are inaccessible to most of the
    population. Law enforcement and justice are incompetent at best, and
    malicious at their worst. The political process is deadlocked. Frankly,
    the only indicators that are on the rise are unemployment and the drug
    trade.
        One of the largest investments we have made in Haiti is a good
    illustration of the weakness of our track record. We have spent more
    than $66 million to train and patrol with the Haitian National Police.
    A State Department document says ``In a country that has never had a
    professional and apolitical security service the HNP despite numerous
    problems and its relative inexperience is considered a success story.''
        Let me describe how the Haitian police officers who are assigned to
    one of the poorest areas of Port-au-Prince feel. They are inadequately
    armed, inexperienced, lack competent supervision and are incapable of
    basic law enforcement missions. They do not have ammunition. They are
    uncertain of basic policing skills because there is no coherence to
    their training program. They have been offered a hodge-podge of
    training--the Americans came in and told them to get out on the street
    and engage in community policing. Six months later the French showed
    up, threw up barb wire around their tiny compound and told them never
    to venture on the street. In January, the Canadians showed up with more
    new ideas.
        They have yet to prove they can engage in effective crowd control--
    in fact, senior U.S. and Haitian officials acknowledge they run away.
    There continue to be regular complaints about their use of excessive
    force during routine arrests.
        This, Ambassador Steinberg is not `` a success story'' by my
    standards and probably yours. Adding to this bleak picture, the
    elections scheduled for March 19 have been postponed amid allegations
    of incompetence, abuse, harassment and violence. Registration
    facilities have been attacked and destroyed--the basic materials for
    producing registration cards which USAID helped pay for have been slow
    to arrive out in the field. While the process has been marred, the
    people have clearly been eager to participate--I gather record numbers
    have turned out to be registered--a small, hopeful sign in light of the
    5 percent turnout in the last elections.
        Many observers argue that the delays and destruction are part of a
    Preval-Aristede strategy to stifle this interest and postpone the
    parliamentary elections to a point that they would have to be combined
    with the Presidential election scheduled for December. If the elections
    were held today, polling shows it's likely an opposition party or
    coalition of parties would gain control of the legislature, an outcome
    Aristede and Preval hope to avoid if the elections are merged later in
    the year.
        Let me be clear--I would strongly oppose any continuation of
    bilateral or multilateral aid to Haiti if the sitting government
    collaborates with Mr. Aristede to manipulate the election schedule to
    secure political advantage.
        Ambassador Steinberg, no doubt you can point to a project or two
    managed by AID that has achieved some result. Let me be first to
    suggest, AID has reason to be proud of a number of well run activities.
    The agriculture sustainability and coffee cooperative projects are
    excellent examples of programs having meaningful local economic impact.
    But, the $6 million we have spent well to improve agricultural
    productivity has to be considered in the context of a $2 billion
    failure which the Administration seems to have walked away from.
        Before we pursue conditions in Haiti and where we go from here, let
    me make one final observation. This is one of three hearings I want to
    hold to evaluate the progress made over the past eight years in
    countries where the Administration has launched major, new political
    and economic commitment. Haiti, Russia and Bosnia lead that pack. Other
    nations may have received more aid, but they were not the focus of the
    intense diplomacy and political effort that these three have been. It
    is the combined and considerable expenditure of political and economic
    capital that makes these cases interesting.

                 Opening Statement of Senator Patrick J. Leahy

        Senator McConnell. With that, Senator Leahy, do you have
    any comments you want to make?
        Senator Leahy. Mr. Chairman, I will be happy to join with
    you in letters asking Mr. Talbott to come up here.
        I am glad that you are examining our policy towards Haiti.
    Parliamentary elections, which have been anticipated for a long
    time there, were supposed to be held this month. They have been
    postponed until April 9, and who knows if they are going to
    happen then.
        I understand from the administration that between the cost
    of our military personnel and the aid we provided to try to
    build democracy and support economic development, we have spent
    some $2.2 billion since 1992 in Haiti. That is about $300 per
    person, far less than what we spend in some parts of the world.
        By way of comparison, in Africa, with its enormous problems
    and where we also have national interests, we spend about $1 a
    year per person.
        I have been to Haiti. I have also met with Haitians here. I
    do not see where we have accomplished a great deal with our
    assistance. The poorest country in the hemisphere remains a
    place where the government is barely functioning. Political
    reform has gotten nowhere. Democracy exists only in theory. The
    judicial system is in disarray. The police have been
    politicized. The average person lives from hand to mouth.
        Our policy toward Haiti has been simplistic and often
    plagued by partisanship. Our aid programs, with some
    exceptions--and it is important to note these exceptions--have
    been poorly conceived and poorly managed. But the Haitian
    leadership itself deserves most of the blame. The greatest
    obstacle to the island's development in the years since
    President Aristide's return has been Haitian officials, who are
    far more interested in playing politics and staying in power
    than addressing the basic needs of the impoverished people they
    are there to represent.
        We could talk about the mistakes of the past or the money
    that has been spent, or misspent, since 20,000 U.S. troops
    launched ``Operation Uphold Democracy,'' a mission that may
    best be remembered for its overly optimistic name.
        But we have to think about where Haiti is and what its
    options are for the future. It is at a critical juncture. I
    believe that over the next few months, it is either going to
    slide deeper into poverty and violence, or begin to dig itself
    out of the quagmire.
        The question we have to answer is: Do we cut our losses,
    close down our AID mission and go home, or throw good money
    after bad in the hope that things might get better?
        The Haitian people themselves deserve better. They have
    suffered every possible indignity and deprivation. I have met
    them both in the city, but also out in the countryside. My wife
    has visited a number of their medical facilities and is
    appalled by the lack of basic services--services that anybody
    would expect in even the most rural parts of our country.
        I would like to see the United States help, if we can spend
    our money wisely. But I worry about Haiti's political elite.
    They have made a lot of empty promises over the years.
        But then you look at the people. Despite an electoral
    process fraught with irregularities, millions of Haitians have
    registered to vote. Over a million more are seeking to
    register.
        Long lines outside voter registration offices show their
    desire for a better life and a willingness to again put their
    faith in the electoral process. I think they believe that is
    their best hope, and I do too.
        There is one other bright star in this, Mr. Chairman, and
    that is Ambassador Steinberg.
        I knew him when he was our Ambassador to Angola. I know him
    through his current role as Special Advisor to the Secretary of
    State for Humanitarian Demining. It is a cause I have a deep
    personal interest in, and which Don Steinberg has shown not
    just a professional interest in, but a moral interest in.
        Mr. Chairman, you have also been a strong and valuable
    supporter of our cause of demining around the world.
        I think if anybody is capable of injecting pragmatism and
    forthrightness into our policy in Haiti, he is the one that
    could do it.
        I do not envy him his difficult task in coming before this
    subcommittee. But I do commend him for what he has done, just
    as I commend you, Mr. Chairman, for looking into this issue.
        Thank you.
        Senator McConnell. Thank you, Senator Leahy.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Mr. Chairman, this is an excellent time to be examining United
    States policy towards Haiti. Parliamentary elections, long awaited,
    were to be held this month. Once again, they have been postponed, this
    time until April 9, and who knows if they will happen then.
        According to the administration, between the cost of our military
    personnel and the aid we have provided to try to build democracy and
    support economic development, the United States has spent over $2.2
    billion dollars in Haiti since 1992.
        In a country of 7 million people, that is about $300 per person. By
    way of comparison, our foreign aid to Africa amounts to about $1 per
    person per year.
        What has been accomplished in Haiti? Very little, as far as I can
    tell. The poorest country in the hemisphere remains a place where the
    government is barely functioning, political reform has gotten nowhere
    and democracy exists only in theory, the judicial system is in
    disarray, the police are politicized, and the average person lives from
    hand to mouth.
        Our policy has been simplistic and plagued by partisanship. Our aid
    programs, with few exceptions, have been poorly conceived and poorly
    managed. But the Haitian leadership deserves most of the blame.
        The greatest obstacle to the island's development, in the years
    since President Aristide's return, has been Haitian officials who are
    far more interested in playing politics and staying in power than
    addressing the basic needs of the Haitian people.
        It would be easy to dwell on the mistakes of the past and the time
    and money that has been spent--or misspent--since 20,000 U.S. troops
    launched ``Operation Uphold Democracy''--a mission that may be
    remembered most for it's overly optimistic name.
        But we need to use this opportunity to honestly assess where we
    are, and what our options are for the future. Haiti is at a critical
    juncture. Over the next few months it will either slide deeper into
    poverty and violence, or begin to dig itself out of the quagmire.
        The question we must answer is whether we should cut our losses,
    close down our AID mission and go home, or throw good money after bad
    in the hope that we can do better from this day forward.
        The Haitian people deserve better. They have suffered every
    possible indignity and deprivation. I would like to see the United
    States help, if we can spend our money wisely.
        Despite years of empty promises and opportunism by Haiti's
    political elite, despite an electoral process that is fraught with
    irregularities, it is encouraging that millions of Haitians have
    registered to vote and over a million more are seeking to register.
    Long lines outside voter registration offices attest to their desire
    for a better life and a willingness to again put their faith in the
    electoral process. They know that it is their best hope.
        I have known Ambassador Steinberg from when he was our Ambassador
    to Angola, and from his current role as Special Advisor to the
    Secretary of State for Humanitarian Demining--a cause that I have a
    deep, personal interest in. If anyone is capable of injecting
    pragmatism and forthrightness into our policy in Haiti, it is Don
    Steinberg and I commend Chairman McConnell for inviting him here to
    testify.
        Don, this is your first time as a witness before this Subcommittee
    and I do not envy your task today, but we welcome you and are eager to
    be convinced that all is not as hopeless in Haiti as it seems.

                 SUMMARY STATEMENT OF HON. DONALD K. STEINBERG

        Senator McConnell. Mr. Ambassador, go right ahead.
        Ambassador Steinberg. Thank you, Mr. Chairman.
        Senator McConnell. We will put your full statement in the
    record. And if you could summarize it, that would be good.
        Ambassador Steinberg. Mr. Chairman, Senator Leahy, I
    welcome this opportunity to come before the committee and to
    discuss recent developments in Haiti, as well as our mutual
    efforts to promote positive change.
        I have submitted a lengthy statement for the record, but I
    want to take, at your convenience, a few moments to discuss
    some elements of that testimony.
        I have been in the job of Special Haiti Coordinator just
    since November, but I have already made six trips to Haiti in
    that period. It is clear to me that we have a huge challenge
    ahead of us in helping Haiti down the road to democracy,
    respect for human rights, and economic development.
        I agree with you that so far that road has been bumpy at
    best. There are no quick fixes to helping a society overcome
    the legacy of literally two centuries of authoritarian regimes,
    rapacious military forces, and class divisions.
        Clearly, the expectations in the wake of the restoration of
    the democratically elected government in 1994 have not been
    fully met. In my written testimony, you will see that I
    highlight a number of areas of disappointment and frustration,
    including halting progress on human rights, problems of drug
    trafficking, and the sorry state of the judiciary and prison
    systems.
        In one of my recent visits, I went to the National
    Penitentiary, walked through that facility, and talked with
    prisoners, many of whom had been held for months and even years
    without ever having been charged with anything.
        That visit filled me with rage and frustration, but equally
    important, a new commitment to help create rule of law and
    administration of justice in Haiti.
        As both you and Senator Leahy have pointed out, the lack of
    a parliament and local government since their disbanding 14
    months ago, has been an undercutting element to all of our
    efforts to promote democracy.
        You both highlighted the positive development in Port-au-
    Prince now, something I like to call ``election fever.'' Some
    3.6 million people have gone to register to vote. That is about
    80 percent of the population. That is a pretty impressive
    number, certainly by international comparison.
        You walk through the streets of Port-au-Prince and the
    outlying cities, and there is an excitement. There are
    political debates going on. There are posters everywhere.
    Indeed, we have helped through election support to promote this
    election fever.
        But we are very concerned. In fact, the government of Haiti
    is not allowing that fever to reach fruition. During my most
    recent visit, NSC Senior Director Valenzuela and publicly
    called for the government of Haiti to publish new dates for the
    election and to support those elections with financial,
    logistical and security support.
        We warned that the failure to constitute a parliament will
    risk isolating Haiti from the community of democracies, and it
    will jeopardize further cooperation. We also condemned elements
    in Haiti who are using strong-arm tactics to derail these
    elections.
        We are working with the international community, including
    the United Nations, the OAS, and the European Union, to
    mobilize international pressure to get these elections held.
        Mr. Chairman, while acknowledging a number of problems and
    frustrations in Haiti, I think it is equally important to
    acknowledge some achievements that have been attained since
    1995.
        I think we can all share satisfaction in some strides that
    have been taken to alleviate poverty and hunger, to build some
    of the basic institutions of democracy, to increase access to
    education, and to improve health care.
        The programs that Mrs. Leahy has visited, indeed, have done
    wondrous efforts to promote mother-child health care and family
    planning.
        We are combating environmental degradation. We are helping
    incubate civil society. And we have helped demobilize the armed
    forces, which has been an overhanging threat to democracy
    throughout Haiti's history.
        We all need to remember as well what the situation was like
    in the early 1990s when a brutal military regime was
    terrorizing its political opponents in Haiti; when tens of
    thousands of boat people were fleeing the terror and risking
    their lives; when starvation and suffering was rampant; and
    when the economy was in shambles due to capital flight and
    sanctions.
        Despite all the problems of Haiti today--the problems that
    you have identified and the problems that we identify--Haiti
    has its best chance in its history to move down the road to
    democracy, national reconciliation and economic recovery.
        And I believe we need to be on that road with the Haitians.
    Our national interests are too great: promoting democracy
    throughout the western hemisphere; addressing crushing poverty
    on our doorstep; interdicting cocaine trafficking; and
    preventing a new flood of illegal migrants.
        If we can all resist the easy solace of frustration and
    fatigue, I think we can achieve these reasonable expectations.
    I look forward over the coming months and years to working with
    this Committee to achieve this.
        Thank you.
        Senator McConnell. Thank you, Mr. Ambassador.
        [The statement follows:]

              Prepared Statement of Abmassador Donald K. Steinberg

        I welcome the opportunity to be with you this morning to discuss
    recent developments in Haiti and the Administration's efforts to
    address the challenges of promoting democracy, human rights, and
    economic recovery there. I just returned from my sixth visit to Haiti
    since November, and I look forward to an exchange of views with you on
    the road ahead.

                 PURSUING AMERICAN NATIONAL SECURITY INTERESTS

        Since the early 1990's, Haiti has been a focal point of our efforts
    in the Western Hemisphere. Our objectives, based on strong national
    security interests, include: helping Haiti join the global march toward
    democracy through construction of basic institutions; alleviating
    crushing poverty, illiteracy, and malnutrition; stemming illegal
    migration; and interdicting drug trafficking.
        Pursuing these objectives has been a huge challenge and the record
    has been decidedly mixed. Haiti is struggling to overcome political,
    economic and social legacies of nearly two centuries of authoritarian
    regimes and rapacious governments that fostered deep class and social
    divisions. It must also overcome the most severe poverty in the Western
    Hemisphere. Democratic institutions are fragile at best. Unemployment,
    crime, illiteracy and poverty pose constant threats to stability. At a
    level of 99 per 1,000 live births per year, Haiti's infant mortality
    rate is nearly triple the Caribbean average of 38 per year. Some 28
    percent of Haitian children under five suffer from malnutrition.
        Events in Haiti were spiraling out of control in the early 1990's
    as a result of the coup d'etat that expelled then-President Aristide
    from office and established the de facto regime. This brutal military
    regime in Port-au-Prince victimized opposition figures; tens of
    thousands of boat people risked their lives to flee the terror;
    starvation and suffering were rampant; and the economy was in shambles
    due to capital flight and foreign sanctions. When international
    political and economic pressure failed to dislodge the de facto regime,
    a multinational force, including some 20,000 U.S. troops, restored
    order and made possible the restoration of elected government.
        There were also dire predictions that if American forces were used
    as part of an international effort to restore the democratically
    elected Government, we would face huge casualties and decades of
    military engagement. Fortunately, this was not the case. The vast
    majority of U.S. forces were out of Haiti within six months, and today
    there are no permanent U.S. forces there.

                          AREAS OF PROGRESS SINCE 1995

        Haiti has not met all the expectations held by many in the heady
    days after the restoration of democratically elected government--and I
    will be quite frank in a moment about areas of disappointment--but we
    can share some satisfaction in strides to alleviate hunger, build basic
    institutions such as the national police, increase access to education,
    combat environmental degradation, incubate civil society, and
    demobilize the armed forces.
        U.S. development assistance from 1995 to 1999 came to roughly $746
    million. For roughly 60 cents per American each year, we have been able
    to support a range of projects such as helping 225,000 farmers adopt
    sustainable agricultural practices; training some 6,000 teachers at
    primary and secondary levels; and supporting hundreds of grassroots
    organizations in the health, environmental and public advocacy sectors.
    Our population program reaches women in the most rural areas and has
    doubled the use of modern family planning practices to 26 percent in
    the areas in which it operates. Our food security program feeds daily
    some 500,000 of Haiti's schoolchildren, down from more than one million
    several years ago. Our health care program supports access to primary
    health care services for nearly half the population and promotes child
    immunization.
        The U.S. Agency for International Development (USAID) plans to
    build on its core projects in 2000 and 2001, albeit at reduced funding
    levels, with added focus on longer term development programs. USAID
    will continue its ``Secondary Cities'' program, begun in fiscal year
    1999, to reduce the flow of migration to densely populated Port-au-
    Prince by increasing opportunities in and improving services to urban
    areas outside of the capital. If successful elections take place, USAID
    also plans to resume assistance to the Parliament and local
    governments.

                               UNMET EXPECTATIONS

        At same time, there are other areas where our best efforts have
    been frustrated and disappointed.
        First, the consolidation of democratic institutions has been
    thwarted by the disbanding of Parliament and local governments in
    January 1999, and the failure to hold prompt, free and fair elections.
    Due in part to U.S. and international assistance and the steady work of
    the Provisional Electoral Council (CEP), credible parliamentary and
    local elections can be held in time to seat a Parliament on June 12 as
    mandated by the constitution. We have voiced strong opposition to
    further delays in the vote, and we have worked with the international
    community, including the United Nations, Organization for American
    States and the European Union, to underscore the urgency of prompt and
    credible elections. I will discuss this point further below.
        Second, the ``Administration of Justice'' program in Haiti has
    trained scores of judges and prosecutors, contributed to the release of
    hundreds of pre-trial detainees, and provided free legal assistance to
    thousands of impoverished Haitians. Nonetheless, the judiciary remains
    essentially inoperative, plagued by huge case backlogs, a continued
    shortage of adequately trained judges and prosecutors, a lack of basic
    resources, minimal oversight by the Ministry of Justice, and pre-trial
    detention rate of roughly 80 percent. Numerous individuals are being
    detained despite valid release orders, or without charges filed against
    them. The poor state of the judiciary remains at the core of many of
    Haiti's problems, severely inhibiting investment, perpetuating
    corruption, denying average Haitians access to justice, and spurring
    vigilantism.
        Third, in 1995, Haiti replaced its long-abusive military with a new
    civilian police force, mentored and trained primarily by the United
    Nations and the USAID-funded Department of Justice International
    Criminal Investigative Training Assistance Program (ICITAP). Although
    there is no longer a severe and systematic pattern of abuse, as under
    the Duvalier and de facto regimes, the Haitian National Police (HNP)
    remains an immature force grappling with problems of corruption,
    attrition, and incidents of narcotics trafficking and human rights
    abuse.
        Fourth, combating drug trafficking through Haiti remains one of
    this Administration's highest priorities. We have increased our DEA
    presence in Port-au-Prince from one to eight officers in the past year
    and increased interdiction efforts to counter air drops, direct
    freighter shipments and money laundering. Still, some 13 percent of the
    cocaine entering the U.S. transits Haiti, and narco-traffickers operate
    with relative ease. Drug trafficking threatens to corrupt the basic
    institutions of Haiti, including the police, judiciary and government.
    The Administration determined on March 1 that Haiti failed to meet 1999
    counter-drug certification criteria, but granted a vital national
    interest certification.

                          U.S. POLICY: THE ROAD AHEAD

        As we look to the future, our roadmap is clear.
        First, we seek prompt and credible legislative and local elections.
    Elections per se do not equal democracy, nor are they a panacea for all
    that ails Haiti, but after years of impasse and stagnation, free and
    fair elections can empower government to spur economic growth, attract
    new private investment, negotiate new cooperation from international
    partners, and attack festering social problems such as crime,
    insecurity, corruption and drug trafficking that threaten to become
    cancers at the heart of Haiti's institutions.
        Haitians' thirst for democracy was shown by the over 3.6 million
    Haitians--about 80 percent of those eligible--who registered to vote in
    the past two months. More than 29,000 candidates from a wide array of
    parties registered to run for nearly 10,000 local, regional, and
    parliamentary offices. Preparations have been characterized by some
    irregularities and some incidents of violence, but not at a level to
    prevent credible elections. The CEP was delayed in opening registration
    sites in Port-au-Prince, but most locations were open, and
    accommodating large crowds, by early March.
        We will continue to stress clearly and strongly the importance of
    holding these elections rapidly. We have expressed privately and
    publicly that it is time for the Haitian government to publish new
    dates for elections and lend full support to ensure those dates are
    met. We warned that failure to constitute a Parliament risks isolating
    Haiti from the community of democracies and jeopardizes future
    cooperation.
        We will also continue to underscore to all political leaders that
    they are responsible for actions of their party membership; that the
    legitimacy of presidential elections later this year depends on
    credible elections this spring; and that international aid flows
    require the presence of a fully functioning legislature.
        Second, we seek to strengthen Haiti's basic democratic and security
    institutions to improve respect for the rule of law and the protection
    of basic human rights. Most notably, working with the UN and the so-
    called ``Friends of Haiti'' (U.S., Canada, France, Argentina, Chile,
    and Venezuela), we are putting in place a new UN mission called MICAH
    to provide international technical assistance to the police, judiciary,
    and human rights sector. MICAH is much smaller than its predecessor UN
    missions, and moves the focus of UN operations in Haiti from
    peacekeeping to institution building. Its human rights component will
    increase emphasis on developing an indigenous capacity for monitoring
    and promoting human rights. Among other efforts, the justice component
    will help Haitians modernize the Ministry of Justice, improve the
    quality of judges, and revise the archaic criminal code.
        Bilaterally, we will continue to press the Haitian government to
    reduce the high rate of pre-trial detention; and enhance the
    effectiveness of our police training, including new efforts to promote
    retention of existing officers and recruitment of qualified new
    officers.
        Third, we will remain engaged in promoting economic development to
    address abject poverty and festering socio-economic problems. In
    addition to USAID efforts cited above, we are encouraging others in the
    international community to share the burden of helping Haiti move
    forward. We meet with bilateral donors and international financial
    institutions to discuss how we can work together to support economic
    recovery and democracy. All have agreed to consider new engagement in
    Haiti if conditions can be established for effective use for scarce
    international resources. At the same time, we are working with the
    Haitian diaspora in the United States to encourage their increased
    involvement, recognizing their personal interest in success and
    prosperity in Haiti.
        We will continue to press the Haitian government to restore fiscal
    discipline, and move ahead on the modernization of key state-owned
    enterprises and on other critical areas of economic reform.
        Finally, we continue efforts to disrupt the flow of illegal drugs
    and prevent a resurgence in illegal migration. We will work on an
    interagency level in planning U.S. law enforcement activities, in such
    areas as tracking international traffickers, improving the drug
    interdiction capacity of Haitian police, attacking money laundering,
    and facilitating cooperation between Haiti and the Dominican Republic
    on cross-border narcotics issues.
        As the U.S. has remained engaged in Haiti, the number of illegal
    migrants leaving Haiti by boat for the U.S. has declined. The U.S.
    Coast Guard interdicted 67,140 Haitian migrants at sea from 1992-94. In
    1999, there were only some 1,039 such interdictions. We will work with
    Haitian authorities to identify and prosecute individuals involved in
    alien smuggling operations; and continue monitoring trends that may
    indicate the potential for renewed large scale migration to the U.S.

                          BUILDING ON PAST COOPERATION

        We look forward to enhanced cooperation with this committee to
    promote U.S. interests in Haiti through strengthening democratic
    institutions; promoting respect for human rights, and transparent and
    responsive government; helping lay the groundwork for sustainable
    economic development; and disrupting the flow of illegal drugs and
    preventing a flood of illegal migrants.
        Already we have made a foothold in supporting an increasingly
    confident civil society, free and active press, improved respect for
    human rights, vocal political opposition, decreased population growth,
    improved agricultural practices, and increased literacy and access to
    basic healthcare. We cannot turn our backs on a fledgling democracy nor
    on extreme poverty on our doorstep. If the U.S. and international
    community remain engaged, resisting the easy solace of fatigue and
    frustration, future generations may look back to the year 2000 as the
    period in which the roots of democracy, national reconciliation, and
    economic recovery finally took hold. This is good for Haitians and good
    for the United States as well. Thank you.

        Senator McConnell. Do you have an explanation for why no
    U.S. official has questioned or criticized the postponement of
    the elections?
        Ambassador Steinberg. Mr. Chairman, I do not think that is
    an accurate statement. Three days ago in Port-au-Prince, Arturo
    Valenzuela, the NSC Senior Director for Inter-American Affairs
    and I issued a public statement, which called on the government
    of Haiti to hold those elections as soon as possible and
    certainly in time to allow the seating of a national parliament
    by the constitutionally mandated date of June 12. I can make a
    copy of that statement available to you.
        Also, our special envoy, Anthony Lake, on March 10 in Port-
    au-Prince made a public statement in that same regard.
        In addition, on March 3 at the U.N. Security Council, I
    participated in a meeting where an American draft was adopted
    by the U.N. Security Council and read publicly by the president
    of the Council, the Bangladeshi permanent representative. This
    statement called on the government to hold elections as soon as
    possible and to cooperate with the CEP.
        Senator McConnell. Are you optimistic that advice you have
    been giving is going to be heeded?
        Ambassador Steinberg. We are doing everything possible to
    make sure that it occurs. We are, as I have said, working with
    the United Nations, with the OAS, and with the European Union.
        The purpose of my two visits to Haiti in the last 10 days
    have been to meet with not only the president, which I did
    three times during those visits, but to encourage the
    Provisional Electoral Counsel, which I visited five times. I
    highlighted the need for those elections and warned that Haiti
    risks international isolation if those elections are not held
    and a constitutionally mandated seating of parliament by June
    12 is not achieved. This will imperil bilateral cooperation.
        Senator McConnell. Speaking of the president, what role
    does he have in determining the date, and what commitment if
    any, has he made to lock in an April date?
        Ambassador Steinberg. This relates to the electoral law in
    Haiti. It is technically up to the Provisional Electoral
    Council to establish the date for an election, but then it is
    up to the president to actually publish that date in the
    National Monitor. Therefore, he has to agree to that
    publication. There are discussions going on.
        Senator McConnell. Is the Council very independent of the
    president?
        Ambassador Steinberg. The Council has displayed far more
    independence than anyone had suspected during the course of the
    last year. It is by far the most competent and independent
    council that Haiti has ever had. They have taken actions that
    have----
        Senator McConnell. Who appoints them? Who appoints them?
    How do they get there?
        Ambassador Steinberg. The president appointed them after
    consultation with a variety of internal political parties,
    including five parties that have made up a group called the
    Espace De Concertation.
        A negotiation took place. The decision was to appoint, in
    part, representatives of political parties; and the
    representatives of a wide variety of political parties are
    represented on that council.
        Senator McConnell. In January and February, members of the
    opposition parties, OPL and Espace, suggested that any delay in
    the election would be grounds for compelling the president to
    resign.
        What has been the opposition parties' reaction to the
    delay?
        Ambassador Steinberg. They have been very disturbed. During
    each of my visits to Haiti, I have met specifically with Espace
    and OPL, as well as other political parties, Mochrena, and
    others.
        They were very disturbed by the delay. One of the problems
    they are facing is that they are in many cases not particularly
    well-funded. And delays in the election process are going to
    really hurt their opportunity to get their message out.
        One thing we have done with some of our aid funding, at the
    suggestion of Members of Congress, is to provide indirect
    support for all political parties who have pledged to avoid use
    of violence. Right now we are funding political debates
    throughout Haiti.
        We have agreed that we will provide election information
    centers. Six of these centers have now been established where
    the parties can come, debate the issues, and get their message
    out.
        We are even buying advertisements over radio and television
    for opposition parties in Haiti to get their message out there.
        Senator McConnell. What are the key issues that voters are
    going to be caring about, do you think, in this election?
        Ambassador Steinberg. Voters in Haiti are very similar to
    voters anywhere else. They care about their pocketbook to a
    great extent.
        They are deeply concerned over the fact that unemployment
    is some 60 percent and may indeed be rising. They are concerned
    over recent increases in inflation. They are concerned over a
    lack of new investment in the country.
        I think those factors will come in play. I think they are
    also concerned about the sorry state of education where fewer
    than one in seven Haitian children can go to high school. They
    are concerned about high infant mortality rates. These are the
    basic issues that affect people all around the world.
        We talk about our expectations with regard to the
    restoration of the democratically elected government, Mr.
    Senator, but what I have learned from my six trips there is
    that the Haitians' expectations were even higher.
        They truly believed that the restoration of the
    democratically elected government would change everything.
    There was a belief, as is frequently the case, in a fresh
    start, where democracy, economic growth, and improved socio-
    economic conditions can be brought about simply.
        And regrettably, I think we have all ignored the fact that
    this is going to be a huge challenge.
        The Haitian people have to understand that you cannot put
    aside the socio-economic impact of two centuries, literally two
    centuries, of autocratic regimes that did not care a whit about
    their people, in the space of 4 or 5 years.
        Senator McConnell. What role is Aristide playing in the
    parliamentary elections?
        Ambassador Steinberg. Aristide is the head of the Fanmi
    Lavalas. He has some 9,000 candidates running in those
    elections. There are a total of 29,000 candidates from all
    parties who have registered for these elections.
        I met with him 2 or 3 days ago, and he outlined to me his
    electoral strategy. I think he is also trying to create
    conditions on the ground that make it possible for his party to
    get a majority in the new parliament, to name a prime minister
    and to exercise control in that environment.
        I think he is also interested in the elections for the
    presidency, which comes at the end of the year.
        Senator McConnell. He has a pretty good chance of winning,
    has he not?
        Ambassador Steinberg. It is probably inappropriate for an
    administration official to comment on likely election results
    either in Haiti or anywhere else for that matter.
        Senator McConnell. Senator Leahy.
        Senator Leahy. I know there must be some officials here
    from AID. We often get an overly rosy picture about their
    programs in Haiti, and I would urge AID to be more accurate in
    what they tell us.
        I want to quote the congressional budget justification for
    Haiti. ``U.S. engagement in Haiti is transitioning to a more
    normal and long-term development approach aimed at building the
    foundation for poverty alleviation, in the context of an
    evolving inclusive democracy.''
        Now, other than the fact that that is bureaucratic
    gobblygook written by somebody whose fourth language must be
    English, I think somewhere in this baloney is a suggestion that
    things are going well.
        Maybe they have Haiti mixed up with some other country, or
    maybe it is like so many things we see written in bureaucrat-
    ese; it is designed with the hope that, one, nobody will read
    it or, two, if they do, they will not understand it.
        Haiti is in a state of crisis and paralysis. I absolutely
    agree with what you said about the centuries of autocratic and
    despotic rule in Haiti. The ruling elite have long ignored the
    people they claim to represent.
        If you are here next year talking about Haiti, what do you
    think you will be able to say the United States has
    accomplished?
        Ambassador Steinberg. Mr. Senator, I have worked with the
    State Department for 25 years, and I am now completely fluent
    in gobblygook and so I would like to help interpret----
        Senator Leahy. I know you speak several languages.
        Ambassador Steinberg. I would like to help interpret those
    comments.
        I think what AID was getting at was that we went in,
    originally, it was an emergency situation where there was
    starvation, utter despair, and a lack of any authority. And the
    effort has been to move from that environment to a more normal
    development program, which is similar to things we do in other
    developing countries not facing a crisis situation. I think
    that was the only point that was trying to be made there.
        The other related point is that we tend to focus a lot in
    our discussions on the political developments, democracy, the
    justice system, et cetera, but there is something else very
    exciting going on in Haiti.
        There is a development of emerging civil society. There are
    rural farmers who are coming together. There are micro-
    enterprises that are being developed. There is a sense of
    movement at the local level to address problems of health care,
    housing, and education.
        And so to answer your question in very short terms, I think
    we need to go to what AID has actually said that their goals
    are over the next 5 years.
        The first is to raise income for the poor. They are doing
    that by supporting a quarter of a million farmers to improve
    their agricultural practices.
        They are revitalizing the coffee sector. They are promoting
    development in the secondary cities, not Port-au-Prince, but
    outside. And they are supporting micro-enterprise.
        Second, Haiti is a country that is 98.5 percent deforested.
    It is an absolute disaster in terms of every environmental
    criteria that we apply, and so AID is working to plant 7
    million trees a year.
        They are working with some 660 private groups around the
    country to help reverse the trend of environmental degradation.
    They are promoting wider use of non-charcoal fuels.
        Senator Leahy. If I can just interrupt there, sir.
    Reforesting is one of the most significant accomplishments that
    could be made. The degradation has gotten so bad, the people
    are unable to plant crops.
        Ambassador Steinberg. Absolutely.
        Senator Leahy. If this environmental disaster is not
    addressed you are not going to be able to do other things.
    Flying over the country, you can see the silt, the runoff, and
    everything else that has deteriorated as a result of
    deforestation.
        Ambassador Steinberg. Three other quick areas I would touch
    on: One is the health program, where we are working with some
    22 NGOs to improve access to health care. We are working on
    family planning, HIV-AIDS prevention, immunization programs, et
    cetera.
        In the education area, we have helped train some 6,000
    teachers and some 1,000 school directors. We are supporting the
    new national education program.
        We are feeding still a half million school children to make
    sure that they are capable of learning. And fortunately, that
    figure is actually down by more than half as the situation has
    returned to normal.
        And finally, we are working in the area of democracy and
    especially with groups outside of the normal democratic
    governance area in that area. Indeed, we are working with some
    200 groups of civil societies.
        Those are the types of developments, Mr. Senator, that I
    hope we can build on in the future.
        And when we have a chance to renew this contact a year from
    now, I hope to be able to cite some other successes.
        Senator Leahy. We have votes happening, so I am going to
    submit my other questions for the record. But I want to note, I
    am very concerned about the increase in extra-judicial killings
    by the Haitian National Police.
        The chairman referred to the problem of the police in his
    opening statement. If you could take a look at the question I
    will submit for the record, maybe you and I could talk at some
    point about it----
        Ambassador Steinberg. Yes, sir.
        Senator Leahy. It is a more complex question than we have
    time to go into here, but I am very concerned about it. I
    visited with Ray Kelley when he and others were down there
    trying to reform the police. It would frighten me a great deal
    if they are going to fall back into what it was like before. No
    matter what progress is made in Haiti, if the police are
    committing extra-judicial killings, if they are corrupt,
    lasting reforms will be impossible.
        Senator Leahy. Thank you.
        Mr. Chairman.

                         ADDITIONAL COMMITTEE QUESTION

        Senator McConnell. We did regretfully end up with these
    votes coming at an inopportune time, so what I am going to do
    as well, Mr. Ambassador, I have a question, which I am going to
    submit to you in writing----
        Ambassador Steinberg. Thank you.
        Senator McConnell [continuing]. Which we would like for you
    to supply for the record.
        [The information follows:]

     Question Submitted to Ambassador Steinberg by Senator Mitch McConnell

        Question. For several years, Congress has conditioned assistance on
    privatizing at least 3 of the 9 government owned enterprises. What is
    the status of privatization of the 9?
        Answer. Privatization has proven highly controversial in Haiti,
    facing opposition both from within the government and from popular
    groups such as labor unions. Since the debut of the Modernization
    Program in 1996, only two firms have been sold. On October 14, 1997,
    then-Prime Minister Rosny Smarth signed a contract to sell 70 percent
    of the flour mill to a consortium of Continental Grain, Seaboard
    Marine, and Unifinance (a Haitian investment firm) for $9 million.
    Legal transfer of the mill, delayed by an employee revolt, took place
    on May 22, 1998. The mill resumed operations in mid-November 1998 after
    being non-functional for nearly six years. It now employs roughly 300.
    The cement factory was privatized on May 7, 1999 to a European/Latin
    American consortium. At year-end it had not yet resumed operations but
    is expected to do so shortly.
        Donor-funded preparations for privatization or modernization of the
    telephone company, the airport, and the seaport were completed in 1999,
    as, was IDB-funded work on the electricity sector. We have urged the
    Preval government to privatize these institutions with a minimum of
    delay, but it is now virtually certain that no further privatizations
    will take place until after the presidential elections scheduled for
    November 2000.

        Senator McConnell. And we thank you very much for coming up
    today.
        Ambassador Steinberg. Thank you.
        Senator McConnell. We appreciate the opportunity to discuss
    this issue, and that will conclude the hearing.
        Ambassador Steinberg. I appreciate that, Mr. Senator.

                              SUBCOMMITTEE RECESS

        Senator McConnell. The subcommittee will stand in recess
    until 10:30 a.m., Tuesday, April 4, when we will receive
    testimony from Hon. Strobe Talbott, Deputy Secretary of State.
        [Whereupon, at 11:17 a.m., Thursday, March 23, the subcom-
    mittee was recessed, to reconvene at 10:30 a.m., Tuesday, April
    4.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

                                  ----------

                             TUESDAY, APRIL 4, 2000

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:33 a.m., in room SR-303, Russell
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Stevens, and Leahy.

                              DEPARTMENT OF STATE

                         Office of the Deputy Secretary

         STATEMENT OF HON. STROBE TALBOTT, DEPUTY SECRETARY OF STATE
        ACCOMPANIED BY WILLIAM TAYLOR, AMBASSADOR, DEPARTMENT OF STATE

                 Opening Statement of Senator Mitch Mc Connell

        Senator McConnell. Good morning. The hearing will come to
    order.
        We are pleased to welcome today Deputy Secretary of State
    Strobe Talbott. Secretary Talbott, I was recently provided a
    memorandum summarizing the results of a meeting with the
    Russian national security council held in December of 1999. The
    minister for defense and the director of the Federal Border
    Service provided a report to their colleagues on Chechnya. Let
    me quote from the text:

        The mountain settlements of Chechens, which make up less
    than 20 percent of the population centers, do not represent any
    significant economic or other value, neither for this entity or
    for Russia as a whole, and must be entirely liquidated. At the
    same time, conditions which are absolutely unsuitable for
    people to reside in the future must be created there and the
    remnants of peaceful inhabitants must be relocated.
        Intense precision bombing and rocket artillery blows will
    promote the imposed withdrawal and expulsion of the remnant of
    civilian population into areas controlled by federal troops.
    All natural structures, including religious and historical, of
    the mountainous region and ancient clan towers will be deemed
    the equivalent of objects for harboring bandit formations and
    will be subject to total destruction. In Russia's interests,
    this region must be rendered devoid of life.

        While the Russian Government was implementing a strategy to
    bomb civilians out of their homes and destroy religious
    structures, President Clinton paid a farewell tribute in Time
    Magazine to his friend the ``brave, visionary and forthright''
    Mr. Yeltsin, who had ``earned the right to be called the father
    of Russian democracy.'' Thousands of Grozny citizens huddled in
    their basements without food, heat or water, slammed around the
    clock by Russian artillery, must have wondered what kind of
    democracy the President was talking about.
        As reports of Russian troops engaging in torture, rape,
    looting, and summary executions became a staple of daily news
    accounts, the President seemed horribly out of touch with the
    agony being inflicted on these innocent civilians. Rather than
    condemn the savagery of the military's attack on civilians,
    rather than call for a ceasefire and negotiations, the
    President said the question for Yeltsin's successor was not
    just how to liberate Grozny without killing thousands of
    civilians, but whether this war becomes a model for how to deal
    with other problems.
        Secretary Talbott, the Russians have bluntly answered the
    President's question, but they did not say ``liberate,'' they
    said ``liquidate,'' and they meant civilians.
        Now, adding insult to considerable injury, the Russians are
    denying the U.N. High Commissioner for Human Rights access to
    villages and camps. There is a familiar quality to the
    Russians' performance--burning villages, expelling and
    torturing civilians, then denying the international community
    any access to investigate. It all sounds very familiar. Did we
    not just go through this with Milosevic?
        I know the Russians claim they are only doing what NATO did
    in Kosovo, restoring order. But let us be clear. NATO waged a
    military campaign to allow civilians to return to their homes.
    The Russians have waged a campaign to destroy them.
        Secretary Albright recently opined that the administration
    has clearly stated our concerns over Chechnya. Clear words are
    a weak substitute for clear action. We should actively press
    both bilaterally and multilaterally to achieve three goals:
    First, we should support immediate and unrestricted access for
    humanitarian relief workers, human rights investigators, and
    the media. President-elect Putin says he supports the
    dictatorship of law. Accepting the presence of these
    organizations will tell us whether the president intends to
    emphasize dictatorship or the accountability of laws. Based on
    the U.N. High Commissioner's trip this week, he is coming up a
    bit short.
        Second, we must promote and participate in credible
    political negotiations, not the charade we have settled for in
    Nagorno-Karabakh. Without compromising our commitment to
    Serbia's claims to territorial integrity or sovereignty, we
    invited Kosovo's leadership, including the KLA, to talks in
    Rambouillet. We can and should participate in a similar effort
    to end the carnage in Chechnya.
        Finally, our interests in regional stability can only be
    enhanced if we also vigorously affirm our commitment to the
    independence of Russia's neighbors. This can take any number of
    forms, including expanding international monitoring on the
    Georgian-Chechen border. We should also insist on prompt, full
    Russian compliance with their CFE Treaty obligations, thereby
    reducing the destabilizing regional deployment of conventional
    weapons.
        As an aside, I note that the President claimed his mission
    to India and Pakistan failed because the Senate rejected the
    Comprehensive Test Ban Treaty. I might suggest if the
    administration had a more credible record of encouraging
    compliance with existing obligations, whether CFE or START,
    there might be more support for entering new commitments.
        Secretary Talbott, when you appeared here in 1995 the
    military's war in Chechnya had caused immeasurable misery for
    the civilian population. I said then that our approach seemed
    to be cheerleading for Yeltsin rather than being the champion
    for democracy. Five years later, Grozny is a wasteland, leaving
    over 200,000 refugees without homes or futures, and we are not
    champions of democracy to hundreds of thousands of Chechens. We
    must appear to be chumps.
        It is not enough to say that we have been clear in our
    objections to this scorched earth policy. We should act with
    clarity, principle, and purpose. If Russia rejects that agenda
    it rejects the core freedoms and virtues which define
    democracies. I see no wisdom in shoring up dictators, even if
    you do dress them up as democrats.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        Secretary Talbott, I recently was provided a memorandum summarizing
    the results of a meeting of the Russian National Security Council held
    in December 1999. The Minister for Defense and the Director of the
    Federal Border Service provided a report to their colleagues on
    Chechnya. Let me quote from the text: ``The mountain settlements of
    Chechens, which make up less than 20 percent of the population centers,
    do not represent any significant economic or other value, neither for
    this entity or for Russia as a whole, and must be entirely liquidated .
    . . At the same time, conditions which are absolutely unsuitable for
    people to reside in the future must be created there and the remnants
    of peaceful inhabitants must be relocated . . . intense precision
    bombing and rocket artillery blows . . . will promote the imposed
    withdrawal and expulsion of the remnant of civilian population . . .
    into areas controlled by Federal troops . . . All natural structures
    (including religious and historical) of the mountainous region and
    ancient clan towers will be deemed the equivalent of objects for
    harboring bandit formations and will be subject to total destruction.
    In Russia's interest, this region must be rendered devoid of life . .
    .''.
        While the Russian government was implementing a strategy to bomb
    civilians out of their homes and destroy religious structures,
    President Clinton paid a farewell tribute in Time magazine to his
    friend, the ``brave, visionary and forthright,'' Mr. Yeltsin, who had
    ``earned the right to be called the Father of Russian Democracy.''
        Thousands of Grozny's civilians huddled in their basements without
    food, heat or water, slammed around the clock by Russian artillery,
    must have wondered what kind of democracy the President was talking
    about? What brave visionary would cut off humanitarian relief efforts
    and severely censor any news coverage of their suffering?
        As reports of Russian troops engaging in torture, rape, looting and
    summary executions became a staple of daily news account, the President
    seemed horribly out of touch with the agony being inflicted on innocent
    civilians. Rather than condemn the military's attack on civilians,
    rather than call for a cease fire and negotiations, rather than demand
    immediate access for relief workers, the President said that the
    Russians were trying to ``liberate Grozny.'' The question for Yeltsin's
    successor, he said, was not just ``how to liberate Grozny without
    killing thousands of civilians, but whether this war becomes a model
    for how to deal with other problems.''
        Secretary Talbott, the Russians have bluntly answered the
    President's question, but they didn't say liberate, they said liquidate
    and they meant civilians.
        Now, you and I can spend the next hour parsing syntax over the real
    intent behind U.S. policy pronouncements. Let's just stipulate that we
    disagree: you believe the Administration has been clear in objecting to
    the course Russia has pursued in Chechnya. I believe your message has
    been muddled, at best. At its worst, your failure to take decisive
    action invited contempt and a war against the Chechen people which
    reminded many local witnesses of the round-ups and forced deportations,
    famine and devastation of the Stalin era.
        Frankly, it reminds me of what Milosevic did to Kosova, only with
    more firepower and speed. What I can't understand is why we supported
    war crimes indictments for ethnic cleansing in Kosova, yet turn a blind
    eye to identical savagery against civilians in Chechnya?
        Last week another attack on a Russian convoy took dozens of lives
    supporting the view that this war could drag on for some time. Without
    negotiations, I fear this conflict will spread. Already, bombers have
    crossed into Georgian air space and President Shevardnadze has been
    threatened not to offer safe haven to Chechens. As refugees straggle
    down from the mountains in the Spring, will their attempt to escape
    into Georgia ignite tensions? What message is our silence sending to
    our friends in the region who have been economic and political victims
    of Russia's backyard bullying for the past decade?
        Secretary Albright recently opined that the Administration has
    clearly stated our concerns over Chechnya. Clear words are a weak
    substitute for clear action. We should actively press both bilaterally
    and multilaterally to achieve three goals:
        First, we should support immediate and unrestricted access for
    humanitarian relief works, human rights investigator and the media.
    President-elect Putin says he supports the ``dictatorship of law.''
    Accepting the presence of these organizations will tell us whether the
    President intends to emphasize ``dictatorship'' or the accountability
    ``laws''.
        Second, we must promote and participate in credible political
    negotiations--not the charade we have settled for in Nagorno-Karabakh.
    Without compromising our commitment to Serbia's claims of territorial
    integrity or sovereignty, we invited Kosova's leadership, including the
    KLA, to talks in Rambouillet. We can and should participate in a
    similar effort to end the carnage in Chechnya.
        Finally, our interests in regional stability can only be enhanced
    if we also vigorously affirm our commitment to the independence of
    Russia's neighbor. This can take any number of forms including
    expanding international monitoring on the Georgian-Chechen border. We
    should also insist on immediate and full Russian compliance with their
    CFE Treaty obligations thereby reducing the destabilizing regional
    build up of conventional weapons. I noted the President's criticism
    that his mission to India and Pakistan failed because the Senate
    rejected the Comprehensive Test Ban Treaty. I might suggest if the
    Administration had a more credible record of encouraging compliance
    with existing obligations, whether CFE or START, there might be more
    support for entering new commitments.
        Secretary Talbott, when you appeared here in 1995, the military's
    war in Chechnya had caused immeasurable misery for the civilian
    population. I said then that our approach seemed to be cheerleading for
    Yeltsin rather than being the champion for democracy. Five years later,
    Grozny is a wasteland leaving over 200,000 refugees without homes or
    futures. They must be bewildered about what our President means when he
    calls Russian leaders ``visionary democrats.'' We aren't champions of
    democracy, to hundreds of thousands of Chechens, we must appear to be
    just chumps.
        Secretary Talbott, it is not enough to say we have been clear on
    our reservations about Russia's scorched earth strategy, we must define
    an agenda and act with clarity, principle, and purpose. If Russia
    rejects that agenda, it rejects the core freedoms and virtues which
    define democracies. I see no wisdom in shoring up dictators, even if
    they are dressed up as democrats.

        Senator McConnell. Senator Leahy.

                 Opening Statement of Senator Patrick J. Leahy

        Senator Leahy. Thank you, Mr. Chairman.
        This is a very timely hearing. Chechnya is being discussed
    this week at the U.N. Human Rights Commission in Geneva. I very
    much appreciate Secretary Talbott's willingness to be here
    today.
        It is a critical time in our relations with Russia. The
    Secretary understands that as well as anybody in Washington. We
    keep hearing Russian officials say the war in Chechnya is over.
    Yet last week alone 32 Russian soldiers were killed in an
    ambush by Chechen rebels. It is going to be a long time before
    Chechnya recovers.
        The number of Chechens seeking safety in refugee camps is
    increasing, and the gruesome details about atrocities committed
    by both sides, but especially by the Russian forces, continue
    to come to light--atrocities showing a military either out of
    control or being directed to commit war crimes.
        Some positive steps have been taken. Russian President
    Putin has assured the International Red Cross access to some of
    the detention centers in Chechnya. He agreed to a visit by U.N.
    Human Rights Commissioner Mary Robinson. But she was prevented
    from visiting the places she wanted to visit. President Putin
    continues to reject calls for a political settlement of the
    conflict. International organizations there face harassment and
    intimidation by Russian forces. Most have not even been allowed
    into Chechnya and the attitude of the Russian forces seems to
    be: We will do what we want to do and then we will let you in.
        I am also told that substantial amounts of international
    relief aid is being diverted and that the State Department has
    discouraged nongovernmental organizations from working there,
    something I would like you to talk about.
        On March 29, in a rare but welcomed move, a Russian
    military officer was formally charged with killing a Chechen
    civilian. But that is the exception, rather than the rule.
    There is little reason to be optimistic that the Russian
    Government will conduct credible investigations into
    allegations of many other violations by Russian troops.
        While not on the same scale, Chechen rebels have also shown
    little regard for the civilian population. They have committed
    atrocities. They have established military posts in densely
    populated areas and, even when the local people have asked them
    to leave, they have refused. They should be accountable for
    their actions.
        President Clinton and Secretary Albright have made clear
    their objections to the Russian Army's massive, indiscriminate
    use of force against civilian targets in Chechnya. They have
    called for investigations of human rights violations, and I
    agree with that.
        But I think we ought to call the atrocities what they are--
    war crimes. There should be no ambiguity. If the United States
    is unwilling to call them war crimes, then I think we damage
    our credibility.
        The administration recently cleared the way for a half
    billion dollar Export-Import Bank loan to a Russian oil
    company. World Bank loans have also been made. Why should we
    give that kind of aid to a country that obviously has enough
    money in the bank to wage a brutal military campaign in which
    innocent civilians have borne the brunt of the casualties and
    devastation?
        On a positive note, the recent Russian presidential
    election marks a new period in U.S.-Russia relations. There
    were very few people at the height of the cold war willing to
    predict that we would see such a democratic transfer of power
    in our lifetime in Russia.
        The Russian people deserve credit for continuing to believe
    in the democratic process even though many of them have seen
    their standard of living plummet since the end of Communism.
    They have seen many in positions of power steal their country's
    patrimony for short-term gain and despoil the natural resources
    for this generation's benefit, leaving nothing for the next. We
    should not turn our backs on them simply because we abhor the
    policies of their government in Chechnya.
        It is too early to know how our relationship will develop,
    what course the new president will chart for the Russian
    people. But I hope, Mr. Secretary, that you can shed some light
    on what the administration plans to do on Chechnya at the U.N.
    Human Rights Commission and its overall strategy in the region.

                               PREPARED STATEMENT

        I also want to recognize the efforts of the other witnesses
    you have here today, Mr. Chairman. The work they do is
    extremely important. It is often done at enormous personal
    risk. It is easy for us to talk about this here, in this
    magnificent room, but you and I know that a lot of these
    humanitarian groups are out there literally putting their life
    on the line day after day.
        Thank you.
        Senator McConnell. Thank you, Senator Leahy.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Mr. Chairman, this is a very timely hearing, especially with
    Chechnya being discussed this week at the U.N. Human Rights Commission
    in Geneva. I also very much appreciate Secretary Talbott's willingness
    to be here today.
        It is a critical time in our relations with Russia. Despite
    repeated claims by Russian officials that the war in Chechnya is over,
    it may be a long time before Chechnya can begin to recover.
        At least 32 Russian soldiers were killed in an ambush by Chechen
    rebels last week, the number of Chechens seeking safety in refugee
    camps is increasing, and the gruesome details about atrocities
    committed by both sides, but particularly by Russian forces, continue
    to come to light.
        Some positive steps have been taken. Russian President Putin has
    assured the International Red Cross access to some of the detention
    centers in Chechnya, and he agreed to a visit by U.N. Human Rights
    Commissioner Mary Robinson.
        But she was prevented from visiting the places she wanted to visit,
    and President Putin continues to reject calls for a political
    settlement of the conflict. International organizations regularly face
    harassment and intimidation by Russian forces. Most have not even been
    allowed into Chechnya.
        I have also been told that substantial amounts of international
    relief aid is being diverted and that the State Department has
    discouraged non-governmental organizations from working there.
        On March 29th, in a rare but welcome move, a Russian military
    officer was formally charged with killing a Chechen civilian.
    Unfortunately, this is the exception rather than the rule. There is
    little reason to be optimistic that the Russian Government will conduct
    credible investigations into allegations of many other violations by
    Russian troops.
        While not on the same scale, Chechen rebels have also shown little
    regard for the civilian population. They have committed atrocities,
    established military posts in densely populated areas, and refused to
    leave even when asked to by the local people. They should also be
    accountable for their actions.
        President Clinton and Secretary Albright have made clear their
    objections to the Russian Army's massive, indiscriminate use of force
    against civilian targets in Chechnya, and called for investigations of
    human rights violations.
        However, as far as I am aware, the Administration has yet to call
    the atrocities by Russian soldiers in Chechnya what they are--war
    crimes. There should be no ambiguity about that, and I am afraid that
    the failure to do so has damaged our credibility.
        And, the Administration recently cleared the way for a $500 million
    Export-Import Bank loan to a Russian oil company. World Bank loans have
    also been made.
        We need to ask why we are providing this kind of aid when Russia
    seems to have enough money in the bank to wage a brutal military
    campaign in which innocent civilians have borne the brunt of the
    casualties and devastation.
        The recent Russian presidential election marks a new period in
    U.S.-Russian relations. At the height of the Cold War, few imagined
    that we would see such a democratic transfer of power in our lifetime.
        The Russian people deserve credit for continuing to believe in the
    democratic process, even while many of them have seen their standard of
    living plummet since the end of Communism.
        We should not turn our backs on them simply because we abhor the
    policies of their government in Chechnya.
        It is too early to know how our relationship will develop or what
    course President Putin will chart for the Russian people, but I am
    hopeful that Secretary Talbott can shed light on what the
    Administration plans to do on Chechnya at the U.N. Human Rights
    Commission and its overall strategy in the region.
        I also want to recognize the efforts our other witnesses have made
    to be here today. The work they do is extremely important and it is
    done at enormous personal risk. I look forward to their recommendations
    about what more the United States could do to respond to this
    humanitarian crisis.

        Senator McConnell. We are pleased this morning to have the
    chairman of the full committee here. Senator Stevens, do you
    have any observation?
        Senator Stevens. I am here to listen to the Secretary when
    the time comes.

                    Summary Statement of Hon. Strobe Talbott

        Senator McConnell. OK, Mr. Secretary, why do you not go
    ahead. I hope you can summarize your remarks in 10 or 15
    minutes and then we will put your full statement in the record.
    Go right ahead.
        Mr. Talbott. Thank you, Mr. Chairman. I will try to be
    brief.
        If you have had a chance to look at the full statement that
    we are submitting to the record, I think you will be struck on
    how many points we essentially agree. I am going to touch upon
    one or two of those here.
        By the way, let me say that Secretary Albright, in addition
    to sending her greetings, looks forward to meeting with you and
    your colleagues next week to talk about the full range of U.S.
    foreign policy issues. I welcome the chance----
        Senator McConnell. Could you pull the mike over. It seems
    to me you have got neither one of them there.
        Mr. Talbott. Is that any better, Mr. Chairman?
        Senator McConnell. Yes, much better.
        Mr. Talbott. OK?
        Senator McConnell. Yes.

                              Policy Toward Russia

        Mr. Talbott. I welcome the chance to meet with you and your
    colleagues once again to talk about policy toward Russia. I
    agree with you and Senator Leahy that the timing is good. It is
    good for two reasons. First, the recent elections underscores,
    as Senator Leahy said, the pluses or some of the pluses in a
    very mixed picture in Russia today.
        The second reason that this hearing is timely is, of
    course, Chechnya. I have come to hearings in the past and been
    surprised, not always pleasantly, by seeing posters behind the
    Senators. In this case I think these posters are very
    appropriate and they dramatize the core fact that will no doubt
    recur during our discussion here this morning.
        Let me, if I could, say a few words both about the
    democratic process in Russia, its result, a new President for
    Russia, and then amplify on a few points about Chechnya itself.
    The election that took place a week ago Sunday represents the
    completion of Russia's first democratic transfer of power at
    the executive level in its 1,000 year history. This is one of
    several positive trends going on in Russia, although we will, I
    hope, have a chance to talk a little bit about some of the
    difficulties that the very process of democratization still
    encounters. Indeed, that leads us directly into the question of
    Chechnya.
        You and I, Mr. Chairman, along with both Senator Leahy and
    Mr. Stevens, have been meeting off and on over the past 7 years
    to talk about Russia. We have discussed the positive
    developments and the negative developments. I think it is now
    unmistakably the case that the war in Chechnya represents the
    most serious obstacle both to Russia's internal progress,
    including in the area of democratization, and also to its
    international integration in the decade since Russia emerged
    from the old Soviet Union.
        Russia now has a new leader and I would like to offer a
    thought or two about him. He has emerged as the president-elect
    of that country through an election that is generally
    recognized to have been free and fair, but also far from
    flawless, particularly in regards to manipulation of the media.
    A free press, along with a civil society and rule of law, are
    just as important to emergence and consolidation of democracy
    as the holding of elections.
        Still, Mr. Putin does have a democratic mandate. The
    question is what is he going to do with it? In fact, the
    question is often posed in almost existential terms, or at
    least psychoanalytical terms: Who is Mr. Putin? A lot of people
    are wondering whether the real Vladimir Putin is the KGB
    lieutenant colonel of the 1980's or whether the real Vladimir
    Putin is the former deputy to Saint Petersburg reformist mayor
    in the 1990's. There has even been a lot of serious conjecture
    about his black belt in the martial arts, and a lot of people
    have wondered what that tells us about how he is going to deal
    with oligarchs and parliamentarians of the Duma and regional
    governors, Chechen guerrillas, and even with foreign leaders.
        Mr. Chairman, I would submit that the real bottom line on
    Vladimir Putin, the honest hard-headed bottom line, is that
    there is no bottom line. Not just that we cannot see it, but he
    may well have not gotten to the bottom line himself in terms of
    his own thinking and his own plans.
        However, there are some very clear bottom lines to American
    policy, American strategy, American interests, values, and
    objectives. In the period ahead, we need to use our interaction
    with Mr. Putin, his government and with Russia as a whole to
    pursue and advance our objectives and interests and perhaps to
    have some influence over the environment, the atmosphere, and
    the considerations that will lead Mr. Putin to answer the so
    far unanswered questions about himself.
        Now, Mr. Putin has affirmed his support for Russia's
    constitution. He has declared himself to be a proponent of a
    competitive market economy. He has promised quick action on tax
    reform and investment legislation. When Secretary Albright met
    with Mr. Putin for 3 hours on February 2, he said that he sees
    Russia as part of Europe, part of the West, and that he intends
    to hasten the process of Russia's integration with the global
    economy and with the international community.
        Chechnya is the number one obstacle, and will be probably
    for some time to come, to the attainment of that aspiration.
    Indeed, it is an obstacle to our ability to support Russia's
    attainment of that aspiration. As you pointed out in your own
    opening statement, and Senator Leahy echoed this as well,
    Chechnya has severely damaged Russia's international standing.
    That is why this very weak the parliamentary assembly of the
    Council of Europe is considering whether to suspend Russia's
    participation in that body. That is why at the United Nations
    Human Rights Convention in Geneva a number of countries are
    considering a possible resolution that would criticize Russia
    for human rights violations.
        The U.S. Government has made clear what we think must
    happen next. Mr. Chairman, you mentioned three goals. I would
    expand them slightly to four goals. First, there must be a
    prompt, serious investigation of credible charges of
    atrocities. That means a process put in place to hold
    accountable those responsible for what are very credibly
    alleged to have been human rights outrages.
        Second, there must be real, not Potemkin, but real
    international access to the region on the part of the
    Organization for Security and Cooperation in Europe, the
    Council of Europe, and the International Committee for the Red
    Cross; whose head, by the way, Mr. Kellenberger, is meeting
    within the next hour or so with Secretary Albright to report on
    a visit to the region.
        Third, there must be genuine political dialogue with
    leaders in the region. I agree with the point you made about
    the importance of respect for the sovereignty and territorial
    integrity of neighboring states; Georgia in particular.
        The fourth point is that Russia, if it is going to solve
    its problem and deal with this war, which you are right,
    Senator Leahy, continues even as we speak, it is going to have
    to put in place a process of economic reconstruction and
    political reconciliation throughout the Caucasus region as a
    whole.

                               PREPARED STATEMENT

        If Russia does that, it can repair over time the damage
    both at home and abroad that this war has wrought. If it does
    not, then Russia risks further isolating itself. I would
    suggest that that is the most immediate, momentous challenge
    that Mr. Putin faces. It is also a challenge to U.S. policy.
        Thank you.
        Senator McConnell. Thank you, Mr. Secretary.
        [The statement follows:]

                   Prepared Statement of Hon. Strobe Talbott

        Chairman McConnell, Senator Leahy, thank you for the chance once
    again to appear before you and your colleagues. Secretary Albright
    looks forward to her appearance before you on Thursday next week to
    review U.S. foreign policy as a whole. I welcome the chance today to
    discuss the on-going task of forging U.S. policy toward Russia. On that
    crucial subject, along with our policy toward the other new independent
    states of the former Soviet Union, the interaction between the State
    Department and the Senate Appropriations Committee Subcommittee on
    Foreign Operations has been especially frequent and intense. Our staffs
    have been in regular contact on a wide array of issues, including the
    details of the assistance programs that Ambassador Bill Taylor
    coordinates. That's why he is here with me today.
        On a personal note, Mr. Chairman, let me say that I appreciate your
    willingness, over the years, to meet with me in various settings, not
    just in this chamber. It was almost exactly five years ago that you
    invited me to join you at the McConnell Center for Political Leadership
    in Louisville for a discussion with students and faculty on America's
    role in the world. On that occasion, and every other time we've met,
    we've agreed on the need for American engagement with Russia. The issue
    has always been the terms for that engagement. That, you've made clear
    in your opening statement, is our focus again today.
        This hearing could not be timelier, given the recent Russian
    presidential election. President-elect Putin faces daunting challenges
    in achieving what many Russians have described as their greatest
    aspiration: to become a normal, modern, democratic and prosperous
    state.
        Progress toward that goal was uneven and difficult even before the
    war in Chechnya--another topic of this hearing. That conflict--which is
    on-going even as we meet today--would be a severe test for Russia no
    matter who was in charge in the Kremlin. But because of Mr. Putin's
    personal identification with the war in Chechnya--because it was the
    defining issue in his own extraordinary rise--what happens there next
    is of watershed importance not only for Russia but also for its new
    leadership, and its new leader in particular. I will return to this
    subject--and its implications for Russia's integration into the
    international community--in a moment.
        First, let me offer a few words on the March 26 presidential
    election. It marked the completion of Russia's first democratic
    transfer of power at the executive level in its 1,000-year history.
    Since the break-up of the Soviet Union, there have been three nation-
    wide parliamentary elections in Russia and now there have been two
    presidential elections; there have also been hundreds of regional and
    local contests. The ballot box is increasingly the instrument whereby
    Russians choose their leaders. Nearly 70 percent of eligible voters
    participated in this last election. Russia's citizens understand that
    expressing their fundamental rights is central to the nation's
    continued evolution. They like to vote; they want to vote; they are in
    the habit of voting.
        Vladimir Putin won an outright victory with over 50 percent of the
    vote. Election monitors from the U.S. and Europe concluded that there
    were no major irregularities in the electoral process, but that is not
    to say that the election was free of controversy. Democracy is not just
    about free, fair and frequent elections; it's also about a free press.
    Today in Russia, far too much power resides in media outlets controlled
    by a select few, including the powers-that-be in the Kremlin itself.
    The emergence of a more diffuse, balanced and genuinely independent
    media remains a key challenge in deepening democracy's roots in Russia
    over time.
        Now that he has acquired the title President-elect, Mr. Putin has a
    democratic mandate. What is not clear is what he will do with it. Where
    will he lead Russia? Who--and, what--is he?
        We've all devoted a great deal of energy to those questions. My
    friend and colleague Under Secretary Tom Pickering, who served
    brilliantly as Ambassador to Moscow during a tumultuous period, noted
    last week that Putinology has become a cottage industry that smacks
    less of political science than pseudo-psychology. Everyone is asking:
    is the real Putin the KGB lieutenant colonel of the 1980s, or the
    deputy to St. Petersburg's reformist mayor in the 1990s? What does his
    black belt in martial arts tell us about how he will deal with the
    oligarchs, with the Duma, with the regional governors, with Chechen
    guerrillas--or, for that matter, with the President of the United
    States when they meet, no doubt more than once, in the months to come?
        The short answer, of course, is that we don't know. Today, Mr.
    Chairman, the real bottom line on Mr. Putin--the honest, hard-headed
    bottom line--is that there is no bottom line. It's not just that we
    can't see it; he may not have gotten there himself. Just as the new
    Russia is a work in progress, so its new leader has only just picked up
    his tools and is trying to figure out which ones to rely on and what to
    do with them.
        Moreover, insofar as he has a plan in his own mind, he's not going
    to unfold it to us, or to his own people, overnight. What he's shown us
    so far has a placeholder, watch-this-space, trust-me quality to it. It
    also has a something-for-everybody quality: something for liberals and
    conservatives at home; something for Russian nationalists and
    internationalists; something for statists and for freemarketeers; and,
    of course, something for an attentive, curious--and in many cases,
    apprehensive--foreign audience.
        Here's what we do know: Mr. Putin has affirmed his support for
    Russia's constitution and its guarantee of democratic government and
    basic freedoms for Russia's people; he's declared himself a proponent
    of a competitive market economy; he's promised quick action on tax
    reform and investment legislation; he told Secretary Albright when she
    spent three hours with him on February 2 that he sees Russia as part of
    Europe and the West, that he favors Russia's integration with the
    global economy, that he wants to continue the process of arms control
    and U.S.-Russian cooperation on non-proliferation.
        Put in those terms, his stated aspiration for his country jibes
    with American interests and American policy. On that pair of subjects,
    Mr. Chairman--our interests and our policy--there is a clear bottom
    line. Since the end of the Cold War, first President Bush and then
    President Clinton have pursued two overarching goals: first, to
    increase the safety of the international environment and, second, to
    encourage the evolution of Russia itself in what we--and many
    Russians--would regard as the right direction, both for the sake of
    their future and ours. The first goal means reducing Cold War arsenals,
    stopping proliferation, and cooperating in building a stable and
    undivided Europe. The second goal means supporting Russia's effort to
    transform its political, economic and social institutions at home and
    to integrate fully with the principal international structures of the
    world community.
        In both those areas, the record--while mixed and, by definition,
    incomplete--includes real progress. Furthermore, in both those areas,
    our Administration is determined to use the rest of this year to press
    forward. Our posture with regard to Russia as it completes its
    transition of leadership and continues its transformation as a society,
    polity and international actor is emphatically not, Mr. Chairman, one
    of wait-and-see; rather, it's one of active advocacy and advancement of
    our own bottom-line strategic objectives and interests.
        Let me now review both the record and our work plan for the period
    ahead.
        I'll start with security. By working with the Russians over the
    past eight years, we have helped to deactivate almost 5,000 nuclear
    warheads in the former Soviet Union, removed nuclear weapons from three
    countries, destroyed hundreds of missiles, bombers and ballistic
    missile submarines that once targeted our country, strengthened the
    security of nuclear weapons and materials at more than 50 sites,
    purchased more than 80 tons of highly enriched uranium enough to make
    more than 3,000 nuclear warheads.
        The months ahead promise to be crucial for the enterprise of
    strategic arms control. Mr. Putin has repeatedly told us that he
    expects to win ratification of START II in the Duma. If that happens--
    and we've been waiting for it for a long time--we will be able to begin
    formal negotiations on START III and deeper reductions of offensive
    weaponry.
        We are doing so, as you and your colleagues know, in the context of
    consulting with the Russians on an intimately related subject:
    strategic defense and our conviction that the Anti-Ballistic Missile
    Treaty of 1972, while part of the bedrock of the global security order,
    should be amended to take account of the way the world has changed in
    the past 28 years.
        The American plan for a limited National Missile Defense has been a
    difficult issue between us and the Russians, as everyone here knows.
    The Russians have resisted the idea of any change to the ABM treaty.
    They have been frank, though unconvincing, in making the case that NMD
    threatens the long-term credibility of their own deterrent. We have
    been equally frank not only in pushing back against their technical
    arguments, but also in urging them to intensify their efforts to
    cooperate with us in addressing the root cause of the problem that
    gives rise to NMD: the proliferation of ballistic-missile and WMD
    technology to states that could threaten both the U.S. and Russia.
        One of those states--though by no means the only one--is Iran. For
    a number of years, we've worked hard with the Russians, including at
    the level of the President and the Vice President, to prevent the
    transfer of lethal Russian know-how and technology to Iran. Russia has
    not yet shown that it can or will effectively implement its own export-
    control laws and regulations. The long episode of a revolving-door
    prime-ministership made it even more difficult to develop traction in
    our joint, government-to-government dialogue on this subject. That
    feature of Russian politics, presumably, is now in the past. We have
    been working directly with Mr. Putin in all his immediate past
    capacities--head of the national security council, prime minister and
    acting president. So there is some progress on which to build, and some
    momentum behind the work we'll be doing with Mr. Putin and his
    colleagues in the weeks and months ahead.
        We have challenges in other areas of security, too, including the
    control of ``loose nukes.'' That is why the overwhelming majority of
    our assistance dollars to Russia go to programs that lower the chance
    that weapons of mass destruction or sensitive missile technology will
    fall into the wrong hands. President Clinton's Expanded Threat
    Reduction Initiative will help Russia to tighten export controls,
    improve security over its existing weapons of mass destruction,
    facilitate the withdrawal of Russian troops and equipment from Georgia
    and Moldova, and provide opportunities for thousands of former Soviet
    weapons scientists to participate in peaceful commercial and research
    activities.
        Throughout this decade, we have tried to work with Russia and our
    NATO Allies to build a Europe that is secure, stable, and free from the
    divisions that endangered our own security in the 20th century.
    Progress has not been easy and we have had our share of public
    disagreements with Russia, most notably during NATO's air campaign
    against Yugoslavia. However, despite these disagreements, we have built
    a solid track record of practical work together. Even at the height of
    our dispute over the war in the Balkans, the U.S. and Russia
    coordinated their diplomacy to induce Miloevi--to meet NATO's
    conditions for ending the bombing. Since then, Russian and American
    soldiers have served side-by-side to keep the peace in Kosovo; they are
    cooperating in Bosnia as well; our negotiators worked with 28 other
    countries to adapt the Treaty on Conventional Armed Forces in Europe,
    and to reach agreement on the withdrawal of Russian forces from Georgia
    and Moldova; and American and Russian scientists collaborated in
    ensuring that Y2K brought no nuclear mishaps.
        Let me turn now to how the U.S. is using its resources to help
    Russians build a prosperous and democratic country that will be the
    U.S.'s partner in meeting the challenges of this century. In this
    regard, I want to stress that three-quarters of USAID's assistance for
    Russia is spent on programs that do not involve the Russian government.
    It is part of our effort to bolster grassroots support for change. U.S.
    assistance programs have brought more than 40,000 young Russians to the
    U.S. for training, they have helped 250,000 Russian small businessmen
    with financing or training, and they reached out to 300 independent TV
    stations in Russia's provinces.
        In this respect, the programs on which Ambassador Taylor and others
    at the Department regularly consult with this subcommittee and its
    staff have themselves evolved to take account of changing realities in
    Russia. Power centers are developing outside of Moscow. Pluralism,
    decentralization and greater autonomy are among the key facts about
    contemporary Russia. Elected governors and mayors have created their
    own political bases; entrepreneurs have built up commercial empires.
    Russia today has 65,000 non-governmental organizations today; a decade
    ago it had only a handful.
        We are working with Congress--and with this subcommittee--to obtain
    more funding for assistance programs that will further strengthen many
    of those NGO's, start-up political parties, independent media outlets
    and small businesses. There is considerable bipartisan support on
    Capitol Hill for beefing up exchange programs, such as the one that the
    Librarian of Congress, Jim Billington, a source of much wise counsel to
    the Administration and Congress alike, launched this past summer and
    also the one that Senator Richard Lugar has proposed to train Russians
    in business management, accounting and marketing. There is a new
    generation of regional leaders, many of whom are committed to reform.
    Through the vigorous activities of Ambassador Collins and his Embassy
    team, along with the creative use of our assistance funds, we should
    make sure that we are reaching out across Russia.
        None of these programs would have been possible without bipartisan
    support from the Congress. Members of Congress play a direct role in
    engagement as well. After the Russian people elected a new, more
    pragmatic Duma last December, Senators Hagel and Lieberman led a
    bipartisan delegation from both houses to meet with the new Duma
    leadership. Congressman Cox just returned from observing presidential
    elections. Secretary Albright and the rest of us encourage you to
    continue such contacts. The Duma has an important role to play in
    passing legislative basis for Russia's continuing transition and
    ratifying arms control agreements, like START II.
        In choosing to continue engagement, we will continue to promote
    Russia's international integration, to reduce nuclear danger, and to
    help the Russian people consolidate their democracy and market economy.
    America's relationship with Russia is based on our own national
    interests, not the personality of Russia's leader.
        Still, it matters who is in charge in the Kremlin. So let me return
    to the question of--and to the many questions about--Mr. Putin. We have
    listened carefully, and respectfully, to what he has said. Now, as he
    moves toward his inauguration and consolidates his team, we will have a
    chance--and the Russian people will have a chance--to see what he does.
    He has some advantages: he already has an unprecedented degree of
    collaborative rapport with the Parliament, which, in turn is--also to
    an unprecedented degree--more pragmatic, that is: less ideological,
    less in the grips of the holdovers from the old Soviet Communist
    structures and mindset.
        This development could augur well for the Russian economy. Russia
    has in fact rebounded quite a bit since the crash and seeming financial
    meltdown of Aug 1998. That's in part because of rising oil prices and
    the export benefits of ruble devaluation. But it's also because of a
    reasonably tight fiscal policy that has beaten back--though by no means
    whipped--inflation. Mr. Putin has attached particular emphasis to the
    importance of foreign investment as a motor to drive Russian economic
    growth in the future. His success will depend on whether his government
    can build a relationship of mutual confidence with the international
    financial institutions, private capital markets and foreign investors.
        To do that, however, Mr. Putin must build on a constructive
    relationship with the new Duma. Together, they may be able to put in
    place the institutions of a modern economy: laws that protect property,
    that ensure transparency and accountability, and that establish a
    rational, equitable and progressive tax code. In this area, we will
    judge Russian actions, and adjust the implementation of our own
    policies, on a case-by-case basis. For example, in discharging her
    obligation to protect the rights of American investors in Russia,
    Secretary Albright last week decided that positive developments in the
    case and clear assurances from the Russian Government to protect
    investor rights and address the underlying weaknesses in the legal
    framework allowed her to give a go-ahead to the Export-Import Bank for
    a loan to the Russian company Tyumen Oil.
        Mr. Putin and others in his government have proclaimed their
    determination to improve the climate for foreign and domestic
    investment in Russia. They will succeed only insofar as they are able
    to make respect for the rule of law a hallmark of economic life and
    commercial activity.
        In this regard, Mr. Putin has identified countering crime and
    corruption as one of his priorities, not least because that scourge is
    a major obstacle to foreign investment. He will succeed only if he
    works with the legislature to put in place legal, regulatory and
    enforcement structures that instill confidence in citizens, buyers,
    sellers, depositors and investors that the Russian economy is a
    leveling playing field with fair, universally applicable rules--that it
    is not, in other words, a giant back alley where anyone with a little
    money to save or invest is likely to get mugged.
        Here the questions about Mr. Putin are more apparent than the
    answers. He has said he wants to see Russia governed by a
    ``dictatorship of laws.'' That's a phrase worth pausing over, perhaps
    with an arched eyebrow. Where is the accent? Is it on the D-word or the
    L-word? Are the two even compatible? Does it suggest that ``order''
    will come at the expense of basic personal and civil liberties?
        Those are questions that a lot of Russians are asking themselves
    today, Mr. Chairman.
        Mr. Putin has also said he wants to re-establish Russian strength.
    How will he define strength? Will it be in anachronistic terms of brute
    strength and the capacity to intimidate neighbors? Or will it be in
    modern terms, relevant to the demands and opportunities of an era of
    globalization?
        Those are questions that virtually all of Russia's neighbors are
    asking themselves today. They are doing so, especially, though by no
    means exclusively, because of the festering crisis in the North
    Caucasus. It is to that subject I would like now to return.
        The Russian authorities faced--and still face--a very real threat
    in Chechnya. The violent secessionism and extremism of Chechen rebels,
    coupled with provocations in Dagestan and elsewhere were legitimate
    security concerns. We don't dispute Russia's right, or indeed its
    responsibility, to fight terrorism on its soil.
        But none of that begins to justify the Russian government's
    decision to use massive force against civilians inside Chechnya. The
    numbers speak for themselves: 285,000 people displaced, thousands of
    innocent civilians dead or wounded, and thousands of homes and
    businesses destroyed since last September.
        The brutal war has damaged both Russia's democratic transformation
    and its reputation in the eyes of the world. It represents a resurgence
    of one of the worst habits of Russia's past--including its Soviet past:
    the tendency to treat an entire category of people--indeed, of its own
    citizens--as an enemy. Grozny today is, literally, a smoking, charred
    ruin and a grotesque monument to the phenomenon of overkill. It will
    take decades and millions of dollars to rebuild Chechnya.
        Two weeks ago I accompanied Secretary Albright from India to
    Geneva, where she delivered a straight-from-the-shoulder speech to the
    United Nations Commission on Human Rights. She made clear that credible
    allegations about atrocities by Russian forces raise fundamental
    questions about the Russian Government's commitment to human rights and
    international norms; they require prompt and transparent investigation.
    She pressed for Moscow to grant the International Committee of the Red
    Cross unhindered access throughout Chechnya, including to all detainees
    and for the reestablishment of the OSCE Assistance Group in the region.
    President Clinton underscored these concerns when he spoke to Mr. Putin
    on the telephone a week ago yesterday.
        President-elect Putin's decision to grant the International
    Committee of the Red Cross access to detainees was a welcome first
    step. So was the decision to invite United Nations Commissioner for
    Human Rights Mary Robinson to visit. Unfortunately, Ms. Robinson, who
    was in Chechnya over the weekend, was not allowed to visit all of the
    sites that she wanted. Mr. Putin has appointed Vladimir Kalamanov as
    special human rights representative for Chechnya, but to be credible
    and effective, Mr. Kalamanov needs a clear mandate and the resources to
    do his job.
        Russian policy in Chechnya has ramifications that reach far beyond
    Chechnya itself. For example, the Russian Government's decision to
    clamp down on the media's ability to cover the conflict and its
    treatment of Radio Liberty's Andrei Babitskiy have raised questions
    about its commitment to freedom of the press in Russia as a whole.
        The U.S. has also been concerned about spillover of the conflict
    into neighboring Georgia since last fall. That is one reason I have
    made a point of visiting Tblisi and meeting with President Shevardnadze
    myself in recent months. With active encouragement by our government,
    the OSCE has sent a border-monitoring mission to the border and Russia
    has taken steps to lessen tensions there with Georgia. Again, these are
    useful steps, but the situation bears close watching. On a related
    issue, we are using our on-going diplomacy with Moscow to urge Russia
    to comply as soon as possible with the CFE Treaty limits in the
    Caucasus.
        Russia also has a responsibility to care for its 285,000 citizens
    displaced by the conflict. The U.S. has helped to ease the humanitarian
    crisis by providing $10 million to the International Committee of the
    Red Cross and United Nations agencies to help persons displaced by the
    conflict.
        That means taking action against real terrorists, but not using
    indiscriminate force that endangers innocents or re-intensifying the
    disastrous war in Chechnya. It means opening a political dialogue with
    the more pragmatic leaders in the North Caucasus, not antagonizing them
    or their populations. It means stepping up measures to prevent further
    bombings, but being careful not to make people from the Caucasus
    second-class citizens, or in any other way trample on hard-won human
    rights or civil liberties. It means working cooperatively with
    neighboring states to deal effectively with the underlying economic and
    security problems of the Caucasus, but not pressuring those neighbors
    in ways that will shake their fragile sense of their own stability and
    independence.
        I would submit, Mr. Chairman, that no other development in the nine
    years since the collapse of the Soviet Union has raised such serious
    questions about Russia's commitment to international norms as the war
    in Chechnya. That view is widely shared around the world. This week the
    Parliamentary Assembly of the Council of Europe will consider whether
    to suspend Russia's participation. At the U.N. Human Rights Commission
    in Geneva, a number of countries are considering the introduction of a
    resolution criticizing Russia for human rights violations. Chechnya
    casts a shadow over the entire process of Russia's integration into the
    international community.
        In short, Mr. Chairman, the war has already greatly damaged
    Russia's international standing. Whether Russia begins to repair that
    damage, at home and abroad, or whether it risks further isolating
    itself is the most immediate and momentous challenge Mr. Putin faces.
    In this respect, as in others, how he answers the many questions about
    him that we will touch upon today will be a major determinant in
    framing the agenda of U.S.-Russian relations in the months, and years,
    ahead.
        In conclusion, Mr. Chairman, I would return to a theme that you and
    I have discussed over the years: how the very absence of clarity about
    Russia's future course, including in the minds of its own people and
    its own leaders, requires all the more clarity in U.S. policy and
    interests. And that, in turn, requires the maximum degree of bipartisan
    consultation on the terms of our engagement with Russia. It's in that
    spirit that I look forward to our discussion today.

                                   War Crimes

        Senator McConnell. I want to start by asking you how you
    would define the concept of a war crime. What meets that
    threshold?
        Mr. Talbott. I would respectfully suggest that terminology
    is not the most important issue here. Particularly when we are
    talking about matters of international law. Matters where the
    terminology can trigger processes over which we must maintain
    very careful control as regards to the United States' own
    involvement.
        I think the appropriate words to describe what is credibly
    reported and alleged to have happened in Chechnya are the words
    that I have used: Human rights abuses, outrages, and
    atrocities. If in the course of our ongoing dialogue you feel
    it appropriate for us to give you a carefully considered
    opinion on other terms and concepts, we will certainly do so.
    But these are strong words that we are using. As you said and
    as Senator Leahy says, the key challenge is not just to find
    the right words, but to use our influence working with partners
    and allies and the rest of the international community to bring
    about action on the part of the Russian authorities.
        Senator McConnell. Then you would not describe what we have
    seen in Chechnya as war crime?
        Mr. Talbott. I think I would stand by what I have said. I
    believe we must be careful about the words we use and make sure
    we understand what they mean, including in terms of their
    implications and the resulting international legal and
    diplomatic follow-up.
        Senator McConnell. Looking at the pictures of Grozny which
    you referred to behind us before and after the Russians
    attacked, one shows a thriving city. The shadows show large
    apartment buildings in the heart of the city; signs of bustling
    residential life. The second photo is stunning. It is not just
    rubble, it is totally incinerated. It resembles a lunar
    landscape.
        Which gets me back--and I know you are not going to answer
    this, but I am going to try one more time: Does destroying
    400,000 homes and expelling 200,000 people qualify as a war
    crime?
        Mr. Talbott. It qualifies as a grotesque monument to the
    phenomenon of overkill. You quoted a document that, frankly, I
    look forward to seeing. I hope you will share it with us. It
    uses the word ``liquidation.'' I cannot vouch for the document,
    but I certainly know enough about twentieth century Russian and
    Soviet history to know that that word has a very ugly pedigree.
    This is clearly liquidation.
        The real point here is that Chechnya has brought out,
    brought back, one of the worst habits from the Russian and
    Soviet past, which is to treat an entire category of people,
    and in this case citizens of the Russian Federation, as
    enemies. This evidence and plenty of other evidence that has
    been credibly put forward makes a mockery out of the repeated
    assurance and claims that all due care has been taken to
    respect innocent civilian life.
        The question now is whether the almost universal outrage is
    going to translate into a realization on the part of the
    Russian authorities that they have got to recognize this
    problem themselves and deal with it, both in the past tense, in
    an honest accounting of what has happened; in the present tense
    by shifting away from reliance on brute force to opening a
    dialogue wherever it is possible to do so; and in the future
    tense, doing something to rebuild this region.
        Senator McConnell. So it is clear the having an orderly,
    democratic election, a peaceful transfer of power, did not cure
    all the old habits?
        Mr. Talbott. Yes, sir, that is clear. I think that was
    clear even before last August.
        Senator McConnell. The Washington Post reported in January
    1995: ``The 5-week war''--at that time--``has cost the country
    $2 billion to $5 billion and continues to drain the country's
    meager coffers at the rate of $30 million a day. Rebuilding
    Chechnya's pulverized infrastructure and industry would cost
    much more.''
        That was back in 1995 and obviously this war has lasted
    much longer, inflicting, as we have been discussing, much more
    infrastructure damage. Do you have any idea of the cost of
    repairing all of this or the cost of conducting the war?
        Mr. Talbott. The short answer is no on both counts. I think
    we would have to look long and hard at any accounting that we
    saw from the Russian authorities about what they spent, given
    the imprecisions, the tendentiousness of the figures, the
    fungibility of funds.
        No doubt the cost, whatever number we came up with from the
    outside for what it is going to take to rebuild and repair, is
    almost certainly too low, not least because the damage spreads
    throughout the whole region. As I think you know and we have
    discussed at least on the telephone, I have made a point of
    visiting Georgia on several occasions in recent months, and
    this war has spread a sense of instability and vulnerability
    throughout the region. That too bears costs.
        You have been a great supporter, Mr. Chairman, of
    assistance to Georgia. The lion's share or at least the largest
    single item in our assistance to Georgia has been to help them
    with border security. That is an extremely high priority item
    for the Georgians, not least because it reinforces their own
    sovereignty and territorial integrity. But there are
    opportunity costs there.
        Senator McConnell. Well, I guess the relevant question for
    us related to costs is do you believe that the Russian
    Government could have prosecuted the war absent international
    institutional subsidies and support?
        Mr. Talbott. Yes, I do, sir.

                                  G-8 Meetings

        Senator McConnell. In December when members of G-8 met,
    news accounts indicated that the Germans planned to decrease
    aid to Russia or ban Russia from participation in G-8 meetings
    until it changed course in Chechnya. Given the fact that
    Germany is Russia's largest creditor, this position would have
    to be taken seriously. Apparently at this same time Britain and
    France were considering similar options.
        I am told the United States rebuffed these suggestions. If
    there was an emerging consensus of our allies to take tough
    action, can you explain why we either opposed or missed this
    opportunity?
        Mr. Talbott. Well, I have been struck, having been directly
    involved in deliberations and consultations with our G-7--and I
    am saying here ``G-7''--colleagues--Senator Stevens, thank you
    for coming by. I look forward to continuing our own
    conversations.
        I have been struck by the high degree of harmony among us.
    The issue here is working together in the G-7, which still
    exists, by the way, particularly as we look ahead to the G-8
    summit that will take place in Okinawa at the end of July, for
    effective action.
        You are asking, if I understand you correctly, Mr.
    Chairman, about the issue of linkage. Russia is a very big,
    complicated place and also a very big, complicated phenomenon.
    Now, I do not for a minute want to suggest that Chechnya is
    merely one of 89 subjects of the Russian Federation. The horror
    that is taking place there looms much larger. It has
    implications for what is happening in Russia as a whole.
        However--and this goes back to Senator Leahy's point--there
    are a lot of things going on across that vast country that need
    and deserve our support and which if we support are more likely
    to prevail over time in the struggle that is going on in Russia
    between the forces of the new and the forces of the old. We
    should keep that very much in mind as we look at suggestions
    for, as it were, punitive linkages, whether it is in the area
    of our bilateral assistance, which your committee and my
    colleagues worked on so closely together, or whether it is in
    the area of international financial institutions.
        Okinawa is coming up. It is at the end of July. But there
    are more immediately a number of international bodies meeting,
    which I referred to in my opening statement, that have made
    very clear to the Russians that Chechnya casts a shadow over
    this whole range of relationships and transactions.
        Senator McConnell. Milosevic's troops bombed and burned
    villages to the ground, forcing civilians from their homes.
    Fueled by ethnic hostility and racism, his soldiers carried out
    summary executions, looting, rapes, and other unspeakable
    atrocities. The only difference I can discern between
    Belgrade's conduct in Bosnia and Kosovo and Russian forces in
    Chechnya is Milosevic's victims fled across international
    borders while most Chechnyan civilians fled internally to
    Ingushetia, primarily because the passage to Georgia was
    blocked by troops.
        Milosevic and his cronies have been indicted by the Hague
    War Crimes Tribunal, as we all know. What distinguishes,
    qualitatively what distinguishes the Russian assault on
    civilians in Chechnya from Serbian aggression in Bosnia and
    Kosovo?
        Mr. Talbott. There are differences, Mr. Chairman. Certainly
    differences of fact, or what you, I think, would call
    qualitative differences. I will touch on one or two of those,
    but I want to preface doing so by making clear that, while I do
    not believe that parallelism or analogies between Kosovo and
    Chechnya are terribly useful or helpful, my pointing out the
    differences does not constitute an excuse for Russian
    activities, behavior and outrages that we are discussing here
    today.
        Now, that said, there is a fairly fundamental difference
    between Kosovo and Chechnya. This is the second war that Russia
    has waged within its own territory against a significant
    minority of its own population during the last 8 years. This
    most recent round began when Chechnya had become a kind of
    anarchist's paradise and unquestionably a hotbed of various
    kinds of extremism, secessionism, and terrorism. Of course,
    there were events in Dagestan, the origins of which are still a
    bit obscure, that carried this conflict over the borders into a
    neighboring republic.
        That is different from the way in which the Kosovo crisis
    and ultimately the conflict in the Balkans came about. In the
    Kosovo crisis you had a leader in Belgrade who decided to
    essentially define full citizenship of that country in ethnic
    terms and to repress the entire population of Kosovo over a 10-
    year period, and in a particularly brutal fashion over a 1-year
    period.
        So I think this is a pretty good example of where, while we
    should keep history in mind and look for lessons in other
    experiences, we should not overdraw the parallels.
        The key question is, by the way, there is another
    difference, too. The former Yugoslavia, which is to say Serbia,
    is not by any stretch of the imagination a democracy. Russia
    today is an electoral democracy. It has on a regular basis
    elected parliaments. It has now gone through a constitutional
    process and elections that produced a new president. Grassroots
    democracy is to be found, particularly in certain kinds of
    pockets of reform, all around Russia. Efforts of that kind are
    very much the beneficiaries of U.S. bilateral assistance and
    international assistance. So there are some quite significant
    differences betweem Kosovo and Chechnya or Russia and Serbia.
        Nevertheless, the crisis in Chechnya is a threat to Russian
    democracy and it is a threat to the ability and willingness of
    the international community, and the United States, to support
    the central government.
        Senator McConnell. Can you tell me what our position has
    been at the meetings on Chechnya at the OSCE and the Commission
    for Human Rights? For example, are we leading efforts to
    produce an independent commission of inquiry? Will we vote in
    support of such a commission?
        Mr. Talbott. I heard, Senator McConnell, just before coming
    up here this morning that Mary Robinson, the High Commissioner
    for Human Rights, who has just completed, as you referred to or
    I guess maybe it was Senator Leahy, an unsuccessful visit to
    the region and has publicly called for an independent
    commission of inquiry. That has been one of the themes in what
    we have been urging both directly with the Russians and in
    Geneva, where Secretary Albright gave the speech you referred
    to not long ago.
        The exact form, the exact process, is something that we are
    still talking to our colleagues in the commission about. The
    objective here, though, is to make sure that the full weight
    and authority of that body, that is the U.N. Commission on
    Human Rights, be brought to bear with and on Russia to increase
    the chances that Russia will face up to its own international
    obligations here. It has obligations not only to its own
    people, but to the international community.
        Senator McConnell. Who is funding and supplying the Chechen
    guerrillas?
        Mr. Talbott. Insofar as I have impressions, I think they
    should probably be saved for a different setting, and why do we
    not, through the right staff channels, get you back an
    authoritative and probably classified answer to that.
        Senator McConnell. I gather we view Maskadov as the
    legitimate leader of Chechnya.
        Mr. Talbott. Maskadov?
        Senator McConnell. Yes. Does he have any real control over
    the guerrillas?
        Mr. Talbott. Again, not so much for reasons of high policy
    or security, but more because of the complicated factual nature
    of that, I would like to get back to you with a more considered
    response.
        I will give you a preliminary answer, which is that he is
    as close as the people of Chechnya have to an elected leader.
    But he by no means has had, including back before August when
    the fighting greatly intensified, a lot of control over Khatab
    and Masayev and the other so-called ``war lords,'' who are, I
    might add, thoroughly bad actors and a source of real concern
    not just to the Russian authorities, but to others in the
    region.
        In connection with my own work in South Asia as well as in
    the--the South Caucasus, which is to say Armenia, Azerbaijan
    and Georgia, which you and I have talked about in the past, I
    have heard a lot of concern about the terrorist and extremist
    forces that have been able to fester in Chechnya during this
    period.
        It really, by the way, goes back at least 10 years to what
    in retrospect seems to have been a colossally short-sighted
    policy on the part of the Russian Government back when it was
    in the hands of certified reformers, namely Acting Prime
    Minister Gaidar, which was to essentially leave Chechnya alone,
    let it go its own way, but not give it any help to establish
    itself and to give its people any hope that they could have a
    decent, prosperous life.
        That made it into a kind of attractive nuisance for
    characters, both indigenous and from around the region, who
    have collected there and then went on a rampage last year.
        Senator McConnell. Just a couple more questions, then I
    will pass the baton to Senator Leahy.
        The leader of Ingushetia recently said that the Russians
    were guilty of imperial thinking and then proceeded to say:
    ``They can destroy all Chechens. But what next? Who will run
    Chechnya?''
        Mr. Talbott. It is a good question.
        Senator McConnell. What is the answer to the ``What next''
    question?
        Mr. Talbott. My answer--and there is no reason for thinking
    that this is the answer that you will get from Moscow--I think
    my answer is the one that you imply in the way you pose the
    question. The Chechen people have suffered terribly. They have
    suffered terribly at the hands of an inadequate leadership of
    their own, they have suffered terribly at the hands of
    extremists and terrorists in their midst, and they have
    suffered terribly at the hands of the Russian authorities.
        They need to be, first of all, given safety. Second, they
    need a degree of political empowerment, which is to say there
    are moderate and reasonable people in their midst and the
    Russian authorities need to make much more of an effort to
    identify and engage with them. Then they need some hope for the
    future.
        This has been a huge setback for the very concept of what
    it means to be a Russian citizen. There are lots and lots of
    minorities in Russia who are culturally or historically Islamic
    or whose roots are in the Caucasus or in Turkic-speaking parts
    of the Russian Federation, who are asking themselves: What next
    for us? That is why the signal that Moscow chooses to send as
    it goes about the next phase of this is critically important,
    including for the long-term prospects of Russia making it as a
    modern, prosperous, democratic state.
        Senator McConnell. I want to wrap up by going across the
    border for a few minutes. Absent international accountability,
    the new Russian Government will be convinced there are no
    consequences for such brazen defiance of all international
    democratic norms. Diplomats in the region believe that such a
    message will encourage further meddling in Georgia and Armenia
    nearby.
        Mr. Talbott. I am sorry, which message will encourage that?
        Senator McConnell. Well, that there are no consequences for
    this kind of action. And the suggestion is that it would
    encourage further meddling outside the country, but nearby. And
    focusing for a minute on Georgia and Armenia, what immediate
    steps are you prepared to take to discourage Russian
    interference and specifically to encourage Russian cooperation
    on troop withdrawal talks over the border in Georgia?
        Mr. Talbott. Well, first, there are consequences for what
    Russia is doing inside of its own borders and there must be no
    mistaking that. I doubt that there is any misapprehension on
    that point in Moscow today. Russian diplomats, and no doubt
    others, are working overtime to cope with a growing wave of
    international not just indignation, but also international
    determination to induce Russia to fundamentally alter course in
    Chechnya itself.
        Next, the border between Russia and the former Soviet
    republics to the south, particularly Georgia and Azerbaijan, is
    a bright red line in terms of the international community's
    view that the sovereignty and independence of those countries
    matters deeply to us.
        Whenever any of us speaks about Chechnya, whether it is
    President Clinton in Istanbul when he got into a very frank
    public exchange with President Yeltsin, whether it is Secretary
    Albright when speaking in Geneva to the United Nations Human
    Rights Commission, or me today. We always make the point that
    we respect Russia's sovereignty and territorial integrity and
    we understand that Russia has both the right and responsibility
    to combat terrorism and extremism. And then we go on to take
    strong issue with the means that Russia has used, which are,
    among other things, counterproductive in terms of Russia's own
    interests.
        But we also try whenever possible to mention the other
    states in the region, and particularly Georgia, which feels
    especially vulnerable.
        Now what can we do about it? With a lot of support from you
    and from this committee, we have been able to work with the
    Georgians to beef up their ability to look to their own border
    security. We have worked with the OSCE to increase the number
    of OSCE monitors that are operating there. We have used our
    good offices in Moscow, Secretary Albright and I have both been
    personally involved in this, to make sure that the Russians
    understand both what we see as the danger of an overflow of the
    fighting into Georgia and also to work with the Georgians if
    there does appear to be any kind of activity in the northern
    part of Georgia that might, worst case, serve as a pretext of
    some kind for Russian intervention there.
        You mention getting implementation of Russia's obligation
    to withdraw its forces, not only from Georgia, but also from
    Moldova. There is a representative of the Moldovan embassy here
    at this hearing today. We have made that, ever since the
    agreement in Istanbul last year on the CFE Treaty, a priority
    issue in talking to the Russians, stressing the importance that
    Russia move ahead with implementation on those withdrawals, and
    we have tried to play an appropriate facilitating role among
    the parties, which is to say among the Russians, the Georgians,
    and the Moldovans. But we want to see that happen.

                                    Armenia

        Senator McConnell. Finally, next door in Armenia. We have
    had four negotiators for Nagorno-Karabakh in 3 years, further
    eroding United States credibility and commitment to the
    independence of Russia's neighbors. As we approach the end of
    the Clinton years, do you have any expectation that the
    Russians will accept a deal between Armenia and Azerbaijan?
        Mr. Talbott. Well, as you know, this is an issue and a
    problem that I have had an opportunity to work on a lot myself,
    and it is one that you are intimately familiar with. Russia
    certainly should accept and support an agreement that President
    Kucharian and President Aliyev might be able to work out
    between themselves on Nagorno-Karabakh.
        I think I talked to you last fall, shortly after coming
    back from my own mission to the region, which coincided with
    the slaughter in the parliament and the assassination of Prime
    Minister Sarksian, a horrible event in purely human terms, but
    also had devastating and long-lasting implications for Armenian
    politics and therefore the diplomacy of the region.
        We have been working recently and will continue to work for
    the duration of this administration to try to see if we can
    help the parties get that process back on track. I assure you
    we will work with the Russians, who along with the French are
    co-sponsors of the Minsk Group process in the OSCE, to get
    their full support.
        Senator McConnell. Let me rephrase the question. Do you
    think the Russians would like to see this settled or do you
    think they like it the way it is?
        Mr. Talbott. I know what a rational and objective view of
    the situation ought to lead them to think. You used the word
    ``Russians.'' That is a plural noun, and Russia is now a highly
    pluralistic phenomenon. There are different Russians with
    different views.
        A realistic Russian would understand that continued war and
    instability and conflict, including on ethnic lines, in the
    South Caucasus can only have an exacerbating effect on
    stability in the North Caucasus, and they ought to want to see
    peace down there. I assume that it is on that premise that they
    will continue their involvement in the Minsk process.
        Senator McConnell. Senator Leahy.
        Senator Leahy. Thank you.

                         Resolution Criticizing Russia

        You mentioned in your statement that at the U.N. Human
    Rights Commission in Geneva there are a number of countries
    considering the introduction of a resolution criticizing Russia
    for human rights violations. Would the United States be one of
    those countries?
        Mr. Talbott. Will we support a resolution per se?
        Senator Leahy. No. In your statement you said a number of
    countries are considering the introduction of a resolution
    criticizing Russia for human rights violations. Are we among
    those countries?
        Mr. Talbott. We are not among those countries proposing a
    resolution at this time. The standard that we are bringing to
    bear, Senator Leahy, is we want to see an outcome in the Human
    Rights Commission that has maximum effect and also that
    vindicates what we feel ought to be the influence of that
    commission.
        Senator Leahy. Which means that we will wait until we see
    what the wording is to decide whether we will support it?
        Mr. Talbott. No, more than that. We are not in a wait-and-
    see mode. Secretary Albright when she was in Geneva got into
    this in considerable detail with her colleagues there. We are
    reserving on which mechanism will make the most sense at the
    end of the day.
        Senator Leahy. I understand that nobody from the U.S.
    Embassy in Moscow has gone to the field to collect testimony
    from Chechen refugees. Is that correct?
        Mr. Talbott. Let me check----
        Senator Leahy. I am thinking about how we addressed the
    situation in Kosovo. It was a lot different. We did----
        Mr. Talbott. Pardon?
        Senator Leahy. In Kosovo we sent United States personnel to
    the region. Ambassador Bill Walker and others were involved in
    monitoring. In situations like this, we often send somebody
    from our mission to the area to see what is going on.
        Our Moscow mission is an enormous one. I am just curious
    why we have not sent anybody there.
        Mr. Talbott. Well, let me first get back to you on whether
    it is literally nobody. But I have talked to Jim Collins, whom
    I think you know and have worked with yourself, our Ambassador.
        Senator Leahy. I know Ambassador Collins well.
        Mr. Talbott. There is one responsibility, overarching
    responsibility that he has and that we have, and that is for
    the safety, not only of American diplomatic and foreign affairs
    personnel, but also we bear responsibility for the safety of
    any American citizens. There are some representatives of some
    outstanding NGO groups here in the hearing today who very
    bravely have been or are willing to go down to the region. We
    owe them the most candid assessment of what danger they would
    be in, and that is what dictates----
        Senator Leahy. I understand that. But they are already
    there. They do not go with any of the added advantages,
    assuming they are advantages, of diplomatic immunity and such.
    I am not asking you to put our people in unnecessary danger.
    Lord knows we have had far more ambassadors killed than we have
    had generals or admirals in my adult life.
        But I would be very interested in hearing Ambassador
    Collins' and the State Department's response if we have not
    sent anybody there when we have in other places, and when the
    NGO's are already there.
        Mr. Talbott. Before the end of the day I will get back to
    you on that. I can tell you, having worked with Jim since
    virtually the beginning of the administration, he is a great
    believer and proponent in getting American embassy personnel
    all out and around Russia, including into very hardscrabble
    places.
        Senator Leahy. I have been with him to some of those.
        Mr. Talbott. And he is not faint-hearted about these
    things, but he takes his responsibilities very seriously when
    it comes to security and safety.
        Senator Leahy. Following Ambassador Collins'
    recommendations, I have stayed in some of the most God-awful
    places I can imagine. But to his credit, I was in God-awful
    room No. 1 and he was in God-awful room No. 2, or vice versa.
        Mr. Talbott. Exactly as it should be, Senator.
        Senator Leahy. Yes.
        Mr. Talbott. And if I had been along I would have probably
    shared his room with him.
        Senator Leahy. He said the worst part about it, he could
    hear me snore through the walls.
        But anyway, we are providing about $10 million in
    humanitarian aid for the victims of the war in Chechnya.
        Mr. Talbott. I think it is up to $12 million if I am not
    mistaken.
        Senator Leahy. I would like to know how it is being
    distributed, how it is being monitored. I understand that some
    of it is being stolen.
        I also mentioned World Bank and other loans that we have
    agreed to. Have we opposed any loan disbursements to Russia
    within the last year, either from the World Bank, the IMF, or
    anywhere else?
        Mr. Talbott. The answer is yes, but let me come back to
    that in just a second. I first want to pick up on your
    expression of concern about reports of diversion of
    humanitarian or refugee assistance. Bill Taylor, our Ambassador
    responsible for the coordination of our programs, is here today
    and he will get you a more detailed response.
        But we too are concerned about any reports of diversion of
    any funds. We feel a great sense of responsibility to make sure
    that the money this committee appropriates is properly and well
    spent. Whenever we get a report we follow up on it very
    quickly.
        I think it is our judgment that there have not been
    significant diversions. That is a qualifier, obviously, and we
    should have as close as possible to a zero tolerance posture
    with regard to diversions. But we also want to get meaningful
    help to deserving people in real time, and we will continue to
    monitor this.
        With respect to loans to Russia, may I just first clarify
    that you are talking here more in the area of international
    financial assistance as opposed to bilateral?
        Senator Leahy. Yes, loans from the international
    organizations where we have a fair amount of say.
        Mr. Talbott. Sure, right, indeed we do. And Secretary of
    Treasury Summers has been very much part of the core team
    working on Russia policy since the beginning of this
    administration. So he brings a lot of relevant experience to
    bear in his current capacity. And the Treasury, of course, has
    the lead in working with the IFI's, especially the IMF and the
    World Bank.
        Since the real, credible, and subsequently vindicated
    charges of various kinds of scandals with regard to IFI money
    last year, there has been no IMF money. There is another
    tranche under consideration, but it has not gone forward.
    Russia has not met the economic conditionality for that next
    tranche.
        There has been, if I am not mistaken, a World Bank loan for
    the restructuring of the coal sector, and in that case it is
    because they did meet the economic conditionality.
        Senator Leahy. Back to the aid, you say it is up to now $12
    million for the Chechens. How is that aid distributed? Who do
    we give it to? NGO's?
        Mr. Talbott. I can do one of two things--pardon?
        Senator Leahy. Does it go through NGO's?
        Mr. Talbott. I can do one of two things. I can either get
    back to you or I can ask Ambassador Taylor to come to the
    table.
        Senator Leahy. Please get back to me on that, because I was
    actually supposed to be at another hearing at 11:00.
        Mr. Talbott. OK.
        Senator Leahy. I would like to know, if it is going through
    NGO's, which NGO's. If it is not going through NGO's, why not?
        Mr. Talbott. Ambassador Taylor is nodding, which means that
    primarily through----
        Ambassador Taylor. Through NGO's----
        Mr. Talbott. Through NGO's.
        Ambassador Taylor. ICRC and UNHCR.
        Senator Leahy. I am sorry, I did not hear it.
        Mr. Talbott. The U.N. Commission for Refugees and the
    International Red Cross, as well as a variety of NGO's.
        Senator Leahy. Perhaps, Ambassador, you could give me the
    list of who it is going through.
        I look at this satellite photograph that was published in
    the New York Times. The nice thing about having it published
    this way is that you can refer to it in open hearings.
        What the photograph shows is horrible. Physicians for Human
    Rights reports that of the over 1,000 people they interviewed,
    40 percent said they had seen Russian troops kill Chechen
    civilians. There are reports of rape and torture in the Russian
    filtration camps. It is estimated that 1,000 people are being
    held there. Mary Robinson was not allowed to visit these camps.
    She is a woman of great credibility and courage who is willing
    to speak out.
        I have strongly supported efforts to help promote democracy
    in Russia. I am glad the elections took place. On the other
    hand during the cold war we cast a blind eye on the actions of
    people who became our allies because they were anti-communist--
    regardless of how dictatorial they were or how badly the
    violated human rights. I would hope that we would not also cast
    a blind eye to Russia's atrocities in Chechnya.
        With regard to war crimes, I have looked at the laws. I
    have reviewed the definition of war crimes. The atrocities in
    Chechnya are war crimes. They are war crimes that officers in
    the Russian Army know occurred. They know the people involved,
    and little or nothing is done.
        If there is civilian control of the army, then I have to
    assume that Russian officials, up to and including the
    President of Russia is responsible for the atrocities that have
    been committed.
        A war crime is a war crime is a war crime, and these are
    war crimes.
        Thank you, Mr. Chairman.
        Mr. Talbott. Mr. Chairman, may I respond? Are we OK on
    time?
        Senator McConnell. Yes, go ahead and respond to what
    Senator Leahy had to say.
        Mr. Talbott. Senator Leahy, I hope very much--I do not know
    if there is a representative of the Russia embassy here. I
    mentioned there is somebody from the Moldovan here. But I hope
    very much that there is and that a full transcript of this
    hearing gets to the Russia embassy and indeed gets back to
    Moscow.
        For reasons that I hope you found understandable, I did not
    want to get into the terminological issue. But I think the fact
    that two distinguished Members of the U.S. Senate who, between
    the two of you, represent bipartisan support for the principle
    of engagement with Russia--Senator McConnell, I remember our
    conversation on this at the McConnell Center for Leadership in
    Louisville, where we agreed that the issue is not whether you
    engage with Russia, but the terms of engagement. The fact that
    the two of you would insist upon the designation of these
    atrocities as war crimes carries its own weight, even if it is
    the weight of the legislative branch and the executive branch
    is reserving its position on this. That matters.
        The second point I would make has to do with Mr. Putin
    himself. No matter who was the leader of Russia today, Chechnya
    would be a vast problem and obstacle for Russia, for all the
    reasons that we have discussed. But it is particularly so for
    him because of his own personal identification with this war
    and the extent to which it was a defining issue and probably
    the defining issue in his extraordinary rise.
        I would at the same time, though, hope and ask for both of
    you to support this proposition: that we keep in mind that a
    great deal is going on in Russia that we should continue to
    support. Our assistance programs, bilateral assistance programs
    for Russia, basically fall into two categories. There is
    security assistance, the lion's share of which of course is
    funded by the Department of Defense, with some help from the
    Department of Energy, which is basically about ensuring the
    ability of Russia to comply with international obligations to
    dispose of and reduce safely, levels of the kinds of weapons
    that we used to literally lose sleep about when they were aimed
    at us.
        But the other category of assistance is support for
    economic reform. Helping Russia in its transition to a market
    economy, and helping the process of democratization. Going back
    to the end of the Bush administration, since 1992 we have spent
    a total on bilateral assistance of a little less than $9
    billion.
        Now, we owe it to you to justify in both policy terms and
    also in terms of accountability every penny of that. But I do
    think we should keep in mind how that compares to some other
    figures, like the $4.5 trillion that it cost the United States
    to prosecute the cold war and what we spend on our defense
    budget. If I am not mistaken, the $9 billion that we have spent
    over the last 8 years is one twenty-sixth of the DOD budget for
    the current fiscal year.
        So we should keep that very much in mind. This is still a
    bargain at the price. What we have to do is to make sure that
    the recipients of our assistance are indeed part of the
    solution and not part of the problem in Russia.
        Senator McConnell. Thank you very much, Mr. Secretary. We
    appreciate your being here.
                           NONDEPARTMENTAL WITNESSES

                STATEMENT OF DOUGLAS FORD, SENIOR RESEARCHER,
                          PHYSICIANS FOR HUMAN RIGHTS

        Senator McConnell. We are going to have to wrap up the
    hearing.
        A panel: Douglas Ford from Physicians for Human Rights and
    Nathalie Ernoult from Action Against Hunger. I would appreciate
    it if each of you could summarize your remarks in 5 minutes
    each so that we have a few moments for questions, because we
    are kind of moving toward the end of our time here. That would
    be appreciated.
        Mr. Ford. Can you all hear me? I guess.
        Thank you, Chairman McConnell. It is a privilege to be
    here. The U.N. Human Rights Commission is still in session, as
    several people have just noted, and there is still time to take
    action there, action to get an independent international
    investigation, a U.N. commission of inquiry that could save
    thousands of lives in Chechnya.
        Briefly, I would like to provide the committee with some of
    Physicians for Human Rights' most important findings which my
    colleagues and I gathered during our 3-week investigation in
    Ingushetia in February and March, the republic on Chechnya's
    western border. Our team conducted a random survey of 1,140
    individuals drawn from the large refugee population in
    Ingushetia from Chechnya, at the time numbering about 186,000
    people.
        The purpose was to evaluate the prevalence and breadth of
    abuses in Chechnya and to supplement it with some more in-depth
    testimonies. The findings were extraordinary and deeply
    troubling. More than 40 percent of the 1,140 surveyed witnessed
    the killing of a civilian by Russia's federal forces. More than
    59 percent of those surveyed witnessed abuses of people not in
    their immediate family by Russia's federal forces, with only
    one abuse reported by fighters on the Chechen side. More than
    16 percent of the people surveyed witnessed abuses of their own
    family members by Russia's forces, with only 4 abuses reported
    by forces on the Chechen side.
        Ninty-seven percent were forcibly displaced by Chechnya by
    Russia's federal forces. And they were even given the choice of
    saying that the reason for their displacement was the war or
    was both forces, and almost nobody chose that option.
        Thirty-two percent of those interviewed reported
    destruction of medical facilities by Russia's federal forces
    and nobody reported such destruction by fighters on the Chechen
    side.
        Let me detail a couple of examples. Testimonies and medical
    examinations from eight newly released prisoners from
    Chernokozovo filtration camp revealed the brutal torture common
    in these camps, filtration camps where Russian officials try to
    filter out Chechen fighters.
        With one young man, 3 days after his release Dr. Ramin
    Ahmadi, the physician working with me, found a hematoma on his
    third and fourth rib, severe muscle swelling on his neck, ribs,
    and feet, and a broken nose, all symptoms consistent with blunt
    trauma. Dr. Ahmadi said all the former prisoners he interviewed
    showed signs of severe wasting from a starvation diet in the
    camp.
        Testimonies also reveal how federal forces intentionally
    devastated the town of Kata-Yurt from the 4th to the 8th of
    February, at least 3 of those days after all the fighters from
    the Chechen side had left the town, according to nine separate
    and consistent witness accounts. One woman described the
    following scene on the 8th of February: ``Soldiers made a mound
    of people--it did not look like dead people--on the ground. It
    was gruesome. I saw women lying like rubbish in piles.
    Relatives were happy when they found the dead bodies of their
    family members because there were so many bodies littering the
    town.''
        I appreciate Secretary Talbott's comments about our work
    and the Senators' recognition of the war crimes committed
    there. But I must say that I am disappointed in the
    administration's and Secretary Talbott's failure to support an
    international independent investigation, especially after
    Secretary Talbott just noted that Mary Robinson has called for
    a U.N. commission of inquiry.
        Russia has thwarted virtually all international
    investigations, by the OSCE and not by Mary Robinson. The
    stalling must stop. A U.N. commission of inquiry should be
    formed and proceed to collect detailed human rights data. This
    commission can be formed regardless of Russia's opposition,
    especially with the support of this administration and the
    other members of the commission that would need to vote for it.
        To take the example of the East Timor case, a commission of
    inquiry was set up there and has met with some mixed review.
    But to report what Indonesian human rights leaders say, they
    say that there would not have been such a credible
    investigation of the Indonesian Government and their forces'
    participation in abuses there if there had not--if the
    investigation that the Indonesian Government is carrying out
    had not been done in parallel with the U.N. commission of
    inquiry, if the commission of inquiry from the United Nations
    had not existed.
        We would also like to see the Clinton administration oppose
    World Bank loans and other international assistance until such
    times as these attacks on civilians have ceased and
    investigations begin. As I believe it was Senator Leahy asked,
    we would also like to see them send some of their own staff to
    collect data directly from the refugees in Ingushetia.
        Thank you.
        Senator McConnell. Thank you.
        [The statement follows:]

                       Prepared Statement of Douglas Ford

        Thank you for holding this important hearing, Chairman McConnell,
    and for inviting me to testify. My name is Doug Ford, and I am a senior
    researcher for Physicians for Human Rights (PHR). Physicians for Human
    Rights is an organization of health professionals, scientists, and
    concerned citizens that uses the knowledge and skills of the medical
    and forensic sciences to investigate and prevent violations of
    international human rights and humanitarian law.
        The timing of this hearing is unusually important, coming as it
    does just one day before the United Nations High Commissioner for Human
    Rights, Mary Robinson, addresses the United Nations Commission on Human
    Rights in Geneva. It is vitally important that the United States take
    action in Geneva that the Clinton Administration has avoided to date:
    namely, that the U.S. sponsor and promote a resolution at the
    Commission to create an official commission of inquiry into war crimes
    committed by Russian forces and rebel forces in Chechnya. This official
    commission of inquiry is a necessary precursor to establishing an
    international tribunal to prosecute those responsible, which Physicians
    for Human Rights strongly supports. A strong statement of support from
    this Committee for such an initiative would be very helpful in
    encouraging a more robust posture on the human rights situation in
    Chechnya than we have seen to date from the executive branch.
        I would like to start by providing you with information gathered by
    Physicians for Human Rights last month from displaced Chechens in
    Ingushetia. Physicians for Human Rights carried out a detailed human
    rights survey of 1,140 randomly selected individuals. Our random survey
    provides a measure of the breadth and pervasiveness of the violence
    suffered by Chechens at the hands of Russian forces. Using such a
    survey based on epidemiological models to collect human rights data
    allowed my organization to add to reports of individual abuses and
    massacres being collected by other human rights organizations, notably
    Human Rights Watch.
        It is important to note that PHR investigators did not seek out and
    identify witnesses to abuses: the survey was randomly drawn from the
    186,100 displaced persons in Ingushetia at that time. Thus the very
    high percentage of those who witnessed abuses, including killings,
    beatings, torture, wounding, disappearances, or separation and sexual
    violations by Russian forces is especially compelling and extremely
    troubling. More than 40 percent of those surveyed witnessed a killing.
    More that 16 percent of the 1,140 people surveyed witnessed abuses of
    their own family members by Russia's federal forces (RFF), and more
    than 59 percent of the 1,140 surveyed witnessed abuses of persons not
    within their family. The survey also made plain that the vast
    majority--97 percent of those interviewed--were forcibly displaced from
    Chechnya by RFF, and that indiscriminate and disproportionate
    bombardment as well as targeted executions were the cause. In only five
    cases did respondents attribute abuses to fighters from the Chechen
    side. Although PHR's random survey only captured a few instances in
    which an individual witnessed an abuse perpetrated by Chechen
    combatants, we are concerned about reports from other groups, such as
    Human Rights Watch, that Chechen combatants are committing violations.
    Chechen combatants have reportedly beaten and tortured civilians who
    attempt to save their villages from Russian attack by attempting to
    negotiate with Russian forces, and have also endangered the lives of
    civilians by taking tactical positions in areas heavily populated by
    civilians.
        Our survey also included questions about observed violations of
    medical neutrality , another war crime: some 362 of the 1,140
    interviewed reported destruction of medical facilities by Russian
    forces. In addition, testimonies received by the PHR team show that RFF
    troops have violated medical neutrality by shooting patients, arresting
    doctors and patients, and bombing hospitals and clinics. PHR has been
    told by witnesses about the detention of several physicians. In
    Tsotsin-Yurt, RFF arrested a surgeon and a 63-year-old patient wounded
    by shrapnel. In another case, Dr. Hasan Bayiev, a plastic surgeon, was
    detained briefly by RFF and released on February 2. Before his
    eighteen-hour detention, Bayiev performed one hundred surgical
    procedures in two days. Sixty of these were amputations on fighters and
    civilians wounded while retreating from Grozny. Bayiev and a nurse both
    report that 120 patients were taken from the hospital and detained by
    the RFF. Upon returning from detention, Bayiev reported seeing the
    bodies of seven patients, six Chechen fighters, and one 70-year-old
    Russian woman; all shot to death in their hospital beds, allegedly by
    RFF troops.
        Doctors interviewed by Physicians for Human Rights also reported
    the targeting of hospitals by Russian bombing sorties. Dr. Bayiev
    operated in the basement of the bombed-out Alkhan-Kala hospital before
    leaving Grozny. Dr. Zainab Estamirova, the head physician at Grozny
    Ambulatory Clinic #5, reported that the clinic was bombed and she had
    seen the charred remains of the hospital. One physician reported that
    Grozny City Hospital #4 where she worked was destroyed by RFF in the
    first days of February after the retreat of the Chechen rebels. She
    also reported that Chechen fighters had used the hospital as a
    dormitory, in violation of international law.
        In addition to collecting this demographic data regarding Russian
    forces' abuses against civilians, Physicians for Human Rights also
    collected significant testimony and medical data on torture at the
    Chernokozovo filtration camp. Dr. Ramin Ahmadi, Program Director at
    Yale University's School of Medicine conducted interviews and
    examinations for Physicians for Human Rights. In six of the cases we
    investigated, the subject was seen by another person interviewed by
    Physicians for Human Rights who also had been detained in Chernokozovo,
    specifically corroborating these accounts. Chernokozovo camp officers
    reportedly tortured two of these men with electric shock and two with
    gas. One young man, whom Dr. Ahmadi examined three days after his
    release from Chernokozovo had a broken nose, bruises on the third and
    fourth ribs on the right side, tenderness of the right kidney, severe
    muscle swelling and spasms in his neck, and pain on the soles of his
    feet, symptoms consistent with blunt trauma.
        In two of the cases of torture victims interviewed by Physicians
    for Human Rights, the victims had fled their villages but returned
    after responding to Russia's publicity inviting displaced persons to go
    back to areas controlled by the Russian federal forces because they
    would be safe. These two individuals were picked up upon their return,
    abused in detention, and released only after family and friends paid
    bribes to Russian officials equivalent to hundreds of American dollars.
        Notwithstanding frequent firm pronouncements on Russia's conduct in
    Chechnya, we at Physicians for Human Rights are nonetheless deeply
    disappointed in the Clinton Administration's stance with regard to this
    human rights disaster. One need look no further than Secretary
    Albright's March 23 speech before the United Nations Human Rights
    Commission in Geneva to see where the problems lie. The opening days of
    the Human Rights Commission were a unique and important opportunity for
    the Clinton Administration to speak plainly about American revulsion
    for Russian war crimes in Chechnya, and to support international
    mechanisms to investigate those crimes and hold their perpetrators to
    account. To our disappointment, Secretary Albright did not use the
    occasion to either condemn war crimes by name, nor to associate the
    Clinton Administration with a resolution calling upon the Secretary
    General to establish an independent commission of inquiry. Moreover,
    Secretary Albright urged the Russian government to conduct a prompt and
    transparent investigation of all credible charges, she appeared to give
    Russia more credit than it deserves in the area of investigating its
    own human rights abuses. Secretary Albright stated: ``We are encouraged
    by the Russian Government's decision to name a human rights ombudsman,
    accept international experts on his investigative team, and invite High
    Commissioner Robinson to visit Chechnya.''
        I believe that welcoming Russia's decision to appoint its own
    investigator when Russian authorities have consistently blocked
    outside, independent investigators from Chechnya sent an inappropriate
    signal to Moscow. The appointment of the Presidential Representative
    for Human Rights in Chechnya, Vladimir Kalamanov, whose only mandate is
    to forward human rights cases to the military procuracy, is neither an
    adequate response to international demands for Russian accountability
    nor an acceptable substitute for an independent international
    investigation by the United Nations.
        The way that the Presidential Representative's office addressed the
    massacre at Aldi illuminates the deficiencies of an abusive government
    investigating its own forces' conduct. Along with colleagues from Human
    Rights Watch, I investigated the case of the February 5 massacre of at
    least 62 civilians in the Aldi district of Grozny during PHR's human
    rights mission to Ingushetia in March. In my own investigation, I
    collected extensive eye-witness testimony. There is no question that
    Russian forces engaged in unspeakable behavior in Aldi, summarily
    executing large numbers of unarmed people, burning homes, extorting
    money from civilians whom they later executed, and firing on civilian
    structures. I have attached the witness testimony of these massacres as
    an appendix to this document.
        Clearly, evidence of that horrific rampage by Russian Federal
    Forces was easily available. However, we are informed that when Yuri
    Dyomin, the military procurator of the Russian Federation, met with
    Kenneth Roth, executive director of Human Rights Watch on March 10, he
    stated that he had ``never heard of'' the massacre at Aldi and another
    at Staropromyslovskii, documented by Human Rights Watch, where at least
    50 civilians were summarily executed. Thereafter, Human Rights Watch
    reports that Mr. Dyomin opened an investigation but thereafter closed
    it within a week, dismissing the allegations of human rights
    organizations and stating that he ``regretted the time he wasted''
    running inquiries ``based on disinformation.''
        Clearly, no internal investigation by the Russian authorities is a
    substitute for a full-fledged inquiry by a United Nations entity. In
    our view, and that of the other major human rights organizations,
    including Human Rights Watch and Amnesty International, nothing less
    than a formal U.N.-sponsored commission of inquiry is warranted to
    investigate Russian abuses in Chechnya. We believe that Russian forces'
    consistent and pervasive commitment of war crimes, including violations
    of medical neutrality, summary executions, forcible expulsion, and
    torture warrant a response from the international community that is
    proportionate to the crimes committed.
        Failure to establish some formal means of accountability will be
    costly indeed. First, it is costly for Chechen civilians. We believe
    that quickly establishing a formal Commission of Inquiry would
    constrain Russian abuses, persuade them to end indiscriminate attacks
    on civilians and permit international investigators access to detention
    sites. Failure to create structures of accountability sends the Russian
    authorities the clear signal that their behavior in Chechnya has been
    tolerated and that further abuses will be tolerated as well.
        Second, failure to establish international accountability for
    Chechnya is very costly to the international movement to establish
    accountability for war crimes, genocide, and crimes against humanity. A
    human rights double standard is clearly visible: The United States
    collected extensive human rights documentation on Milosevic's abuses
    against civilians in Kosovo, and has been the leading proponent and
    supporter of a war crimes tribunal to try those responsible, including
    President Milosevic himself. Indeed, the United States and its allies
    engaged in extensive military operations against the Federal Republic
    of Yugoslavia in defense of Milosevic's Kosovar Albanian victims. In
    the case of Chechnya, where crimes against the civilian population are
    markedly similar, the Administration has not deployed its own human
    rights monitors, has refused to use the words ``war crimes'' to
    describe what is occurring, and has been silent with respect to a
    formal commission of inquiry by the United Nations.
        The U.N. Human Rights Commission in Geneva is still in session and
    there is yet time to rectify this inconsistency. The Commission has
    been paralyzed for the last week, waiting for Mary Robinson to go and
    return from Chechnya. It is our understanding that Ms. Robinson's
    investigation was thwarted at every turn by Russian authorities. She
    was permitted access neither to the detention sites nor the sites of
    massacres that PHR and others documented that she requested to visit.
    Nor, to our knowledge, has the OSCE mission waiting in Moscow been
    given permission to enter Chechnya.
        This stalling on the part of the Russian authorities and deference
    to it by the United States and its European allies is costing untold
    Chechen lives. It is past time for the United States to lead an effort
    in Geneva for something more robust. Physicians for Human Rights
    respectfully calls upon our government to take the following steps in
    response to the deliberate destruction of Chechnya:
        1. Sponsor a resolution at the current session of the United
    Nations Commission on Human Rights requesting that Secretary General
    Annan convene a Commission of Inquiry to investigate war crimes
    committed in Chechnya. The Commission of Inquiry, directed by U.N. High
    Commissioner for Human Rights Mary Robinson, should establish
    accountability for the destruction of Chechnya, including investigation
    of abuses by Chechen fighters. The State Department should contact its
    European allies now about sponsoring a resolution, or prepare to offer
    such a resolution itself.
        2. Publicly identify and condemn Russian violations in Chechnya for
    what they are: war crimes. President Clinton, Secretary Albright and
    other top U.S. officials should unequivocally condemn Russian practices
    in Chechnya as war crimes, and demand accountability for them.
    Expressions of enthusiasm and support for President-elect of the
    Russian Federation Vladimir Putin are unconscionable in light of his
    association with the campaign to destroy Chechnya, and should cease.
        3. Immediately deploy staff from the U.S. diplomatic mission in the
    Russian Federation to Ingushetia to collect testimonies from the
    displaced Chechen population to document war crimes. To date, the
    Clinton Administration refuses to send its staff to Ingushetia because
    of security considerations. However, numerous researchers from United
    States and European non-governmental human rights organizations
    including Physicians for Human Rights, Human Rights Watch, and Amnesty
    International, have been safely deployed in Ingushetia, some for
    months, and all have been able to safely collect detailed testimony.
    The State Department should reevaluate its prohibition preventing
    officers from collecting human rights data. More information from such
    official sources is urgently needed.
        4. Enlist the U.S. Department of State, in cooperation with U.S.
    intelligence community, to begin a vigorous data collection effort to
    document war crimes. All available intelligence information sources
    should be collected and evaluated, including relevant United States
    knowledge of military and security command control, satellite
    photographs, and radio and telephone intercepts to identify the
    perpetrators of war crimes and their commanders.
        5. Invigorate the Organization for Security and Cooperation in
    Europe's (OSCE) Monitoring Mission. The Russian authorities permitted
    the OSCE to monitor abuses in Chechnya during the 1996 war and at the
    Istanbul OSCE Summit pledged to continue this initiative. Yet Russia
    has not yet permitted the OSCE's six monitors currently in Moscow to
    visit the region. The United States should publicly demand that Russia
    permit the monitoring mission to go forward, and take steps to expand
    it substantially.
        6. Advocate at the highest levels for the release of imprisoned and
    tortured Chechen civilians now detained in Russian filtration camps.
    Meanwhile, so long as prisoners remain in these facilities, it is
    vitally important that there be international access to them. President
    Putin has reportedly given personal authorization to the International
    Committee of the Red Cross (ICRC) to have unimpeded access to places of
    detention. The international community should monitor this to ensure
    that President Putin realizes this commitment and that unrestricted
    access for the ICRC is ensured.
        7. Engage President Putin to address the humanitarian emergency,
    reminding Russia of its obligation to provide food, shelter, and
    medical care to the displaced. Additionally, the United States and its
    allies should supply significant humanitarian aid to non-governmental
    humanitarian groups, including the Red Cross and UNHCR, currently
    serving the displaced population.
        8. Urge Russia to grant access to Chechnya to both human rights
    monitors and representatives of humanitarian organizations.
        9. Demand Russian forces cease their assaults on civilians,
    providing safe passage for all Chechen refugees attempting to cross the
    border.
        10. Announce the United States' intention to oppose upcoming World
    Bank loans to Russia. Physicians for Human Rights is deeply distressed
    by the continuing unrestricted provision of World Bank funding for
    Russia, including $100 million released just two days before the
    Russian elections. An additional $250 million in World Bank loans are
    pending, and it is our understanding that the International Monetary
    Fund will release some $640 million currently on hold. The
    international community possesses significant leverage with the
    government of Russia, would it but use it. The United States should
    strongly oppose all World Bank, IMF, and other international financial
    assistance to Russia until such time as the Russian Federation has
    taken meaningful steps to limit the civilian toll in Chechnya,
    including investigating war crimes and prosecuting those who committed
    them.

        Senator McConnell. Ms. Ernoult, will you go ahead, please.
    If you could summarize your comments in 5 minutes or so, I
    would appreciate it.

         STATEMENT OF NATHALIE ERNOULT, PROGRAM MANAGER, NORTH
                    CAUCASUS, ACTION AGAINST HUNGER

        Ms. Ernoult. Thank you very much, Mr. Chairman.
        Senator McConnell. Pull the mike a little closer to you,
    will you.
        Ms. Ernoult. Is it OK like that?
        Senator McConnell. Yes.
        Ms. Ernoult. Thanks.
        Just basically, I just returned from a field trip in
    Ingushetia and Chechnya, where Action Against Hunger is working
    for the moment. I would like to say just a couple of things in
    summary of humanitarian assistance happening in Ingushetia and
    Chechnya.
        For Ingushetia, I think that some of the needs are covered,
    but basically, in general I would emphasize on the fact that
    humanitarian assistance happening in Ingushetia does not cover
    the minimum standard of the population. We are for the moment
    talking about 200,000 refugees actually in Ingushetia.
        Most of the aid and the assistance was channeled through
    the United Nations and specifically the U.N. High Commission,
    UNHR office, and most of it is indeed channeled through the
    Russian authorities, and we believe that some of the refugees
    actually in Ingushetia do not receive or at least for the past
    month did not receive the basic requirements and the basic aid
    they were supposed to receive because the Russians are
    dictating more or less where humanitarian assistance should
    happen.
        It is based on that fact that Action Against Hunger started
    independent assessment and independent distribution and
    monitoring of its own food distribution within Ingushetia.
        In Chechnya, I had a chance to go up to Gudarmes and meet
    with the administration, the Kochman administration, which is
    the Russian administration, as well as the temporary Chechen
    administration. As well I had a chance to visit two villages at
    the border near by Ingushetia.
        Again, I would say that, apart from the fact--and you know
    all the stories about the general humanitarian situation
    happening in Grozny, in all the towns of Chechnya. And I would
    say and I would mention that humanitarian assistance is almost
    not happening now in Chechnya. Very few agencies are working
    one of which is Action Against Hunger. We started distribution
    of food aid in two towns of Assinovsk and Sernovodsk to above
    30,000.
        Nevertheless, apart from a single convoy of the United
    Nations into Grozny, nothing is happening, when thousands of
    people had to flee their villages and where the fighting is
    still ongoing in Chechnya.
        We believe, as a summary--and this is the position of
    Action Against Hunger--we believe that for humanitarian
    agencies access should be granted. We as an agency have for the
    time being access into Chechnya even if we have to face some
    security or some problems at checkpoints because of sometimes
    the lack of recognition of the army of the orders from their
    offices.
        Access is paramount. It is very important now in Chechnya.
    That is the main point now.
        The second point I would say is that agencies and
    nongovernmental agencies have to work into Chechnya to have
    direct access to information, first-hand information, in order
    to get a better idea of the needs of these populations and to
    be able to implement it directly and avoid a politicized
    humanitarian assistance.
        On top of it, I would say that very few nongovernmental
    agencies are supported now in Chechnya, as far as most of the
    funding is channeled through the United Nations.
        For Action Against Hunger, we are currently receiving
    direct support from the French Government and the European
    Union. Chechnya is one of the few crises where the U.S.
    Government does not fund directly nongovernmental agencies
    doing impartial and neutral assistance, providing neutral and
    impartial assistance within Chechnya.
        So I would call for access in Chechnya and support to
    nongovernmental agencies to provide aid and relieve the
    suffering of the people of Chechnya.
        Thank you very much.
        Senator McConnell. Thank you.
        [The statement follows:]

                     Prepared Statement of Nathalie Ernoult

        Mr. Chairman, Members of the Committee, It is an honor to be here
    today, and I appreciate the attention the Committee is devoting to the
    continuing conflict in Chechnya.
        My name is Nathalie Ernoult, and I have recently returned from a
    field trip to Chechnya and Ingushetia, where our organization has been
    conducting humanitarian assistance programs focussing on the most
    vulnerable people since the beginning of this year. Action Against
    Hunger has a long prior history in the North Caucasus: from 1995 to
    1997, we were active in the Republics of Chechnya, Ingushetia, and
    North Ossetia. Already at that time, relief operations were hampered by
    severe security problems. Our colleagues in the field suffered numerous
    violent assaults; in July 1996, two of them were kidnapped in Chechnya
    and detained for close to a month. The extension of the kidnapping
    problem to neighboring regions finally forced us reluctantly to
    withdraw our mission, in spite of the serious needs of the population,
    in September 1997.
        In December of last year, in the face of the mounting crisis and of
    the massive influx of Internal Refugees (also referred to as IDPs) into
    Ingushetia, our Moscow office mounted a needs and security assessment
    to the region. The conclusion of this assessment was that the ongoing
    hostilities had modified the security picture, and that security
    conditions in Ingushetia were, for the time being, such that the
    mounting of a new relief operation would be possible under strict
    conditions (proper authorizations, a strong support from the Ingush
    authorities, limited and unpredictable presence in the field of
    international staff, local armed protection). Given the massive needs
    and the serious lack, at that time, of international relief agencies,
    Action Against Hunger decided to open a mission based in Nazran, the
    capital of Ingushetia. Beginning in January, given that the United
    Nations was meeting difficulties and delays in setting up a systematic
    food aid program for all the IDPs, we began providing food aid
    distributions in the towns of Sleptsovskaia and Karabulak, in an
    attempt to target vulnerable individuals living in spontaneous
    settlements and camps. Action Against Hunger thus directly distributed
    more than 280 metric tons of essential hygiene and food items,
    purchased in a neighboring region, to approximately 22,000 people
    having sought refuge in Ingushetia.
        Late February, as the humanitarian situation in Ingushetia
    stabilized, Action Against Hunger decided to narrow its focus in
    Ingushetia to highly vulnerable groups such as pregnant & lactating
    women and under-five children, and to push into Chechnya where the few
    remaining ``spared'' towns are overcrowded not only by people fleeing
    the fighting but also by people that have been driven to return to
    ``liberated'' Chechnya by the Federal authorities. After positive
    contacts with the authorities, Action Against Hunger began in March to
    provide humanitarian assistance within the territory of Chechnya. We
    have already conducted a large-scale distribution for over 16,000
    people in the town of Assinovsk, including 2,000 people having just
    fled from the destruction of the village of Komsomolskoe; a second
    distribution, on a similar scale, is due to begin as we speak in the
    town of Sernovodsk. These distributions, which will be repeated on a
    monthly basis, have been made possible by the recently open attitude of
    the Russian authorities in Chechnya, who have provided us with the
    necessary authorizations to access the zone. Serious problems, however,
    still remain with the checkpoints, which often refuse to recognize the
    authorizations provided by their superiors, and frequently deny our
    staff access, delay them, or otherwise harass or threaten them, thereby
    hindering our relief efforts. Finally, access to Groznyi is still being
    denied to international organizations, on the grounds of security
    considerations that we believe to be mainly specious.
        The situation of the population within Chechnya is nothing short of
    dramatic. Over one hundred thousand people, driven from their homes by
    intense, indiscriminate bombardments, have sought refuge in other
    towns, often only to have to flee again in front of renewed assaults.
    Many of the towns in the lowlands, where we have access, have been
    massively destroyed--some up to 30 percent--and thousands of families
    are without shelter; the situation in the mountain areas is said to be
    even worse, due to months of blockade, but the ongoing hostilities
    there do not yet permit access. The hospitals are crammed with wounded
    that are forced to move out within days to make way for new cases;
    doctors operate without even the bare minimum in terms of anaesthetics,
    medicines, medical equipment, or sanitary conditions; medical personnel
    are harassed and have on several occasions been arrested by the Federal
    forces for simply carrying our their medical duties and caring for the
    wounded, wounded that the Russians consider as criminals.
        Humanitarian aid for the displaced, in particular food aid, is
    practically non-existent: with the exception of Action Against Hunger's
    distributions, and a single convoy sent by the United Nations to
    Groznyi through the Russian Ministry for Emergency Situations
    (EMERCOM), the IDPs receive practically nothing. In a few selected
    towns, IDPs identified by the Russian authorities according to
    extremely narrow and discriminatory criteria are indeed entitled to
    Federal food aid; but the agencies responsible for this limited aid
    have virtually no budget to implement their mandate, and we have direct
    eyewitness evidence that a substantial part of their bread and food
    items is systematically looted at the checkpoints by Federal troops.
        For Action Against Hunger, the key issue for humanitarian
    assistance inside Chechnya remains the question of access and
    independence of intervention. In this context, we can only note that
    the agencies of the United Nations are unable to guarantee the
    neutrality and impartiality of their relief operations. U.N. agencies
    such as the U.N. High Commission for Refugees, the World Food Program,
    and UNICEF, while present and active in Ingushetia and Daghestan, are
    forced to work through Russian counterparts, some of which, such as the
    EMERCOM, are of a militarized nature; their staff are escorted
    throughout the region by Federal troops similar to units involved in
    the conflict; and, to a substantial degree, Russia dictates to them
    where, how and when they can work.
        In such a situation, only independent non-governmental
    organizations, such as Action Against Hunger are, in our view, able to
    operate with the minimum of flexibility and impartiality needed to
    guarantee direct access and efficient relief to those most in need. In
    a more or less stable context, such as Ingushetia, the agencies of the
    United Nations, with their far more massive means, are indeed able to
    provide wide-ranging and effective services to the IDPs, though we
    still feel that minimal international standards, especially in the
    fields of shelter, water & sanitation, and medical care, are not being
    met. However, in a context as unstable, chaotic and unpredictable as
    Chechnya, their ability to maneuver is highly restricted. Current U.N.
    plans for the possible provision of assistance within Chechnya mainly
    involve donating commodities to the Federal EMERCOM, and attempting to
    supervise their use; past experience with such a system leads us to
    believe it is wholly inadequate. Action Against Hunger, on the
    contrary, has been able to directly implement distributions, using only
    its own staff, after an impartial needs assessment. In a context in
    which humanitarian aid has been so massively politicized and
    conditioned, we believe that such an impartial and independent approach
    is vital.
        However, the ability of independent humanitarian organizations to
    carry out such operations is highly dependent on donor support:
    firstly, to press for increased access for humanitarian non-
    governmental organization, and, secondly, to provide adequate financial
    support to enable those organizations to carry out their activities. On
    this issue, we regret that the Government of the United States has so
    far declined, through its various agencies such as the State
    Department's Bureau of Population, Refugees and Migration, and USAID's
    Office of Foreign Disaster Assistance, to directly finance non-
    governmental humanitarian organizations. Instead the U.S. Government
    has mainly relied on the agencies of the United Nations to channel its
    aid.
        In this context, we welcome the recent decision of the U.S.
    Government to financially assist the International Committee of the Red
    Cross as a positive step. But more needs to be done. Non-governmental
    humanitarian organizations such as ours have an opportunity, right now,
    to help relieve some of the terrible suffering of the people of
    Chechnya. We feel that we can do so professionally, with adequate
    security measures, and above all, impartially; and in fact we have
    already begun. Our presence in the field also enables us to draw, and
    to pass on to the international community, a clearer picture of the
    widespread violations of human rights and humanitarian law that have
    occurred and continue to occur on a daily basis. Over the course of
    this crisis, the Government of the United States has repeatedly
    expressed its concern over the methods used by the Federal forces to
    prosecute their campaign, and over the enormous resulting human
    suffering. We ask the United States to demonstrate this concern further
    in two ways:
        1. Use all possible means to press the Russian authorities to allow
    free, unimpeded, and impartial humanitarian access to the whole
    territory of
        Chechnya, including the city of Groznyi;
        2. Provide funds directly to non-governmental humanitarian
    organizations to ensure impartial humanitarian aid delivery to the
    people most in need.
        Thank you again for the opportunity to speak before you today.

        Senator McConnell. Mr. Ford, on February 26 PHR issued a
    statement discussing a survey of Chechen civilians, almost half
    of whom, as you indicated, had seen civilians killed by Russian
    forces. What led to your initial inquiry?
        Mr. Ford. You mean to doing the survey?
        Senator McConnell. Yes.
        Mr. Ford. We had done a similar survey in Kosovo and had
    found that this is a way, in an environment that is constantly
    changing and with constant cross-accusations and assertions of
    the scope of the problem, that it gives us and we assume the
    other policymakers and people with influence information about
    how widespread and pervasive are the abuses.
        Senator McConnell. Where did you conduct the interviews?
        Mr. Ford. We were based in Nazran, which is the major city
    in Ingushetia, and we were given or received a random sample of
    names out of the computerized data base that was funded by
    UNHCR of the approximately 186,000 displaced persons from
    Chechnya in Ingushetia. They were scattered basically
    throughout the province or, shall we say, the flat lands of the
    province or the republic, some of them in formal camps, some of
    them just in private homes, some of them in factories that were
    still working even though the kids were running around the
    machinery. So it was in Ingushetia.
        Senator McConnell. How recently were the interviews
    conducted and how recent before the interviews were the events
    which were described?
        Mr. Ford. We conducted the survey framing the questions as
    what had--when we interviewed a family member, usually the head
    of the household, or we would approach the family and ask them
    to give us the person who was the head of the household or
    could give us the best information about what had happened to
    their family. We framed the questions as: Since August of 1999,
    what have you seen?
        So the information varies across that time frame. Most of
    the people that we interviewed had left Chechnya between late
    September and mid-November, so the assumption would be many of
    the abuses were from the fall of 1999. But the time frame of
    when the displaced had arrived in Ingushetia was from August
    until February 2000, so the abuses ranged across that time.
        Specifically, the testimonies about Chernokozovo, the
    filtration camp, and about Kata-Yurt came from people who had
    arrived in Ingushetia in mid to late February.
        Senator McConnell. Do you think the worst is over?
        Mr. Ford. Excuse me?
        Senator McConnell. Do you think the worst is over?
        Mr. Ford. I would not want to speculate on how Russia or
    the Chechen fighters would wage the war. But we all read the
    papers and the war is clearly going on, and all the reports are
    that there is current abuses and that there needs to be
    something done to change the way the war is being waged and to
    generate accountability for what has happened.
        Senator McConnell. I want to go back to the war crime
    issue. Can you explain in terms the public can comprehend
    exactly what constitutes a war crime? Let me go ahead. Set
    aside the legalities of the Geneva Convention and the Genocide
    Convention and describe how abuses meet that threshold. For
    example, do you require a pattern of abuses, the type of abuse,
    a racial or ethnic motivation, a civilian target?
        How do you define a war crime?
        Mr. Ford. To be honest with you, I am not fully prepared
    with our internal briefing on a war crime. But if I can hazard
    a couple of comments that I think are within the realm of our
    understanding. First of all, a war crime, if you were to truly
    judge it on international standards, should go before a
    tribunal and there should be a verdict. Obviously, we do not
    even have a tribunal, so we do not even have a verdict.
        So that legality aside, the conventions, the Geneva
    Convention, the Genocide Convention, and other human rights and
    international humanitarian law treaties, are what we refer to
    to define war crimes. Those treaties call for armed groups to
    not murder, kill civilians who are not engaged in the conflict,
    to permit doctors and health professionals to operate, to take
    care of the injured regardless of which side they are on.
        The documentation we have seen violates provisions such as
    that. So I would say that is why we call them war crimes, in
    reference to those instruments.
        Senator McConnell. Can you discuss the role the United
    States has played in support of an independent commission of
    inquiry and access for your organization and others who have
    sought to investigate the abuses in Chechnya?
        Mr. Ford. Well, I would not know or want to comment on all
    the back room negotiations of the U.S. Government in Geneva.
    But certainly their comments there and Secretary Talbott when
    he himself acknowledged just a moment ago that Mary Robinson
    has called for a U.N. commission of inquiry and, despite at
    least two different questions on it, refused to support it,
    that would show to me that there is not full support for an
    independent international investigation, and I would call that
    inadequate.
        Senator McConnell. Do you see similar patterns of crimes in
    Bosnia, Kosovo, and Chechnya?
        Mr. Ford. There are certainly similarities. Secretary
    Talbott's perspective on the history and background is
    certainly valid, but that does not change the abuse, the facts,
    the killings of civilians. In that sense there are
    similarities.
        In some ways what is striking is that our survey in
    Chechnya shows a higher level of abuse among civilians than our
    survey did in the camps in Macedonia and Albania of Serb abuses
    of Kosovars.
        Senator McConnell. Your February report states:

        Russian federal forces are brutally and arbitrarily
    detaining civilians, mostly men, but women as well, as
    checkpoints and community round-ups, torturing them in so-
    called ``filtration camps.'' In the last day or two, the troops
    are burning and disposing of bodies of civilians.

        How systematic do you think the Russian federal forces has
    been in destroying evidence and how difficult will it be to
    investigate if we are able to establish a truly independent
    commission of inquiry?
        Mr. Ford. Once again, to speculate on what all the Russian
    forces are doing is certainly a difficult thing to do,
    especially when you talk about systematic. We received
    individual reports of disposal of bodies, of destruction of
    evidence. It clearly looks that like some parts, some units of
    the forces, are doing that. But I would not give that as a
    reason, for instance, for not calling for a commission of
    inquiry. I think there is plenty of evidence. You just go to
    the camps in Ingushetia to get, to document serious human
    rights abuses and war crimes.
        Senator McConnell. What about on the other side? How would
    you characterize the abuses, if any, conducted by the Chechen
    guerrillas?
        Mr. Ford. The abuses that we documented certainly are very
    serious, but it is not apparently, at least according to our
    own information, which is based on scientific methods, nearly
    as widespread. So because the major violator, at least
    according to our information and several other human rights
    groups media outlets, is the Russian federal forces and that
    seems to be the place where we have the greatest leverage, that
    is why we are focusing on that.
        But that is in no way to dismiss the flagrant violations
    that occasionally have occurred and apparently did occur prior
    to this war by certain officials and commanders inside
    Chechnya.
        Senator McConnell. I am going to have to wrap this up, but
    I want to ask one question of you, Ms. Ernoult. Really it is
    two questions collapsed into one. The first is: Does your
    organization receive any support from us, the United States?
    And second: How cooperative have the Russians been and how have
    you worked out the clearance, if any, to provide relief?
        Ms. Ernoult. Thank you very much. Specifically, Action
    Against Hunger is not receiving any support from the U.S.
    Government right now. We are keeping some of your offices
    informed about the ongoing situation, humanitarian situation,
    in Chechnya and Ingushetia through our field reports, but that
    is all for now.
        As far as I know, I do not think the United States
    Government is now funding directly any nongovernmental agency
    in Ingushetia and in Chechnya.
        To answer about the clearance, for now we had some various
    discussions at different levels with the Russian authorities,
    talking about the Kochman administration, and to get some
    authorization of movement within Chechnya. We got it on paper
    for now. We tried this paper. It is partly working, but still
    some problems remain at some checkpoints with some of the
    security.
        So it is a matter for us to negotiate each time and to
    discuss and explain again and again and again what we are doing
    and where we are going and how our organization is working. It
    hampered a little bit humanitarian assistance now, but we
    believe it is possible to continue passing on the message and
    insist on the Russian administration about access for
    humanitarian agencies.
        Senator McConnell. Well, I want to thank you both for the
    important contribution you have made here today to our review
    of this tragic situation, and congratulate you also for the
    fine work you are doing. Thank you very much.
        Ms. Ernoult. Thank you very much.

                              SUBCOMMITTEE RECESS

        Senator McConnell. The subcommittee will stand in recess
    until 11:00 a.m., Thursday April 6, when we will receive
    testimony from Hon. Lawrence H. Summers, Secretary of the
    Treasury.
        [Whereupon, at 12:01 p.m., Tuesday, April 4, the
    subcommittee was recessed, to reconvene at 11 a.m., Thursday,
    April 6.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

                                  ----------

                            THURSDAY, APRIL 6, 2000

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 11:10 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Gregg, and Leahy.

                           DEPARTMENT OF THE TREASURY

                            Office of the Secretary

    STATEMENT OF HON. LAWRENCE H. SUMMERS, SECRETARY

                 Opening statement of Senator Mitch Mc Connell

        Senator McConnell. Thank you, Secretary Summers for coming.
    I apologize for the delay. We had two votes that took us to
    this point.
        For the past several years, Senator Leahy and I have
    focused our hearings almost exclusively on personnel and
    lending management problems which continue to afflict the
    international institutions. I take the view that if they cannot
    get their own house in order, the policies and programs
    designed for borrowers are never going to succeed.
        To assure we cover all necessary ground, Senator Leahy and
    I have agreed to divide up questioning for today's proceedings.
    He will focus on the personnel issues, and I will concentrate
    on corruption and management problems. However, let me be clear
    on one point: Senator Leahy does not stand alone in his
    expectation that these serious issues must be addressed
    promptly and thoroughly.
        Since 1992, Senator Leahy has carefully reviewed cases and
    the personnel system at the World Bank and IMF. I completely
    concur with his views that sexual harassment and gender
    discrimination are real blights on the reputations of these
    institutions. Unfortunately, his efforts to deal constructively
    with these problems have not always been welcomed. A number of
    women who have approached the committee for assistance have
    been threatened and experienced retaliation and abuse. In our
    staff meetings with senior officials at the Fund and IMF, the
    response to our concerns has ranged from openly hostile to
    disinterested to bizarre. An American woman who serves on our
    Executive Director's team at the IMF actually tried to
    rationalize the acute problem of gender hiring and promotion
    bias by suggesting that women prefer not to have the senior
    level, better paying jobs because they are too time consuming
    and involved a lot of travel.
        Secretary Summers, may I suggest that it is time for the
    IMF and the Bank to join the 21st century. Women are an
    important addition and here to stay in the professional work
    force.
        Shifting to corruption, as you will recall, last year I
    raised concern about flagrant abuses which compromised the
    World Bank's program in Indonesia. The Bank's Country Director
    ignored internal reports detailing program kickbacks, skimming,
    and fraud because he was unwilling to upset the Suharto family
    and their cronies whom he believed were responsible for
    Indonesia's economic boom. A change of government and country
    directors presented an opportunity to set a new course for
    management and lending policies.
        I asked GAO to conduct a review of the Bank's management
    with an emphasis on anti-corruption policies and programs in
    several of the largest borrowing countries, including
    Indonesia, Russia, and Brazil. While the Bank limited their
    access to documents and set up a special committee to supervise
    their work, the GAO still did an excellent job, and I am
    pleased to make that report available today.
        In brief, the GAO concluded the Bank has launched an
    ambitious effort to identify problems, but significant
    challenges lie ahead. We are a long way from real solutions.
        Let me tick off some of the conclusions which concerned me
    the most.
        First, although the Bank has established an investigations
    unit which answers to a new fraud and oversight committee, many
    local problems in borrowing countries never reach the
    investigators. In one country where the Bank itself identified
    corruption as a serious problem, 30 allegations of abuse
    reported to their local officials had not been referred on to
    the investigations unit or the committee.
        Second, both the investigations unit and the committee
    answer to one of the Bank's Managing Directors. GAO concluded
    that the independence of investigations could be compromised by
    the fact that a Managing Director controls the unit's budgets
    and makes final decisions on whether an investigation is in
    fact pursued, including those that may involve employees who
    answer to the Director.
        Third, new initiatives introduced in 1998 to improve
    financial and procurement procedures only apply to 14 percent
    of the Bank's 1,500 projects. In recent audits, 17 of 25
    borrowers showed a lack of understanding or noncompliance with
    procurement rules. GAO's review of 12 randomly selected
    projects identified 5 projects where the borrowing countries'
    implementing agencies had little or no experience in managing
    projects.
        Fourth, when making project recommendations for board
    approval, the staff's risk analysis fails to adequately address
    corruption or undue political influence as key factors. Eight
    of 12 projects reviewed did not identify corruption or
    political manipulation as a critical risk, even though other
    Bank reports indicated both were serious issues in the
    countries included in the project sampling.
        Finally, GAO determined that solving problems is made more
    difficult because audits are often late and of poor quality and
    the Bank does not evaluate the quality of audits.
        To remedy these problems, GAO recommends the Bank integrate
    the investigative function and establish its organizational
    independence, include more complete corruption data in risk
    assessments and country strategies, develop a system for
    allocating anti-corruption assistance, improve borrowing
    countries' capabilities to monitor, implement, and supervise
    fraud-free projects, and improve auditing and project
    supervision. Given the fact that the IMF has been caught by
    surprise in both Russia and Ukraine about the abuse of loans,
    it might seem prudent for the Fund to consider some of these
    same recommendations.

                               PREPARED STATEMENT

        I know that Treasury and the Bank have been provided with
    the GAO report, so I look forward to discussing it with you
    shortly.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        For the past several years, Senator Leahy and I have focused our
    hearings almost exclusively on personnel and lending management
    problems which continue to afflict the international institutions. I
    take the view that if they can't get their own house in order, the
    policies and programs designed for borrowers will never succeed.
        To assure we cover all necessary ground, Senator Leahy and I have
    agreed to divide up questioning for today's proceedings--he will focus
    on the personnel issues and I will concentrate on corruption and
    management problems. However, let me be clear on one point--Senator
    Leahy does not stand alone in his expectation that these serious issues
    must be addressed promptly and thoroughly.
        Since 1992, Senator Leahy has carefully reviewed cases and the
    personnel system at the World Bank and IMF. I completely concur with
    his views that sexual harassment and gender discrimination are real
    blights on these institutions' reputations. Unfortunately, his efforts
    to deal constructively with these problems have not always been
    welcomed. A number of women who have approached the committee for
    assistance, have been threatened, and experienced retaliation and
    abuse. In our staff meetings with senior officials at the Fund and IMF
    the response to our concerns has ranged from openly hostile to
    disinterested to bizarre. An American woman who serves on our Executive
    Director's team at the IMF actually tried to rationalize the acute
    problem of gender hiring and promotion bias by suggesting that women
    prefer not to have the senior level, better paying jobs because they
    are too time consuming and involved a lot of travel.
        Secretary Summers, may I suggest it is time for the IMF and Bank
    join the 21st century. Women are an important addition and here to stay
    in the professional work force.
        Shifting to corruption, as you recall last year, I raised concern
    about flagrant abuses which compromised the World Bank's program in
    Indonesia. The Bank's Country Director ignored internal reports
    detailing program kick backs, skimming and fraud because he was
    unwilling to upset the Suharto family and their cronies whom he
    believed were responsible for Indonesia's economic boom. A change of
    government and country directors presented an opportunity to set a new
    course for management and lending policies.
        I asked GAO to conduct a review the Bank's management with an
    emphasis on anti-corruption policies and programs in several of the
    largest borrowing countries, including Indonesia, Russia, and Brazil.
    While the Bank limited their access to documents, and set up a special
    committee to supervise their work, they still did an excellent job. I
    am pleased to make that report available today.
        In brief, the GAO concluded the Bank has launched an ambitious
    effort to identify problems, but significant challenges lie ahead. We
    are a long way from real solutions.
        Let me tick off some of the conclusions which concerned me the
    most--
        First, although the Bank has established an Investigations Unit
    which answers to a new Fraud and Oversight Committee, many local
    problems in borrowing countries never reach the investigators. In one
    country where the Bank itself identified corruption as a serious
    problem, 30 allegations of abuse reported to their local officials had
    not been referred on to the Investigations Unit or Committee.
        Second, both the Investigations Unit and the Committee answer to
    one of the Bank's Managing Directors. GAO concluded that the
    independence of investigations could be compromised by the fact that a
    Managing Director controls the unit's budgets and makes final decisions
    on whether an investigation is pursued, including those that may
    involve employees who answer to the Director.
        Third, new initiatives introduced in 1998 to improve financial and
    procurement procedures only apply to 14 percent of the Banks 1,500
    projects. In recent audits, 17 of 25 borrowers showed a lack of
    understanding or noncompliance with procurement rules. GAO's review of
    12 randomly selected projects identified 5 projects where the borrowing
    countries implementing agencies had little or no experience managing
    projects.
        Fourth, when making project recommendations for Board approval, the
    staff's risk analysis fails to adequately address corruption or undue
    political influence as key factors. Eight of Twelve projects reviewed
    did not identify corruption or political manipulation as a critical
    risk even though other Bank reports indicated both were serious issues
    in the countries included in the project sampling.
        Finally, GAO determined that solving problems is made more
    difficult because audits are often late and of poor quality, and the
    Bank does not evaluate the quality of audits.
        To remedy these problems, GAO recommends the Bank integrate the
    investigative function and establish its organizational independence,
    include more complete corruption data in risk assessments and country
    strategies, develop a system for allocating anti-corruption assistance,
    improve borrowing countries' capabilities to monitor, implement and
    supervise fraud free projects, and improve auditing and project
    supervision. Given the fact that the IMF has been caught by surprise in
    both Russia and Ukraine about the abuse of loans, it might seem prudent
    for the Fund to consider some of these same recommendations.
        I know that Treasury and the Bank have been provided with the GAO
    report so I look forward to discussing it with you shortly.

                 Summary Statement of Hon. Lawrence H. Summers

        Senator McConnell. I think Senator Leahy will be here
    momentarily, but why do you not just go ahead, Mr. Secretary,
    with your opening comments.
        Secretary Summers. Mr. Chairman, thank you very much for
    this opportunity to testify about the administration's fiscal
    year 2001 budget request for Treasury's international programs.
        Let me at the outset thank this committee for its effective
    leadership and strong support last year.
        Today I would like to address three issues: first, the
    strong case for continued United States support for the
    multilateral development banks and for debt reduction; second,
    the central elements of our request for funding for Treasury
    international programs; and third, issues of ongoing reform in
    the multilateral development banks.
        I will try to address briefly the comments that you made in
    your opening statement, Mr. Chairman.
        The case for U.S. support for multilateral development
    banks and debt reduction programs rests on their importance for
    successful economic development in the developing world and the
    role of these programs in promoting such development. They
    promote core United States interests in three ways.
        By advancing core values and humanitarian goals at a time
    when more than a billion people live on less than $1 a day.
        By promoting our direct commercial interests, ranging from
    $4.8 billion in procurement in 1998 to support for market-
    oriented reforms like tariff reductions in Mexico and India
    that enormously benefit U.S. producers.
        And third, and I think perhaps ultimately most important,
    Mr. Chairman, they promote our national security. From the
    experience of Germany in the 1930's to Bosnia and Africa more
    recently, history teaches us that conflicts are much more
    likely in situations of deprivation and distress as populations
    turn their frustration to nationalist leaders.
        Multilateral development banks are particularly effective
    tools of U.S. assistance. Each dollar that we contribute,
    because of borrowing and because of multilateral leverage,
    brings about some $45 in investments in tomorrow's markets and
    democracies. Through our support for the MDB's, we associate
    ourselves with $50 billion to $60 billion of lending each year
    at a cost that is less than one-tenth of 1 percent of the total
    U.S. budget.
        To be sure, these institutions have to, and will, change
    with the development of private capital markets. But it is
    important to be recognized that they have been part of profound
    progress in the developing world. The Green Revolution,
    developed and disseminated through research supported by the
    World Bank, has lifted literally hundreds of millions of people
    out of poverty in Asia and elsewhere. The fight against river
    blindness has resulted in 30 million people being protected
    from that infection. Life expectancy in the last 20 years has
    increased by nearly 8 years in the developing world, an amount
    equivalent to solving cancer three times over, and the
    development banks have been an important part of all of that.
        Let me turn now to our request. Let me highlight, Mr.
    Chairman, in response to the concerns that have been expressed
    by Congress and in response to our own judgments about what is
    appropriate in a changing world and a world of growing private
    capital markets, that the ongoing level of U.S. commitments to
    these institutions in international negotiations has been very
    substantially reduced from the neighborhood of $2 billion in
    1992 to $1.2 billion in fiscal year 2001.
        For fiscal year 2001, we are requesting a total of $1.6
    billion for Treasury international programs. There are three
    components to this request.
        The first and largest element is a $1.4 billion payment to
    the multilateral development banks. Of that $1.4 billion, $1.2
    billion is for scheduled U.S. commitments and $167 million is
    for clearing a portion of U.S. arrears. Mr. Chairman, for a
    number of years prior to last year, we had been making progress
    in reducing those arrearages from the nearly $900 million to
    the low $300 millions. Unfortunately, last year, despite all of
    our best efforts, we had a shortfall and the arrears rose to
    $450 million. My hope would be that we could reduce a third of
    that outstanding $450 million figure this year.
        Second, our request includes $262 million for debt
    restructuring. Last year Congress acted on a bipartisan basis
    to enable the enhanced HIPC initiative to begin. The steps
    agreed to last year will help us to cover roughly one-third of
    the direct cost to the United States of implementing HIPC. But
    much work remains to be done, notably with respect to the
    multilateral HIPC Trust Fund to which we have yet to make a
    contribution. I would stress that every dollar of our total
    request will leverage nearly $20 in international debt relief.
        I might just say that if we are not successful with respect
    to the fiscal year 2000 supplemental request, the Latin
    American poorest countries will be most especially affected. To
    put it bluntly, if we do not play our part in this area, debt
    relief for Bolivia will not happen.
        Third, our budget also includes a request of $7 million for
    international technical assistance to spread knowledge as part
    of our efforts to support countries engaged in fundamental
    reforms.
        Let me say that over time, Mr. Chairman, the administration
    and Congress have helped to make the international financial
    institutions increasingly effective advocates of policies that
    reflect core American values: transparency, accountability,
    respect for markets, investments in people. My written
    statement goes on at some length about the specific changes
    that have resulted and the changes that are in prospect. Let me
    briefly address your concerns about personnel, your concerns
    about corruption, and then the broader policy direction of the
    institutions.
        With respect to personnel policies, we fully share the
    concerns that you expressed and that Senator Leahy has
    expressed, that these institutions must be models of best
    practice. We will continue to work aggressively within them to
    assure adequate and appropriate grievance procedures and to
    address any specific abuses that are brought to our attention.
    I will make this a crucial point in my dialogue with senior
    management of these two institutions.
        With respect to corruption, let me highlight one
    development, if I could, because it relates to a remark you
    made in your statement, Mr. Chairman. You suggested that after
    the Russian and Ukrainian experiences it would be good for the
    IMF to put in place a set of safeguards. That is a view that we
    share and, going back to last fall's meetings and my London
    speech, we have worked very hard to achieve. I am pleased to be
    able to report that the IMF Board last week approved a quite
    comprehensive set of measures that will require external audits
    of central banks receiving IMF funding, will require much more
    detailed reporting than has been the case in the past, and--as
    a result of our pressure--some of the cases of particular
    concern, notably Russia and Ukraine, will have rather elaborate
    forensic audits in order to understand what has happened in the
    past. This is a critical priority for us.
        With respect to the World Bank, I think we are again very
    much in agreement. I will submit for the record a copy of the
    letter that Mr. Schuerch sent to the GAO responding in some
    detail to their report. Let me say that we share both the GAO's
    judgment that the Bank has undertaken an ambitious and
    systematic effort and has made significant progress, and also
    the GAO's judgment that challenges remain, that this will
    require a long-term investment in increasing managerial
    capacity. This will be a crucial priority for us.
        With respect to the broader question of bank policy, the
    approach that we have taken, Mr. Chairman, is to believe that
    bank finance must support rather than supplant private sector
    finance and must be used only in the ways in which it will be
    most effective. That means, in the context of increasing
    selectivity in lending, a greater focus on areas where private
    markets are unlikely to be able to enter. It means a greater
    focus on types of projects for which private market financing
    is not likely to be available. For example, issues of global
    public goods, of which perhaps the most prominent example is
    the development of vaccine technologies that literally have the
    capacity to save millions of lives.
        The President is, as you know, proposing a greater
    allotment of World Bank and IDA funding to vaccine research. An
    important priority for us in the administration is to take an
    action that probably can have more direct human consequence
    than anything else we will be able to do this year by passing
    an appropriate tax credit that will provide a market incentive
    for the development of appropriate vaccines.

                               PREPARED STATEMENT

        Mr. Chairman, we have been having these discussions for a
    number of years. I think we can all take some satisfaction both
    in the fact that the world development effort has progressed
    significantly over the last several years, that major crises
    have been met and development is proceeding again, and that the
    institutions, while still constantly in need of improvement,
    are less costly to the United States, and are substantially
    more transparent and accountable than they were a few years
    ago. We look forward to continuing to work with you to promote
    these valuable objectives.
        [The statement and letter follow:]

                 Prepared Statement of Hon. Lawrence H. Summers

        Chairman McConnell, Ranking Member Leahy, Members of the Committee,
    I appreciate the opportunity to testify today about the
    Administration's fiscal year 2001 budget request for Treasury's
    international programs.
        Let me say at the outset that this Committee's effective leadership
    and strong support last year resulted in securing appropriations
    sufficient to meet a large portion of U.S. scheduled commitments to the
    Multilateral Development Banks (MDBs), as well as the bilateral element
    of the enhanced Heavily Indebted Poor Countries Initiative (HIPC), and
    in the authorization of U.S. participation in resource replenishments
    for five of the multilateral development banks and use of IMF internal
    resources, including earnings on investments of profits of sales of IMF
    gold, for HIPC. Literally hundreds of millions of people, in some of
    the poorest countries on earth, owe you their thanks for your support
    in these efforts.
        Today I would like to address three issues:
      --First, the strong case for continued United States support for MDBs
            and debt reduction programs.
      --Second, the central elements of our request for funding for
            Treasury international programs.
      --Third, our ongoing reform agenda for the MDBs.

    I. THE CASE FOR STRONG SUPPORT FOR THE MDBS AND DEBT REDUCTION PROGRAMS

        The case for U.S. support for the MDBs and debt reduction programs
    rests on the importance of successful economic development in the
    developing world and the role of the MDBs and debt reduction in
    promoting such development.
        These institutions promote our core interests in three ways.
      --First, the MDBs advance our core values and humanitarian goals.
            Countries that are helped to succeed economically are much more
            likely to become democratic, and their people are more likely
            to avoid debilitating disease, to learn useful skills and to
            find dignified work.
      --Second, they promote our economic and commercial interests. Already
            the developing world accounts for more than 40 percent of U.S.
            exports and that will increase. The MDBs support policy
            changes, such as reduced tariffs in Mexico and opening up the
            Indian economy, which enormously benefit U.S. producers. There
            are also more direct benefits for U.S. companies: in 1998
            alone, U.S. firms received $4.8 billion from contracts arising
            from MDB investment and adjustment programs.
      --Third, they promote our national security. From the experience of
            Germany in the 1930s to Bosnia and Africa in more recent times,
            history teaches us that conflicts are more likely in situations
            of economic distress, as populations turn their frustration to
            nationalist leaders because of a lack of economic opportunity.
            Our ability to create a successful economic development
            strategy around the world reduces the likelihood of conflicts
            that we might otherwise be drawn into.
        The MDBs provide a strong and uniquely effective means to promote
    these core American interests. To be sure, the world has changed in
    profound ways: most importantly, with the spread of market ideologies
    and a more truly global private capital market. The development
    institutions must change and adapt as well. But their special benefit,
    their special efficiency; their special ability to lever funds--because
    they are both financed multilaterally and able to borrow from the
    private markets--all make them especially important tools today.
        Each dollar that we contribute to the MDBs leverages $45 to build
    tomorrow's markets and democracies. Each year these institutions carry
    out lending around the world in the range of $50-60 billion, at a cost
    to American taxpayers that is one tenth of one percent of the total
    U.S. budget.
        It bears emphasis that as private capital markets have grown and
    global realities have changed, we have successfully reduced our annual
    contributions to the MDBs by nearly 40 percent, or $700 million, in
    real terms since 1995. Treasury has subjected every MDB request for
    additional resources to the closest possible scrutiny, and has
    structured each new US funding commitment to obtain maximum impact from
    the resources available.
        At the same time, strong U.S. leadership and advocacy on a wide
    range of bipartisan issues have produced major operational and policy
    improvements across the MDBs. The result is a multilateral system that
    addresses, directly and cost effectively, priority U.S. policy
    objectives on issues of global importance. This system is also able to
    address regional and country-specific challenges where substantial U.S.
    interests are at stake.
        By any standard, these institutions provide exceptional value for
    money. And through their policies and programs they can and have had a
    tangible impact on millions of lives.
      --Infant mortality in low and middle-income countries has dropped
            from 107 per 1,000 births in 1970 to 59 per 1,000 in 1998. And
            life expectancy in these same countries has increased from 58
            in 1980 to 65 in 1998 or more than three times the increase we
            would achieve in the United States by eliminating cancer.
      --In South Asia, access to safe water increased from 52 percent of
            the population in the early 1980's to 77 percent a decade
            later.
      --The fraction of SubSaharan Africa's children that can read has
            risen from 38 percent to 59 percent since 1980.
      --The Green Revolution, developed and disseminated through research
            supported by the World Bank in conjunction with other
            international organizations, has literally lifted hundreds of
            millions out of poverty. It has been estimated that it has
            helped to lift 230 million people out of poverty in Asia alone.
      --The African Development Bank and World Bank provided important
            financial support in the fight against river blindness
            (onchocerciasis), the transmission of which has been halted in
            eleven African countries. As a result of eradication efforts
            over the past twenty years, over 30 million people are now
            protected from infection and 185,000 who were already infected
            have been spared blindness.
      --Most recently, the HIPC Initiative, created in 1996 and further
            enhanced last year at the Cologne Summit, has helped some of
            the poorest nations in the world free up precious resources for
            reducing poverty that would otherwise have been spent on
            servicing debt. For example, thanks to the earlier version of
            HIPC, Uganda was able to save $45 million on debt service in
            1999 alone. The reduction in its debt under HIPC has helped
            Uganda to double enrollment in primary education in just two
            years.

                        II. THE FISCAL YEAR 2001 REQUEST

        For fiscal year 2001 we are requesting a total of $1.6 billion for
    Treasury international programs.
        There are 3 components of the Treasury request:
      --The first, and largest element is a $1.4 billion payment to the
            multilateral development banks, of which $1.2 billion is for
            scheduled U.S. commitments--the majority for concessional
            lending by these institutions to the poorest countries--and
            $167 million is for clearing a portion of U.S. arrears.
      --Second, a request of $262 million for debt restructuring programs,
            comprising $150 million for the HIPC Trust Fund; $75 million
            for HIPC bilateral debt reduction; and $37 million for debt
            relief for tropical forest countries.
      --Third, a request of $7 million for international technical
            assistance programs
        Let me say a little about each of these.

    1. Funding for the MDBs

        With respect to the MDBs, let me emphasize again that as a
    consequence of our international negotiations, US commitments to these
    institutions have been very substantially reduced in recent years. The
    going rate of annual US commitments has been reduced from $1.9 billion
    in 1996 to $1.2 billion in fiscal year 2001.
        As I will highlight in a few moments, even as we have reduced our
    financial contribution to these institutions we have worked to change
    them in ways that are important to the United States. We believe that
    there are important further changes that the MDBs will need to make if
    they are to be as effective as possible in a new 21st century global
    economy. But our capacity to maintain our leadership of these
    institutions and influence their future direction depends crucially on
    our capacity to meet our commitments to them. In this context, the
    level of U.S. arrears is an especially important concern.
        Mr. Chairman, at the end of fiscal year 1997, our arrears to the
    MDBs totaled $862 million, threatening to undermine our leadership in
    these institutions and the multilateral system more broadly. Several
    years of bipartisan collaboration in the Congress helped us cut these
    arrears to $335.3 million by end-fiscal year 1999. However, a shortfall
    in funding last year reversed this progress, and arrears rose to $451.1
    million.
        My hope is that this year we can reduce that number by more than
    one third. Our request for $167.1 million for fiscal year 2001 would
    still leave $284 million in arrears to clear in future years, but it is
    an important down payment.
        The details of our request for the MDBs are as follows:
      --For the International Development Association (IDA): $835.6
            million, of which $803.4 million is for our second of three
            payments under the IDA-12 replenishment and $32.1 million is to
            clear U.S. arrears.
      --For the Multilateral Investment Guaranty Agency (MIGA): $16
            million, of which $10 million is for our second of three
            payments under MIGA's general capital increase and $6 million
            is to clear U.S. arrears.
      --For the IDB's InterAmerican Investment Corporation (IIC): $34
            million, of which $25 million is for our second of five
            payments to this private sector-oriented facility's general
            capital increase and $9 million is to clear U.S. arrears.
      --For the IDB's Multilateral Investment Fund: $25.9 million to clear
            a portion of U.S. arrears to this Fund, which focuses on
            stimulating domestic investment and private capital flows to
            the region.
      --For the Asian Development Fund (ADF): $125 million, of which $100
            million is for our fourth and final payment under the ADF's
            seventh replenishment and $25 million is to clear a portion of
            U.S. arrears.
      --For the African Development Fund: $100 million, for our second of
            three payments under the Fund's eighth replenishment.
      --For the African Development Bank (AfDB): $6.1 million, of which
            $5.1 million is for our second of eight payments under the
            AfDB's modest capital increase and $1 million is to clear U.S.
            arrears.
      --And for the European Bank for Reconstruction and Development
            (EBRD): $35.8 million for our fourth of eight payments under
            the EBRD's general capital increase.
        In addition, we are requesting $175.6 million for the Global
    Environment Facility (GEF). Of this amount $107.5 million is for our
    third of four payments under the second replenishment. The remaining
    $68.1 million is to clear a portion of U.S. arrears. Today U.S. arrears
    to GEF total $204.2 million, the single largest amount we owe to any of
    the MDBs. With full funding of this request, our arrears to GEF would
    be cut by one-third. This is progress that we need to make if we are to
    preserve our credibility as seriously supporting environmental
    protection in a multilateral context.

    2. Debt Relief

        The enhanced HIPC initiative is the core of our request for debt
    restructuring programs this year. In 1999, under U.S. leadership, the
    international community undertook to provide deeper, broader, and
    faster debt relief within HIPC. The enhanced initiative is built around
    a basic commitment to a more systematic and effective effort against
    poverty by the benefiting countries themselves and by the IFIs.
        The centerpiece of this new framework is the Poverty Reduction
    Strategy, prepared by the borrower country in consultation with
    representatives of civil society, the World Bank and other donors,
    which lays out a framework of policy reforms to ensure that the one-
    time benefits of HIPC debt relief are translated into demonstrable
    progress toward poverty reduction and economic growth. In particular,
    these agreed strategies focus on monitorable performance standards for
    macroeconomic criteria and a greater allocation of public expenditures
    for priority social needs.
        Last year, Congress acted on a bipartisan basis to enable the
    Enhanced HIPC Initiative to begin. The steps agreed to last year will
    help us to cover roughly one-third of the direct costs to the United
    States of implementing the enhanced HIPC. But much work remains to do
    our share, notably with respect to the multilateral HIPC Trust Fund, to
    which we have yet to make a contribution. Overall, every dollar of our
    total request will leverage well over $20 in international debt relief.
        That is why we are requesting a supplemental budget and
    authorization request for fiscal year 2000 and appropriation request
    for fiscal year 2001.
        First, and most urgent, is the fiscal year 2000 supplemental
    request. This contains three elements:
      --Appropriation of $210 million for the HIPC Trust Fund.
      --Authorization of $600 million for the HIPC Trust Fund over three
            years.
      --Authorization for the IMF to use remaining earnings on investments
            of profits from its sales of gold.
        Mr. Chairman, these supplemental fiscal year 2000 appropriations
    are urgently needed if this crucial initiative is to move forward. The
    Latin American HIPCs will be especially affected if we fail to do our
    part to ensure that the HIPC Trust Fund is adequately funded this year.
    To put it bluntly: if we do not play our part in this area, debt relief
    for Bolivia will not happen.
        There should be no doubt that any delay in funding for this effort
    will have real consequences.
        For example:
      --Earlier this year, Bolivia became the second country to qualify for
            enhanced HIPC and is expected to receive about $850 million in
            debt relief in present value terms. Bolivia, however, will not
            see a reduction in its debt payments this year unless the
            current financing gap in the IDB's portion of Bolivia's HIPC
            package is addressed. This gap is directly related to the
            failure of the United States to contribute to the HIPC Trust
            Fund. If the gap is not filled, Bolivia will not receive debt
            relief this year that might have been invested in more rapid
            growth and poverty reduction.
      --Without United States support, debt relief for Sub-Saharan Africa
            is also at risk. Due to contributions to the HIPC Trust Fund
            from the European Union and other creditors, most of which is
            specifically earmarked for Africa, it appears that there is
            funding for the first few African countries. However, because
            donors have based their pledges to the HIPC Trust Fund on an
            American contribution, and because there are over 25 African
            countries in the HIPC program, we will not be able to deliver a
            comprehensive debt relief program without additional
            appropriations.
        For fiscal year 2001, in order to play our full part in this
    initiative going forward, we are requesting:
      --$75 million for bilateral debt reduction costs.
      --$150 million for multilateral debt reduction under the HIPC Trust
            Fund to assist regional development banks and other
            multilateral institutions meet their costs of debt reduction.
      --$375 million in advance appropriations for fiscal year 2002 and
            2003 to cover costs of multilateral and bilateral debt
            reduction.
        For fiscal year 2001 we are also requesting $37 million for debt
    relief for countries that have tropical forests, as permitted under the
    Tropical Forest Conservation Act of 1998. The program provides local
    currency resources to non-government organizations (NGOs) and private
    voluntary organizations (PVOs) for tropical forest conservation or
    restoration projects. These resources would be generated through debt
    buybacks and debt reduction that would entail a budget cost.
        For example, Bangladesh, which is the first likely beneficiary of
    this fiscal year's $13 million appropriation for tropical forest debt
    reduction, will now be able to reduce a portion of its concessional
    debts owed to the United States, while generating funds to conserve or
    restore its tropical forests. While the debt reduction component of the
    legislation is modest, the amounts generated for tropical forest
    conservation programs would be meaningful. The roughly $6 million that
    we have already set aside for Bangladesh's participation will leverage
    even more resources to conserve or restore its more than 3 million
    acres of tropical forests, roughly half of which are in the
    southwestern Sunderbans region. This area is home to the world's last
    genetically viable population of Bengal tigers, a total of only 400.
    3. Technical assistance
        Our request also includes $7 million for Treasury technical
    assistance programs, which are important in our efforts to support
    countries engaged in fundamental reforms. These programs have operated
    for nearly a decade in Central/Eastern Europe and the FSU, and
    beginning in fiscal year 1999, a direct Congressional appropriation
    allowed us to expand the program on a global basis. For fiscal year
    2001 we are requesting increased funding to support work in key,
    reform-oriented countries in Africa, Asia, and Central and South
    America.
                             III. THE REFORM AGENDA

        As I noted earlier, effective U.S. engagement and advocacy at the
    MDBs have produced substantial results over the past decade. Working
    together, the Administration and Congress have helped to make these
    institutions increasingly effective advocates of policies that reflect
    core American values:
        For example:
      --We have obtained information policies at most of the MDBs based
            largely on the presumption of disclosure. Key policy and
            operational documents are now routinely made public through
            public information centers and, increasingly, through the
            Internet. For example, on the basis of IDA-12, starting July 1
            1999, all new IDA Country Assistance Strategies (CASs) will
            become public. Many of the Bank's non-IDA borrowers are also
            voluntarily making their CASs public.
      --As a result of strong U.S. advocacy, MDB consultations with the
            public about project plans are required, which gives an
            effective voice to many people who have never had one.
      --Issues of good governance and corruption, once considered off-
            limits for the institutions, are now being considered
            systematically in program design and lending decisions. The
            World Bank has developed a range of programs and tools to
            identify and address pervasive corruption in member countries.
            These range from technical assistance for civil service reform
            in Senegal, to procurement reform in Tajikistan, judicial
            modernization in Venezuela and legal and tax reform in Latvia.
      --As a direct result of Administration and Congressional efforts, the
            World Bank and AfDB are now using clear and monitorable
            performance indicators to determine certain concessional
            lending allocations. In addition to fiscal and monetary policy
            criteria, these indicators have related to the development of
            social safety nets, and borrower efforts to improve the
            efficiency and equity of public expenditure. More generally,
            IDA resources are now being directed overwhelmingly to better
            performing borrowers demonstrating a real commitment to poverty
            reduction.
      --In large part as a result of U.S. pressure, the MDBs now have in
            place environmental, natural resource use, and resettlement
            policies that many, including critics, regard as state of the
            art. All of the MDBs require environmental assessments as part
            of the project development process, with public disclosure and
            consultation with affected people an increasingly important
            element in this process.
      --The basic budgetary and public policy choices being made by
            borrowing countries themselves are now the focus of close MDB
            attention, ranging from the adequacy of spending for primary
            health and education, to excessive spending for the military.
      --Traditional development investments, such as for basic
            infrastructure and social needs, are increasingly complemented
            by programs to build the efficient and accountable institutions
            and transparent legal frameworks needed for private enterprise
            to take root.
        A great deal of progress has been made. But as we have said many
    times, to say these institutions are indispensable is not to say we can
    be happy with them as they now are. In a speech to the Council on
    Foreign Relations in New York last month I outlined our suggestions for
    a new framework for multilateral development policy designed to
    accelerate the pace of growth and equitable economic development in the
    world's poorer countries. This highlighted three areas where we believe
    that additional efforts by the MDBs will be especially important in the
    months and years ahead.
    First, more effective policies in the poorest countries
        What the MDBs do to promote development in the poorest countries is
    without doubt their most morally urgent and important work. The HIPC
    initiative is a one-off attempt to clear away the mistakes of the past
    and offer these countries a fresh start. It is essential that we make
    it work so that countries do not find themselves in this situation
    again.
        We believe that an effective approach will require a shift in the
    emphasis of the MDBs in these countries in the following respects.
      --A more human-centered approach and new division of labor between
            the IFIs.--Official estimations of the need for external
            support need increasingly to move from a predominant focus on
            macro-economic issues to greater emphasis on the nature of
            human needs. As I noted earlier, as a condition for receiving
            debt relief and new loans, HIPC countries are now required not
            only to have established a solid track record of reform, but
            also to produce forward-looking Poverty Reduction Strategies.
            They will and must form an important part of the basis for a
            satisfactory financing framework for countries.
      --Increased selectivity.--As the World Bank has recognized in
            implementing IDA 12, we need increasingly to shift the balance
            in favor of providing support to countries where donors can
            have confidence that assistance will be well used--and denying
            it more often where it is likely to be misused, particularly in
            cases of corruption. By some estimates, this would more than
            triple the effectiveness of development assistance in reducing
            global poverty.
      --Better procedures for the interaction between countries and the
            IFIs.--We believe that the MDBs should rely on a smaller number
            of clear and measurable performance targets, set more
            realistically, and then more vigorously adhered to. An
            important part of this shift will be developing more effective
            mechanisms within the MDBs for evaluating when targets and
            intermediate benchmarks have been met, including a stronger
            commitment to disbursing in stages and more frequent formal
            reviews.
      --Continued support for concessional resources.--We should not delude
            ourselves that HIPC or the reforms that it has inspired will
            translate into better basic schooling or health care in these
            countries without continued donor country support for the
            provision of concessional resources. This makes it especially
            urgent and important for Congress to help the U.S. play our
            proper part in this effort, by enacting the President's
            supplementary appropriations request and the funding contained
            in his fiscal year 2001 budget.

    Second, more focused MDB lending in emerging market economies

        Emerging market economies, where there are private financial flows,
    involve different issues than those posed in the poorest countries.
    Specifically: MDB lending in these countries should be confined to
    those areas where they can increase the country's overall capacity to
    access external resources, and add value that the private markets
    cannot.
        This suggests an emphasis on three types of circumstances:
      --Where they can effectively deploy the MDBs' unique capacity to
            impose conditions and to promote key public investments--
            including basic health and education and other social spending
            and the development of an effective institutional
            infrastructure for markets--and add to the total stock of
            public resources relative to what governments and the markets
            would have achieved by themselves.
      --Where the involvement of the MDBs can attract genuinely additional
            private flows: for example, where MDB co-financing arrangements
            and guarantees can enhance the credibility of developing
            country borrowers in the eyes of investors. In this context we
            believe that the MDBs should continue to explore more
            innovative ways of catalyzing private capital flows to such
            countries, where these can be pursued within strict and clear
            guidelines that safeguard the financial position of the
            institutions.
      --Where the MDBs can help to counteract temporary disruptions or
            limitations in a country's access to private capital due to
            contagion or other external shocks. To this end, they should be
            taking advantage of the substantial recent improvement in
            global financial conditions to develop a large, more flexible,
            contingent financial capacity to respond to deterioration in
            investor confidence in emerging markets down the road. This is
            an important point, because financial emergencies are times
            when there is more social and human distress, and as we have
            seen, they are times when more structural changes can be
            achieved in 18 months than would otherwise been achieved in a
            matter of years. On the basis of recent experience, we strongly
            believe that the World Bank should find ways to upgrade
            substantially its capacity to respond rapidly and effectively
            to such emergencies in the future.
        As part of this approach, the World Bank and others need to work
    harder to ensure that their lending is genuinely productive, and that
    it supports and complements, rather than supplants, private sector
    finance. Notably, we believe there should now be a strong presumption
    that the MDBs have no business lending in countries for sectors in
    which private financing is available on appropriate terms, and where
    there is a risk that such lending will simply supplant private
    financing. We also believe that a review of pricing policies is
    appropriate, and that pricing needs to avoid excessive encouragement of
    public rather than private sector reliance.
    Third, an Enhanced Focus on the Provision of Global Public Goods
        Increasingly, as integration proceeds, the world is confronting a
    broad class of problems that cross borders and defy solution by
    individual governments and markets. Whether it is money laundering and
    financial crime, global warming, new killer diseases, or reductions in
    global bio-diversity--the solutions to these problems will be global
    public goods, requiring concerted global cooperation. We believe that
    the World Bank and other development institutions potentially have an
    enormous contribution to make in helping to push the frontier of
    international efforts to promote these kinds of goods, many of which
    will especially benefit developing countries.
        One issue that we believe ought to be especially high priority in
    the future is promoting the creation and dissemination of medical
    knowledge. Infectious diseases such as HIV/AIDS, tuberculosis, malaria
    and respiratory and diarrheal disease, are responsible for almost half
    of all deaths of people under 45 worldwide. Indeed, life expectancy is
    now actually declining in a host of African countries struck by HIV/
    AIDS, with adult mortality rates in the worst affected countries now
    twice what they were even a few years ago. Yet the WHO estimates that
    only perhaps 10 percent of the $50-60 billion spent worldwide each year
    on health research is directed toward diseases that afflict 90 percent
    of the world's population.
        We need to harness the scientific and technological skills of our
    nation and others to accelerate the development of new vaccines and
    medicines for infectious diseases. Because poor countries often cannot
    afford to buy vaccines, the market provides little incentive for
    pharmaceutical companies to develop vaccines for diseases that
    disproportionately affect those countries.
        The President has proposed a number of proposals to strengthen our
    bilateral efforts toward this objective. Specifically:
      --The President's fiscal year 2001 budget for the National Institutes
            of Health includes a significant increase in research critical
            to creating vaccines for deadly diseases that afflict primarily
            developing countries. Funding for AIDS vaccine research will
            increase substantially in fiscal year 2001 and will have more
            than doubled since fiscal year 1997.
      --The President is also proposing a new tax credit for sales of
            vaccines against malaria, tuberculosis, HIV/AIDS, or any
            infectious disease that causes over one million deaths annually
            worldwide. Under the proposal, the seller of a qualified
            vaccine could claim a credit equal to 100 percent of the amount
            paid by a qualifying nonprofit organization (such as UNICEF)
            that received a credit allocation from the U.S. Agency for
            International Development (AID). The tax credit would match the
            purchaser's expenditures dollar-for-dollar, thereby doubling
            its purchasing power. For 2002 through 2010, AID could
            designate up to $1 billion of vaccine sales as eligible for the
            credit. This credit would provide a specific and credible
            commitment to purchase vaccines for the targeted diseases once
            they become available. And the President is calling on other
            governments to make similar purchase commitments, so that we
            can ensure a future market for these critically needed
            vaccines.
      --In addition, Treasury and other Administration agencies have
            recently conferred with others on this issue. And as a result,
            we now also support a tax incentive that would be applied at a
            developmental stage--a tax credit for qualified clinical
            testing expenses for certain vaccines, similar to the existing
            orphan drug tax credit. The credit would be for 30 percent of
            the expenses for human clinical testing of vaccines for the
            diseases targeted by the President's initiative. This credit
            will provide an additional incentive for drug manufacturers to
            undertake research on new vaccines and accelerate their
            development.
        We also believe that the World Bank has an important contribution
    to make, by helping to create a market for new treatments and vaccines
    in many of the countries worst affected. That is why the President is
    proposing that the MDBs dedicate a further $400 million to $900 million
    each year of their concessional lending for basic health care to
    immunize, prevent and treat infectious diseases in the poorest
    countries.
        Mr. Chairman, can I take this opportunity to bring to your
    attention an item that has been of great interest in previous years. We
    have worked hard to make the domestic window of the North American
    Development Bank, the Community Adjustment and Investment Program
    (USCAIP) fully productive. It is fulfilling its mission, and I urge the
    Congress to support this year's request, which is contained in the
    domestic section of the President's fiscal year 2001 budget.

                             IV. CONCLUDING REMARKS

        Mr. Chairman, Senator Leahy, let me conclude by reiterating that
    our strong support for the international financial institutions
    strongly promotes America's well being and national security interests.
    This Committee is central to providing that support, and we look
    forward to continuing our good working relationship as this budget
    request is considered. I would be happy to answer any questions that
    you have about our request.

       Letter From Hon. William E. Schuerch, Deputy Assistant Secretary,
                           Department of the Treasury
                                    Department of the Treasury,
                                        Washington, DC, March 23, 2000.
    Mr. Benjamin F. Nelson,
    Director, International Relations and Trade Issues,
    U.S. General Accounting Office, Washington, DC.

        Dear Mr. Nelson: Thank you for the opportunity to comment on the
    General Accounting Office's draft report on World Bank financial
    management controls. The report (World Bank Management Controls
    Stronger, but Challenges in Fighting Corruption Remain; GAO/NSAID-00-
    73) covers a difficult and challenging subject and, we believe, does so
    fairly and constructively. Its analysis and recommendations track
    broadly with our own thinking, and provide very helpful guidance for
    process and policy improvement in the future.
        Establishing and maintaining effective internal controls are as
    essential for the World Bank as they are for any large financial
    organization, and perhaps more so given the uniquely challenging nature
    of its work and the particular risks it faces. We have carefully
    considered GAO's specific recommendations against this background. In
    our view they constitute an appropriate set of steps that should be
    incorporated into a specific action program for the Bank going forward.
      --The various elements of the Bank's investigative function should be
            combined into a single unit, which should be organizationally
            independent within the Bank.
      --Project appraisal documents and country assistance strategies
            should include a more complete assessment of risks related to
            corruption, as well as borrowers' procurement and financial
            management weaknesses.
      --The effectiveness of the Bank's direct anticorruption assistance
            could be increased by allocating it more systematically on the
            basis of assessed risk.
      --Improvements should be made in the Bank's monitoring and reporting
            on progress in strengthening management controls, including
            project auditing and supervision.
      --An action program is needed to increase the profile and
            understanding of the Bank's anticorruption agenda among
            borrowers, implementing agencies, and beneficiaries.
        Each of these issues has been the focus of intensified scrutiny and
    analysis in recent years, both within and outside of the Bank. As a
    result, there already exists a substantial foundation for a Bank-wide
    action program, as well as a high degree of consensus among the Bank's
    largest shareholders about an effective way forward. Specifically we
    would note the following:
      --With our strong support the G-7 Ministers called upon the World
            Bank to perform an authoritative review of its procedures and
            controls and to identify ways to strengthen financial
            safeguards. We have followed up on this initiative with
            specific proposals for safeguard improvements that are now
            under active discussion in G-7 fora. Our expectation is that
            this effort will produce a solid G7 consensus around
            improvements that will track closely with the GAO's
            recommendations.
      --The IDA-12 replenishment agreement, which governs the Bank's new
            concessional operations during the 1999-2001 period, contains
            specific recommendations to integrate financial and procurement
            management and risk assessment considerations much more
            systematically into the Bank's lending programs. Specifically,
            the IDA Deputies agreed that Country Financial Accountability
            Assessments (CFAAs) and Country Procurement Assessment Reports
            (CPARs) should be prepared for individual borrowers, and then
            integrated into the Country Assistance Strategies (CASs) that
            provide the key multi-year framework for Bank operations. CFAAs
            and CPARs are specifically designed to identify weaknesses in
            borrower country fiduciary processes, identified by the GAO
            report as one of the most serious challenges in the Bank's
            current control system. Under IDA-12, CASs are to be published
            as a matter of routine; to date, in fact, 100 percent of IDA
            CASs have been published.
      --The IDA-12 replenishment also incorporates major steps forward on
            the broader issue of Bank engagement in borrower country
            governance issues. A substantially improved system of
            performance indicators, for which we pressed strongly, now
            incorporates an assessment of corruption and governance issues
            into IDA lending allocations.
      --These steps track well with the Bank's own Corruption Strategy,
            under which it committed to take corruption explicitly into
            account in country risk analysis, lending decisions, and
            portfolio supervision if it affects project or country
            performance and if the government's commitment to deal with
            corruption is in question.
      --Largely as a result of the initiative the Bank has taken on the
            corruption issue, borrowing countries are increasingly
            requesting the Bank's assistance to fight corruption. Specific
            work ranges from diagnostic efforts to identify problem
            sources, to technical assistance, to lending for public sector
            management reforms.
        These are welcome and important steps forward. They reflect strong
    U.S. advocacy over a period of years, the clear and public commitment
    of the Bank's President, and a growing appreciation of the urgency of
    the issue among the Bank's shareholders more broadly. They also track
    well with the priorities identified in the GAO report. Nevertheless, it
    is also clear that there is scope for further improvements, and we
    agree with GAO's assessment that these be pursued as a matter of
    priority. In particular, we would identify the following as areas
    worthy of special attention going forward.
      --We believe the Bank should increase its internal, up-front
            investments in project control systems, including in
            procurement, financial management, and audit. There is a need
            for more aggressive Bank support for capacity building for
            borrowers, more up-front project planning, more up-front
            reviews prior to contract award, and more detailed diagnostic
            work on borrowers' public sector management control mechanisms.
      --A working group comprising the MDB Chiefs of Procurement has been
            developing a master standard bidding document for procurement
            of goods. We have been strongly supporting this effort to move
            the World Bank and regional development banks to uniform MDB
            procurement rules of the highest standard and to require the
            use of best-practice MDB standard bidding documents. The result
            will be increased transparency and efficiency gains for
            borrowers and bidders; perhaps more importantly, the effort
            should produce an improved model for wider use by donors and in
            national procurement systems.
      --The Bank's administrative budget must provide sufficient resources
            for the additional work needed to deliver these improvements.
        The Treasury Department is committed to strong and effective
    internal controls in all of the multilateral financial institutions, as
    well as more focused Bank assistance to strengthen borrowers' fiduciary
    controls and public sector management. This report is a substantial
    contribution to that objective, and one whose key components we will be
    pursuing directly with Bank management.
        Separately, we greatly appreciate the open and constructive working
    relationship that we have had with GAO over the years, and that
    characterized our engagement on this latest report. This report is one
    more in a long series of GAO reports on the IFIs, done over a period of
    many years, that have been enormously useful to us as a major
    shareholder, and to the institutions in providing helpful and objective
    analysis.
                Sincerely,
                                   William E. Schuerch,
         Deputy Assistant Secretary, International Development,
                                             Debt & Environment Policy.

        Senator McConnell. Thank you, Mr. Secretary.
        Your statement says that issues of good governance and
    corruption, once considered off limits for the institutions,
    are now being considered systematically in program design and
    lending decisions. Yet, the GAO has stated the exact opposite.
    They report the Bank has not prioritized which countries should
    participate in anti-corruption programs.
        One of the first steps in establishing a major anti-
    corruption program in a country is conducting an assessment of
    that country's procurement and financial management systems.
    Bank officials confirmed that they did not use a systematic
    approach or establish priorities for conducting these
    assessments. Instead, they were generally scheduled based on
    the interests of borrowers. Few of these assessments were
    completed among the Bank's top 10 largest borrowers, which
    collectively received 62 percent of the Bank's lending last
    fiscal year. That tells me the Bank has publicly announced an
    anti-corruption strategy but has not actually done a whole lot.
        Are you, in effect, contesting the GAO conclusion? And what
    evidence can you offer that Treasury has insisted and the banks
    have made real progress on a systematic approach to selecting
    priority countries for good governance programs and making
    corruption a key part of lending documents?
        Secretary Summers. Let me say, Mr. Chairman, that I think
    the GAO report is broadly in the right direction, and I would
    not try to contest it broadly. I think a fair reading of the
    GAO report is consistent with what I have said and what you
    have said. It points up that there has been a broad range of
    concerns in the past, and it points up that these problems
    cannot be eliminated in a day or a month or a year or probably
    a good deal longer than that.
        I think the report, broadly speaking, indicates that the
    Bank is now pursuing the right approaches to getting on track
    with respect to these important issues, and we are fully
    supportive of that approach. Where further prodding is
    necessary, we are certainly prepared to provide that prodding.
        Frankly, Mr. Chairman, even more important, in my judgment,
    than reviews and different procedures for the preparation of
    different papers is the hard-edged decision as to where lending
    is going to go. What I think is significant is that in the
    World Bank's concessional lending there has been a sea change
    in the degree of selectivity, with a strategy of providing
    substantial increases to those countries that have been shown
    to use resources well and substantial decreases to those that
    have been shown to use resources poorly. I think that we can
    document that there has been an increase in selectivity, and
    that the fraction of resources going to good performers,
    relative to that going to bad performers, has increased. That
    is the ultimate test.
        So, I think there is no important disagreement with the
    GAO. I am sure there are differences of detail, but there is no
    important disagreement between us and the GAO. I think a fair
    reading of the GAO report would be that, as of now, the Bank is
    moving with vigor to address these concerns.
        Senator McConnell. With regard HIPC, a great interest of
    yours, the argument the administration uses to appeal to the
    public is debt relief will free resources so that governments
    can spend on social programs. What you never state clearly is
    that most of these countries are borrowing to make those debt
    payments. That means that if they no longer have to pay the
    debt, they would still have to borrow to support any new
    spending. That could put them right back in deep debt in a few
    short years.
        It seems the only way to break this destructive cycle is to
    guarantee reforms in the economic policies of the borrowers
    which will then produce jobs, income, and growth. Yet, no one
    in the administration has talked about benchmarks or conditions
    for future economic performance for eligible HIPC candidates.
    You talk, instead, about poverty strategy papers which are
    likely to focus on social spending not economic performance
    conditions or benchmarks.
        The question then: In return for debt relief, should we
    expect a HIPC beneficiary to agree to follow sound free market
    principles, such as eliminating state ownership and control of
    industry and reducing tariffs and non-tariff barriers to trade,
    for example?
        Secretary Summers. Mr. Chairman, we should and we do. With
    respect to your statement about components of anti-poverty
    strategies, I would refer you to the recent speech I gave at
    the Council on Foreign Relations addressing the question of a
    development strategy in which I suggested that a major lesson
    which needs to permeate the approach to conditionality is that
    economic growth is absolutely necessary--and a significant way
    towards being sufficient--for poverty reduction. So, we believe
    it is absolutely crucial that in these programs there be a set
    of strong policies directed at precisely the concerns that you
    described.
        Our only point has been, and will continue to be, that as
    we measure performance, it is important to measure bottom line
    performance in terms of social indicators, just as many in both
    parties, I believe, have taken the same position with respect
    to education funding in the United States. It is important that
    we have output-based measures in terms of how much kids know as
    part of the allotment and allocation of those funds.
        So, given that the objective and mission here is, in part,
    to promote poverty reduction and to promote social progress, so
    the range of measurable indicators used in developing countries
    should include measures with respect to health and education.
    But that is in no way intended to slight the importance of
    economic growth or the importance of promoting market forces.
        Indeed, one of the reasons why we have believed that the
    program needs to be structured as it is--and why we have
    rejected those who believe that in the interest of speed all
    conditionality should be dropped--is precisely because of our
    belief that without appropriate market-oriented measures, there
    is the real possibility that money will go in and will go out
    as capital flight. This possibility is not tolerable and is
    especially not tolerable in what is supposed to be a one-time
    program of reducing debt and cleaning the slate for the future.
    So, we are right with you on the importance of market-oriented
    growth, Mr. Chairman.
        Senator McConnell. Thank you, Mr. Secretary.
        We all have time problems as a result of the Senate floor
    votes. I have some other questions which I will submit in
    writing and I will at this point hand the ball, pass the baton
    to Senator Leahy. Senator Gregg is here as well and we want to
    give him an opportunity to get in the mix. Senator Leahy.
        Senator Leahy. Thank you very much, Mr. Chairman. I will
    put my whole statement in the record.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Mr. Chairman, I too want to welcome Secretary Summers. Mr.
    Secretary, you have so many big--or maybe I should say gargantuan--
    issues on your plate that I wonder how you do it.
        We have a lot to cover today.
        First, the Meltzer Commission report. It has stirred up a lot of
    controversy. One thing that immediately struck me is that the members
    of the Commission, who the Congress selected, are all men. I think that
    is very unfortunate.
        Congress created the Meltzer Commission because there is growing
    concern that the World Bank and the IMF have strayed too far from their
    original missions, that large amounts of public funds have been wasted
    on poorly designed projects or on politically-driven loans that were
    made without adequate conditionality, and that like any bureaucracy
    they tend to paint a rosy picture of even their worst failures.
        Of course, some people forget, or ignore, that these institutions
    have also had a positive impact on economic development and have helped
    to avert potentially devastating financial crises. The problems they
    are trying to solve are far beyond our ability to solve alone, both in
    terms of spurring economic growth, and addressing global social needs
    like health, education, and protecting the environment.
        The Commission's recommendations are sufficiently varied and far-
    reaching that just about anyone can probably find something they
    support, and something they oppose. Except, perhaps, some of the people
    at the World Bank and the IMF, who probably don't like any of it since
    they tend to resent any suggestions from outsiders.
        I am intrigued by several of the Commission's recommendations, and
    troubled by others, and want to get your reactions.
        I also want to discuss an issue I have focused on for some time,
    which is the World Bank's and the IMF's treatment of women. World Bank
    President Jim Wolfensohn has taken some commendable steps to reform its
    flawed grievance system, and I very much appreciate that. But I also
    believe the reforms do not go far enough. My office continues to be
    contacted by women who have been victimized not only by their
    supervisors, but also by a grievance system that is not independent,
    and a legal department that has fought them every step of the way.
        I would be the first to say that most of the people at the World
    Bank and IMF are hard working, intelligent, honest people. But why
    should we assume that the international financial institutions are
    capable of policing themselves? There is corruption in any institution.
    There is discrimination. There is sexual harassment and retaliation.
    But these institutions are unique, because they are immune from the
    court process. We have given them blanket authority to manage their own
    affairs.
        Whistle blowers have been ostracized and forced out. Excuses are
    made, victims are labeled as too aggressive, incompetent, or
    emotionally unstable. Those who decide to pursue their claims often
    can't afford lawyers.
        Misconduct is hidden behind claims of confidentiality, the
    supervisors responsible have often escaped punishment, and there are
    rarely follow-up investigations of the underlying mismanagement. The
    grievance system, which is comprised of individuals whose careers
    depend on management or who are paid by the Bank, has often failed to
    right these wrongs.
        At the IMF, women economists continue to be seriously under-
    represented in top positions, and some of those who have challenged
    this discrimination have been treated shamefully. This Subcommittee
    first raised concerns about this in 1992, and the IMF's own data shows
    that little has changed.
        It comes down to governance. The international institutions are no
    more capable of policing themselves than any other bureaucracy that
    ignores warning signs and then attacks the messenger. Managing
    directors, at least in the past, treated the areas within their control
    as their personal fiefdoms. Even the boards of directors have tended to
    stay out of the internal workings of the institutions.
        I don't want to suggest that this is always the case, or that there
    are not people who are trying to fix it. Jim Wolfensohn has shown real
    leadership on these issues, as has the U.S. Executive Director to the
    World Bank. We cannot expect results immediately, but we also want to
    be confident that the necessary reforms have been put in place.
        These are deeply rooted problems, and it is not enough to hold
    seminars, issue ``zero-tolerance'' pronouncements, and offer mediation.
    There needs to be a credible, independent system for adjudicating
    complaints, and the people responsible for misconduct need to be
    punished. That is the only tried and true way to deter misconduct.
        Mr. Secretary, I also want to get your reactions to concerns that
    have been raised about your request for debt restructuring. I favor
    debt forgiveness, since many countries have no hope of growing their
    economies if so much of their budget is used to pay the interest on old
    loans. But I also agree with those who believe that future lending
    should be linked to conditions that give confidence that these
    countries will not just go back into debt.
        Finally, Mr. Secretary, I want to thank you for agreeing to testify
    next week at our hearing on global health. The threats that we and
    people everywhere face from infectious diseases, and the lack of
    capable public health systems in so many countries, should deeply
    concern us all.
        Lifesaving vaccines are not getting to those who need them, and the
    drug companies are not investing in new vaccines for use in countries
    where many people are suffering but can't afford the vaccines.
        These are important issues which Chairman McConnell and I have
    devoted a lot of time to, and the fact that Secretary Summers and the
    Director General of the World Health Organization will be here is
    certain to make it an instructive hearing.

        Senator Leahy. I hope, Mr. Secretary, you have a chance to
    look at it because it covers a number of things, the Meltzer
    report, the grievance issues that Senator McConnell referred to
    in his statement, and some other concerns I have.
        Also, I strongly support your efforts on debt relief, but
    there are some questions that you and I and others have raised
    about how we ensure that countries that receive debt relief do
    not find themselves in the same situation down the road. I
    would like you to discuss this.
        I am concerned about some of the problems at the World Bank
    and the IMF. Most of the people who work there are hard-
    working. They are honest. They are extraordinarily intelligent.
    But I worry that they cannot police themselves. There is
    corruption in any institution. There is sexual harassment and
    retaliation. But these institutions are unique because they are
    immune from the court process. With that immunity comes at
    least the assumption that they are going to police themselves.
    However, whistle blowers have been forced out or ostracized.
    Excuses are made. This bothers me a great deal.
        On the matter of debt restructuring, you requested $225
    million to support bilateral and multilateral debt forgiveness
    for the poorest countries. That is in addition to the $210 you
    requested in the supplemental which appears to be stalled. I am
    very much in favor of debt forgiveness, as I said.
        However, many of the poorest countries are borrowing money
    to pay interest on their debt, so they are not going to get a
    big bundle of cash if we suddenly forgive it. It is not as
    though they have extra money. If we want to forgive debt so
    these countries have more to spend on social needs like health
    and education, is there any conditionality to ensure that if
    they are no longer borrowing money they will put more money
    into health and education?
        Secretary Summers. Senator Leahy, if I could take just one
    moment on the first issue you raised. Then I will come to debt
    forgiveness.
        These are issues at the institutions that we take very,
    very seriously. As you know, I had an opportunity to work at
    the World Bank for 2 years prior to my time in Government.
    Clearly the immunities with respect to international
    organizations preclude some of the kinds of solutions that
    would be pursued domestically. I think it is fair to say--and I
    say this to explain and in no way to excuse what are very real
    problems--that practice in respect to these issues in the
    United States has moved ahead somewhat faster than in many
    other parts of the world. As international organizations, these
    institutions tend to reflect a set of norms that are more
    typical of other countries than are typical of our country
    today.
        I know that Jim Wolfensohn has convened a group headed by
    retired Federal Judge Shirley Hufstedler to propose a full set
    of procedures. I believe he has moved aggressively to implement
    those proposals. It is clear from the continuing volume of
    reports that we are not there yet with respect to satisfactory
    procedures. We will have further discussions with the senior
    management of these institutions to see if we can reach a set
    of procedures that will be more satisfactory.
        Needless to say, we are not without influence and are
    prepared to address specific cases and problems of abuse.
        With respect to your second question with respect to
    conditions for debt relief, for all the reasons you suggested
    we believe conditionality is absolutely essential, both with
    respect to the general quality of economic policy--which is
    essential for economic growth and which is essential for the
    retention of funds that go in--and with respect to
    transparency, popular participation, and monitorable indicators
    of social progress. The Poverty Reduction Strategy papers
    attempt to impose exactly that kind of conditionality.
        Senator Leahy. I strongly support debt forgiveness. These
    countries are desperately in need of help. You and I have
    discussed this before. Conservative Members of Congress who
    have banking backgrounds say it makes sense. None of us, no
    matter what our political ideology, wants to see these
    countries back in the same situation 5 or 10 years from now, if
    that can be avoided.
        Secretary Summers. In that regard, one crucial thing that
    we are ensuring is that when there is continued lending to
    countries that receive debt reduction it is concessional
    lending at very low interest rates with very substantial grace
    periods. Any new lending would be only in the context of
    overall programs in which debt ratios are calculated and
    forecast to be at sustainable levels. While there can be no
    absolute certainty in all of this, the design of this program--
    in the spirit of it being the Jubilee Year--is to pursue a one-
    time clearing of the mistakes of the cold war past so as to
    avoid the need for recurrent debt reduction of subsequent as
    well as previous loans. That is absolutely the intent. Having
    spent a fair amount of time on it myself, I believe that the
    programs are carefully designed to reflect exactly that
    imperative.
        Senator Leahy. If it is at all helpful, I would be glad to
    work with you and Senators on both sides of the aisle to figure
    out, what conditions are necessary to help ensure that funds
    for debt forgiveness are approved.
        Secretary Summers. Very good. We would be pleased.
        Senator Leahy. Obviously, if we are going to forgive debt
    we do not want countries later burdened with the same problem
    we are trying to eliminate now.
        Secretary Summers. I might just say in that regard, Senator
    Leahy, I think there was a very useful dialogue with the Senate
    Foreign Relations Committee as it developed authorization
    legislation that I think addresses a number of these concerns
    and passed it on a bipartisan basis.
        Senator Leahy. The Meltzer Commission's proposal is that
    IDA get out of the loan making business and become a grant only
    institution. The purpose would be to focus the World Bank's
    money in the poorest countries that cannot afford to repay
    loans. The Bank says it would actually increase the number of
    countries eligible for IDA grants, to include Russia and Turkey
    and South Africa. What do you think would be the impact of this
    proposal?
        Secretary Summers. I think that these programs were
    originally designed as concessional loans programs for two
    reasons. One is that lending and the obligation to repay carrys
    with them the kind of accountability that we are seeking to
    encourage on the part of these countries. And the second is
    leverage: That at a given budget cost, it is possible to fund a
    larger volume of desirable projects if there is lending with
    some of the money coming back, than if it is being done
    entirely in the form of grants.
        I think there are roles for grant programs and we have them
    bilaterally. The Bank has a number of trust funds that make
    grants. I think that development lending however has over time
    shown itself to be an enormously effective tool in support of
    economic development. If we were to abandon development lending
    and the interest and principal payments that come back from
    past development lending, we would find ourselves ultimately in
    a situation where there would be much greater pressure on our
    taxpayers for much greater funding. The kind of progress that
    has been made in managing these costs could well be reversed.
        Senator Leahy. The Meltzer Commission also suggested the
    IMF get out of the business of long-term lending and limit its
    role to short-term currency emergency loans. Is that what IMF
    should be doing?
        Secretary Summers. We have taken the position that the IMF
    does need to be more focused and selective in its financing
    operations. Increasingly, in a world where there is a private
    capital market, the IMF should not be a low-cost alternative to
    the private capital market. Instead, the IMF should concentrate
    on situations where the private capital market does not work,
    in particular, in response to financial emergencies.
        I think, though, Senator Leahy, that one has to proceed
    with some care in this area. The recommendations of the Meltzer
    Commission, that would allow only 120-day loans, I fear would
    not be viable in the event of a financial crisis. The
    obligation to pay back billions of dollars within 120 days
    would undermine any possible confidence that a loan could
    create.
        Senator Leahy. You are also not going to put much
    conditionality on a 120-day loan either.
        Secretary Summers. Exactly.
        But we do believe--and I think it is an important step--
    that there does need to be some greater demarcation of the
    roles of the institutions between the promotion of financial
    stability and the promotion of long-term development. We have,
    as you know, called for a full review of the IMF's facilities
    and their pricing around those objectives. Already several
    facilities have been eliminated as a consequence of that
    review. My hope would be in the next few months that there
    would be some further clarity brought to this area.
        I think an example of something that in some ways is a
    model for the future is the announcement by the Brazilian
    authorities today that they will be repaying the funds that the
    United States and other countries guaranteed through the BIS
    facility at a profit, if you like--or at least a benefit above
    our costs--to American taxpayers of $110 million. That
    repayment resolves a situation that could have gone very much
    off track. They will also be looking to pay back the IMF as
    rapidly as possible. I think that announcement is an example of
    success in crisis resolution. That success is related to the
    fact that confidence was restored and a return to the private
    market was possible. That approach has got to be the focus of
    our efforts.
        Senator Leahy. It is quite a success story.
        I am going to put my other questions in the record with the
    exception of one. You have asked for $178 million for the
    Global Environment Facility, the GEF, of which $68 million is
    for the arrears from last year. What do you say to those
    Members of Congress who say that this is for the Kyoto Protocol
    which they oppose? How are we going to get back up to our
    annual contribution, which has been the same for a number of
    years?
        Secretary Summers. Ultimately Congress will make its
    choice, Senator Leahy. What I would say to you is that in this
    area it seems to me there are things that ought to be
    controversial and ought to be less controversial. I can
    certainly appreciate the controversial aspects of the Kyoto
    Protocol and its possible consequences for the global economy.
    They are very difficult issues. The administration has stated
    its position, but I certainly appreciate that there are
    difficult issues.
        On the other hand, it seems to me that from almost every
    perspective, we have got a lot to gain from voluntary projects
    that take advantage of the market, that substitute lower cost
    energy strategies for higher cost energy strategies in the
    developing world. It seems to me that we have a great deal to
    gain from the low-cost, pro-market approaches to preserving
    biodiversity. So, it seems to me that if one looks carefully at
    what it is that the GEF funds, what the GEF funds is those
    portions of the environmental agenda that, it seems to me,
    ought to command a quite widespread consensus because they are
    voluntary and market-oriented and because they address concerns
    that are very much concerns of the American people.
        So, my hope would be that, as people study the GEF issues,
    they would not see the GEF as a stalking horse for some larger
    agenda, but would see it as a set of relatively uncontroversial
    steps that are desirable regardless of what views one has on a
    broader agenda. We have worked very hard to structure the GEF's
    programs with that objective.
        Senator Leahy. Thank you and I thank my friend and neighbor
    from New Hampshire. This has been very helpful. I will leave
    you to the tender mercies of the Granite State Senator.
        Senator Gregg [presiding]. I thank the Senator from
    Vermont.
        Mr. Secretary, I was not here and so you may have gone over
    this ground, but in prior testimony in other hearings, you have
    talked about the Meltzer Commission and your view of it, which
    seems to be--if I am inaccurate tell me--that you are generally
    appreciative of their ideas but not necessarily supportive of
    their specific proposals. Is that a accurate----
        Secretary Summers. Yes, but I would emphasize both pieces
    of your comment. I think that the broad imperatives of
    delineating a role for official finance that is not redundant
    with private finance, delineating an imperative of financial
    stability for the work of the IMF, and delineating a
    development role for the Bank are constructive. I think their
    emphasis on the overwhelming importance of debt relief and of
    efforts to support global public goods like vaccines--all of
    those are extremely constructive and are aspects of the
    commission report with which I very much want to associate the
    administration.
        However, I think their specific recommendations are, in
    some respects which we can discuss if you like, quite
    problematic.
        Senator Gregg. I guess one of their specific
    recommendations is that before loans be made to a country, that
    the country have transparency in its financial markets and that
    the financial markets be open to non-public events and that
    that be a precondition. It seems like a reasonable view. I am
    wondering what your thoughts are on that.
        Secretary Summers. The distinction between the approach
    that I would favor and the approach that the Meltzer Commission
    favors is this: We, too, believe that transparency and having
    an open financial system and correcting directed lending needs
    to be a prerequisite for IMF funding. That has been a crucial
    part of the programs we have supported and the conditionality
    that we have supported. So, we share the same view as the
    Meltzer Commission in that respect.
        The difference is that the Meltzer Commission favors an
    approach based on what is known as pre-qualification, where
    countries that meet certain tests would be deemed pre-qualified
    and then, if they had a financial crisis, would have the
    opportunity to draw money without any further conditions or
    qualifications. So, the kind of conditions on private sector
    involvement that were so important in Korea, or the kind of
    conditions with respect to corruption that have been important
    in Indonesia, or the kind of conditions with respect to
    controlling profligate government spending that were important
    in bringing about success in Brazil--the Meltzer approach--
    relying on pre-qualification would preclude that type of
    conditionality which we believe is essential to ensure that
    money is used well. But there is no difference of opinion on
    the importance of transparency or the importance of a sound
    financial system.
        Senator Gregg. This may not be the proper hearing, but can
    you give us your thoughts on China relative to entering into
    the World Trade Organization?
        Secretary Summers. I would be pleased to, Senator Gregg.
        I think the question of China's entry into the WTO will be
    one of the most important issues that we as a country will face
    during this presidential term. There are very few votes that
    the Congress takes that I believe have the real prospect of
    appearing in a history book one way or the other 25 or 50 years
    from now. There are three crucial reasons why I believe China's
    WTO accession is enormously in the American interest.
        First, direct commercial benefits. We have negotiated an
    agreement that brings Chinese tariffs down by 50 percent and
    eliminates quotas in many sectors. If we do not pass PNTR,
    those benefits will be available to European and Japanese
    producers and will not be available to American producers,
    putting the United States ironically at a competitive
    disadvantage as a consequence of an agreement that we reached.
        Second, changing China's internal dynamics. China, by one
    estimate, now has more stockholders than members of the
    Communist Party. The Internet, as I saw when I visited there,
    is changing China in very dramatic ways. A vote for China WTO
    is a vote that strengthens those who believe in the Internet,
    those who believe in modern communications, those who believe
    in markets, and those who believe in China looking outside.
    That is why the reformers in China thought it was so important,
    not because of the framework it would give for our policies,
    but because of the framework it would give for their policies.
    A vote against China WTO would be sawing the limb off on which
    all of those who support the things we value have walked.
        The third reason why it is crucial is ultimately our
    national security. If you go back through history to Assyria
    and Sparta, situations where the balance of economic power has
    changed radically are a very, very high percentage of the time
    followed by military conflict. Germany before the First World
    War, Japan before the Second World War are examples of that
    phenomenon. Our prospects of accommodating the changes in the
    Asian security environment, associated with dramatic change in
    China, are vastly better in a global system that includes
    China, based on respect, rather than rejects China and leaves
    it outside.
        The crucial point that I believe people need to focus on in
    thinking about this issue is that this is not a referendum on
    whether we do or do not approve of China. This is a judgment
    about how we can best pursue American interests in having a
    stronger economy, in having a more compatible China and in
    having a global system that remains at peace. From that
    perspective, I believe we have everything to gain and an
    enormous amount to lose if we do not take this step.
        Senator Gregg. Thank you. I appreciate your coming to the
    hearing. I know the chairman does too.
        Secretary Summers. Thank you.

                         Additional Committee Questions

        Senator Gregg. There will be some additional questions
    which will be submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Questions Submitted by Senator Mitch McConnell

                                    ECUADOR

        Question. Did the Treasury ever recommend to Ecuador that it ask
    for its debts to be rescheduled?
        Answer. No. This was Ecuador's decision and Treasury did not advise
    Ecuador to seek rescheduling of its private debt.
        Question. At the time Ecuador asked for rescheduling, what was its
    outstanding debt and what was the level of its international reserves?
    In other words, did Ecuador have the money to pay the Brady
    bondholders?
        Answer. In August 1999, when the Government of Ecuador announced it
    would not pay the upcoming $45 million payment on its Discount Brady
    Bond, Ecuador's public sector external debt was approximately $13.5
    billion--about 100 percent of 1999 GDP (vs. 40 percent external debt/
    GDP average for all of Latin America). Of this debt, about $6 billion
    was held by Brady bondholders and another $500 million by Eurobond
    holders. Ecuador's Central Bank held international reserves of about
    $1.3 billion, of which roughly half were in usable liquid form. At the
    time of its announcement, the GOE indicated it was facing a severe cash
    flow problem (reflected by recurrent arrears on public sector salaries,
    including police, teachers, and the military) and did not have cash
    available to pay bondholders.
        While Ecuador technically could have met its Discount Brady Bond
    payment, there were two problems. First, liquid reserves of about $650
    million, equal to about three months of imports, were not high by
    international standards, and depleting them to pay bondholders may not
    have been prudent. Second, the government is prohibited by law from
    accessing international reserves held by the Central Bank for fiscal
    purposes such as payments to creditors or public sector wages. Further
    consideration may have been that Discount Brady bondholders had access
    to collateral.
        Question. What has been the reaction of the private bondholders to
    Ecuador's request for rescheduling?
        Answer. Bondholders were understandably not pleased with the
    prospect of having to reschedule their claims on Ecuador. During
    meetings between the Government of Ecuador and private bondholders last
    fall, private bondholders indicated a reluctance to commit to any
    rescheduling efforts without better information about Ecuador's medium-
    term economic plan and what the official sector is prepared to do,
    which they saw as necessary information for judging Ecuador's capacity
    to repay. Following the recent IMF Board approval of a standby
    arrangement for Ecuador, the Government of Ecuador has resumed direct
    dialogue with private creditors, starting with meetings in New York in
    the first week of May.
        Question. If Ecuador is successful in rescheduling its Brady Bonds,
    will this be a precedent for other countries, for example Russia?
        Answer. There are circumstances in which countries will be unable
    to pay, but rescheduling agreements will vary case-by-case depending on
    the circumstances, and no one agreement can be taken as a precedent for
    other agreements. In those countries that have rescheduled their debts
    recently (such as Pakistan and Ukraine), there have been important
    differences, including the amounts and maturity profiles of their debts
    and their degree of indebtedness. In the case of Ecuador, we have
    emphasized the need for the Government of Ecuador to work with its
    private creditors in a transparent and cooperative manner to reach
    arrangements that best satisfy their common interest in economic
    recovery and sustainable finances over the medium-term. Regarding
    Russia, it reached a rescheduling agreement in February of this year
    with the London Club of private creditors on its privately held Soviet
    era debt.
        Question. Is the Ecuador situation different from the situation
    facing Mexico a few years ago?
        Answer. Yes. Aside from the strategic and economic importance that
    Mexico has for the United States and its systemic significance,
    Mexico's crisis was fundamentally a liquidity problem caused by poor
    debt management policies (though underlying levels of debt were
    relatively modest and debt service capacity was relatively ample),
    combined with a current account imbalance that was unsustainable at the
    dollar/peso peg at that time. In contrast, Ecuador's underlying debt
    levels are far more burdensome relative to its capacity to repay.
        Question. Will the current higher price for crude oil help Ecuador
    to any significant extent?
        Answer. Yes. During the past several years, each $1/barrel increase
    in the price of Ecuador's oil has generated roughly $90 million in
    additional exports (about 0.9 percent of GDP) and $70 million (about
    0.7 percent of GDP) in additional government revenues on an annual
    basis. Ecuador will derive a projected 37 percent of its government
    revenue from oil this year. Nonetheless, even if current oil prices
    persist, Ecuador's public and external finances are inadequate to
    support its present debt and debt service obligations.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

                       ROLE OF REGIONAL DEVELOPMENT BANKS

        Question. Do you agree with the recommendation of the Meltzer
    Commission that the World Bank's Latin American portfolio be
    transferred to the Inter-American Development Bank? Do you agree with
    the Meltzer Commission's recommendation that the World Bank's Asian
    portfolio be transferred to the Asian Development Bank?
        Answer. We do not support the Meltzer Commission recommendation to
    transfer the World Bank's Latin America and Asia portfolios to the
    Inter-American Development Bank or the Asian Development Bank.
        We believe that having both regional and global development
    institutions has served our interests and those of the developing world
    reasonably well over time. In our view, making a radical change in the
    current arrangement would need a compelling case; such a case has not
    been made.
        A transfer of portfolios would not be in the U.S. national
    interest. The U.S. share and, in turn, our voting power in the
    respective institution varies. For example, within the World Bank
    Group, the U.S. voting share in IDA is 14.96 percent, compared to 16.98
    percent in the IBRD. At the Inter-American Development Bank, the U.S.
    voting share is 31 percent while at the Asian Development Bank the U.S.
    voting share is 13 percent.
        The World Bank has unique qualities to offer in the international
    development effort:
      --It is an unparalleled resource in terms of the breadth and depth of
            its development expertise.
      --Its global engagement positions it to apply a desirable level of
            consistency across regions, as well as to ensure that lessons
            learned in one region can be effectively applied in another.
      --The Bank is also uniquely qualified to serve effectively as a
            center of global aid coordination.
      --The World Bank's role cannot be absorbed by the regional
            development banks without substantial risk of disruption and
            derailment of on-going development efforts that would also take
            time to replicate elsewhere.
      --The Bank is best positioned to ensure consistency with IMF
            operations.
      --World Bank net income has been used to support valuable development
            and U.S. priorities around the world, including the Balkans,
            the Middle East and the former Soviet Union.
        The regional development banks also have particular characteristics
    that make them valuable contributors to the international development
    effort and to the advance of U.S. interests:
      --The regional banks have local expertise that can not be easily
            duplicated.
      --They are in many cases better suited to engage in smaller scale
            operations.
      --The regional banks have a substantial capacity in some important
            niche businesses such as micro-enterprise lending and
            agriculture.
      --By virtue of their location and proximity to their clients, the
            regional banks have relatively greater accessibility to local
            communities and donors in the field.
        We believe that the current system of multilateral development
    institutions best serves the over-arching development objectives of
    achieving an enduring reduction in poverty and supporting market-driven
    democratization around the world.

                         PRIVATIZATION OF IFC AND MIGA

        Question. Do you agree with the Meltzer Commission's recommendation
    that the IFC and MIGA be privatized?
        Answer. The MDB's private sector arms, such as IFC, and MIGA, have
    been shown to catalyze additional and high value-added private
    investment that would not otherwise take place given the current
    realities of emerging-market finance. At a time when the central role
    of the private sector in promoting development has never been more
    fully appreciated, nor developing countries more receptive, we do not
    see a case for eliminating this instrument. We therefore support their
    continued operation as facilitators and catalysts for sound private
    sector investment and development through:
      --Investment Climate Development by promoting sound economic
            policies, institution-building, capital market development,
            investment rules and protection, and the positive demonstration
            impact of financially viable investments;
      --Risk Mitigation by selectively deploying direct loan and equity
            financing, use of innovative instruments such as co-financing,
            guarantees and project structuring, and special access to
            investment opportunities and information to provide greater
            confidence to investment identification, risk reduction and due
            diligence; and
      --Market Access Facilitation by restoring investor confidence in
            crisis times through investment in disrupted emerging markets
            with sound economic and investment climate fundamentals.
        In addition, these institutions often encourage corporate
    responsibility through introduction of best practice standards in
    value-added environmental and social safeguards--which otherwise might
    not accompany an investment.

                           NEW IMF CREDITS FOR RUSSIA

        Question. Do you expect the IMF to issue new credits to Russia?
        Answer. Last year, IMF funding for Russia was delayed because
    Russia did not fulfill a number of structural conditions required for
    disbursement. We supported that position.
        With the recent inauguration of President Putin, a new government
    will be responsible for setting Russia's reform course. Putin and his
    economic advisors have indicated that they intend to work with the IMF
    and World Bank on an ambitious program of reforms, including measures
    to strengthen the rule of law, improve the efficiency of government,
    and strengthen a market economy. We encourage President Putin and his
    team to work with the IMF and World Bank on a sufficiently strong
    program of economic reforms which could be supported by those
    institutions and help build sustainable economic growth in Russia.

                           ECUADOR DEBT RESCHEDULING

        Question. Did the Treasury ever recommend to Ecuador that it ask
    for its debts to be rescheduled?
        Answer. No. This was Ecuador's decision and Treasury did not advise
    Ecuador to seek rescheduling of its private debt.
        Question. At the time Ecuador asked for rescheduling, what was its
    outstanding debt and what was the level of its international reserves?
    In other words, did Ecuador have the money to pay the Brady
    bondholders?
        Answer. In August 1999, when the Government of Ecuador announced it
    would not pay the upcoming $45 million payment on its Discount Brady
    Bond, Ecuador's public sector external debt was approximately $13.5
    billion--about 100 percent of 1999 GDP (vs. 40 percent external debt/
    GDP average for all of Latin America). Of this debt, about $6 billion
    was held by Brady bondholders and another $500 million by Eurobond
    holders. Ecuador's Central Bank held international reserves of about
    $1.3 billion, of which roughly half were in usable liquid form. At the
    time of its announcement, the GOE indicated it was facing a severe cash
    flow problem (reflected by recurrent arrears on public sector salaries,
    including police, teachers, and the military) and did not have cash
    available to pay bondholders.
        While Ecuador technically could have met its Discount Brady Bond
    payment, there were two problems. First, liquid reserves of about $650
    million, equal to about three months of imports, were not high by
    international standards, and depleting them to pay bondholders may not
    have been prudent. Second, the government is prohibited by law from
    accessing international reserves held by the Central Bank for fiscal
    purposes such as payments to creditors or public sector wages. A
    further consideration may have been that Discount Brady bondholders had
    access to collateral.
        Question. What has been the reaction of the private bondholders to
    Ecuador's request for rescheduling?
        Answer. Bondholders were understandably not pleased with the
    prospect of having to reschedule their claims on Ecuador. During
    meetings between the Government of Ecuador and private bondholders last
    fall, the private bondholders indicated a reluctance to commit to any
    rescheduling efforts without better information about Ecuador's medium-
    term economic plan and what the official sector is prepared to do,
    which they saw as necessary information for judging Ecuador's capacity
    to repay. Following the IMF Board approval of a standby arrangement for
    Ecuador, the Government of Ecuador resumed direct dialogue with private
    creditors, starting with meetings in New York in the first week of May.
        Question. If Ecuador is successful in rescheduling its Brady Bonds,
    will this be a precedent for other countries, for example Russia?
        Answer. There are circumstances in which countries will be unable
    to pay, but rescheduling agreements will vary case-by-case depending on
    the circumstances, and no one agreement can be taken as a precedent for
    other agreements. In those countries that have rescheduled their debts
    recently (such as Pakistan and Ukraine), there have been important
    differences, including the amounts and maturity profiles of their debts
    and their degree of indebtedness. In the case of Ecuador, we have
    emphasized the need for the Government of Ecuador to work with its
    private creditors in a transparent and cooperative manner to reach
    arrangements that best satisfy their common interest in economic
    recovery and sustainable finances over the medium-term. Regarding
    Russia, it reached a rescheduling agreement in February of this year
    with the London Club of private creditors on its privately held Soviet
    era debt.
        Question. Is the Ecuador situation different from the situation
    facing Mexico a few years ago?
        Answer. Yes. Aside from the strategic and economic importance that
    Mexico has for the United States and its systemic significance,
    Mexico's crisis was fundamentally a liquidity problem caused by poor
    debt management policies (underlying levels of debt were relatively
    modest and debt service capacity was relatively ample), combined with a
    current account imbalance that was unsustainable at the dollar/peso peg
    at that time. In contrast, Ecuador's underlying debt levels are far
    more burdensome relative to its capacity to repay.
        Question. Will the current higher price for crude oil help Ecuador
    to any significant extent?
        Answer. Yes. During the past several years, each $1/barrel increase
    in the price of Ecuador's oil has generated roughly $90 million in
    additional exports (about 0.9 percent of GDP) and $70 million (about
    0.7 percent of GDP) in additional government revenues on an annual
    basis. Ecuador will derive a projected 37 percent of its government
    revenue from oil this year. Nonetheless, even if current oil prices
    persist, Ecuador's public and external finances are inadequate to
    support its present debt and debt service obligations.

                              SUBCOMMITTEE RECESS

        Senator Gregg. The subcommittee will stand in recess until
    10 a.m., Tuesday, April 11.
        [Whereupon, at 12:02 p.m., Thursday, April 6, the
    subcommittee was recessed, to reconvene at 10 a.m., Tuesday,
    April 11.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

                                  ----------

                            TUESDAY, APRIL 11, 2000

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Leahy, and Murray.

                             DEPARTMENT OF TREASURY

                            Office of the Secretary

    STATEMENT OF HON. LAWRENCE H. SUMMERS, SECRETARY

                 Opening statement of Senator Mitch Mc Connell

        Senator McConnell. I want to welcome Secretary Summers back
    before the committee. This is becoming his home away from home.
        I am going to give an opening statement and then pass the
    baton to my friend and colleague, Senator Leahy, because I have
    to go to another subcommittee related to the uranium enrichment
    plant in Paducah in my home State.
        So, I want to welcome all of our witnesses today to discuss
    global health problems and specifically efforts to improve
    access and availability of vaccines in developing countries. We
    have gathered some of the world's most impressive experts here
    to continue the review Senator Leahy and I began in 1997.
    Speaking of Senator Leahy, I think he deserves great credit for
    concentrating public interest on this important issue.
        Last October, the GAO completed the first study we
    requested on factors contributing to low vaccination rates in
    developing countries. The four key factors limiting
    availability are: first, inadequate health delivery
    infrastructure; second, the higher cost of vaccines recently
    recommended by the World Health Organization; third,
    insufficient surveillance and information on a country's
    disease problems; and fourth, the shift in funding priorities
    for donors.
        A hopeful sign that we may be able to ease and remove some
    of these impediments is reflected in the new public-private
    collaborative initiative known as the Global Alliance for
    Vaccines and Immunization, GAVI. GAVI has created the Global
    Fund for Children's Vaccines to receive and administer
    donations. Both the generous commitment from the Bill and
    Melinda Gates Foundation and support from pharmaceutical
    companies, most notably Merck, have the potential to improve
    immunization coverage in targeted countries.
        However, supply strikes only one part of the problem. The
    GAO study also pointed out that weak health care systems
    produce poor data and even worse results. In many countries,
    surveillance data is uneven and unreliable, so we do not know
    how pervasive a problem we face with certain communicable
    diseases. Inadequate information leads to inaccurate estimation
    of needs and waste. I was surprised to learn in the GAO study
    that on average, 43 percent of vaccines delivered were not
    administered to children. Lack of refrigeration, limited shelf
    life, and the use of one dose of a multi-dose vial are among
    the many reasons the global vaccine supply may not be
    effectively used. Before we spend the millions of dollars
    donated to buy more vaccines, we need to make sure delivery
    systems are improved. If the average global vaccination rate is
    82 percent with a 43 percent non-use rate in developing
    countries, it seems to me a first step to boost global coverage
    is to improve the non-use rate.
        Reducing infectious diseases will depend in part on
    reducing the costs for treatment, which is why we will hear
    from Secretary Summers. He has taken the lead on defining the
    administration's options for funding incentives for research,
    development, and delivery.
        Before we hear from Secretary Summers, let me caution that
    this committee is not in a position to make any legislative
    recommendations regarding tax credits or incentives for the
    pharmaceutical industry. This subcommittee's focus is the
    problems international health officials are trying to define
    and address and the resource gaps which limit effective
    solutions.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        I welcome all our witnesses today to discuss global health problems
    and specifically, efforts to improve access and availability of
    vaccines in developing countries. We have gathered some of the world's
    most impressive experts here to continue the review Senator Leahy and I
    began in 1997. Senator Leahy deserves great credit for concentrating
    public interest on this important issue.
        Last October, the GAO completed the first study we requested on
    factors contributing to low vaccination rates in developing countries.
    The four key factors limiting availability are: (1) inadequate health
    delivery infrastructure; (2) the higher cost of vaccines recently
    recommended by the World Health Organization; (3) insufficient
    surveillance and information on a country's disease problems; and (4)
    the shift in funding priorities for donors.
        A hopeful sign that we may be able to ease and remove some of these
    impediments is reflected in the new public--private collaborative
    initiative known as the Global Alliance for Vaccines and Immunization
    (GAVI ). GAVI has created the Global Fund for Children's Vaccines to
    receive and administer donations. Both the generous commitment from the
    Bill and Melinda Gates Foundation and support from pharmaceutical
    companies, most notably Merck, have the potential to improve
    immunization coverage in the targeted countries.
        However, supply strikes only one part of the problem. The GAO study
    also pointed out that weak health care systems produce poor data and
    even worse results. In many countries surveillance data is uneven and
    unreliable, so we simply don't know how pervasive a problem we face
    with certain communicable diseases. Inadequate information leads to
    inaccurate estimation of needs and waste. I was surprised to learn in
    the GAO study that on average, 43 percent of vaccines delivered were
    not administered to children. Lack of refrigeration, limited shelf
    life, and use of one dose of a multi-dose vial are among the many
    reasons the global vaccine supply may not be effectively used. Before
    we spend the millions of dollars donated to buy more vaccines, we need
    to make sure delivery systems are improved. If the average global
    vaccination rate is 82 percent, with a 43 percent non-use rate in
    developing countries, it seems to me a first step to boost global
    coverage is to improve the non-use rate.
        Reducing infectious disease will depend in part on reducing the
    costs for treatment which is why we will hear from Secretary Summers.
    He has taken the lead on defining the Administration's options for
    funding incentives for research, development and delivery. Before we
    hear from Secretary Summers, let me caution that this committee is not
    in a position to make any legislative recommendations regarding tax
    credits or incentives for the pharmaceutical industry. This
    Subcommittee's focus is the problems health officials are trying to
    define and address and the resource gaps which limit effective
    solutions. So, let me turn to Senator Leahy as we begin to frame both
    the problem and solutions.

        Senator McConnell. So with that, let me turn to my friend
    and colleague, Senator Leahy, who will be conducting the
    hearing today, and thank him for his leadership in this
    important area.

                 Opening statement of Senator Patrick J. Leahy

        Senator Leahy [presiding]. Thank you, Mr. Chairman. I want
    to thank you personally for all the help you have given on
    this. Senator McConnell has demonstrated once again that this
    issue is not a partisan issue. It is a human issue. I
    appreciate what he has done and also his courtesy in scheduling
    this hearing.
        I will put my full statement in the record, but I do want
    to say a couple of things. This is the third hearing the
    subcommittee has had on global health since 1997. Our first
    hearing was actually the first of its kind in the Congress. We
    highlighted how disease outbreaks and impoverished public
    health systems half a world away directly affect us here in the
    United States. An outbreak of any disease anywhere in the world
    is only one airplane trip away from our own shores.
        It is because of the magnitude of the challenges and
    opportunities, as well as the recognition of the essential role
    the United States must play in global health, that our
    witnesses today are the foremost experts and leaders in the
    field. When you are the wealthiest, most powerful nation on
    earth, you have a moral responsibility to help others who are
    less fortunate. With our wealth and our expertise we could and
    should be doing far more.
        Let me just cite a couple facts.
        In the United States, we spend over $4,000 per person per
    year on health care--$4,000. In the countries where 2 billion
    of the world's people live in desperate poverty, only $3 to $5
    is spent per year on health care--$3 to $5 in those countries.
        It would only cost $15 per person per year to address most
    of the urgent health needs of those 2 billion people. Most of
    our citizens, if they thought they could eradicate tuberculosis
    and other infectious diseases for $15, would say, sure. With
    those few additional dollars we could prevent many millions of
    deaths caused each year by tuberculosis, malaria, pneumonia,
    diarrheal diseases, measles, HIV/AIDS, and pregnancy-related
    diseases.
        Now, the benefits to the whole world should be obvious, but
    they are also benefits to our country. In an increasingly
    interdependent world, reducing the threats posed by infectious
    diseases and poor reproductive health and the social and
    economic consequences of poverty, of which ill health is such a
    key ingredient, is absolutely crucial to our own future
    security and prosperity.
        Global health consists of a broad set of issues that have
    to be addressed together. Our challenge is to provide the
    resources for developing countries to build the capacity, both
    human and infrastructure, to support effective public health
    systems.
        Today I will introduce legislation to authorize an
    additional $1 billion to support five key components of global
    health. The Global Health Act of 2000 targets HIV/AIDS, other
    deadly infectious diseases such as TB, malaria and measles,
    children's health, women's health, and family planning.
    Together, these five groups of issues account for over 80
    percent of the disproportionate burden of disease and death
    borne by the 2 billion people living in the world's poorest
    countries.
        We have the technology to do this. We simply need the
    resources and we need to think in terms of far larger amounts
    of money if we are serious about global health. Every dollar of
    the additional $1 billion called for in my legislation, which
    is double the amount we currently spend, is justified. It is
    urgently needed. The payoff would be enormous, both in terms of
    lives saved and future health care cost savings.
        If our witnesses today can advise us how best we could use
    the funds we have and any additional funds we could appropriate
    to respond to these challenges, it will help.
        We invited the Secretary of the Treasury to represent the
    administration today because too often in developing countries
    health is treated as the sole responsibility of Ministers of
    Health who rarely have influence over national budgets. But
    ministers of finance in a lot of these countries who do control
    the budgets are often misinformed or ill-informed about health
    care.
        Now, our own Treasury Secretary has a key role in decisions
    about global health policy and funding. I would also say that
    he is a man I know to have a deep personal interest and
    knowledge about these issues and a man of great conscience and
    great concern not only for his own country, which he serves so
    ably, but for the rest of the world where he knows the
    influence that our country can have.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Good morning. This is the third hearing of this Subcommittee on
    global health since 1997. Our first hearing was the first of its kind
    in the Congress, when we highlighted how disease outbreaks and
    impoverished public health systems half a world away directly threaten
    Americans. Since then, the interest in these issues in the Congress,
    the administration, the media, and the public has skyrocketed.
        Today, there are about a dozen pieces of legislation pending which
    deal with some aspect of global health, the President has proposed
    major increases in funding and policy initiatives to encourage the
    pharmaceutical companies to invest in new vaccines against HIV/AIDS,
    malaria, TB, and other major killers, and the World Health Organization
    is setting the pace for us all to tackle these challenges with new
    energy and new resources.
        It is a reflection of the magnitude of the challenges and
    opportunities, as well as a recognition of the essential role the
    United States must play in global health, that we have as witnesses
    today are the foremost experts and leaders in the field.
        There is no need to describe at great length why we are here, but I
    do want to cite a couple of facts to focus our discussion:
      --In America, each year we spend over $4,000 per person on health
            care.
      --In the countries where 2 billion of the world's people live in
            desperate poverty, only $3 to $5 per person per year is spent
            on health care.
      --It would cost just $15 per person per year to address most of the
            urgent health needs of those 2 billion people.
      --With that $15 per person, we could prevent or cure the many
            millions of deaths caused each year by tuberculosis, malaria,
            pneumonia, diarrheal diseases, measles, HIV/AIDS, and pregnancy
            related diseases.
        That is the challenge we face. The benefits to the world, and to
    the United States, should be obvious. In an increasingly interdependent
    world, reducing the threats posed by infectious diseases and poor
    reproductive health, and the social and economic consequences of
    poverty and disease, is absolutely key to our own future security and
    prosperity.
        The Congress has become increasingly seized with these issues.
    However, while I strongly support most of the bills that have been
    introduced--and I am a cosponsor of Senator Kerry's ``Vaccines for the
    New Millennium Act,'' they have tended to focus narrowly on the
    development of new vaccines, HIV/AIDS, and other major killers like
    tuberculosis.
        These are admirable and important goals, but I have always believed
    that global health consists of a broad set of issues that must be
    addressed together. Our primary challenge is to provide the resources
    to enable developing countries to build the capacity--both human and
    infrastructure, to support effective public health systems.
        That was the motivation for my infectious disease initiative 3
    years ago, which since then has provided an additional $175 million to
    support programs in surveillance, anti-microbial resistance, TB, and
    malaria.
        Today, in an effort to build on that initiative, I am introducing
    legislation to authorize an additional $1 billion to support five key
    components of global health. The ``Global Health Act of 2000,'' targets
    HIV/AIDS; other deadly infectious diseases such as TB, malaria and
    measles; children's health; women's health; and family planning.
        Together, these five groups of issues account for over 80 percent
    of the disproportionate burden of disease and death borne by the 2
    billion people living in the world's poorest countries.
        The important point to emphasize is that we have the technology to
    do this. The key missing ingredient is resources, which is why our
    witnesses have come to the subcommittee which appropriates funds for
    global health.
        We can, and we must, recognize that we need to think in terms of
    far larger amounts of money if we are serious about global health.
    Every dollar of the additional $1 billion called for in my legislation,
    which is double the amount we currently spend on these activities, is
    justified and urgently needed. And the payoff would be enormous, both
    in terms of lives saved and in future health care cost savings.
        Today, we want our witnesses to tell us on how we can best use the
    resources we have, and any additional resources we can provide, to
    respond to these challenges.
        Many Federal agencies are involved in global health issues. USAID,
    the State Department, CDC, NIH through its research programs, and the
    Department of Defense. Be we invited the Secretary of the Treasury to
    represent the administration today because it has been my experience
    that in developing countries, health is treated as the sole
    responsibility of Ministers of Health who rarely have influence over
    national budgets.
        Ministers of Finance, who wield great influence over budget
    matters, including health budgets, are often uninformed and
    uninterested in health care.
        We wanted to make the point that our Secretary of the Treasury has
    a key role in health policy and in funding for global health, and, as I
    think he will convey, he has a deep personal interest and knowledge
    about these issues.
        Secretary Summers, thank you for being here.

                 Summary Statement of Hon. Lawrence H. Summers

        Senator Leahy. So, Mr. Secretary, I am delighted you are
    here and I will turn the floor over to you. I thank you for
    taking this time. It seems that you have taken up residence in
    this committee in the last couple weeks, and I can imagine what
    that has done to your schedule but I do appreciate it.
        Secretary Summers. Thank you very much, Senator Leahy. I am
    grateful for your leadership on this issue. I am grateful to
    Chairman McConnell for inviting me to testify at this hearing,
    and I welcome your leadership, along with that of Senator Kerry
    and Congresswoman Pelosi, that I believe has the potential to
    make a real difference on profoundly important issues.
        I am not a doctor or a public health expert, but I come as
    Secretary of the Treasury to this committee because I believe
    the issues we are discussing involve profound investment
    choices, choices where we have opportunities to have an
    enormous return, a return in terms of our economic interests in
    a developing world that is prospering, in terms of our security
    interests in a developing world that is succeeding, and in
    terms of our moral interest in seeing disease, which can be
    addressed, be cured.
        I come also because this is an issue where incentives, the
    design of institutions, and the use of finance are so
    profoundly important. As Senator McConnell indicated in his
    opening statement, we must address very difficult issues of
    incentives, of assuring that resources are well used and that
    innovations do not go to waste if we are to succeed in
    achieving our objectives with respect to improving global
    health.
        It is difficult to exaggerate the stakes at a time when 2.5
    million people annualy die of AIDS. Tuberculosis accounts for 2
    million deaths; malaria, more than 1 million deaths; and
    diarrheal and respiratory infections kill twice as many people
    each year as AIDS. In substantial parts of this world we are
    now seeing life expectancy not progressing but regressing, with
    the possibility of regression to levels not seen since the
    1950s.
        Mr. Chairman, this moment is an especially attractive
    moment for a new focus on these issues and for greatly enhanced
    efforts on vaccine issues for four reasons:
        First, because science is making it possible to design
    vaccines that could not have been designed just a few years
    ago.
        Second, because we have seen what a difference the right
    kinds of cooperation between the public and the private sector,
    between the nonprofit and the profit sector, can make. We have
    seen it with Merck's success with respect to river blindness in
    large parts of Africa. We have seen it with the efforts of the
    Gates Foundation. We have seen it with the coming together of
    the Global Alliance with respect to vaccines. We now have
    structures for public/private cooperation that are superior to
    anything that we have had in the past.
        Third, we have seen a change in attitude towards economic
    policy within developing countries towards the recognition that
    the right kinds of governments are not just governments by the
    people but are governments for the people, which means an
    emphasis on the provision of very basic services such as
    education and health care.
        And fourth, we have seen, with the debt relief program now
    underway for the 36 highly indebted poor countries, a new
    energy and a new willingness on the part of the world to
    insist, as a condition for assistance, that resources be
    channeled into effective health delivery.
        The combination of new science, new forms of cooperation
    between the public and private sectors, and a change in
    attitude towards development policy within many developing
    countries and within the donor community makes this an
    especially attractive moment for us to support what are
    extraordinarily high-return investments.
        The President's Millennium Vaccine Initiative draws on
    these concerns and contains four major elements:
        First, the mobilization of additional international
    resources to help the poorest countries purchase existing
    vaccines for their children. The budget proposes a $50 million
    contribution to the Global Alliance for Vaccines and
    Immunization, GAVI, to purchase existing vaccines for children.
    This complements contributions of over $750 million from the
    Gates Foundation and is critical in mobilizing support from
    other foundations and other countries. This is something that
    will be very much at issue at the Okinawa Economic Summit that
    will take place this July.
        Second, and of great importance to us at the Treasury,
    developing increased implementation capacity through our debt
    reduction programs and through our support for the
    international financial institutions. The President has called
    for an increase from $400 million to $900 million every year in
    the allocation of World Bank concessional resources to basic
    health care. We have committed that, in the poverty reduction
    papers and poverty reduction policies that will be integral to
    debt reduction programs, we will focus not just on the
    traditional indicators of bank capital and budget deficits, but
    also on measurable results in the health care sector.
        I might say that the early evidence on debt reduction is
    encouraging. Last year, for example, the Ugandan Government
    saved $45 million in reduced interest payments and that saving
    was part of a process that increased immunization rates, as
    well as significantly increased levels of literacy among
    Ugandan children.
        I should emphasize that these reallocations of World Bank
    resources do not require new U.S. budgetary commitments. Of
    course, the successful execution of the debt relief program
    does require new U.S. budgetary commitments, and our ability to
    influence the MDBs will be dependent on decisions that this
    committee will make with respect to our appropriations to these
    institutions.
        The third component of the President's vaccine program is
    support for increased research and development in the National
    Institutes of Health. We have seen again and again and again
    over the years that what starts as basic research finds very
    direct and immediate application. If we are to have a
    successful biotechnology industry, if we are to have success in
    developing vaccines, we need an investment at the national
    public level in basic understanding of cellular processes that
    are essential to the design of vaccines. Basic research is best
    carried on within the public sector.
        Fourth, harnessing the science and technological skills of
    the private sector in the development of new vaccines and
    medicines for infectious diseases. If it is true that the most
    basic research is a public good, it is best funded publicly and
    made available to all. We have also learned again and again
    from experience, however, that the best applied research is
    done by those who are seeking to meet a substantial market and
    who are encouraged to meet that market.
        Frankly, with respect to research for vaccines for diseases
    that occur predominantly in the poorest parts of the world,
    there is a major market failure. There is a missing market,
    which comes from the reality that the countries may lack the
    capacity to cover the full costs of development and marketing
    of vaccines for these diseases. Inevitably that capacity to
    cover costs has shaped research priorities toward those medical
    and health problems that occur in industrial countries, whereas
    only 10 percent of the world's $50 billion to $60 billion in
    health research goes to the diseases that affect 90 percent of
    the world's population.
        What is to be done?
        We have made the judgment, after extensive consultation
    with industry, after our own analysis, after consulting the
    analyses of a number of prominent economists who have looked
    hard at these issues, that the most effective strategy is to
    design an appropriate incentive that will work to create a
    market for products that are effective against the limited
    number of diseases that kill more than 1 million people each
    year. That is the centerpiece of the President's tax proposal
    in this area which seeks to create a market by providing a
    matching tax credit for any purchases of newly developed
    vaccines. The President's proposal also provides certain
    subsidies for input research with respect to these vaccines.
    This is an approach that works with the market and tries to
    harness the kind of forces that have been so spectacularly
    successful with respect to the development of domestic
    pharmaceutical products.
        Mr. Chairman, let me conclude with this thought. Several
    million people are dying each year of diseases which we know
    how to prevent. Our first priority has to be working to prevent
    those diseases with effective finance for effective delivery.
    Millions of people will be dying over the next several decades
    from diseases for which we could find an inoculation. We should
    begin to do everything we can to intensify efforts toward that
    objective at the earliest possible moment.
        The President's program reflects our vision of how this can
    be done best. All of us in the administration look forward to
    working with Members of the Congress and with those in the
    private sector, both for profit and not-for-profit, and with
    our colleagues internationally to find the most effective ways
    to meet what is as great a challenge as any facing humanity.
        Thank you very much.
        [The statement follows:]

                 Prepared Statement of Hon. Lawrence H. Summers

        Thank you, Chairman McConnell, for inviting me to testify on the
    President's Millennium Initiative to help combat infectious diseases.
    Let me also thank Senator Leahy for the leadership he has shown on this
    matter. Along with the leadership of Senator Kerry and Congresswoman
    Pelosi and others, your support has made a real difference.
        Increasingly, as integration proceeds, the world is confronting a
    broad class of problems that cross borders and defy easy solution by
    individual governments and markets. Whether it is money laundering and
    financial crime, climate change or reductions in global bio-diversity--
    the solutions to these problems will be global public goods, requiring
    concerted global cooperation.
        The proposals that the Administration has put forward in its
    Millennium Initiative seek to catalyze a global response to one of the
    most urgent and morally compelling of such problems: the scourge of
    infectious diseases that hit hardest the countries that are least able
    to cope.
        Today I would like to address the three points that form the basis
    for the President's Initiative.
      --First, the development and delivery of vaccines and effective
            treatments for infectious diseases is now one of the effective
            investments that we can make in successful economic development
            in the poorest countries.
      --Second, both the lessons of recent development experience and the
            advance of scientific discovery have put us in a position to
            have a real impact on the global spread of these diseases.
      --Third, public-private cooperation, both at the national and
            international level, is needed to achieve this and elements of
            the
        President's Initiative provide the most effective means of setting
    the right kinds of cooperation in train.
      combating infectious diseases as a moral and an economic imperative
        It might seem surprising that the Treasury Secretary is devoting so
    much attention to the goal of preventing and controlling disease in the
    developing world. But, as Treasury Secretary, I am constantly aware of
    the enormous national economic, humanitarian, and security stake that
    the United States has in the successful development of the poorest
    countries.
        A more global prosperity will produce better trading partners for
    the United States: time and again, as poor countries grow richer, they
    become the fastest growing markets for United States goods and
    services. Already, developing countries account for some 42 percent of
    United States exports. A more global prosperity will also promote
    peace: from Bosnia to East Timor, from Rwanda to the Middle East. It
    will also promote human freedom. Nations that succeed economically are
    much more likely to become democratic. And a more global prosperity
    will help us to meet the profound challenge of protecting the global
    environment. Environmental degradation spawned by dire poverty is a
    global concern.
        Today, it does not overstate the case to say that the greatest
    single obstacle to human development in these countries and to a more
    inclusive global prosperity is the specter of disease.
        The spread of HIV/AIDS in recent years has been swift and
    particularly brutal:
      --Fifty million people worldwide have been infected with the HIV
            virus; more than 16 million have died; and annual AIDS-related
            fatalities hit a record 2.5 million last year.
      --In sub-Saharan Africa, where 85 percent of all AIDS deaths have
            occurred, life expectancy is now declining sharply in many
            countries, reversing decades of hard-won gains. In at least
            five African countries, over 20 percent of adults are HIV-
            positive. In southern Africa, life expectancy is expected to
            drop from a high of 59 in the early 1990s to 45 within the next
            5-10 years--a level not seen since the 1950s. And the highest
            rates of new infection are often among young women who will
            soon be mothers.
      --Most worrisome is the rate at which HIV/AIDS is spreading, and the
            very real danger that what is happening in Africa is about to
            happen elsewhere. Infection rates in Asia are climbing rapidly,
            with several countries on the brink of a large-scale pandemic
            and needing to take action immediately to forestall the
            disaster that Africa has suffered. Parts of Latin America and
            the Caribbean--our own neighbors also show high and rising
            rates of infection. And the former Soviet Union countries and
            Eastern Europe are vulnerable as well, with Russia experiencing
            the highest increase in infection rates in the world last year.
        At the same time, it bears emphasis millions of the world's people
    still fall prey to diseases that are centuries old.
      --Tuberculosis accounts for over 2 million deaths annually, and drug-
            resistant strains are spreading. Indeed, thousands of people
            who are HIV-positive actually die of TB; their damaged immune
            systems allow active TB to develop, which then can spread to
            people who are not HIV-positive.
      --Malaria strikes hundreds of millions of people each year and
            results in more than one million deaths, mostly children.
            Diarrheal and respiratory infections are even more devastating,
            killing almost 6 million people each year.
      --And millions die of diseases for which cheap vaccines are available
            today. Fewer than half of Africa's children are vaccinated
            against basic diseases like measles and diphtheria even though
            such vaccines are one of the most cost-effective ways to
            improve health. And in South Asia, less than three-quarters of
            the children are vaccinated.
        All told, infectious diseases are the leading cause of death
    worldwide, causing almost half of all deaths among people under the age
    of 45. The end result is not merely a humanitarian crisis, but a
    broader social and economic crisis.
      --Life expectancy is falling mainly because of rising mortality among
            prime age adults and research has shown that economic growth
            depends importantly on the share of the population that is of
            working-age. A recent World Bank study estimates that AIDS is
            likely to subtract about 1 percent a year from GDP in 30 sub-
            Saharan African countries.
      --The burden of coping with these diseases further reinforces the
            poverty that allowed these diseases to take root. Health care
            budgets and facilities are overwhelmed by the heavy burden of
            caring for those who are infected. And families that are
            already impoverished are forced to liquidate assets and defer
            expenses for essentials such as education in order to pay for
            costly medical care thus sending them into a deeper downward
            economic spiral. AIDS, alone, has orphaned an alarming number
            of children over 11 million worldwide, with all but one-half
            million in Africa.
        The implications of this crisis are global:
      --Because infectious diseases do not respect the boundaries of states
            and geography as we have seen with HIV/AIDS, with the
            resurfacing of tuberculosis in parts of the United States, and
            with last year's outbreak of West Nile encephalitis in New
            York.
      --Because if these countries do not develop they cannot contribute to
            the broader global growth in which we have such a stake, at a
            time when already, more than 40 percent of our exports already
            go to developing countries.
      --And because the national economic distress and political
            instability that inevitably accompany this scale of human loss
            can cause greater damage to the global system as a whole.
        For all of these reasons, support for the development and delivery
    of vaccines and effective treatments for infectious diseases is one of
    the most cost-effective investments we can make both in successful
    economic development in these economies, and in the prosperity and
    stability of the global economy as a whole.
        We believe this is fundamentally a humanitarian imperative. It is
    also a national economic and security imperative. And it is an
    imperative that global experience and the pace of scientific discovery
    have now put us in a much stronger position to address.

                     THE ABILITY TO MAKE A REAL DIFFERENCE

        We cannot sit back and wait for these critical discoveries. We must
    deal now with the ongoing and immediate impact of infectious and other
    diseases of poverty.
        The record of past international efforts to combat infectious
    disease suggests that there are no easy, simple solutions to this
    problem. But we are in a much stronger position today than we were even
    a few years ago to help countries make concrete progress, for three
    reasons.

    First, because of the rapid growth in relevant scientific understanding

        Clearly, one reason for the high incidence of infectious diseases
    is the remaining gaps in our scientific knowledge about those diseases.
    The development of vaccines and medicines simply cannot exceed the
    frontiers of available basic science. But, as one pharmaceutical
    executive said at a recent meeting on this subject with the President,
    this is a ``golden age'' for research and implementation. Important
    recent advances are being made on malaria, pneumococcus, and AIDS. As I
    will describe in a few moments, we believe that public policy can
    provide a critical boost to private research efforts in this area.

    Second, because we have new tools for potentially channeling
            significant internal and external resources toward this effort

        A sheer lack of financial resources relative to the cost of even
    the most basic investments in health is clearly an even greater
    obstacle to improving health outcomes in these countries.
      --On average, the poorest nations in the world spend just $15 per
            person on health care each year--less than it costs to fully
            vaccinate a child against nine basic diseases including polio,
            measles, and tetanus. In the United States, we spend thousands
            of dollars per person on health care each year.
      --In the poorest developing countries, there are only 14 doctors and
            26 nurses on average for every 100,000 patients, compared to
            245 doctors and 878 nurses in the United States. And 800
            million people live on less than $1 a day. The harsh reality is
            that the cost of caring for patients with AIDS the way we do in
            the United States far exceeds the per capita income of most
            developing countries.
        We cannot hope to eliminate the relative gap in countries' economic
    resources. But in the Heavily Indebted Poor Countries Initiative we do
    have a tool for increasing the funds they have available--and ensuring
    that they are channeled to core human development priorities such as
    basic healthcare.
        The HIPC Initiative, created in 1996 and further enhanced last
    year, has already helped some of the poorest nations in the world free
    up precious resources for human development that would otherwise have
    been spent on servicing debt. Fully funded and implemented, the
    enhanced HIPC initiative has the potential to be an even more powerful
    tool for helping countries devote more resources to combating
    infectious disease.

    Third, we have greater understanding of the importance of--and pre-
            requisites for--effective delivery of vaccines and treatments

        Clearly, it does no good to ship vaccines and medicines to the
    ports of poor nations if they do not end up in the throats or arms of
    the people who need them. Just as clearly, it does little good to
    administer vaccines and medicines to people who do not receive basic
    tools for maintaining health, such as nutritional interventions like
    vitamin A and iron, or preventing disease, such as bed nets for malaria
    and education to prevent the spread of HIV/AIDS.
        These problems have often been important obstacles to international
    efforts to combat heart diseases in the past. However, the tight
    linkages between different aspect of health care are now well
    understood in the development community and are being successfully put
    into practice.
        As I will note in a few moments, this is reflected in both the
    President's Millennium Initiative and plans now being developed by the
    World Bank, which focus on shifting significant resources to improving
    the delivery of basic health services including vaccines and medicines.
        We also understand better that this is not a problem of money
    alone--but also competence and enduring commitment. Specifically,
    developing country governments need to commit themselves to specific
    targets for improving health care delivery and health outcomes. And
    donor countries, international organizations, and non-government
    entities in developing nations need to cooperate to find solutions that
    will work best for the country in question. And applying these
    principles is yielding concrete results. For example:
      --In Uganda and Thailand, recent innovative programs supported by the
            international community have begun to reverse HIV infection
            rates of high-risk groups. And in Senegal, an early investment
            in prevention programs has helped to keep HIV infection rates
            low.
      --In Bangladesh, which can spend only $4 per person per year on
            health, the World Bank, USAID, and other donors have supported
            the development of networks of nonphysician personnel fanning
            out to thousands of villages and urban slums, which have helped
            to reduce the infant mortality rate from 132 to 75 between 1980
            and 1997.

                 THE PRESIDENT'S MILLENNIUM VACCINE INITIATIVE

        The President's Millennium Vaccine Initiative, outlined in his
    State of the Union address, draws on both of these realities: the scale
    and urgency of the problem, and the greater scope that we have today
    for launching an effective global response.
        In these efforts, we are building on the support of the private
    sector, including pharmaceutical companies that can provide the
    research and development that is so necessary to developing the right
    vaccines; we are also drawing on the commitment of the non-profit
    sector, including organizations like the Gates Foundation that has
    contributed so generously to the fight against disease; and we are
    utilizing the expertise of government so that it can act as a catalyst
    to ensure that these efforts are expanded on an international scale.
        The President's initiative has four basic components.

    First, mobilizing additional international resources to help the
            poorest countries purchase existing vaccines for their children

        Many poor countries often cannot afford to buy vaccines. To help
    address this problem:
        The President's fiscal year 2001 budget proposes a $50 million
    contribution to the Global Alliance for Vaccines and Immunization
    (GAVI) to purchase existing vaccines for children. This contribution
    should help catalyze significant contributions from other countries and
    foundations. It will also add critical credibility to the international
    community's commitment to provide a market for new vaccines, including
    vaccines for AIDS, when they are developed. Further, the President has
    helped to catalyze commitments from the pharmaceutical industry to
    donate hundreds of millions of dollars worth of existing vaccines.

    Second, shifting existing international resources toward building
            infrastructure in poor countries that can deliver vaccines and
            medicines and provide essential basic health services

        President Clinton has called on the multilateral development banks
    to shift an additional $400 million to $900 million annually of
    concessional resources into basic health care. Of course, an essential
    element of such care is prevention and treatment of infectious
    diseases, including AIDS. These banks are the right institutions for
    investing in health infrastructure and health care:
      --First, because these activities fall clearly within the poverty
            reduction and development mandate of the banks, and no other
            institutions can bring to bear the funding and policy dialogue
            on the scale needed for the task.
      --And second, because one crucial part of the problem is that there
            is not a visible market for new treatments and vaccines in many
            of the countries worst affected. And the World Bank and other
            institutions can do much to create a market, through its
            lending programs and the policies they support.
        As I noted earlier, the Administration is also using the enhanced
    HIPC debt initiative to support our efforts on infectious diseases. The
    HIPC countries will be developing Poverty Reduction Strategy Papers, in
    a participatory process with civil society and donors, to establish
    comprehensive plans with monitorable targets. We have already requested
    that our Embassies and USAID missions in these countries stress the use
    of debt-reduction savings for bolstering basic education and health,
    including the fight against infectious diseases. We expect that all
    PRSPs that are prepared by HIPC candidates will discuss the adequacy of
    budget resources and policy reforms devoted to basic health care.
        The early evidence from HIPC beneficiaries is encouraging. Last
    year, the Ugandan government saved $45 million in debt service under
    the original HIPC program. Its expenditures on health and education
    increased by $55 million, including a major effort to combat the HIV/
    AIDS epidemic. Immunization rates for children in Uganda are expected
    to increase from 55 percent in 1996 to 60 percent in 2002. One of the
    key priorities for health spending in the future, which would be
    facilitated by enhanced HIPC debt relief, is to extend HIV/AIDS
    education outreach, particularly to rural communities.
        These measures do not require additional budget commitments.
    However, our influence within the multilateral development banks and on
    HIPC depends on our ability to meet our existing commitments. I would
    note here that for fiscal year 2001 we are requesting a total of $1.6
    billion for Treasury international programs, of which by far the
    largest share is taken up by commitments to the MDBs--some of them
    required to clear arrears--and appropriations to enable us to play our
    part in funding HIPC. It will be very important to the overall success
    of this Initiative that these requests are passed.

    Third, intensifying the search for more effective ways of treating and
            preventing diseases that widely afflict developing countries
            especially HIV/AIDS, malaria and tuberculosis

        The President's fiscal year 2001 budget for the National Institutes
    of Health also includes a significant increase in research critical to
    creating vaccines for deadly diseases that afflict primarily developing
    countries. Funding for AIDS vaccine research will increase
    substantially in fiscal year 2001 and will have more than doubled since
    fiscal year 1997.
        The President has also proposed an additional $100 million for HIV
    prevention and AIDS treatment in Africa, Asia and other developing
    countries. We can make crucial headway against HIV and AIDS by
    providing clear information on prevention strategies and treating
    sexually transmitted diseases. We are calling on other countries to
    join us in committing money for these purposes.

    Fourth, harnessing the scientific and technological skills of the
            private sector in the development of new vaccines and medicines
            for infectious diseases

        While important progress is being made, it is widely recognized
    that the market does not provide sufficient incentive for
    pharmaceutical companies to develop vaccines and medicines for diseases
    that disproportionately affect developing nations. Indeed, the WHO
    estimates that only perhaps 10 percent of the $50-60 billion spent
    worldwide each year on health research is directed towards diseases
    that afflict 90 percent of the world's population.
        To start to address this problem:
      --The President is proposing a new tax credit for sales of vaccines
            against malaria, tuberculosis, HIV/AIDS, or any infectious
            disease that causes over one million deaths annually worldwide.
            Under the proposal, the seller of a qualified vaccine could
            claim a credit equal to 100 percent of the amount paid by a
            qualifying nonprofit organization (such as UNICEF) that
            received a credit allocation from the U.S. Agency for
            International Development (AID). The tax credit would match the
            purchaser's expenditures dollar-for-dollar, thereby doubling
            its purchasing power. For 2002 through 2020, AID could
            designate up to $1 billion of vaccine sales as eligible for the
            credit. This credit would provide a specific and credible
            commitment to purchase vaccines for the targeted diseases once
            they become available. The President is calling on other
            governments to make similar purchase commitments, so that we
            can ensure a future market for these critically needed
            vaccines.
      --In addition, the Administration has expressed its willingness to
            support a tax credit for qualified clinical testing expenses
            for certain vaccines, similar to the existing orphan drug tax
            credit. The credit would be for 30 percent of the expenses for
            human clinical testing of vaccines for the diseases targeted by
            the President's initiative. This credit will provide an
            additional incentive for drug manufacturers to undertake
            research on new vaccines and accelerate their development.

                               CONCLUDING REMARKS

        Mr. Chairman, the sheer magnitude and complexity of the challenge
    of combating infectious diseases, and their resistance to the efforts
    of the past, have a tendency to overwhelm hope with a sense of
    futility. Around the world, infectious diseases including AIDS are
    killing millions of children and weakening and killing tens of millions
    of prime-age adults. The devastating human and economic consequences
    are clear.
        However, in Uganda, Thailand, Senegal and elsewhere. We have now
    seen compelling examples of concrete progress. And we have seen in the
    past well-coordinated global efforts can have an enormous impact. One
    need only consider the eradication of smallpox; the nearly complete
    campaign against polio--and the remarkable global effort to combat
    river blindness (onchocerciasis), which has halted the transmission of
    that disease has been halted in eleven African countries and prevented
    185,000 who were already infected from going blind.
        As I have said, we believe that we now have a historic opportunity
    to make headway against the other killer diseases that today exact such
    a toll on the developing economies. What is crucial is that we act not
    to catalyze a broad international effort to address the problem at its
    root. We look forward to working with the Congress to try to mobilize
    the necessary resources and shape the incentives and strategies that
    can contribute to enduring solutions. Thank you. I would now welcome
    any questions that you might have.

        Senator Leahy. Thank you very much, Mr. Secretary. I am
    sure your statement will be reproduced and shown to a lot of
    other Members.
        On a personal level, you and I both have children. If they
    needed a vaccination, they got it. We take that for granted.
    While the expense to us was not that great, it would be
    insurmountable for many people in other countries, if the
    vaccine was available at all.
        I have mentioned before that my wife is a nurse. She has
    seen the impact and the human suffering that occurs when people
    do not have access to some of the most basic medicines and
    vaccines.
        As you said in your statement, research will lead to new
    vaccines in the coming decades. Developing countries should
    have access to these as well.
        As Senator McConnell, again a man who has been very, very
    supportive on these issues, has said, our committee does not
    have jurisdiction over the tax credit proposal. The Finance
    Committee does. But I would like to ask you a couple questions
    about it just the same.
        This would enable the seller of a qualified vaccine to
    claim a tax credit equal to 100 percent of the amount paid by a
    qualifying organization, up to a total of $1 billion over 10
    years.
        Some of these qualifying organizations are going to be
    governments. As you know from experience, some governments are
    slow or unable to pay this kind of money. Are we going to have
    a situation where the United States will finance the tax credit
    on one end and, through foreign aid, the purchase on the other
    end?
        Secretary Summers. It is a fair and important question,
    Senator Leahy.
        The motivation here is to create more of a market. The
    advantage of this approach is that a successful effort depends
    upon the creation of a market. No doubt in some cases
    governments will purchase vaccines with funds that have come in
    part from foreign aid, but the difficulty traditionally has
    been that what always happens is that there is a strong
    incentive to push the price down as far as possible and to just
    simply pay the marginal cost. That is not a very attractive
    business for anybody to go into. So if we are going to succeed
    in creating a market, we have to find some way of supplementing
    the funds that will be provided, whether by international
    agencies or by the country's own resources.
        So, this market approach functions as a kind of indirect
    research incentive, but because it is a research incentive that
    you only get if you win, if you successfully develop the
    product, I think much of the best thinking in this area
    believes that it is likely to result in more efficient
    allocation of resources because it is creating a larger
    incentive for the production of the right products.
        Senator Leahy. Is that the way the vaccine manufacturers
    have reacted to it? Do they feel this program would give them
    the incentives?
        Secretary Summers. I hesitate to speak for the vaccine
    manufacturers, but my impression from discussions is that they
    believe that it is central that there be an effective market
    for their product if they are to make substantial investments
    in the development programs. They believe this would be quite
    constructive in the development of a market. They believe also
    that better delivery systems within developing countries are
    essential if there is to be an effective market.
        That is why we have tried to lay out a multi-faceted
    approach that begins by saying, look, this can work. We have
    vaccines right now. We are going to do some things to more
    effectively deliver the vaccines we have right now. We are
    going to provide more funding to purchase them and work with
    the foreign aid community on the delivery systems so you do not
    get, for example, 43 percent of refrigeration-necessary
    vaccines sitting without refrigeration until they are past the
    date when they can be safely used. We have to clear up those
    kinds of problems, but then even if you have the best delivery
    system in the world, if there is no market where you can cover
    your fixed costs, there is going to be much less research than
    there otherwise would be.
        Senator Leahy. We use the Leahy War Victims Fund primarily
    for victims of land mines in many places around the world, and
    I have visited several of them. Even in countries where
    medicines are available, people may be unable to get them
    because there is a civil war or there are land mines in the
    ground. Mozambique is facing this problem. After all the
    floods, mines that were marked are suddenly floating in the
    water. In addition, just finding people who have basic medical
    training can be difficult.
        Again, we could walk into virtually any hospital in this
    country for treatment and be helped by people with the
    necessary expertise.
        I have one other question.
        One goal of the HIPC debt initiative, which as you know I
    strongly support, is to channel additional funds to social
    needs like health. The administration has considered making
    vaccination rates a performance target for debt forgiveness.
    What does that mean?
        Secretary Summers. It means that your vaccination rate
    would be one of the things that would be monitored and that,
    under your debt reduction program, before the subsequent
    tranches of assistance were released or before the final stages
    of debt relief were completed, you would have to show that
    there had been satisfactory performance in the vaccination
    area. So, it is basically trying to bring this area within the
    ambit of conditionality.
        Senator Leahy. We were talking about debt forgiveness last
    week when you were here. A lot of poor countries are borrowing
    money to pay their debts. If you forgive the debt it does not
    mean there is suddenly a huge bundle of cash available for
    other things. In some instances, countries are still going to
    have to borrow money for health care and other costs.
        If debt forgiveness is partly conditioned on what a country
    does to improve the health of its people, what kind of
    monitoring will be needed to make sure that vaccines are
    available and people have access to them?
        Secretary Summers. Let me see if I can respond to two
    aspects of your question.
        Senator Leahy. I realize there are several questions.
        Secretary Summers. You have raised what I think are
    profoundly important issues in terms of doing this right,
    Senator Leahy.
        First, with respect to the first part of your question
    which went to the availability of adequate finance, you are
    clearly correct that relieving debt only makes available
    resources for health or anything else if the debt payments are
    actually being made. In fact, if one looks at most of these
    countries, they are making their debt payments to the
    international financial institutions. That is why the so-called
    HIPC Trust Fund, which makes possible the relief of payments to
    the international financial institutions, is such a crucial
    part of all of this. Relief of that debt does make available
    real funding that can go for real health care or real education
    expenses or what have you.
        Second, you are absolutely right that this will require
    greater efforts at monitoring things that traditionally have
    been monitored poorly or have been monitored with a lag time.
        I once met a management consultant who had a slogan that
    has really stuck with me. It captures something that is the
    truth. He said, what you count counts, and over time we are all
    driven by what is measured and by what score can be kept.
        There is no question that as we work with NGOs to a much
    greater extent in development, as we work on popular
    participation, we are going to have to find ways of not just
    measuring bank capitalizations, but also measuring immunization
    rates and those things with shorter lag times than has been the
    case in the past.
        I think in the social area, as well as in the financial
    area, transparency is a very large value. If one finds that
    democratic governments are having their performance in doing
    vaccinations monitored, measured and made clear, and the
    governor of one province can be compared with the governor of
    another province, if the progress that elected officials make
    in bringing about increased immunization is something that
    everybody can see, the very act of doing the monitoring will
    itself be a constructive force in leading to increased
    immunization rates. That constructive influence can be very
    much reinforced by the conditionality associated with our debt
    relief programs.
        Senator Leahy. As an elected official, I understand your
    analogy very, very well.
        Mr. Secretary, I appreciate you being here, but more than
    just being here, I appreciate the personal attention you have
    given to this problem. I applaud you for it and I admire you
    for it. Thank you very, very much.
        Secretary Summers. Thank you very much.

                           NONDEPARTMENTAL WITNESSES

    STATEMENT OF GRO HARLEM BRUNDTLAND, M.D., M.P.H., DIRECTOR-GENERAL,
                WORLD HEALTH ORGANIZATION; CHAIR, GLOBAL ALLIANCE ON
                VACCINES AND IMMUNIZATION

        Senator Leahy. Our next witness will be Dr. Gro Brundtland.
    Dr. Brundtland, it is a great pleasure having you here. I
    remember our earlier discussions. I appreciate the effort you
    have made to come here with all of the other things you have to
    do.
        As a leader in the field of global health, you have done a
    great deal to focus the world's attention on these issues. Your
    work as Director-General of the World Health Organization and
    the Chair of the Global Alliance for Vaccines and Immunization,
    is very important.
        I do not think it is an overstatement, Doctor, to say that
    you have one of the most important jobs in the world today. The
    world is very fortunate to have you, one of the most qualified
    people in the world to do the job. I am delighted that you are
    willing to devote your enormous energy to this effort.
        Very few people, including those of us in elected or
    appointed office, have the opportunity at the end of life to
    say we accomplished a great deal for humanity. You will have
    that opportunity.
        So, Doctor, the microphone is yours.
        Dr. Brundtland. Thank you very much, Senator Leahy. I am
    sure that in that last sentence you also have a good chance to
    be making a difference, and I am glad to be here in this very
    important context with people who try to make a difference with
    significance to global health.
        Now, I want to state from the outset that I think we need
    now to review the ways in which ill health precipitates and
    perpetuates poverty. I will argue that effective health care
    can yield considerable developmental benefits for poor people
    and describe some of the new partnerships that can turn hope
    into reality and thereby concentrating on the Global Alliance
    on Vaccines and Immunizations, GAVI.
        Because our new century is marked by a growing gap between
    what has been achieved through research and common efforts,
    which could be used, and what in fact is not achieved, although
    we know what can be done. So, the 20th century saw some people
    have great improvements in their health, but more than a
    billion human beings are still experiencing these enormous
    levels of suffering, hardship, and even early death as a result
    of illness. That unsatisfactory situation is partly a result of
    old-fashioned approaches to human development.
        Not long ago, spending on personal well-being such as
    people's health and education had to wait. Good health was a
    luxury, only to be achieved when countries developed a certain
    economic level, and then a certain economic strength that made
    it possible to put efforts into health and education.
        Now, I think that is a very simplistic way of thinking and,
    at worst, it is plain wrong because if poor people and poor
    nations are going to prosper, they certainly have to enjoy
    better health. Recent evidence confirms to us that illness
    keeps poor people poor. It prevents them from prospering and it
    undermines human security. So, health improvements increase
    educational attainment and stimulate economic development. For
    the poorest 1.5 billion people in the world, better health is
    critical to prosperity not only in humanitarian terms.
        So, our fight against poverty has in many ways failed.
    Differences are spreading inside and between countries, and it
    looms as a threat to people, to the environment not only for
    the poor but for all of us.
        Many parliaments around the world, not only the U.S.
    Congress, are growing increasingly impatient, questioning
    whether money is being spent wisely and effectively in a way
    that reduces poverty. They want to see results, results that
    are concrete and measurable.
        And these are the facts. There are a few conditions that
    cause the majority of deaths and illness among poor people. For
    the world as a whole, as you mentioned in the introduction
    here, the reasons for death and disability are cardiovascular
    disease, it is diabetes, mental illness, and smoking tobacco.
    But when you focus on low-income countries, they still, in
    addition to that, suffer a huge additional threat from deaths
    due to HIV/AIDS, to tuberculosis, to malaria, to diarrhea, and
    respiratory infections, measles, and problems connected with
    childbirth.
        But it does not have to be like this. Our collective
    experience suggests that when poor people are able to access
    essential drugs, vaccines, chemically treated mosquito bed
    nets, and trained attendants during childbirth, then there are
    marked reductions in death rates, disabilities, and time lost
    to ill health.
        So, we have in our hands concrete, results-oriented, and
    measurable interventions that dramatically reduce the excess
    burden of disease and thereby, in fact, reduce poverty itself.
        We have the means to stop the spread and to manage, reduce
    the damage of tuberculosis. We have the methods to dramatically
    reduce the effects of malaria on African populations and, by
    that, increase their economic potential. We have the ways of
    limiting the already devastating damage caused by HIV/AIDS.
        But as we know, funds available in most poor countries from
    government budgets and from development assistance, as you have
    shown on the board here, often amount to less than $10 per
    person each year, and systems to see that poor people get
    access are not functioning adequately.
        So, I see at least five reasons for concerted action to
    tackle the diseases of the poor.
        First of all, we do have a window of opportunity now. If we
    delay, the agents of infectious diseases will become more
    resistant to commonly used medications.
        Second, we do know what is needed.
        Third, we know that poor people can benefit if health
    systems focus on their interests and needs.
        Fourth, we have now learnt even better the importance of
    working in partnerships with the international organizations,
    foundations, and private entities, governments, and donor
    agencies. The partners' power lies in their shared commitment
    to common goals.
        And there are political reasons. Good health is moving
    towards the center of debates about both economic development
    and national security. Leaders of developing countries are
    committing themselves to improvements in the health of their
    people, particularly in relation to HIV/AIDS and malaria.
        Health is of concern to finance ministers, as we just
    heard, the World Bank and the IMF, as they discuss modalities
    for debt relief. It is of concern to the UN Security Council as
    they discuss HIV/AIDS in Africa.
        And WHO is ready, more than ever before I think, to help
    countries respond to the challenge. We have organized ourselves
    so that we are better able to recognize priorities and to
    respond to them. We can improve international health efforts by
    catalyzing effective responses and building on what is already
    being done.
        Now, the most cost effective health intervention of all is
    childhood immunization. For only $17 per child, we can provide
    lifetime protection against five historical scourges: polio,
    diphtheria, whooping cough, pertussis, measles, and tetanus.
    For only $10 more than that, we can bring additional life-
    saving vaccines to the children that need them.
        Nevertheless, 1 in 4 newborn children do not receive a full
    course of basic vaccines, and many more do not receive the
    vaccines that are provided for children in the United States.
    Of the 30 million that do not, 3 million die each year from
    vaccine preventable diseases. Of course, this is not
    acceptable. We need to reach each and every child with the
    vaccines that are needed, including the new ones that are
    starting to become available.
        That is why the Global Alliance for Vaccines and
    Immunization has been formed, and I think GAVI is special
    because it brings public and private sector partnerships
    together in a worldwide network. It is a true public/private
    partnership based on the shared responsibility for the world's
    children and, indeed, where all children receive a basic chance
    of survival and health. It draws on the success of child
    survival and immunization programs which have been backed for
    many years by the U.S. Congress and particularly by this
    committee. It seeks to build on the achievements of the past
    and to offer new hope for the future.
        The same is the situation with the Roll Back Malaria, Stop
    TB, and the HIV/AIDS in Africa. Those partnerships have similar
    features as the one we have created with GAVI.
        We are learning from experience to bring these ventures
    together at an international level and, even more importantly,
    at a country level because that is where it needs to function
    with the basic infrastructure that is needed, which you have
    referred to, the cold chain, the efficiency, and where we need
    to measure performance, which is built into the GAVI process
    now, we will spend resources together, agreeing how best to use
    it and we will monitor performance as we move on to the next
    year of giving financing to the countries that are involved in
    improving their immunization programs.
        So, we have the knowledge. We have the opportunity. And I
    believe that globally we can find the resources to really move
    forward.
        Thank you, Senator Leahy.
        [The statement follows:]

                  Prepared Statement of Gro Harlem Brundtland

        Mr. Chairman, Senator Leahy, Distinguished Members of the
    Committee, I appreciate this opportunity to meet today with a group of
    legislators who have made a significant difference to world health.
        I propose to review ways in which ill-health precipitates and
    perpetuates poverty. I will argue that effective health care can yield
    substantial developmental benefits for poor people. I will then
    describe some of the new partnerships that turn hope into reality,
    concentrating on the Global Alliance for Vaccines and Immunizations, or
    GAVI.
        Our new millennium is marked by a growing gap between what has been
    achieved and what can be achieved. The 20th century saw dramatic
    improvements in some people's health. However, more than a billion
    human beings still experience enormous levels of suffering, hardship
    and early death as a result of illness.
        This unsatisfactory situation is a result of old-fashioned
    approaches to human development.
        Not long ago, spending on personal well-being, such as people's
    health and education, had to wait. Good health was a luxury, only to be
    achieved when countries developed a particular level of physical
    infrastructure and established a certain economic strength.
        Our experiences have shown that such thinking was at best
    simplistic, and at worst plain wrong.
        If poor people--and poor nations--are to prosper, they have to
    enjoy better health. Recent evidence confirms that illness keeps poor
    people poor, prevents them from prospering and undermines human
    security. Health improvements increase educational attainment and
    stimulate economic development. For the poorest 1.5 billion people in
    our world, better health is critical to prosperity.
        What relevance do these observations have to the United States? The
    relevance lies in what I will describe as ``enlightened self
    interest''.
        We all fear of the spread of disease. In the modern world, bacteria
    and viruses travel almost as fast as money. With globalisation, a
    single microbial sea washes all of humankind. There are no health
    sanctuaries.
        The separation between domestic and international health problems
    is no longer useful, as people and goods travel across continents.
        In the words of Benjamin Franklin: ``We must all hang together, or,
    assuredly, we shall all hang separately.''
        But, Mr. Chairman, it is not only fear which would spur us into
    action. There are also tangible incentives.
        There is the obvious argument that healthier populations abroad
    would make better markets for U.S. goods and services. Increasingly in
    a global economy, one region's poverty is another region's opportunity
    loss.
        In addition, health care itself has become a vast global industry,
    absorbing in 1994 over 9 percent of the world product, or 2.3 trillion
    dollars. I hardly need to remind an American audience about the
    centrality of health care to the economy.
        Yet, so far the war on poverty has failed. Differences are
    spreading inside countries and between countries. This looms as a
    threat to people and to the environment--not only for the poor--but for
    all of us.
        Many parliaments around the world are growing impatient questioning
    whether money is being spend wisely and effectively in a way that
    reduces poverty. They want to see results; results that are concrete
    and measurable.
        These are the facts: a few conditions cause the majority of deaths
    and severe illness among poor people. For the world as a whole, the
    leading causes for death and disability are cardiovascular disease,
    diabetes, mental illness and smoking tobacco. However, people in low-
    income countries still suffer a huge additional threat from deaths due
    to HIV/AIDS, tuberculosis, malaria, diarrhea, respiratory infections,
    measles and childbirth problems.
        It does not have to be like this.
        Our collective experience suggests that where poor people are able
    to access essential drugs, vaccines, chemically-treated mosquito
    netting and trained attendants during childbirth, there are marked
    reductions in their death rates, disability and time lost due to ill-
    health.
        Within the field of health we have--in our hands--concrete, result-
    oriented, and measurable interventions that dramatically reduce the
    excess burden of disease among the poor and therefore reduce poverty
    itself.
        We have the means to stop the spread and reduce the damage of
    tuberculosis. We have the methods and technology to drastically reduce
    the effect of malaria on African populations--and, by extension,
    increase their economic potential. We have ways of limiting the already
    devastating damage caused by HIV/AIDS.
        However, most of the people in need cannot access the basic health
    care they need.
        In most poor countries, funds available for health care--from
    government budgets and development assistance--often amount to less
    than $10 per person each year. In too many countries, systems for
    ensuring that poor people can get the help they need do not function
    adequately.
        I can see at least five good reasons for us working together on
    concerted action to tackle the diseases of the poor.
        First of all: we have a window of opportunity. If we delay, the
    agents of infectious disease will become more resistant to commonly
    used medications.
        Second: we know what is needed. Thanks to pioneering research--much
    of it from U.S.-linked groups, we have good evidence about
    interventions which must reach poor people if they are to become
    healthier and prosper.
        Third: we know that poor people can benefit if health systems focus
    on their interests and needs, and
        Fourth: we have learnt the importance of working in partnerships--
    with the international organizations, foundations and private entities,
    governments, and donor agencies. The partners' power lies in their
    shared commitment to a common goal and strategy. Within this context,
    each partner works to its comparative advantage--maintaining its
    sovereignty and autonomy where relevant.
        There are also political reasons for acting now. Good health is
    moving towards the center of debates about both economic development
    and national security. Leaders of developing countries are committing
    themselves to improvements in the health of their people particularly
    in relation to HIV/AIDS and malaria.
        Health is of concern to finance ministers, the World Bank and the
    IMF as they discuss modalities for debt relief. It is of concern to the
    U.N. Security Council as it discusses HIV/AIDS in Africa. It is a key
    component of human security as the basis of foreign policy in a growing
    number of states.
        WHO is ready to help countries respond to the challenge of ill
    health and poverty. We have organized ourselves so that we are better
    able to recognize priorities and respond to them. We can improve the
    impact of international health efforts by catalyzing effective
    responses, and building on what others are doing already.
        Mr. Chairman, the most cost-effective health intervention of them
    all is childhood immunization. For only U.S. $17 per child, we can
    provide lifetime protection against five historical scourges--polio,
    diphtheria, pertussis, measles and tetanus. For only ten dollars more
    we can bring additional life-saving vaccines to the children that need
    them.
        Take polio. Recently, in India, I watched as 30 children with knee
    braces lit one candle each to show sympathy with the 30 children who
    contract polio each day around the world. Five years ago, we would have
    needed one thousand children to do the same job. Hopefully, by this
    time next year, there will be no more candles to light.
        Our polio eradication effort is on the right track. The world is
    likely to be certified as polio free by 2005. But it is important to
    stress that we are entering a period of more--not less--intense
    vaccination effort. In the next few months and years, we must reach the
    last, hardest-to-reach places while continuing to vaccinate all the
    children of the world until we are confident that we can certify that
    there not a single remaining case of polio. If funding for polio
    eradication dwindles in these final, critical years, the fruits of our
    whole twelve-year campaign may be postponed or endangered.
        Nevertheless, each year, one in four newborn children does not
    receive a full course of basic vaccines. And many more do not receive
    the vaccines that are provided for children in the United States. Of
    these 30 million, three million die each year from vaccine preventable
    diseases.
        This is not acceptable.
        We need to kick-start a campaign to reach each and every child with
    the vaccines that are needed, including the new ones that are starting
    to come available. That is why the Global Alliance for Vaccines and
    Immunization has been formed.
        GAVI is special because it brings public and private sector
    partners together in a world-wide network.
        It is a true public--private partnership. It is based on a shared
    responsibility for a world where all children receive a basic chance of
    survival and health. It draws on the success of child survival and
    immunization programs, backed for many years by Congress, and
    particularly by this Committee,. It seeks to build on achievements of
    the past, and offer new hope for the future. The Roll Back Malaria,
    Stop TB and HIV/Aids in Africa partnerships have similar features.
        We need to learn from experience and bring these ventures together
    at an international level--and even more importantly--in individual
    countries.
        Distinguished Committee members, we have the knowledge. We have the
    opportunity. I believe that globally, we can find the resources. The
    time to act is now. It can be done.
        Thank you.

        Senator Leahy. Thank you so much, Doctor.
        Obviously, with me you are preaching to the converted on so
    many of these issues. The purpose of this hearing, of course,
    is to make sure that other Members of Congress and the public
    hear this.
        You will recognize the charts we put up because they are
    from WHO's booklet ``Removing Obstacles to Healthy
    Development''. I would urge anybody who is interested to get a
    copy of this publication.
        The charts give you some idea of what we face, and this is
    only infectious diseases. They do not include premature deaths
    from smoking or other causes. But if you focus just on
    infectious diseases, there are many challenges. Strengthening
    surveillance. Addressing the causes of drug resistance, which
    is becoming a major problem around the world. Developing new
    vaccines and drugs. Building delivery systems.
        I recall in one country where, when my wife asked why there
    was a child in the hospital suffering from polio--they said,
    they had the vaccine, but the child was in a heavily mined area
    and they could not get the vaccine to the child. The child was
    not crippled by the land mines, but was crippled by polio. So
    we have many challenges. Let me begin with this question.
        What is the degree of cooperation between WHO and the
    United States on global health, and if there are areas where it
    should be better, how can we make it better? Please be candid,
    as you always are.
        Dr. Brundtland. Well, first of all, obviously your major
    institutions, not only the efforts in research which, to a
    great extent, comes from or is linked to what happens in the
    United States as a strong economy and a country with a strong
    research background and investment in that is essential in
    itself, more broadly speaking. Then your big institutions like
    NIH, CDC are essential to the global health effort. The link,
    in the case of polio, as you mentioned, with CDC as a major
    partner, together with UNICEF, WHO, World Bank, and others, to
    do that major effort is absolutely essential.
        We still have a lack of funding, by the way, for the
    eradication effort for polio. We are struggling still with
    having the sufficient--we lack about $300 million, in fact, for
    the next couple of years, 3 years, in order to do that
    campaign, which has to be--and I think we can reach the target.
    It will complete ridding the world of polio completely, having
    been surveilled and checked, by 2005. But this year is an
    important one--this year and next--because the target is 2000.
        You mentioned your wife seeing the polio child. Now, I was
    in India a few months ago and we had a polio event with Rotary
    and others to really now raise the awareness of the necessity
    to get up the efforts in India, Pakistan, and other countries
    where there is still quite a lot of polio virus active. There
    were 30 children with polio in this big meeting, illustrating
    that 30 children that day would be--you know, solidarity with
    the 30 children--that's still in this year 2000--will be taken
    by polio and with disabilities coming from it. But in 1988
    those would have been 1,000 children. So, what we have already
    done from 1988 to 2000 has made a major difference with the
    help of U.S. institutions. But we have to get that 30 down to
    0. So, that is a major collaborative alliance I think to
    mobilize sufficient resources.
        But the other issue, this is the support to the WHO regular
    budget. Now, I know this committee is not directly in that
    area, but obviously the United States plays a key role in the
    total picture of the specialized agency, WHO, what our regular
    budget gets to. Many of the other efforts are efforts which are
    extra-budgetary and which we are very grateful for and where
    you have a great influence both on what goes to NIH, what goes
    to CDC, and the support that we get from public debate and from
    the minister of health in the United States and all that.
        I am being frank, but it is true that you do play an
    important role both in this committee and in your institutions
    and obviously USAID which is our main partner in much of this
    work where we work together at the country level also in
    dealing with development efforts in the health field.
        Senator Leahy. You mentioned polio and the great strides
    that have been made toward eradication. But polio should be
    like smallpox. It should already be gone.
        I turned 60 a couple weeks ago, a matter of great angst on
    my part.
        Well, I thought I was not going to live through it, but
    with great help from my family, and some very, very irreverent
    help, let me tell you, I made it.
        I remember as a child, all of a sudden all the public
    swimming pools closing because there was a threat of polio. I
    remember seeing pictures of children in iron lungs. In grocery
    stores there were little cardboard iron lungs that you would
    put your coins in to help find a cure.
        When I mention this to my own children, it is hard for them
    to understand because polio is essentially unheard of in the
    United States now. Think what we have saved in health costs and
    what we gain when a child goes on to become a scientist, a
    teacher, a great writer, or an artist.
        WHO recently reported on the increased incidence of drug
    resistance, including in some western European countries--there
    are an increasing number of reports of people with TB and drug-
    resistant TB in the United States. I wonder what we might have
    saved if we had put money into drug-resistant TB research 10,
    15 years ago as compared to the up to a quarter of a million
    dollars it might cost to help cure somebody with drug-resistant
    TB now.
        Malaria afflicts 500 million people each year. The amount
    we spend on malaria research is far less than we spend on
    diseases that are common in wealthy nations. I suspect we spend
    a lot more money on cold and sinus problems here in the United
    States than we do on malaria.
        How do we make the countries that do not have diseases like
    malaria realize that they have a responsibility to help those
    that do?
        Dr. Brundtland. Yes. Well, you are making an effort,
    Senator Leahy, to make that happen.
        But I mean, generally that is the point, and if you look at
    the TB example, the resistance to the drugs has developed
    gradually, and as we have not treated with the drugs that were
    effective, treated effectively the people who got tuberculosis,
    because the health systems were not in place and the technology
    was not used, the disease was left spreading in the former
    Soviet Union and also in poor countries of Africa. And as HIV
    came, it became a major problem because the immunity to
    infection was so undermined. So, what we did not do 20 years
    and 10 years ago has led to higher costs to make it happen now
    because we did not use the window of opportunity to get that
    disease down to a very low level which we could have done at
    earlier stages.
        Now we have that challenge of trying really to make a major
    effort to treat people with TB because it is the only way to
    stop spreading the infection, as we do not have an effective
    vaccine. That again illustrates it is a question for all of us
    because any one of us can get TB on an airplane or in any other
    situation and lead to an increased insecurity with regard to a
    disease that we thought was gone, more or less, because it is a
    global challenge.
        Now, with malaria, it was also one where we had great
    successes 30 years ago in getting rid of it in many places. But
    in the continent of Africa and also in other places around the
    world, it certainly was not eliminated as a problem, and it has
    come back with greater vengeance and as climate changes and
    other environmental changes have also added to the problem and
    the efficiency of the medications have gone down. As you said,
    the investment in new treatments have not been followed because
    of the market situation that there are poor people who have
    malaria and the industry has not invested in their research
    institution, not sufficiently.
        So, one is trying to address it by the Roll Back Malaria,
    by the Medicines for Malaria Venture where we work with private
    industry, with also public funding, as Larry Summers was
    talking about in principal terms here, to try to bridge the gap
    so that we can get new research into this area. Of course, NIH
    is making a major effort also both on that aspect and on
    getting a vaccine both for HIV/AIDS and malaria, and that is
    happening also, of course, in other parts of the world as we
    need to be moving ahead on these major issues where there is a
    market failure, as Larry Summers was saying.
        Senator Leahy. Doctor, WHO recently reported that two-
    thirds of the world's countries are failing to supply safe
    blood. This adds to the spread of hepatitis, HIV/AIDS, and
    other diseases. Unfortunately, some of these countries only
    spend $3 to $5 per person per year on health care to begin
    with. Is there any way they can possibly do the blood typing
    and the cross matching that is necessary? Sometimes we overlook
    the fact that hepatitis can be as deadly as AIDS or any other
    disease.
        Dr. Brundtland. Yes. And in fact, 5 to 10 percent of the
    HIV/AIDS cases we believe are spread through unsafe blood. When
    you look at the number of HIV-infected people, that amounts to
    a considerable number of people having been infected by blood
    and by unsafe blood systems.
        In addition comes the hepatitis B and C, which of course
    are chronic and even deadly diseases which lead to serious
    consequences.
        So, that is why on World Health Day we, together with the
    International Federation of Red Cross and Red Crescent
    Societies, which are active in many, many countries around the
    world through their National Red Cross Societies and in some
    way involved in the systems of blood transfusion services, are
    trying in the next 5 years to really increase the awareness and
    the investment at country level in making more safe blood
    systems because there are, as you said, only one-third of our
    member states have a fully functioning, high quality blood
    transfusion system in place. One of the key aspects is really
    voluntary donors that you have sufficient availability of
    people who are willing to give the life support that blood is
    and that there are people who can be tested and who are not in
    risk groups at the sufficient level. In many countries, that is
    not in place, which is an essential quality criteria.
        Senator Leahy. The problems are not easy, are they?
        Dr. Brundtland. No, and they are quite many.
        Senator Leahy. They are, indeed.
        Doctor, I appreciate your being here. I have a couple other
    technical questions, but I will just send them on to you.
        Dr. Brundtland. Thank you. We will, indeed, respond.
        Senator Leahy. Thank you very much for coming.
        Dr. Brundtland. Thank you very much.

    STATEMENT OF WILLIAM FOEGE, M.D., M.P.H., PROFESSOR OF
                INTERNATIONAL HEALTH, EMORY UNIVERSITY; AND
                ADVISOR, BILL AND MELINDA GATES FOUNDATION

        Senator Leahy. On the final panel, we have Dr. William
    Foege, Dr. Nils Daulaire, and Dr. Adel Mahmoud. Dr. Foege is
    known worldwide for his key role in the campaign to eradicate
    smallpox. I wish we could have similar success, Doctor, with
    some of the other diseases we face. He is a former Director of
    the Centers for Disease Control and Prevention and currently
    serves as the senior health advisor to the Bill and Melinda
    Gates Foundation.
        I know you had to adjust your schedule and I know, Doctor,
    you may have to leave, so we are going to call on you first. I
    just want to introduce the other two members of the panel.
        Dr. Nils Daulaire is, on top of all his other
    qualifications, a close personal friend and a Vermonter. Our
    State is so small that if you are a Vermonter, you tend to be a
    friend anyway.
        He is formerly the Senior Health Advisor to USAID. He is
    now President of the Global Health Council, which has become an
    extraordinarily effective advocate for global health. I
    especially appreciate, Nils, how you bring people together to
    challenge governments and educate the public. I note that both
    of the co-panelists are members of the Global Health Council's
    board of directors.
        Dr. Mahmoud is the President of Merck Vaccines. Three years
    ago, his predecessor, Dr. Gordon Douglas, testified before the
    subcommittee. Two years ago we heard from Dr. Gail Cassell of
    the Eli Lilly Company. We talk a lot about what the
    Government's role is, but the private sector is also
    extraordinarily important. GAVI is an example of the approach
    we need, so the pharmaceutical companies can recoup their costs
    when they invest in vaccines and new drugs, especially if they
    are going to be used in countries where nobody is going to be
    able to pay for them.
        So, Dr. Foege, let's start with you. Again, I thank you for
    being here.
        Dr. Foege. Thank you, Senator, and thanks for allowing me
    to go first. But now that I have heard the beginning, I want to
    stay and hear the end, so I am going to stay right here.
        I have some testimony, and with your permission, I will put
    it in the record and make only six points.
        No. 1, vaccines are truly scientific marvels. Resistance
    does not develop. They have to be developed only once in the
    history of the world. They are easy to use. They are relatively
    inexpensive. Around the world, vaccines provide the foundation
    for public health programs. If a country cannot deliver
    vaccines, it probably cannot deliver much else in public
    health. So, this becomes the entre.
        No. 2, they have great power. Fifteen years ago the single
    most lethal agent in the world was the measles virus. It killed
    3 million children. That figure is down to something perhaps
    below a million. It shows the power of that vaccine, but it
    also shows our lack of power in getting it to everyone that
    needs it. You have already mentioned smallpox eradication.
        You asked the question why we cannot do that with polio. I
    well remember the day in 1955. It was the 10th anniversary of
    FDR's death when there was a press conference at the University
    of Michigan announcing that the Salk vaccine protected
    children. It is hard for us to remember what that was like, but
    the next day spontaneously there were signs in store windows,
    thank you, Dr. Salk. And 45 years later, we have not finished
    the job.
        No. 3, because vaccines can provide primary prevention, it
    means that you do not need hospitals and clinics to treat these
    diseases. The food that children take in can be used for growth
    rather than to fight a disease or to support fever. They
    preserve health and they help in development. The World Bank
    today--and that is where my conflict is--is having a meeting on
    how the investment in children, in their health, improves
    development. So, these are primary prevention agents.
        Richard Feinman, the great physicist, once said, it takes
    very little energy to scramble an egg, and science is totally
    incapable of reversing that simple process.
        It takes very little energy for the measles virus to
    scramble a brain. It takes very little energy for the polio
    virus to scramble a neuron and lead to crippling, and we cannot
    reverse that but we can prevent it.
        No. 4. As you have heard repeatedly, there are great
    inequities and if you are poor in a poor country, your chance
    of being protected against hepatitis B is zero.
        No. 5. There never has been a better opportunity to redress
    the inequities, to exploit the new vaccines, to encourage
    vaccines for tuberculosis, malaria, for AIDS. The science, the
    management, the desire all come together, and now with GAVI,
    chaired by Dr. Brundtland, we have a chance to make a coalition
    that shares an objective, and with such a coalition you can
    actually get transparency. Secretary Summers talked about what
    you count counts. Well, the American Management Association has
    a slogan, you get what you inspect, not what you expect. And
    that is what GAVI has a chance to do, to have transparency, and
    to inspect to get synergy and equity.
        You asked Dr. Brundtland how does the United States support
    WHO, and she had to be very diplomatic. I used to be a
    Government employee and had to be very diplomatic also. Now I
    am not.
        Senator Leahy. What a sense of release. Go ahead.
        Dr. Foege. Over the years we have simply not given WHO the
    support it needs. We are always trying to figure out how to
    keep its budget down and we sometimes do not pay our dues. They
    cannot count on us.
        Years ago I wrote an editorial about this inability of the
    United States to pay its dues. We save more because of smallpox
    eradication each year in this country than our dues to WHO and
    we still do not pay them sometimes. And I, in the editorial,
    quoted Dolly Parton who said, you would be surprised how much
    it costs to look this cheap.
        Senator Leahy. I will be sure to tell Ms. Parton she was
    part of the hearing this morning.
        Dr. Foege. We have a chance to recapture the spirit of the
    bipartisan Marshall Plan and the Point Four Program of 50 years
    ago, and I hope we do it.
        No. 6, finally. Dr. Brundtland mentioned windows of
    opportunity. Thirty-five years ago, the world argued about
    whether we should spend the money for smallpox eradication.
    USAID funded CDC to see what it would take to eliminate
    smallpox from West and Central Africa within 5 years. CDC did
    it in 3 years and 5 months and under budget. That strategy was
    then used around the world and there has not been a case for
    over 20 years.
        Why do I say this? Because in the age of AIDS in Africa, we
    do not think we could use smallpox vaccine on a mass basis, a
    window of opportunity that would have been missed if we had not
    done that 35 years ago.
        Senator Leahy. Could not use it because of the immune
    systems breaking down?
        Dr. Foege. That is right. So, when you think of the fact
    that the last case was in the late 1970's, in 1978, and that
    AIDS came on the scene in 1981, it is a sobering reminder that
    we simply have to seize the moment.
        Thank you.
        [The statement follows:]

                      Prepared Statement of William Foege

                                  THE PROBLEM

        Only 15 years ago, the single most lethal agent in the world was
    the measles virus, killing some 3 million children a year. The use of
    measles vaccine has reduced that toll by about \2/3\, demonstrating the
    power and potential of vaccines. On the other hand, the promise has
    obviously been unrealized when a million children still die each year
    because of a disease like measles that could easily be prevented by an
    inexpensive vaccine.
        The world loses a million children a month because of simple
    disease problems, and a quarter of them could be saved by the use of
    vaccines already available. The world made great progress from 1985 to
    1990, increasing global coverage for six basic vaccines from about 15
    percent to a high of 80 percent. Since then, the gap between potential
    lives saved and actual lives saved, has widened for two reasons. The
    immunization infrastructure has weakened with falling immunization
    rates, especially in Africa. Second, there has been an increase in the
    number of effective vaccines available, but this new generation of
    vaccines has been unavailable to poor countries.

                                  THE SCIENCE

        The 20th century saw a remarkable explosion of medical science.
    Some is expensive and difficult to use widely. Vaccines on the other
    hand are relatively inexpensive and easy to use anyplace. While many
    diseases, such as heart disease, cancer, malaria and tuberculosis,
    require a multi-factorial approach, for many of the vaccine preventable
    diseases the vaccine is a sufficient tool, unto itself, to prevent
    suffering and death. Unlike antibiotics, microorganisms, to date, have
    not developed resistance to vaccines. The vaccine has to be perfected
    only once in the history of the world. In addition, a single encounter
    with the vaccine, or a series of encounters, will provide life-long
    immunity. And often, as in the case of smallpox, polio and measles, the
    genius of mass production at pharmaceutical companies has made the
    vaccine available for pennies, rather than dollars, for each child.
    Vaccines are remarkable and powerful inventions; they are also
    underutilized. Even though underused, immunization programs provide the
    backbone of public health programs around the world. Immunization is
    frequently the only asset that a program has to offer. Immunization
    requires the development of all components of public health, from
    surveillance, to a logistics system, health education, delivery
    programs, and evaluation. Therefore, immunization programs provide
    valuable experience for the development of other public health
    programs. Finally, it should be noted that if the public health program
    of a country cannot deliver vaccines it is unlikely to be able to
    deliver other benefits.

                                    RESULTS

        In 1966, the World Health Assembly resolved to use the gift of
    smallpox vaccine, to rid the world of the disease forever. A
    coordinated effort, with strong leadership from the United States, led
    to the last case of smallpox 11 years later. It is now over 20 years
    since that last case, completing the prediction of Thomas Jefferson, in
    1806, in a letter to Edward Jenner. Jefferson wrote, ``Future
    generations will know by history only that this loathsome disease has
    existed.'' The United States investment in smallpox eradication is
    recovered by this country every 3 months and our annual savings exceed
    our dues to the World Health Organization. This would be true even if
    the United States consistently honored its obligation to pay its dues!
    We are pleased by the elimination of suffering and death that has
    resulted, but it should also be apparent that disease control programs
    represent a strong investment opportunity. The monetary returns exceed
    the investment.
        While measles, pertussis, diphtheria and tetanus rates have all
    declined; the exciting prospect of eliminating polio from the world is
    currently receiving great attention. Once again, it will be possible to
    provide a gift to the future so that, ``Future generations will know by
    history only that this loathsome disease has existed.''

                                   THE FUTURE

        The current accomplishments are but a harbinger of what is to come.
    It is anticipated that the future will hold new vaccines to counter a
    host of diseases, including AIDS, tuberculosis and malaria. Vaccine
    delivery mechanisms will improve, first by eliminating the need for
    refrigeration, and then by eliminating needles and syringes. Children
    of the future will receive oral vaccines or vaccines included in food
    products such as potatoes or bananas. Vaccines will be given
    simultaneously, necessitating fewer contacts with each child.

                   THE CURRENT GLOBAL IMMUNIZATION INITIATIVE

        What has been done? In the past year there has been a revival of
    interest in immunization. The Global Alliance for Vaccines and
    Immunization (GAVI), is the expression of that interest, having brought
    to the table global agencies, industry, bilateral agencies and non-
    governmental organizations. It provides for a coordinated effort
    worldwide and organizes a spectrum of groups around a shared goal . . .
    the protection of all children through immunization.
        Two windows of opportunity are being pursued initially. First, for
    countries that may be poor but have demonstrated the capacity to
    provide immunization, there is an effort to provide them with the new
    generation vaccines now used routinely in industrialized countries,
    vaccines such as Hepatitis B and Hemophilus influenza B. In addition,
    this effort will include Yellow Fever, a vaccine not needed in the
    industrialized countries but underused where needed. Already, 54 of the
    74 poorest countries have made application, through UNICEF, for funds
    to expand the number of vaccines that they are providing. These
    applications are being processed in an attempt to provide resources
    based on the health needs of children rather than the politics beyond
    the control of those children. For this effort trust fund monies will
    be provided largely for vaccine purchase.
        The second opportunity now being pursued is improvement of the
    immunization infrastructure to provide for better coverage of both the
    traditional and new generation vaccines. This may be the most
    difficult, and protracted, of all the challenges facing GAVI. A country
    unable to deliver six vaccines is not helped by having more vaccines,
    unless the delivery system can be strengthened. The focus for resource
    expenditures will be on adequate logistic support but especially on
    achieving the best possible outcomes. Supervision, evaluation,
    incentives and rewards will be high priorities.
        What is planned? The highest priority will be given to achieve
    maximum coverage with the traditional and the new generation vaccines.
    When these activities are felt to be progressing in an adequate
    fashion, GAVI will be able to focus on research and development. This
    will include promotion of new vaccines for diseases of developing
    countries, easier delivery methods, better surveillance approaches and
    improvements in evaluation techniques.

                                  IMPLICATIONS

        The convergence of many factors makes this the opportune time to
    provide major global health improvements. A global coalition in the
    1980's demonstrated it was feasible to organize global immunization
    programs that could reach most children. The scientific advances of the
    past decade have provided new vaccines and the world is on the
    threshold of improved delivery systems. The resources have increased
    with the attention of Rotary International, the United Nations
    Foundation and the Gates Foundation building on the traditional
    interests of U.N., bilateral and non-governmental organizations. And
    now there is a global coalition that includes all of the public and
    private immunization interests. In addition, the World Bank and
    academic economists have made the case that health is an important
    causative component of development, that there is a positive benefit
    cost ratio to immunization expenditures and that therefore immunization
    programs should be viewed as an investment.

                                   CONCLUSION

        GAVI is determined to achieve synergism by combining the efforts of
    all who wish to improve immunization. GAVI is also determined to
    achieve equity with all children receiving the benefits of vaccines
    regardless of their social or geographic residence. Finally, GAVI is
    determined to accelerate the development of new vaccines, streamline
    delivery techniques and demonstrate that it is possible for the world
    to organize effectively to improve global health, specifically to
    improve global immunization efforts.
        The world has never had so much power to improve the health of
    children everywhere. The US, because of its science base, its
    experience in immunization programs, and its monetary and public health
    resources, will be key to the realization of that dream.
        Thank you.

        Senator Leahy. Thank you.
        Dr. Daulaire.

    STATEMENT OF NILS DAULAIRE, M.D., M.P.H., PRESIDENT AND
                CEO, GLOBAL HEALTH COUNCIL

        Dr. Daulaire. Thank you, Senator Leahy. It is said that if
    you are judged by the company you keep, this must be one of my
    finest days. It is a remarkable panel you have assembled here.
        As you well know, I speak both as a public health physician
    who has worked for several decades overseas and also as a
    representative of the world's largest membership alliance
    dedicated to critical global health issues. This is, as
    Secretary Summers said, an attractive moment, and as Dr.
    Brundtland and Dr. Foege have reiterated, a remarkable window
    of opportunity for global health.
        I spent New Year's Eve, as you will probably appreciate, on
    a hilltop in central Vermont waiting to see if all the lights
    would go out--and they did not--with members of my family.
    Later that night, on a neighboring hillside, some friends of
    ours gave birth to their first child, a girl by the name of
    Lisa, a new constituent of yours, Senator.
        Mother and child and family are doing very well.
        But I think about a cemetery also on our farm which tells
    the history of health as it was in Vermont 100 years ago, 150
    years ago, which is very much like the world of health we see
    around the world today. I see a mother and her infant child
    buried side by side, obviously a result of a disastrous
    pregnancy outcome. I see three children from the same family
    buried over the course of 6 weeks, obviously from a viral
    epidemic that swept through. I see young adults who died in the
    prime of life probably from tuberculosis. This is our history
    as well, and we have come so far in terms of the science and
    the knowledge of public health and of medicine.
        There is no law of nature today that says that a child in
    Mali should be 15 times more likely to die before reaching the
    age of 5 than the child in Vermont, and no act of Congress that
    says that a mother in Nepal is 200 times more likely to die
    during the course of her reproductive years as a consequence of
    pregnancy and childbirth than that mother in Vermont. These are
    today not issues bound by what we know in science. They are not
    bound by greater laws. They are bound by economic decisions
    that we make on a daily basis in Washington and other capitals
    of important countries.
        Now, globalization has done a great deal for the economy of
    this country. We are coming at the 10th year of an enormous
    economic boon, much of it driven by global economic growth in
    trade.
        But just this morning, I went past the World Bank where Dr.
    Foege is going back to later, and I saw a group of protesters
    there, and we have all heard about the Seattle protests and
    heard about what is growing here as a protest at the World
    Bank. Many people are rightly concerned because of a very small
    group of troublemakers who have broken windows and caused
    violence, but the core of these protests I think revert back to
    what happened in this country 40 years ago when we looked at
    the civil rights movement.
        The protesters are not protesting the movement of people
    and goods and services. They are not objecting to the
    increasing integration of the world. What they are objecting to
    is one that I think we all share concerns about, and that is
    that the way things are currently structured in globalization.
    There are enormous winners and equally enormous losers. They
    are the meaningful voices of conscience for those left behind,
    and in that sense we may well look back in 10 or 15 years at
    these protesters as being heroes in very much the same way that
    the civil rights protesters were.
        The great religions of the world tell us that morality
    implies a positive obligation to act if you can, and simply not
    acting when you have the ability to act is an act of
    immorality.
        Senator, the bill that you introduced today is an act of
    morality and we congratulate you and thank you for it. This is
    not a budget buster. A $1 billion add-on to a $1.8 trillion
    budget is--what is it? It is one-half of one-tenth of 1 percent
    of the budget. This is not an issue which should be the subject
    of great conflict in terms of putting a budget together, and I
    hope and wish you well in terms of moving this forward. I can
    assure you that our membership, 120 or more organizations of
    which have endorsed this act, will work very actively to
    support you because one of the great shames of the last several
    years has been the shell game that has been played with the
    foreign aid budget of saying, well, we will increase this but
    we will not increase the whole budget. So, it has come out of a
    different part. We have increased funding for child survival at
    the cost of family planning, and we have increased funding for
    infectious diseases, thanks to your leadership, but sometimes
    at the cost of agriculture and development programs. We cannot
    afford to do that anymore for ourselves or for the world.
        In addition to your act, I think that the debt reduction
    initiative, which is before the Congress now, is a very
    important one for moving the world forward, as Secretary
    Summers has said.
        And we strongly support as well, the President's Millennium
    Initiative. We understand it may be attached to the Africa
    trade bill, and if so, we urge its rapid passage in whichever
    most expeditious legislative form it can have.
        Similarly, we encourage the Kerry bill, which is now before
    the Senate, which we think has some advantages over the
    administration's proposal, but is very consistent with it.
        We stress that the $50 million that the President has
    requested for GAVI under his proposed budget is a vital
    investment, as Dr. Foege has said, in the future of all the
    world's children.
        This child who was born, Lisa, on the hillside in Vermont--
    10 years is not a very long time. As you know yourself,
    Senator, you just had a grandchild born I think in the past
    year. You see them grow. They change. New things happen. 10
    years ago, I was not on the Internet. I do not think many
    people in this room were. Now we take it for granted. The kinds
    of things that we can invest in today, be they development of
    new vaccines or today's programs in treating and controlling
    infectious diseases, reproductive health issues, will pay
    enormous dividends, and our children themselves will be the
    beneficiary of this.
        I think what you have done today and what your colleague,
    Senator McConnell has done both in hosting these hearings and
    in moving the agenda forward, will provide for our children a
    different and a much more positive future, and I thank you.
        [The statement follows:]

                      Prepared Statement of Nils Daulaire

        Mr. Chairman, Senator Leahy, and other members of the Subcommittee,
    thank you for the opportunity to submit this testimony on behalf of the
    thousands of members of the Global Health Council working to improve
    health around the world. We have unprecedented opportunities today to
    make a real difference in the health and lives of billions of our
    fellow human beings. I trust these opportunities will be reflected in
    the decisions you make in your foreign operations appropriation for
    fiscal year 2001.
        Speaking as a physician, and in the company today of some of the
    world's great leaders in global health, I see the opening of the 21st
    century as a unique and exciting time to be engaged in health. In this
    country, a revolution in biotechnology, genetic engineering, and a
    deeper understanding of the determinants of health have put us at the
    verge of social changes as profound as the economic changes brought
    about by personal computers over the past two decades. Our children and
    grandchildren may reasonably anticipate life-spans that exceed a
    century of healthy and active living. I believe it is no coincidence
    that one of the first to see and harness the economic potential of the
    computer revolution twenty years ago, Bill Gates, is now investing his
    fortune in bringing this new health revolution to all the world's
    people.
        The United States of America has a huge stake in seeing to it that
    the benefits of these changes are not just reserved for the affluent.
    None of us will be able to afford the ultimate price of a world in
    which the rich live and the poor die--they will not ``go peaceful into
    that good night.'' Yet, with two billion of the world's people existing
    in conditions of desperate poverty, that is the future we and our
    children could face. The consequences for international security, U.S.
    foreign policy, and the very health and safety of Americans here at
    home would be severe. And as a direct result, we could all be pulled
    back into the abyss of health conditions that might more closely
    resemble the 19th century than the 21st.
        This is no exaggeration. We have seen hard-nosed analyses, such as
    the one recently declassified by the National Intelligence Council, and
    those conducted by the Center for Strategic and International Studies
    and the Council on Foreign Relations, that have placed global health
    issues squarely at the center of the new national security agenda. They
    have made it clear that the threats of HIV/AIDS and other infectious
    diseases, and the social consequences of high levels of suffering and
    death for children and women around the world as a result of abysmal
    health conditions, could have a domino effect on U.S. national well-
    being. Other studies by prominent economists have proven that improved
    health is a critical input into poverty reduction and economic growth
    in low-income countries, and there is unmistakable evidence that U.S.
    global trade is deeply dependent on healthy trading partners in
    developing countries.
        The power of these considerations is reflected in the presence and
    priorities expressed here today by Treasury Secretary Summers. It is
    unprecedented for any senior official of any U.S. department not
    directly concerned with health or development, much less the U.S.
    Treasury, to speak out on America's vital interests in global health.
    It is equally unprecedented for the President to speak out and make
    this a priority of his Administration, and for the U.N. Security
    Council to devote its attention to the international security threat
    posed by a virus. Yet all these things have happened just over the past
    three months.
        I think we are on to something. And I congratulate this Committee,
    and particularly Senator Leahy, for having recognized this emerging
    reality not only in the last three months, but over the past several
    years. You have demonstrated real leadership.
        Your Committee now has the power to put your imprint indelibly on
    which path we will take--improved health for all, or a polarized world
    of medical haves and have-nots. I urge you to seize the opportunities
    now before us. After all, as Senator Leahy has noted, while we spend
    over $4,000 per year on health care for every American, we have
    evidence that the cost of addressing the most urgent health needs of
    the poorest 2 billion would amount to a mere $15 per person. This is a
    critical investment in our common future. And the time is ripe for
    action.
        Let us not settle for half measures. I urge this Committee to
    consider a substantial increase in the U.S. investment in global
    health--not in order for the U.S. to shoulder this entire burden alone,
    but to show American leadership and to set the direction for the
    world's children and mothers as we approach the tenth anniversary of
    the World Summit for Children.
        More than 120 organizations have joined with the Global Health
    Council in support of the bill introduced into the Senate today by
    Senator Leahy, the Global Health Act of 2000, a bill that would
    authorize an increase of $1 billion for funding directed toward
    reducing the risk, spread and consequences of HIV and other major
    infectious diseases; improving child health and nutrition; and reducing
    unintended pregnancies and the deaths of young mothers. The House
    version of this bill, HR3826, has been introduced by Representative
    Crowley (whose Queens district was the epicenter of the recent outbreak
    of West Nile Encephalitis and who understands first-hand the
    globalization of health risks) and already has 32 co-sponsors.
        As Senator Leahy has made clear, the Global Health Act of 2000, and
    the funding increases it envisions, is unique among the various
    proposals before Congress this year in its comprehensive look at the
    health needs of the new century. This is reflected in the breadth of
    support this proposal has stimulated, from Save the Children to the
    United Methodist Church to the American Public Health Association. The
    $1 billion increase in funding proposed over the amount appropriated
    for health programs in fiscal year 2000 represents approximately a
    doubling from last year. These investments would complement, and be
    complemented by, investments in basic education (particularly for
    girls) and in poverty reduction.
        Mr. Chairman, Senator Leahy, last year you appropriated just over
    $1 billion for these critical global health issues. Your fiscal year
    2000 increases in funding for HIV/AIDS and infectious diseases were
    wise and welcome. You kept other categories of health spending level
    last year, yet most Americans already see the humanitarian and economic
    importance of doing more to help improve the health and survival of
    children who will be the citizens (and trading partners) of the 21st
    century as well as of their mothers, and they believe that couples in
    developing countries should have the means to be able to decide for
    themselves the number and spacing of their children as we Americans do
    at home. I would note that the members of the Global Health Council
    represent a wide spectrum of religious and moral beliefs, but that we
    are united in our view that the domestic debate over abortion should
    not continue to be played out on the world stage. We Americans would
    not appreciate it if other countries involved themselves in our debate.
    We should afford them the same courtesy, and I urge you to see to it
    that the restrictive language of the last year's Global Gag Rule is not
    included in this year's legislation.
        To assure a reasonable and responsible U.S. engagement in the
    opportunities to improve health globally, the Global Health Council
    strongly endorses Senator Leahy's proposed increases in fiscal year
    2001 appropriations. We would recommend that the $1 billion increase be
    allocated as follows:
      --For HIV/AIDS an additional $275 million, bringing the annual U.S.
            foreign operations contribution to this global battle to $430
            million--enough to turn the tide on this epidemic and give the
            34 million already infected with HIV reasons to hope for the
            future of their communities and nations, as well as the
            essential seed money to encourage other donors to substantially
            increase their contributions to this effort. The virus has
            declared war on humankind, and has already exceeded war in its
            toll of lives. We should respond in kind.
      --For prevention and control of global infectious diseases in
            developing countries an additional $200 million, bringing the
            foreign operations total to $275 million--a recognition of the
            looming threats of TB, malaria, other infections, and drug
            resistance given the speed with which these can affect all
            countries of this globalized world. We need far better
            surveillance and control if we are to get ahead of this threat.
            This funding is separate from the President's proposed tax
            credit, which would provide an incentive for vaccine R&D, a
            critical long-term investment. But there is a pressing need for
            resources to be devoted here and now to support application of
            the technologies we already have in hand to bring these killers
            under control. These two approaches are complementary, and the
            Global Health Council endorses the President's Millennium
            Initiative as a visionary undertaking that could have enormous
            and beneficial consequences for reducing infectious diseases in
            the next decade; we hope the other committees that have
            jurisdiction on tax matters will enact this legislation, and
            our members will work to bring this about.
      --For programs aimed at the survival and health of children an
            additional $225 million, bringing the total U.S. funding for
            child survival to $525 million (including our contribution to
            UNICEF)--a recognition that with the great progress that has
            been made over the past decade, we still face more than 10
            million child deaths each year, the large majority of which
            could be readily and inexpensively avoided by vaccines and
            other preventive measures, and by early treatment through basic
            health services. I would note that the proposed $50 million
            U.S. contribution to the Global Alliance for Vaccines and
            Immunizations would be an important and timely booster shot for
            the worldwide effort to immunize every child against
            preventable killer diseases, and the Council strongly supports
            this initiative.
      --For programs to save the lives and improve the health and nutrition
            of mothers an additional $100 million, bringing the U.S. total
            to approximately $150 million--a recognition that the 600,000
            women in the developing world who die in pregnancy and
            childbirth each year (and whose every pregnancy poses a risk
            more than 50 times as great as that experienced by an American
            woman), and the more than 15 million women who survive but are
            damaged for life, should not need to pay for their poverty with
            their lives. Senator Leahy, you have been a leader in
            recognizing the need to address women's health issues in our
            global health programs, and we salute you for that.
      --For family planning an additional $200 million, bringing the total
            to $610 million (including our contribution to UNFPA)--a
            recognition that the most effective way to save a woman's life
            and prevent malnutrition and death among her young children is
            to assure that she and her husband can decide for themselves
            when they will have their next child. One hundred and fifty
            million young couples in low income countries do not yet have
            effective access to family planning services and their needs
            for such assistance cannot wait.
        These increases could save well over a million lives a year. They
    are a necessary and timely investment in our common future.
        Together, these five sets of issues account for more than 80
    percent of the disproportionate burden of disease and death borne by
    those whose only fault was to be born poor and in poor countries. We
    have the technology and know-how to do something about these critical
    problems now, and the world's scientists and businesses stand ready to
    make the investments of mind and material to advance our technologies
    further if there is a viable market for what they create. The presence
    here today of Dr. Mahmoud from Merck testifies to that willingness. One
    billion dollars is a small down payment for the U.S. to make for our
    clear national interest in building a healthy, prosperous and stable
    world. We have already seen the willingness of the Bill and Melinda
    Gates Foundation and other foundations, as well as private industry, to
    enormously increase their own contributions to this effort.
        Advances cannot be made without research. As I have noted, the
    proposed tax credits of the President's Millennium Initiative help to
    provide incentives for accelerating such research. The immediate R&D
    tax credits of Senator Kerry's bill take this a constructive step
    further, and we support his proposals. But in addition, in the light of
    these additional resources the U.S. government needs to step up its
    commitment to direct funding of research for global health. There is no
    magic number for the ``right'' level of research, but studies of
    successful industries have indicated that devoting 10 percent to
    research is a useful rule of thumb. Some would say that USAID, which
    manages most of the funds appropriated by this Committee, is not a
    research organization. That may be true, but past research funded by
    USAID, in such areas as vitamin A, oral rehydration, vaccine vial
    monitors, contraceptive effectiveness, and safe disposable syringes,
    have become mainstays of today's global health strategy. Much, much
    more should be done, in such areas as field testing of potential AIDS
    vaccines to objective assessment of the practicability and impact of
    program strategies. I urge the Committee to express itself on this
    issue in this year's appropriations language.
        While not under this Committee's jurisdiction, I would also note
    that while funding increases for global health research under the
    National Institutes of Health were enacted by Congress last year, and
    further increases are called for under the President's budget proposal
    this year, there is as yet insufficient coordination and accountability
    of these efforts. I would urge that the part of NIH mandated to
    coordinate our engagement in international research, the Fogarty
    International Center, be given clear responsibility for overseeing and
    managing NIH's efforts. I hope you will work with your colleagues on
    other Committees to see to it that this comes about.
        It is also the height of irony that with WHO finally under the
    sound and dynamic leadership of Dr. Brundtland, of which you have had
    ample evidence in her statement today, the U.S. government is still
    apparently fixed on an inflexible and counterproductive strategy of
    holding WHO's budget (and that of all U.N. agencies including our own
    hemisphere's Pan American Health Organization) to ``zero nominal
    growth.'' This slow strangulation means that WHO has actually had to
    scale back its activities by about 3 percent a year, and PAHO by even
    more. If we are to be serious about our commitment to global health and
    its importance to our national security, the State Department should be
    urged to modify its position on WHO's budget to allow reasonable
    increases under the IO budget. The results of such a change would be
    great--for every dollar increase the U.S. allowed, other nations
    contributing to WHO's core budget would add three. This is the kind of
    leverage the U.S. should be seeking, not turning away from. I look
    forward to working with members of this Committee to bring about this
    change in the State Department's position.
        You are of course a Committee that deals first and foremost with
    appropriating the budget for U.S. operations overseas. USAID has for
    the most part played an exemplary role in carrying out its global
    health mission, and its partnerships with CDC and WHO have been vital
    to this effort. I would however highlight for you an unfortunate game
    that has at times been played in the appropriations process--that of
    mandating increases for certain expenditures without making the
    additional resources available. As Senator Leahy has noted, several of
    the bills now before Congress call for categorical increases for
    certain global health programs, most of which the Council supports as
    they are consistent with the increases called for under the Global
    Health Act. But without the overall increase in appropriations that
    have been called for today, these supposed increases will be nothing
    but a cruel shell game. They will force robbing Peter to pay Paul. The
    health of children should not come at the expense of the health of
    their mothers. The Global Health Council's position is that, pressing
    as they are, global health needs should not be funded at the expense of
    equally pressing needs in basic education, agricultural development,
    economic growth and poverty reduction, or protection of the environment
    in developing countries. We recognize that healthy people require
    healthy economies and societies, and support the vital role played by
    U.S. international development assistance in bringing this about. We
    are in a period of unparalleled economic growth in this country. This
    is not a time to be parsimonious when it comes to our national
    interests and our ability to make a real difference in the lives of
    billions.
        The Global Health Council and our members appreciate the proven
    commitment of members of this Committee. We look forward to actively
    supporting your expanded efforts in improving the health of families
    around the world. We know that the appropriations process is one in
    which hard choices have to be made, and priorities fought for. Your
    leadership can make this aspiration a reality.
        After all, what better contribution could America make to the well-
    being of all the world's people--and to the future of our own
    children--at the dawn of the new century?
        Thank you for the opportunity you have given me to testify before
    this Committee today.

        Senator Leahy. Well, thank you. I also thank both Tim
    Rieser and Robin Cleveland who work with us on this. You have
    known Tim for years. You know he will never let me ignore these
    issues. But as Senators, we are merely constitutional
    necessities for the staff who do most of the work.
        Dr. Mahmoud.

    STATEMENT OF ADEL MAHMOUD, M.D., PH.D., PRESIDENT,
                MERCK VACCINE DIVISION

        Dr. Mahmoud. Thank you very much, Senator Leahy and Senator
    Murray. We really appreciate the opportunity to add some
    comments on behalf of Merck and the industry part of the
    partnership.
        There are three basic points, and I do not want to repeat
    what is in the official statement or some of the points which
    were presented by my colleagues. But there are really three
    points that we are coming to appreciate that probably will make
    a difference in the future.
        The central issue is appreciating that health and
    investment in health is crucial to development. This has been a
    long-term debate that went on and on for many years. We are
    coming to the conclusion that if we invest in health, we are
    really investing in the development particularly in the
    developing countries.
        The second point is that prevention is the central strategy
    for health, and the most effective element in prevention is
    immunization. There are all sorts of ideas about what really
    will make a difference in health, but I think the international
    community is coming to realize the power of immunization and of
    prevention.
        The third, there is a partnership in there that is a lot
    more excited about what can be done than what is to happen.
        We applaud the efforts about these issues and would like
    just to point to that really the problems of vaccination in the
    world relate to a complex set of issues, the lack of political
    will, the lack of health care infrastructure that can deliver
    vaccines, the lack in science, and the lack in sources of
    finance.
        Consequently, we feel that the Millennium Initiative that
    the administration has put together represents a very, very
    effective effort to put together a multi-faceted approach to a
    complex problem. The multi-faceted approach that we feel is the
    message coming from that initiative. We are going to contribute
    to GAVI because it is the most effective alliance that the
    international community agreed to to deliver the vaccines which
    are available for children in the developed world and have not
    reached any effective level in the developing world. The $50
    million is a very effective translation of that effort.
        Two, the major barrier is science and scientific progress.
    We do not have vaccines for TB and malaria because we need to
    enhance the scientific undertaking for those vaccines. At
    Merck, we have been working on a vaccine for HIV for over 14
    years, and the accelerated effort in the last 5 or 6 years
    comes from the major support that you all put in NIH over the
    last 5 or 6 years to open up avenues in basic understanding of
    the immune system that makes it possible today to construct a
    potential vaccine for HIV. After 14 years the effort is coming
    to the point where we have introduced the vaccine in human
    populations late last year to look into immunogenicity and
    safety. It could not be possible without the investment in NIH
    and other scientific opportunities that we have, and
    consequently that part of the Millennium Initiative we feel is
    a very, very strong and important part.
        The third part is the partnership with the World Bank to
    help the developing countries build the infrastructure because,
    as you know and as the GAO report said, we might talk about
    vaccination rates, but whether that really reaches the children
    in the world in the back parts of Kenya, Mozambique, Tanzania,
    and so on is questionable. Consequently, we have to see that
    infrastructures are being developed to deliver these vaccines.
    The new vaccines are going to be even much more complicated
    that the great success story of smallpox, so it needs
    infrastructure.
        The fourth element, which is an attractive element, trying
    to say how can we entice the development of new vaccines and
    the tax break for purchase of vaccines is an interesting
    approach to develop some help to the developing countries as
    they put together vaccination policies that will extend beyond
    the superficial people in the main cities and so on.
        In conclusion, Merck is committed to play a major role in
    the new alliance, in the new partnership that is developing
    vaccines. We spelled it out in the meeting in the White House
    by adding two components: a donation of our recombinant
    hepatitis B vaccine to the cost of $100 million to help get
    that vaccine to the children of the world who are in deep need
    for that, and the second commitment is to include the global
    targets in our HIV vaccine. So, hopefully the vaccine that will
    come out of our research program will include the serotypes and
    the strains that are in the making in some other areas besides
    the United States, and hopefully that will become a vaccine.
        These two issues represent a continuation of what Merck has
    been doing over the years of donating if the issue becomes the
    medication. Merck donated the Mectizan. But remember, donating
    Mectizan was not really a solution. It is an easy drug. It is
    one pill once a year, no side effects. After the announcement
    of the donation, it was a lot clearer that the barrier is how
    to deliver it. So, even if you remove that barrier of the price
    of purchasing, infrastructure and political will was an
    important issue to get these vaccines to reach the desired
    populations.
        Thank you very much.
        [The statement follows:]

                       Prepared Statement of Adel Mahmoud

        Mr. Chairman and members of the Committee. Good morning. Today's
    hearing reinforces a renewed global vision of a world free of
    preventable diseases through international immunization programs; of
    economic and social development spurred by investing in health; and an
    energized partnership committed to secure the policies and resources
    needed to bring this vision alive.

                  MERCK WELCOMES THE RENEWED FOCUS ON VACCINES

        Merck applauds the efforts of the Administration, the World Health
    Organization, the World Bank, the Gates Foundation and others to assure
    children of every nation in our global community access to safe and
    effective vaccines. Merck pledges to do our part to shape and implement
    a comprehensive package of policies and programs that will support this
    truly exciting momentum. As one of only two major remaining U.S.-based
    pharmaceutical companies with an ongoing program of innovative vaccine
    discovery, manufacturing and delivery, Merck is pleased to have the
    opportunity to comment on the specific proposals before this Committee
    today.
        When Merck testified before this Committee in 1997, we stressed
    that solutions to controlling infectious diseases include more than
    just direct spending by various government agencies. Providing access
    to comprehensive health services in developing nations presents a
    unique set of challenges, including poor nutrition and sanitation, lack
    of trained medical staff, minimal medical facilities-particularly in
    rural areas-lack of disease awareness, poor or non-existent medical
    recordkeeping capability or capacity.

                    AVAILABILITY DOES NOT GUARANTEE DELIVERY

        Perhaps the hardest lesson of all for those of us with a commitment
    to improved global health through immunization is that simply having
    vaccines available is not enough. For example, while it has been shown
    that in the industrialized countries immunization can dramatically
    reduce hepatitis and hepato-cellular carcinoma caused by hepatitis B,
    and childhood meningitis caused by Haemophilus influenza type B (or
    Hib), relatively few developing countries have introduced these
    vaccines into their national prevention programs.
        What's missing is deliverability. Why this disparity among
    countries exists is not a simple matter. It's a function of: (1)
    political will; (2) adequate health care infrastructure; and, (3)
    sufficient financial resources. The need for adequate, dedicated
    funding for the purchase of safe and effective vaccines will become
    even greater with the introduction of new vaccines--like rotavirus--and
    combination vaccines, which could be considerably more expensive than
    the older products.

                       GAVI AND THE MILLENNIUM INITIATIVE

        Mr. Chairman, you've asked for Merck's comments in three areas: the
    United States' contribution to the Global Alliance for Vaccines and
    Immunization--or GAVI; President Clinton's proposal for a $1-billion
    tax credit for vaccine purchase; and the need for increased resources
    to combat infectious diseases and strengthen the public health
    infrastructure in developing countries.
        As a package, we believe these initiatives go a long way in
    supporting the three conditions defining true deliverability just
    mentioned.
        Specifically, GAVI, with its focus on expanding worldwide access to
    the new safe and effective vaccines-beginning with vaccines to prevent
    hepatitis B, Haemophilus influenza type B (or Hib) and yellow fever-
    clearly is on target.
        What is significant about the President's initiative is that it is
    multifaceted: it takes into consideration the barriers just mentioned.
    Specifically, the President's request for a $50-million contribution to
    the GAVI vaccine purchase fund will help save lives today and could
    create confidence that a market for new vaccines will be available in
    countries where there is a great need in the future.
        His recommendation for additional funding to support the National
    Institutes of Health basic research in HIV/AIDS, tuberculosis and
    malaria is in keeping with Merck's long-standing position on NIH's role
    in the discovery process. Vaccines are complex products with a multi-
    stepped process for research, development and manufacturing. Industry
    traditionally provides the expertise and experience in product
    development and manufacturing, with government focusing more on
    reducing the barriers to new discovery through the creation and
    expansion of the scientific base in the disciplines that underlie
    product development.
        The biggest obstacle in the search for vaccines against these three
    diseases remains lack of basic science, not money or markets. Fueling
    the research engines at NIH and other research institutions and
    biotechnology companies can help fill this void. This additional
    support would prove particularly timely, given recent advances in the
    genetic sequencing of both tuberculosis and malaria.
        President Clinton's proposal for a $1-billion tax credit for future
    vaccine sales is an interesting approach to promoting vaccines for
    diseases that would have primary health value to developing countries.
    The tax credit represents a funding source for future vaccine purchases
    and sends the right message to those who are currently engaged in
    research as well as to those who may be considering initiating research
    in these disease areas. It's the message that the Administration wants
    to do everything possible to ensure a future market for these
    critically needed vaccines.

                      DEVELOPING A MEDICAL INFRASTRUCTURE

        The Millennium Initiative truly hits the nail on the head in its
    emphasis in shifting international resources toward building health
    infrastructure in poor countries. Merck learned first hand how the lack
    of medical infrastructure can stymie even the best intentions. Our
    experience with the donation of our drug MECTIZAN, to prevent
    onchocerciasis, or river blindness is an example. MECTIZAN involves
    only minimal medical care--one pill, once a year--and is relatively
    easy to handle, store and transport. Yet the significant challenges to
    delivering it and getting it administered cannot be overstated.
    Government commitment to a distribution program, establishing a system
    of identifying infected individuals, persuading them that the drug was
    safe to take, getting the patients to the drug or the drug to the
    patients and maintaining records-all were critically necessary
    components to the program's success.
        These are the more classic challenges. Others include: black market
    sales that can divert products from those who need them most;
    epidemiology gaps--inadequate data to assess the incidence of an
    infectious disease in a country; and the lack of quality assurance--
    storage, handling, administration--which is of particular concern with
    vaccines.
        Merck supports policies that would constructively redirect
    resources to overcome any--or all--of these gaps in the health care
    infrastructure, not only in the interest of the delivery of vaccines
    and medicines, but also to provide access to essential basic health
    services.

                                 IN CONCLUSION

        As the world awakens to the power of immunization as the central
    policy for health in stimulating economic and social development, the
    need for partnerships becomes even more vital. Governments, industry,
    the private sector, international organizations and agencies all need
    to step up to the challenge. Achieving global access to safe and
    effective vaccines will require both collaboration and individual
    contribution.
        Last month, Merck was pleased to demonstrate our own commitment to
    the cause with the donation of $100-million of RECOMBIVAX HB,
    our vaccine to prevent hepatitis B. In terms of its volume--1 million
    doses for each of 5 years--and value, this donation is second only to
    our Mectizan program. We also reaffirmed our dedication to the global
    targets of our 14-year-and-still-counting research program in HIV/AIDS.
    And we hope to do more.
        I want to thank you, Mr. Chairman, and the Committee, for inviting
    Merck to share in the discussion here today. Certainly the broad issues
    surrounding global infectious disease deserve this Committee's full
    attention. And the opportunities for improving global health through
    disease prevention, as outlined in the mission of GAVI and the
    President's proposal, deserve the careful consideration this hearing
    offers. We look forward to working with you on these and other issues
    in the future.

        Senator Leahy. Thank you. That GAO report that you
    mentioned is one that Senator McConnell and I requested. In
    fact, Lynn Holloway, the author of the report, is here in the
    room today.
        Let me just hit a couple of your points and then I want to
    follow up with Dr. Foege.
        In your statement, it is fairly clear that Merck is neutral
    about the tax credit proposals. You do not oppose it. You are
    not enthusiastic about it. Do you feel that it will not have
    much effect or that it should be coupled with something else?
        Dr. Mahmoud. We feel that the tax credit represents a
    funding source for purchase of vaccine and as such is a
    positive development. In a sense if the poor countries of the
    world will have, in addition to their internal resources or the
    aid that is coming from outside resources, another mechanism
    the U.S. Government will help them with to purchase vaccines,
    we feel that is a positive impact.
        Now, the other point is would that by itself alone induce
    the production or the development of new vaccines. We feel that
    issue is a little bit more complicated. The issue of discovery
    and development is dependent on scientific progress, on
    feasibility, on development, and on the three other issues, the
    political will, the infrastructure, and the health care
    systems.
        Senator Leahy. The infrastructure issue is something that
    bothers me a great deal. Everybody has talked about the
    problem. Polio vaccine is very, very inexpensive. Measles
    vaccine, very, very inexpensive. Yet, they do not get to all
    the people who need them.
        Can GAVI address this problem, or do we have to go beyond
    GAVI?
        Dr. Mahmoud. GAVI has got three mechanisms. One mechanism
    which is the purchase is straightforward for purchase. The
    other mechanism is to develop health. What these countries
    need--and I just want to relate my own personal experiences.
    Uganda reduced the prevalence of HIV not by major scientific
    developments and utilization of all new drugs. Uganda developed
    a multi-faceted program that started with the President
    committing himself. We have HIV and we are going to do
    something.
        Senator Leahy. I was sitting with the President of Uganda
    on the day when he had his first briefing on that. He turned to
    me, pounded the table and said: ``we are going to do something
    about this. We are going to admit we have a problem.'' I still
    remember that like it was yesterday.
        Dr. Mahmoud. Absolutely.
        I was the chairman of Medicine at Case Western in Cleveland
    at that time, and we went and worked with them. The program
    involves several universities from this country, the Government
    of Uganda, and it really made a difference. It reflects the
    political will and support and the science, the intelligence of
    the process can put into effect results today.
        Senator Leahy. Can I ask both Dr. Foege and Dr. Daulaire to
    talk about GAVI and building the public health infrastructure?
    How do you feel about that?
        Dr. Foege. Infrastructure is obviously key. We keep saying
    a country that cannot deliver 6 vaccines will not be helped by
    12. It is that simple.
        But what GAVI is going to look at is would there be ways of
    getting incentives that would make performance rewarded rather
    than poverty. For instance, could the price of vaccine be based
    on how good the performance is? What is the coverage of the
    vaccine rather than how poor the country is? I like that idea
    of rewarding performance rather than poverty.
        Senator Leahy. Let me make sure I understand. In other
    words, you perform well, we lower the cost?
        Dr. Foege. That is right. So, there is something in it for
    a country to have the best possible coverage.
        But GAVI is looking at what would it take with
    infrastructure, and they talk about having two windows that
    they are trying to fund. One window is to get the new vaccines
    in. The second window is to improve infrastructure. I think if
    there is a chance for transparency and improvement of
    infrastructure, it will come through GAVI.
        Senator Leahy. Nils.
        Dr. Daulaire. Senator, the issue of infrastructure is one
    that I have certainly devoted a lot of my overseas career to.
    Certainly GAVI and its plans for engagement in this area are a
    very important potential contribution to the area.
    Infrastructure is not just about government programs. In fact,
    when you look at who delivers health care services to the
    poorest in the poorest countries, very often it is not
    governments, it is mission groups, it is nongovernmental
    organizations, it is community-based organizations. What we
    need to see in the context of infrastructure development is
    both the support of these programs which has been happening
    very actively by organizations moving from--USAID is a very
    important donor to a broad base, both government and
    nongovernmental.
        Also the World Bank has a critical role to play here, and I
    welcome the new emphasis that the President of the World Bank,
    Jim Wolfensohn, has said he will place on World Bank lending
    for this area.
        Also the debt reduction initiative. Ultimately government
    infrastructure in these countries has to be driven by the
    countries themselves. They have to have enough money to do it,
    and then in addition, they have to have the political will. The
    debt reduction gives a window of opportunity and a certain
    amount of leverage to move that process forward. So, I would
    say GAVI is helpful, but there is a much bigger context here.
        Senator Leahy. It is interesting. I look at the vaccines
    for respiratory infections, diarrheal problems. Millions of
    children die of these diseases.
        Dr. Daulaire, you mentioned my grandson. He, like our
    neighbor's children, gets all the vaccinations he needs. In
    fact, vaccines are a small part of the cost of raising a child
    in the United States. And they are available to everybody. If
    you are poor, there are programs to help cover the expense. If
    you are a wage earner, they are affordable.
        Unfortunately, children in rich countries are more likely
    to live than children in poor countries.
        If we bring down the cost of these vaccines so people in
    poor countries can purchase them then we run into a controversy
    similar to the one today between the United States and Canada.
    The price for a particular drug is 30 or 40 or 80 percent lower
    in Canada than it is in the United States. In our own State of
    Vermont, people take buses up to Canada to buy drugs.
        Dr. Mahmoud, you represent the private sector. Do you get
    caught in a ``damned if you do, damned if you don't'' kind of
    bind?
        Dr. Mahmoud. Actually the situation for vaccines in Canada
    is interesting because it really is a----
        Senator Leahy. I do not mean to inject Canada into the
    discussion, but----
        Dr. Mahmoud. No, no. But it just happens to be the prices
    are not all lower than the United States. So, there might be
    some Canadians coming over here to buy their vaccines in some
    ways.
        The pricing of vaccines is an element of a broad set of
    problems. I think once we see the multi-faceted approach to
    these problems, the price is going to be one element that can
    be addressed in a direct way. But you are talking about
    vaccines which have been available.
        We have many, many countries of the world that say these
    diseases don't occur. Merck and some other pharmaceutical
    companies are funding studies in Southeast Asia to prove to the
    political leadership there that haemophilus influenza type B is
    a major cause of lung infection and meningitis. They do not
    believe us. We have eradicated meningitis because of
    haemophilus influenza in this country. Out there it does not
    exist.
        So, there is a process of, in many ways, partnership with
    the leadership in these countries, with the scientific
    communities in these countries to take them one step forward at
    a time to realize the burden of illness, what is needed to
    deliver these vaccines and to work on the price of vaccines.

                   Opening Statement of Senator Patty Murray

        Senator Leahy. I have been joined by Senator Murray from
    Washington State. Senator Murray has been a leader in this
    area. I yield to her.
        Senator Murray. Well, thank you very much, Mr. Chairman,
    and thank you for having this hearing. I apologize for being
    late. Like a lot of Senators, I am juggling a number of
    hearings today.
        But I did want to, before I engage the witnesses, Senator
    Leahy, commend you for your leadership in the area of global
    health. I am really anxious to work with you on your
    legislation that you are introducing today. I was reading your
    testimony on the Global Health Act of 2000, and it seems like a
    very important issue and will target a number of deadly
    infectious diseases for children and women. And I commend you
    and look forward to working with you. And I thank you for your
    work in that area.
        Dr. Foege, I had a chance to read quickly through your
    testimony, and I want you to know that I strongly support the
    important work that you are doing. Your testimony tells this
    subcommittee a lot about the progress that is being made and
    the challenges that are ahead of us in global immunization
    initiatives.
        But I did notice that you were rather reserved in one area
    that I wanted to discuss today for the record, being the
    Senator from the State of Washington. It is important I think
    to note the generous, important work of Bill and Melinda Gates
    Foundation in supporting the Global Alliance for Vaccines and
    Immunization. Senator Leahy and I were in a meeting with Bill
    Gates last week and Senator Leahy asked him a question about
    the global vaccine work of his foundation, and his eyes lit up.
    I thought it was pretty telling that a man who was going
    through a lot last week----
        Senator Leahy. That was I think 2 days after the court
    case, and I think he was delighted to be talking about this
    issue.
        Senator Murray. But I think his heart was really interested
    in it.
        For the record, earlier this year Bill and Melinda Gates
    Foundation announced a $750 million gift to GAVI. To put that
    in perspective, the administration announced its intention to
    seek a $50 million contribution.
        Dr. Foege, if you could for me--and I do not want to gloss
    over the important issues that all of you are raising, but I
    would like to hear your comments about the importance of
    charitable contributions and what you see this kind of gift
    allowing us to do in the international arena.
        Dr. Foege. Thank you very much, Senator. I will not be
    reticent to say this is one of the greatest things that has
    happened in global health in my lifetime. Forty years I have
    been involved in global health. I never thought I would see
    this day when we would have these kinds of contributions. They
    build on a crescendo of Rotary starting in 1985 to raise money
    for polio eradication, Ted Turner providing $1 billion to the
    U.N. system, and now the Bill and Melinda Gates Foundation with
    $22 billion. Half of that, which will be about $550 million a
    year will go for global health.
        The Gates often say that when they have their children
    immunized, they ask the question, why do not all parents have
    this ability?
        It is a tremendous gift. If you look at what it would cost
    to immunize all children in the world, a ball park figure, we
    heard from Dr. Brundtland that with the new vaccines, it is
    probably in the neighborhood of $27 per child. I think that $30
    is a good estimate. If you look at 100 million to 120 million
    children a year, we are talking about $3 billion to $4 billion
    a year for total immunization. That is what we spend in the
    United States on health every day. We have to keep that in
    perspective. Of that amount, two-thirds of it is actually paid
    by the countries and only about a third comes from outside. So,
    we are talking about $1 billion to $1.2 billion a year from the
    outside.
        We are probably getting about half of that, and so we are
    short $500 million to $600 million a year. The Gates' gift
    which comes to $150 million a year is about 25 percent of that.
    That is a tremendous contribution to the gap.
        So, I think that this is very important, and when you look
    at the excitement in the world now with immunization, it is
    clear that no one wants to be left behind. It is part of the
    impetus for this coalition. I am convinced that the health
    problems of the future will be solved by coalitions where
    people get behind an outcome.
        We have heard about Merck's contribution of ivermectin or
    Mectizan. Last year 33 million people got Mectizan, given free
    by the Merck drug company, but without a structure. That is,
    these people are held together, medical mission groups, as Nils
    has mentioned, WHO, UNICEF, foundations, ministries of health,
    by a shared outcome, and I think that is the way it will be in
    the future. GAVI is now one more example of how this can
    happen.
        Senator Murray. Very good. Let me ask one other question,
    Mr. Chairman.
        Dr. Daulaire, you mentioned debt relief. We have a lot of
    folks in town today demonstrating for debt relief. Maybe any of
    you who wants to jump in can tie the strings for me. How does
    debt relief actually affect children's health or immunizations?
        Dr. Daulaire. One of the proposals in terms of this HIPC
    debt relief program is that the money that would be freed up
    from debt relief, money that is currently going to pay back the
    debt, which we know is not everything that is owed, but there
    is money leaving poor countries right now to pay the debt, that
    that money would be instead turned to critical social programs
    with health and education as the two principal ones.
        There is discussion underway, which we are very actively
    encouraging, for this to be not just a matter of turning this
    back to the governments, let them do what they will with it,
    because we know in our own Government we sometimes do not make
    social investments when we have the marginal dollar. But to
    have the NGO community, those people who are actively engaged
    in dealing with the poorest of the poor and with the health
    conditions of those people, engaged in overseeing how these
    monies are used and to have firm agreements negotiated between
    the IMF and the nations to make sure that these resources go
    right back into health programs.
        Senator Murray. Very good.
        Well, thanks very much, Mr. Chairman. Again, I apologize.
        Senator Leahy. Unfortunately, we are all on four different
    committees at once. I will wrap this up shortly.
        Dr. Daulaire, 3 years ago you played a key role in
    developing USAID's infectious disease strategy. I worked with
    you on that. What do you think the results have been so far,
    and does USAID have the expertise necessary to implement that
    strategy and appropriately allocate funds between surveillance,
    anti-microbial resistance, TB, malaria, and so on?
        Dr. Daulaire. What you did when you introduced that
    legislation and you urged the agency for which I was working at
    that point, USAID, to make sure that it sought the expert
    guidance of the world's leaders in these areas, was to assure a
    process which is still ongoing today--and I look at it now from
    the outside rather than the inside--of involvement of others
    than AID in developing and carrying out the strategy. The
    Centers for Disease Control and Prevention and WHO are active
    partners. In any partnership, there are always times when there
    are disagreements or frictions, but I routinely check back with
    all of my old colleagues, whom I am working with now under
    different circumstances.
        What I see here is a process that is moving very
    productively forward. The resources are getting out to the
    field, being used for very important work. As always it is not
    enough, but you are working to correct that with your most
    recent act, and some very important progress has been made.
        In terms of allocations, there is no exact science to this.
    There is an art. Clearly important investments are now being
    made in tuberculosis, in malaria control, in antimicrobial
    resistance work, and in surveillance, which this group of
    experts who were called in agreed were the key issues that were
    a missing piece in the work that the United States was carrying
    on internationally.
        Senator, if I may just come back to a question you raised
    earlier with Dr. Mahmoud. I would like to mention, since among
    the members of the Global Health Council are a number of
    pharmaceutical firms, with whom I have had this discussion,
    what is this issue in terms of pricing of vaccines, there was a
    hearing held in the U.S. Congress I think about a decade ago in
    which pharmaceutical executives were taken to task for the fact
    that vaccine prices were higher here than they were in some
    other countries. That just about shut off the tap of U.S.
    companies producing, manufacturing, and providing vaccines for
    poor countries because they did not want to get, frankly,
    hammered over this issue. The United States is their key
    market.
        It would be enormously helpful if Congress were to express
    itself very clearly that it is appropriate for poor countries
    to have vaccines at concessional prices. This would enable U.S.
    pharmaceutical companies to play a much more active role
    without having to watch their backs.
        Senator Leahy. You are talking about tiered pricing.
        Dr. Daulaire. Yes.
        Senator Leahy. Dr. Foege and Dr. Mahmoud, I will let you
    each have the last word. Dr. Foege, is there anything you would
    like to add to what you have heard?
        Dr. Foege. Thank you, Senator.
        One of the things that GAVI hopes to do is to bring some
    new science not just into the vaccines, but think what would
    happen if the vaccines did not need refrigeration. If you got
    rid of the refrigerators and you did not have to worry about
    this wastage factor, think of what would happen if they can
    engineer the science so that there are no needles and syringes,
    that children will get their vaccine orally or will get it in a
    banana or in a potato or something else. These are important
    things that I think are on the horizon.
        The last thing, just picking up on something that Dr.
    Daulaire said on the moral aspect of this, Roger Bacon was
    asked in the 13th century by the Pope to give a summary of
    science. He gave a summary with three concluding comments.
        No. 1, the glories of science, and in the 13th century, he
    predicted automobiles and airplanes and submarines. This was a
    man who really saw the future.
        No. 2, he said science has no moral compass.
        No. 3, the church is not doing its part to provide a moral
    compass.
        I am just pleased that you are introducing a bill with a
    moral compass.
        Senator Leahy. I take that as high praise. Thank you very
    much.
        Dr. Mahmoud.
        Dr. Mahmoud. I just wanted to repeat my original point of
    gratitude to you and your colleagues on the leadership.
        We need to remember that it took us more than 100 years
    from the discovery of the smallpox vaccine to eradicating
    smallpox. It is about 50 years and the count is still coming on
    polio. The new vaccines need a lot more science than the old
    vaccines. And intensifying the scientific effort is a crucial,
    crucial element in using all the modern biotechnology, the
    genome progress, the function of genomics to really make a
    difference because we have to break the time barrier. Having a
    good vaccine is not going to be enough. This time we need a
    better vaccine and delivered. And this is a commitment of Merck
    and our colleagues in different other organizations.
        Thank you very much.
        Senator Leahy. Thank you, all three of you and Dr.
    Brundtland, for the time you have taken. This has been
    extremely valuable. I know you have all had to move your
    schedules around. I appreciate it very, very much.
        I also want to express my appreciation again to Senator
    McConnell. Without his strong support, we would not have been
    able to have the hearing in the first place.

                              SUBCOMMITTEE RECESS

        The subcommittee will stand in recess until 10:30 a.m., on
    Thursday April 13, when we will hear testimony from Madeleine
    K. Albright, Secretary of State, Department of State.
        [Whereupon, at Noon Tuesday, April 11, the subcommittee was
    recessed, to reconvene at 10:30 a.m., Thursday, April 13.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

                                  ----------

                            THURSDAY, APRIL 13, 2000

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:36 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Specter, Bennett, Campbell,
    Leahy, Lautenberg, and Murray.

                              DEPARTMENT OF STATE

                            Office of the Secretary

    STATEMENT OF HON. MADELEINE K. ALBRIGHT, SECRETARY OF
                STATE

                 Opening statement of Senator Mitch Mc Connell

        Senator McConnell. The hearing will come to order.
        We are pleased to have with us this morning the Secretary
    of State, and my friend and colleague, Senator Leahy, is
    detained in the Judiciary Committee and will be along shortly.
        Madame Secretary, there are three crucial diplomatic tools
    which advance and protect America's national security
    interests: our commitment to principle, our constancy of
    purpose, and our credibility. Each is essential; all are
    mutually reinforcing. Indeed, absent one, the ship of state
    founders. If we fail to honor our commitments, our credibility
    suffers; inconsistency compromises both.
        With the Clinton administration drawing to a close, now is
    a good time to consider how well these tools have been used and
    to what purpose. We should appraise the general condition of
    these tools for the sake of the country and for our next
    leaders. Are they sharper, more precise and finely honed? Or
    have they been allowed to corrode? Are they duller and damaged?
        I have listened for 8 years to the lament that foreign
    policy was so much simpler in the bipolar world led by
    Presidents Reagan and Bush. After all, you knew the good guys
    from the bad. There were communists and capitalists, or so the
    argument goes. The truth is foreign policy was no easier to
    administer, our interests no less difficult to defend. But it
    is true it appeared easier to manage our international
    relations. Yet, I believe that ease was not a gift of
    circumstance, but the hard-won prize for arduous work improved
    by sharp clarity of principles and purpose and a trust
    painstakingly built between these Presidents and the public.
    Commitment, consistency, and credibility were developed and
    used to achieve great things.
        The keystone commitment which defines our Nation is
    democracy. We are scattered over vast territory, yet we are
    strengthened and bound as one community by our allegiance to
    liberty, by the promise of economic opportunity, by our
    obligation to the rule of law.
        In a January farewell tribute, President Clinton suggested
    Boris Yeltsin shared this hallowed vision and had earned the
    right to be called the father of Russian democracy. As he
    delivered this praise, hundreds of Chechens were being beaten,
    raped, tortured, and executed by the Russian military.
    Thousands of civilians were huddled in their basements without
    heat, water, and food, pounded around the clock by Russian
    artillery. In this context, I doubt many Chechens believed our
    commitment to true democracy.
        I read your op-ed in the Washington Post documenting the
    recent occasions in which you have stated opposition to the
    brutal Russian assault on Chechnya. As I reminded Secretary
    Talbott, there is talk and there is action. I understand we
    have a number of issues to balance on our bilateral agenda, but
    they must be balanced, not traded. Our pressure to secure
    ratification of the START agreement should not give the
    Russians a free pass to trample freedom and human rights in
    Chechnya.
        Our commitment to advance democracy must stand in clear,
    bright contrast to the dark repression which troubles the
    landscape. That commitment was not clear in Chechnya, nor is it
    yet clear to the Montenegrins. I have yet to hear any public
    assertion that we will take all necessary steps to deter any
    overt aggression by Belgrade to undermine the Djukanovich
    government. An ambiguous commitment to democracy for Montenegro
    is an invitation to Milosevic to wreak havoc.
        Our commitment was strong enough to invest $2 billion and
    send 20,000 troops to restore democracy in Haiti. Yet, at the
    same moment in Burma, we remained silent as a military junta
    annulled free and fair election results, arrested the winner,
    Aung San Suu Kyi, and her supporters, and ever since has
    maintained a cruel dictatorship funded by narcotics
    trafficking.
        Haiti and Burma lead me to the problems with inconsistency.
    It is here that I believe the record is the weakest. Last week
    I learned that the United States has refused requests from
    nongovernment organizations to support relief efforts in
    Chechnya and Ingushetia. I was advised that the region was
    insecure and we did not want to encourage relief workers to
    take risks.
        Unfortunately, that argument falls flat. Courageous relief
    workers are already in the area, barely sustained by private
    and European contributions. I cannot understand why we have
    provided over $442 million in food aid to North Korea, yet will
    not support the desperate work underway to help the Chechens. I
    can neither understand nor condone this tragic inconsistency
    with our longstanding policy of generosity in support of global
    humanitarian relief work.
        Nor do I understand why we would indict Milosevic for war
    crimes and publicly support an international tribunal to
    consider human rights abuses in Timor, yet we will not publicly
    declare support for a similar international commission of
    inquiry for indictments in Chechnya.
        Less you think I am only concerned with our problems in
    Russian relations, let me point out other regions troubled by
    inconsistency.
        The President and you have invested heavily in a
    comprehensive peace agreement in the Middle East, a goal we all
    share and support. However, a fraction of that personal effort
    could have produced a resolution to the political stalemate
    between Armenia and Azerbaijan. Instead, we have had four U.S.
    negotiators rotate through in 3 years. Again, there is no
    constancy of purpose nor consistency in application of
    diplomatic effort.
        Finally, let me briefly address the overriding importance
    of American credibility. It is my sense that uneven commitment
    and inconsistency undermine our ability to successfully manage
    and address future problems. In other words, weakened
    credibility means it will take more effort to accomplish less.
        What will it now take for Milosevic to believe we will
    defend Montenegro? After our acquiescence to the coup in
    Ecuador, does President Fujimori really accept that we will
    suspend our support if he steals the elections?
        Nowhere has our credibility been more damaged than Haiti.
    Two dates have come and gone when parliamentary elections were
    to be held, and still Preval stalls without consequence. It is
    clear he and Aristide are counting on consolidating
    parliamentary and presidential elections with the hope of a
    more favorable outcome. Our $2 billion in aid pales in
    comparison to the substantial political capital senior
    officials invested early on in Haiti's crisis. Yet, it now
    seems to have dropped off everyone's radar screen. Failure and
    abandonment bruise and batter our friends and allies'
    confidence and willingness to work in common purpose toward
    peace and prosperity.
        Cloudy commitments, inconsistency, and crippled credibility
    also erode congressional support for resource requests.

                               PREPARED STATEMENT

        So, are the tools sharper, Madam Secretary? Is our
    commitment clear? Do you see a Nation serving a constant
    purpose with consistent effort? Is there luster and strength to
    America's credibility?
        Now, I know this has been a rather tough waltz around the
    world, but I invite your response in hopes that you could
    provide maybe more balance to my analysis from your point of
    view. We look forward to hearing your opening statements and
    then moving on to questions.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        There are three crucial diplomatic tools which advance and protect
    America's national security interests: our commitment to principle, our
    constancy of purpose and our credibility. Each is essential--all are
    mutually reinforcing. Indeed, absent one, the ship of state founders.
    If we fail to honor our commitments, our credibility suffers;
    inconsistency compromises both.
        With the Clinton Administration drawing to a close, now is a good
    time to consider how well these tools have been used and to what
    purpose. We should appraise the general condition these tools for the
    sake of the country and for our next leaders. Are they sharper, more
    precise and finally honed? Or, have they been allowed to corrode? Are
    they duller and damaged?
        I have listened for eight years to the lament that foreign policy
    was so much easier in the bipolar world led by Presidents Reagan and
    Bush. You knew the good guys from the bad, there were communists and
    capitalists--or so the argument goes. The truth is, foreign policy was
    no easier to administer, our interests no less difficult to defend.
    But, it is true it appeared easier to manage our international
    relations. Yet, I believe that ease was not a gift of circumstance, but
    the hard won prize for arduous work, improved by a sharp clarity of
    principles and purpose, and a trust painstakingly built between these
    presidents and the public. Commitment, consistency and credibility were
    developed and used to achieve great things.
        The keystone commitment which defines our nation is democracy. We
    are scattered over vast territory, yet we are strengthened and bound as
    one community by our allegiance to liberty, by the promise of economic
    opportunity, by our obligation to the rule of law.
        In a January farewell tribute, President Clinton suggested Boris
    Yeltsin shared this hallowed vision and ``had earned the right to be
    called the Father of Russian democracy.'' As he delivered this praise,
    hundreds of Chechens were being beaten, raped, tortured and executed by
    the Russian military. Thousands of civilians were huddled in their
    basements without heat, water and food, pounded around the clock by
    Russian artillery. In this context, I doubt many Chechens believed our
    commitment to true democracy.
        Secretary Albright, I read your editorial in The Washington Post
    documenting the recent occasions in which you have stated opposition to
    the brutal Russian assault on Chechnya. As I reminded Deputy Secretary
    Talbott, there is talk, and there is action. I understand we have a
    number of issues to balance on our bilateral agenda, but they must be
    balanced, not traded. Our pressure to secure ratification of the START
    agreement should not give the Russians a free pass to trample freedom
    and human rights in Chechnya.
        Our commitment to advance democracy must stand in clear, bright
    contrast to the dark repression which troubles the landscape. That
    commitment was not clear in Chechnya, nor is it yet clear to the
    Montenegrins. I have yet to hear any public assertion that we will take
    all necessary steps to deter any overt aggression by Belgrade to
    undermine the Djukanovich government. An ambiguous commitment to
    democracy for Montenegro is an invitation to Milosevic to wreak havoc.
        Our commitment was strong enough to invest $2 billion and send
    20,000 troops to restore democracy in Haiti. Yet, at the same moment,
    in Burma, we remained silent as a military junta annulled free and fair
    election results, arrested the winner, Aung San Suu Kyi and her
    supporters and, ever since, has maintained a cruel dictatorship funded
    by narcotics trafficking.
        Haiti and Burma lead me to the problems with inconsistency. It is
    here that I believe the record is the weakest. Last week, I learned
    that we have refused requests for support from non- government
    organizations operating in Chechnya and Ingushetia. I was advised that
    the region was insecure, and we did not want to encourage relief
    workers to take risks.
        Well, that argument falls flat. Courageous relief workers are
    already in the area, barely sustained by private and European
    contributions. I cannot understand why we have provided over $442
    million in food aid to North Korea, yet will not support the desperate
    work underway to help the Chechens? I can neither understand nor
    condone this tragic inconsistency with our long standing policy of
    generosity in support of global humanitarian relief.
        Nor, do I understand why we would indict Milosevic for war crimes
    and publicly support an international Tribunal to consider human rights
    abuses in Timor, yet will not publicly declare support for a similar
    international commission of inquiry or indictments in Chechnya?
        Less you think, I am concerned only with problems in our Russian
    relations, let me point out other regions troubled by inconsistency.
        The President and you have invested heavily in a comprehensive
    peace agreement in the Middle East, a goal we all share and support.
    However, a fraction of that personal effort could have produced a
    resolution to the political stalemate between Armenia and Azerbaijan.
    Instead we have had four negotiators rotate through in three years.
    Again, there is no constancy of purpose nor consistency in application
    of diplomatic effort.
        Finally, let me briefly address the overriding importance of
    American credibility. It is my sense that uneven commitment and
    inconsistency undermine our ability to successfully manage and address
    future problems. In other words, it will take more effort to accomplish
    less.
        What will it now take for Milosevic to believe we will defend
    Montenegro? After our acquiescing to the coup in Ecuador, does
    President Fujimori really accept that we will suspend our support if he
    steals the elections?
        Nowhere has our credibility been more damaged than Haiti. Two dates
    have come and gone when parliamentary elections were to be held, and
    still Preval stalls without consequence. It is clear he and Aristide
    are counting on consolidating parliamentary and presidential elections
    with the hope of a more favorable outcome. Our $2 billion in aid pales
    in comparison to the substantial political capital senior officials
    invested early on in Haiti's crisis, yet it now seems to have dropped
    off everyone's radar. Failure and abandonment bruise and batter our
    friends and allies' confidence and willingness to work in common
    purpose toward peace and prosperity.
        Cloudy commitments, inconsistency and crippled credibility also
    erode Congressional support for resource requests.
        So, are the tools sharper, Madame Secretary? Is our commitment
    clear?
        Do you see a nation serving a constant purpose with consistent
    effort? Is there luster and strength to America's credibility?
        I know I have been tough, so I invite your response in hopes that
    you can balance my analysis.

                Summary statement of Hon. Madeleine K. Albright

        Secretary Albright. Thank you very much, Mr. Chairman and
    Senator Leahy. I am very glad to be here. Despite this opening
    salvo, this is one of my favorite subcommittees. I recall with
    great pleasure, Mr. Chairman, our visit to Louisville a couple
    of years ago. You are indeed a plain speaker, and though we do
    not always agree, I think we have a very good record of working
    together, and I hope very much that we can build on this since
    I am not out of here yet.
        I am looking forward to Senator Leahy coming in because I
    think that he has long been a champion of human rights and a
    leader on land mines and now the sponsor of the Global Health
    Act of 2000. I think no one has a better grasp of the linkage
    between American interests and values.
        So, every Senator is a great leader. Now that I have
    praised you, I am going to ask you for your money.
        Senator McConnell. You usually get it.
        Secretary Albright. I would like to get back to the points
    that you have raised because I think you have put three C's
    together in a very interesting way, and I happen to believe
    frankly that our commitment to democracy is unwavering and is
    the main thread through which our foreign policy is carried
    out.
        I think we can talk about consistency a little bit because
    I think that consistency is one thing. The cookie cutter
    approach is another. We need to look at each of these case by
    case, and maybe in the questioning we will have a chance to do
    that.
        Credibility is an issue, and some of the credibility has to
    do with the fact that we do not put our money where our mouth
    is. And some of it has to do with the fact that we cannot get
    the money early enough in order to make a difference in a lot
    of these places.
        So, I would take those three points and talk to you about
    them as we go through this hearing because I think that you
    raise very important points. I think the tools that we have for
    foreign policy, as we enter the 21st century, need to be
    sharpened. Some of them are different, and I would be very glad
    to talk about them. But, I would like very much to go through
    some of my points in my statement.
        I think that this subcommittee, more than others, really
    understands the importance of U.S. leadership in our era and
    the fact that events overseas have an increasing impact on our
    citizens here at home; on our security, our jobs, our health,
    even the safety of our schools and streets. You know, as well
    as I do, that the term ``foreign aid'' is in fact virtually
    obsolete. I think when we fight proliferation, drug trafficking
    and terrorism, disease and crime, we are actually aiding
    America. The same is true when we work to open worldwide
    markets, foster democracy and strengthen the rule of law.
        It is only because our predecessors were willing to bear
    the cost of leadership that our Nation entered the new century
    strong, respected, prosperous, and at peace. We have a
    responsibility now to secure these blessings for future
    generations of Americans. We cannot do that unless we lead, and
    we cannot lead without resources.
        Most Americans are astonished when I tell them we devote a
    smaller percentage of our wealth to assisting overseas
    development than any other industrialized country. During the
    past decade, our rate of investment has declined by half, since
    the days of Marshall and by more than 90 percent since Truman.
    This makes it harder for us to leverage the help of others and
    often leaves us with no other choice than to short change one
    urgent need in order to cope with another.
        So, I urge the committee, and the Senate, to act soon on
    our request for emergency supplemental funds this year. This
    money will meet critical needs, especially those in the still
    turbulent region of southeast Europe and in our own hemisphere.
    You mentioned Montenegro and the Balkans. I need the money
    there. I need the Kosovo supplemental. That is what this is
    about. That is the credibility issue.
        In the Balkans, the struggle between violent extremists and
    more moderate elements is taking place in real time, and we
    need to be there to help. We ask your backing for our efforts
    to promote stability and democratic values; including
    tolerance. We need help in bolstering security and also in
    doing our part to revitalize the Kosovo economy and civil
    society. It serves our interests, for the sooner the people of
    Kosovo are able to live in security and peace, the sooner
    American troops can begin to come home. Our effort to ensure
    continued support from Europe will be undermined if we fall
    short in our own contributions.
        Closer to home, President Clinton's request includes funds
    to help the people of Colombia reclaim their country from drug
    criminals, and these resources will assist the nation in
    disrupting illicit narcotics production, apprehending drug
    traffickers, fostering alternative development, and enhancing
    respect for human rights. We have a huge stake in helping the
    Colombians to achieve these goals. More than four-fifths of the
    cocaine flooding our Nation either comes from Colombia or
    passes through it, and most of Colombia's heroin production
    also ends up here.
        Earlier this week, I met with Colombian President Pastrana,
    and some of you may also have had that opportunity. I find him
    a courageous leader with a bold plan for lifting his country
    up, he deserves our help and it is in our interest to provide
    it; not eventually but now. That is the point of having asked
    for a supplemental.
        As you know, the House of Representatives has acted on our
    supplemental request but omitted essential elements, including
    embassy security and international peacekeeping. The Senate has
    not yet acted and this morning I ask your support for the
    President's entire request and for moving ahead on an emergency
    basis.
        I also urge full funding for the foreign operations
    component of the President's national security budget for the
    coming fiscal year. Now, I say this, knowing that most of the
    money will not be spent until 2001 under a new administration,
    so my urging has nothing to do with parties or personalities,
    but everything to do with U.S. interests and values--
    commitment, consistency, and credibility.
        For example, many of our programs help to keep America
    secure. The cold war is over and our Nation is strong, but we
    still face grave dangers. The funds we seek will help us to
    assure the safe handling of nuclear materials and expertise in
    the former Soviet Union, slow the spread of nuclear, chemical,
    and biological weapons, counter international terror, and fight
    transnational crime.
        Our programs also support American prosperity, by promoting
    U.S. exports, spurring overseas development, and helping other
    countries to achieve viable market economies.
        In this connection, I urge Members to support the
    President's request for permanent, normal trade relations with
    China. This request makes sense from whichever angle you view
    it. Strategically, it will help integrate China more thoroughly
    into the world economy and create further incentives for
    Beijing to support stability within the Asia Pacific region.
    Economically, it will dramatically increase United States
    access to Chinese markets without requiring us to further open
    ours, and it will strengthen protections against unfair trade
    practices. When China joins the WTO, Beijing will be required
    to accept international trading rules and diminish the role of
    state-owned enterprises. This will reduce government control
    over people's lives, promote the rule of law, and aid those
    within China who want to develop a more open society.
        A third major objective of our international affairs
    program is peace. Today in the Middle East, we must operate
    with a steady hand as we strive to help Israel and her
    neighbors move towards a comprehensive settlement. In recent
    months, we have been reminded just how hard that job is and how
    deep the legacy of mistrust, but never before has the logic of
    peace been so compelling or the opportunities for peace so
    clear. At this critical time, America's commitment to provide
    appropriate support to our partners in peace must remain rock
    solid.
        In Southeast Europe, we are striving to foster stability
    and tolerance. We will not succeed without international
    support. We are counting on our friends in Europe to provide
    the lion's share of muscle and money. As I saw during my visit
    to the region last month, the majority of people there are more
    interested in plugging into the world economy than slugging it
    out with old adversaries. Huge obstacles remain however, but I
    am convinced that with sufficient resources and the right
    leadership, Southeast Europe can indeed become a full
    participant and a partner in the Euro-Atlantic community.
        The fourth purpose of our international affairs program is
    to promote values that Americans cherish. For example, our
    contributions to international family planning spur overseas
    development, reduce the number of abortions, and save human
    lives. I ask your support for full funding in this area without
    any unrelated restrictions.
        Senators, the United States has a huge stake in helping to
    see that the democratic tide remains a rising tide around the
    world. The President's budget proposes significant investments
    in promoting democracy in key countries such as Colombia,
    Indonesia, Nigeria, and Ukraine. No country is better equipped
    than ours at helping nations to strengthen democratic
    institutions and practices. This is appropriate because support
    for freedom is in the proudest of American traditions, and I
    ask your help in getting a good start on what I hope will be
    known, with a small d, as the democratic 21st century.
        We also support our values when we assist people in
    desperate need. Earlier this year, we joined with others in
    helping to rescue the victims of devastating floods in
    southeast Africa, especially Mozambique. Unfortunately,
    substantial additional resources will be needed. The floods
    have undone much of the economic progress achieved in
    Mozambique since the civil war ended there 8 years ago.
    Accordingly, we will be consulting with you soon about
    reprogramming roughly $32 million from existing resources and
    we will be coming forward with a request for $200 million in
    emergency supplemental funds.
        Mr. Chairman, the cost of all the initiatives I have
    described, plus many more that I have not had time to mention,
    is equal to roughly one penny out of every dollar the Federal
    Government spends, but that single penny can spell the
    difference between hard times and good times for our people,
    war and peace for our country, less and more freedom for the
    world.

                               PREPARED STATEMENT

        The annual budget debate in Washington typically revolves
    around the appropriate role of the Federal as opposed to the
    State and local governments in such areas as education and
    health care. But under the Constitution, the protection of our
    national security is one of the Federal Government's most basic
    tasks. It is our responsibility that cannot be delegated or
    privatized. It is our responsibility to formulate plans for
    protecting American interests and to come up with the resources
    required to make those plans work. Senators, I know that you
    understand this and I hope you will agree to support the
    President's budget and American leadership in your
    deliberations this year.
        Thank you very much.
        [The statement follows:]

                Prepared Statement of Hon. Madeleine K. Albright

        Mr. Chairman and members of the Subcommittee, good morning. I am
    delighted to have the opportunity to testify before you.
        My message is straightforward. I ask you to fully fund the foreign
    operations portion of the President's national security budget request.
    I do so knowing that this Subcommittee--more than most--is comprised of
    men and women who understand the complex demands of leadership in our
    era. You know that, more and more, events overseas have an impact on
    our citizens here at home, on our security, our jobs, our environment,
    even the safety of our streets and schools.
        And you know that because America has led for so long, through
    Republican and Democratic Administrations alike, our nation was able to
    enter the new century strong and respected, prosperous and at peace.
        The President's fiscal year 2001 request for Foreign Operations is
    $15.09 billion, as part of a total international affairs budget of
    roughly $22.75 billion. This includes a broad array of programs and
    initiatives administered by four cabinet departments and more than a
    dozen agencies. It covers everything from supporting peace in the
    Middle East to interdicting drugs; from curbing the spread of nuclear
    weapons to the Peace Corps; and from promoting U.S. exports to
    responding to humanitarian disasters.
        The amount requested by the President is our best estimate of what
    we will absolutely need next year. But the truth is that unforeseen
    events occur and it is simply not possible to anticipate every need a
    year or more in advance, as the budget process requires.
        As you know, in 1999, we had to come back to Congress for
    supplemental appropriations to aid in hurricane response in Central
    America and the Caribbean, and to help implement the Wye Memorandum in
    support of Middle East peace.
        This year, the President is seeking your support for emergency
    funds to help stem the flow of narcotics from the Andes, bolster
    democracy in Southeast Europe, and keep the peace in Kosovo and East
    Timor. These investments are urgently needed.
        For example, in Colombia, President Andres Pastrana merits our
    support for his plan to fight drug trafficking, achieve peace, promote
    prosperity and improve governance throughout his country.
        The United States has a profound interest in helping Colombians to
    achieve these closely-linked goals. New production methods and expanded
    cultivation have caused a sharp increase in illicit narcotics
    production in Colombia. Today, more than four-fifths of the cocaine
    entering our nation either comes from that country or is transported
    through it. And most of Colombia's heroin production is exported to the
    United States.
        The emergency aid President Clinton has requested will help Bogota
    gain control over parts of the country where drugs are produced and
    which are now dominated by illegal armed groups that engage in, or
    protect, drug trafficking. It will support alternative development
    programs, increase our backing for narcotics interdiction, and
    strengthen mechanisms for judicial reform, human rights and
    humanitarian assistance.
        Recognizing that neither criminals nor conflicts respect national
    borders, the President's request will also support counter-drug
    initiatives in other Andean countries.
        Only Colombians can devise a solution for Colombia's ills.
    President Pastrana has put forward a bold plan for doing just that. It
    is urgent that we support him.
        The requirement for supplemental funding to address instability in
    the Balkans is equally pressing. Throughout this region, the struggle
    between violent extremists and more moderate and democratic elements is
    taking place in real time.
        We are at a pivotal point in Kosovo, where respected Serb leaders
    have agreed to participate in meetings of the U.N.'s Joint Interim
    Administrative Council. In Montenegro, President Djukanovic is being
    pressed hard by the Milosevic regime. Within Serbia, democratic forces
    are striving to open more political space, and build the institutions
    of an independent civil society. And in Croatia, a new and democratic
    government is struggling to respond to economic crisis.
        With support from many in both parties in Congress, we have worked
    hard to support stability and democratic growth throughout Southeast
    Europe. This is in our interests, because we know from history that the
    United States cannot be secure if Europe is not secure, and that Europe
    will be at risk as long as its southeast corner is plagued by conflict.
        We have also worked hard to assure that our European partners would
    provide the lion's share of reconstruction and other assistance to this
    region. They are stepping up to the task. But we will not be successful
    in leveraging the help of others, or in protecting our own interests,
    without support for the President's emergency supplemental funding
    requests.
        These requests also include funds needed to pay our share of U.N.
    peace missions in Kosovo and East Timor.
        As you know, the House has approved an emergency supplemental
    appropriations bill, although it failed to include some important
    elements of the President's requests. I hope we will be able to work
    with the Senate leadership and members of this Committee to remedy
    those deficiencies and move ahead soon on this very vital legislation.
        As we respond to these immediate needs, Mr. Chairman, we must also
    consider requirements for fiscal year 2001, the first full year of the
    new century. And to me, the most salient characteristic of our budget
    request for the coming year is its modesty.
        Most Americans are astonished when I tell them that we devote a
    smaller percentage of our wealth to assisting overseas development than
    any other industrialized country. Over the past decade, our rate of
    investment has declined by 50 percent. Half a century ago, in the era
    of Truman and Marshall, our international affairs programs, in relative
    terms, were more than ten times larger than today.
        All this has consequences. It reduces our influence for stability
    and peace in potentially explosive regions. It detracts from our
    leadership on global economic issues. It makes it harder for us to
    leverage the help of others. And it often leaves us with a no-win
    choice between devoting resources to one emergency and using those same
    resources to deal with another urgent need.
        That is why it is so important that you support the President's
    full international affairs request. I emphasize this because we truly
    are talking about the minimum amount we need. If you reduce our
    request, you will reduce our capacity to lead.
        I say this with the clear understanding that the vast majority of
    the funds I seek will be spent next year, under a new Administration.
    My request has nothing to do with parties or personalities; it has
    everything to do with our nation's ability to protect our interests,
    promote our values and meet our priorities.
        Accordingly, I am very concerned about the fiscal year 2001 Budget
    Resolution that is in the final stages of congressional consideration.
    A proposal has been made to slash funding for the international affairs
    function by more than $2 billion from the President's budget. This
    would destroy the options of this Subcommittee, Mr. Chairman, and take
    a meataxe to America's capacity to lead. I urge you to do all you can
    to shape a Budget Resolution that is in keeping with America's global
    responsibilties, and that would enable us to provide the kind of
    effective foreign policy our citizens deserve and our interests demand.
        And now, with your permission, Mr. Chairman, I would like to review
    some of the priorities of our foreign policy, with emphasis on the
    direct benefits our citizens derive from the work we do.

    First, our international programs help make Americans more secure

        The Cold War is over and our nation is strong, but our citizens
    continue to face grave dangers. These include terrorists who target
    Americans, possible conflicts in key regions, drug traffickers, and the
    spread of nuclear, chemical and biological weapons and the missiles
    that can deliver them.
        In many cases, we cannot defend against these threats simply by
    acting alone. We need the help of others. Nor is force always the best
    approach. On many occasions, we will rely on diplomacy as our first
    line of defense--to cement alliances, build coalitions, and find ways
    to protect our interests without putting our fighting men and women at
    risk.
        An example is our effort to protect Americans from the threat posed
    by nuclear weapons.
        Here, the military deterrent provided by our armed forces and the
    technological edge they enjoy are indispensable. But we will sleep
    better and be safer if our deterrent never has to be used. The job for
    our diplomats, then, is to create a political environment in which
    serious military threats to our country are less likely to arise.
        To this end, the United States has led in establishing an
    international legal framework--centered on the Nuclear Non-
    Proliferation Treaty, IAEA safeguards, the Chemical and Biological
    Weapons Conventions, and now the Comprehensive Nuclear Test Ban
    Treaty--designed to prevent weapons of mass destruction from spreading
    or falling into the wrong hands.
        Moreover, our Expanded Threat Reduction Initiative (ETRI) has done
    much to protect the American people, destroying almost 5000 nuclear
    warheads in the former Soviet Union; eliminating nuclear weapons from
    three former Soviet Republics; and engaging 30,000 former Soviet
    weapons scientists in peaceful ventures. The President is requesting
    $974 million for ETRI in fiscal year 2001, including $141 million for
    programs administered by the Department of State.
        We are also taking steps to protect ourselves from the new threats
    posed by ballistic missiles.
        On the Korean Peninsula, we have reviewed our policy over the past
    year in close coordination with Seoul and our indispensable ally Japan.
    We are backing President Kim Dae-jung's strategy of dialogue with the
    Democratic Republic of North Korea (DPRK), including plans for an
    historic summit between leaders from the North and South in June.
        We have also expressed a willingness to improve our own relations
    with Pyongyang while it addresses our key concerns.
        Last September, we reached an understanding with the North that it
    will refrain from any long-range missile flight tests as long as
    negotiations to improve relations are underway. Last month, the DPRK
    committed to hold a new round of missile talks and to initiate
    discussions that would address our concerns on nuclear weapons issues.
    The DPRK also confirmed that it will provide access once again to
    Kumchang-ni; which we plan to visit in May.
        The DPRK's nuclear weapons-associated activities are another area
    of deep concern. By freezing the North's nuclear facilities at Yongbyon
    and Taechon, which pose a serious proliferation risk, the Agreed
    Framework is making a vital contribution to stability. We need
    Congressional support for meeting our obligations under the Framework,
    just as we expect the DPRK to meet its own.
        We also need your help in safeguarding Americans from other
    dangers. Today, when America's military is called upon to act, we often
    do so as part of a coalition. This reflects the value of our security
    assistance programs, including International Military Education and
    Training. These programs contribute to America's defense industrial
    base, take advantage of opportunities to promote democratic practices,
    and help friends and allies to develop armed forces that are more
    capable and better able to operate with our own.
        In this connection, I am pleased to report that we are developing a
    proposal to enhance Egypt's Foreign Military Financing that we believe
    is responsive both to the Egyptian military modernization program and
    our own budget constraints. The Directed Disbursement Proposal is being
    readied for submission to Congress now and we will want to discuss it
    with you shortly.
        A similar rationale underlies our voluntary contributions to
    international peacekeeping activities. After all, if we do not want
    America's military deployed in more and more hot spots abroad, we
    should do all we can to enhance the capacity of others to end conflicts
    and build peace.
        Another area where resources are required to protect our interests
    is in responding to the threat posed by international terror. Because
    of our military strength, potential enemies may try to attack us by
    unconventional means, including terrorist strikes and the possible use
    of chemical or biological weapons. Although the number of terrorist
    strikes has declined in recent years, the severity of such strikes has
    increased.
        In countering these threats, we must be prepared at home and
    overseas. That is why we are taking strong security measures and--at
    President Clinton's direction--improving our planning for emergency
    response.
        Through our diplomacy and training programs, we help friendly
    governments to improve border security and share information about
    those suspected of being affiliated with terrorist networks. We gather
    information to advise and warn Americans. We strive to forge
    international agreements and cooperation that will leave terrorists
    with no place to run, hide, operate or stash their assets. We do all we
    can to bring suspects before the bar of justice, as we have in several
    major cases, including the sabotage of Pan Am 103, and the tragic 1998
    bombing of two U.S. embassies in Africa.
        This year, we are proposing in the President's budget the creation
    of a dedicated Center for Antiterrorism and Security Training. This
    Center will help us to improve the skills of foreign security personnel
    who are on the front line of defense at airports, diplomatic missions
    and other facilities frequented by Americans overseas. We believe this
    Center should be located in the Washington, D.C. area, in order to
    foster interaction between the foreign security officials we train and
    our own security and law enforcement personnel. This will also enable
    us to consolidate our training programs, thereby streamlining
    management and improving the environment for training.
        American security also depends on our ability to fight and win the
    struggle against international crime.
        Drug cartels and criminal syndicates have expanded their operations
    since the end of the Cold War, in part by capitalizing on the same
    technological advances that have fueled legitimate international
    commerce.
        Recognizing the seriousness of this threat, President Clinton has
    launched a comprehensive effort to integrate all facets of the federal
    response to international crime. The State Department is a key partner
    in this initiative.
        We are working with other nations around the globe to strengthen
    legal codes; train police, prosecutors and judges; close criminal front
    companies; halt illegal smuggling and money laundering; negotiate
    extradition treaties; and bring criminals to justice.
        We are also pursuing a comprehensive strategy to fight illegal
    trafficking in narcotics. This includes support for eradication,
    interdiction, alternative development, seizing drug assets and
    extraditing drug kingpins to the United States for trial.
        These efforts are paying healthy dividends. Last year our programs
    helped prevent a potential 135 tons of cocaine--with a street value of
    more than $23 billion--from reaching American neighborhoods. We have
    helped to substantially reduce opium production in Thailand and end it
    entirely in Guatemala; cut coca production dramatically in Bolivia and
    Peru; and worked with foreign governments to break up transnational
    drug organizations.

    A second overarching goal of our foreign policy is to support American
            prosperity by promoting a healthy world economy and by ensuring
            fair treatment for American businesses, farmers, ranchers and
            workers

        With this goal in mind, the President has asked Congress to support
    the Administration's agreement to bring China into the World Trade
    Organization by passing Permanent Normal Trade Relations (PNTR). The
    arguments in favor of PNTR are clear and compelling.
        As President Clinton put it, ``economically, this agreement is the
    equivalent of a one-way street.'' It will dramatically cut import
    barriers imposed on American goods and services, without requiring us
    to change any of our own current market access policies. We preserve
    our right to withdraw market access in the event of a national security
    emergency. We make no changes in laws controlling the export of
    sensitive technology. And our protections against unfair trade
    practices and potential import surges are stronger with the agreement
    than without it.
        Conversely, if we do not enact PNTR for China, the United States
    will risk losing most of the market access benefits of the WTO
    agreement. China will join the WTO anyway. And our competitors in
    Europe, Asia and elsewhere will reap the benefits from the agreement we
    negotiated. So a vote against PNTR would simply be shooting ourselves
    in the foot-it would cost America jobs, not protect them.
        Some critics suggest that U.S. concerns about China's human rights
    record should be expressed by denying normal relations on trade. But
    that approach would undercut the positive forces that are now at work
    in China. WTO accession will require China to follow international
    trading rules and reduce the role of state-owned enterprises. This will
    help promote the rule of law and spur the development of a more open
    society.
        Others suggest that the United States should not grant PNTR to
    China until there is clear improvement in Beijing's relations with
    Taipei. But this ignores the strong support Taiwan authorities have
    expressed for China's entry into the WTO, and President-elect Chen's
    public support for normal trade relations between China and the United
    States.
        From the standpoint of our national security, President Clinton's
    proposal for according PNTR to China is a plus. The combination of PNTR
    and WTO accession will give China more reasons to be prudent in its
    handling of the Taiwan issue. China and Taiwan in the WTO together will
    be able to develop a deeper and rule-based economic relationship. The
    stronger its economic relations across the Strait and with the U.S.,
    the more China has to gain from cooperation and a peaceful resolution
    of differences.
        Conversely, China would see a rejection of PNTR as a strategic
    decision by the United States to turn from cooperation to
    confrontation, and to deal with China as an adversary. This outcome
    would not serve our interests. Denying PNTR would drive the Chinese
    away from integration into the international community and its
    standards. This is the wrong direction. We want China to move in the
    right direction, towards increased cooperation on tough security issues
    such as South Asia, Korean stability and nonproliferation. In recent
    years, we have made considerable progress on these issues. A vote for
    PNTR is a vote for encouraging China to do more.
        As we pursue trade with China, the State Department is also working
    to strengthen the global network of financial, legal, and other
    arrangements upon which virtually all international business
    transactions depend.
        This is especially important for leading edge sectors such as
    Internet commerce and parts of the telecommunications industry. For
    example, in the last two years we have ensured that the most lucrative
    e-commerce markets--estimated to be worth more than $1 trillion by
    2003--are taxed without discrimination or costly customs duties. And we
    won the European Union's agreement not to discriminate against American
    cellphones.
        More traditional industries also benefit. In recent years, we have
    negotiated 35 civil aviation agreements in support of an industry that
    employs more than 600,000 of our citizens. These agreements also help
    cities that are now international destinations. Memphis has recently
    attracted dozens of new businesses because Federal Express has
    expanded, and Chicago's O'Hare Airport is expected to attract $1
    billion in new regional investment because of our new aviation
    agreement with Japan.
        Of course, many of America's fastest-growing markets are in
    developing countries where the transition to an open economic system is
    incomplete. Often these countries are held back by high rates of
    population growth, lack of access to health care and education, and
    civil strife.
        So there is still a vital need for development assistance and for
    organizations such as the United Nations Development Program (UNDP),
    especially in the poorer nations of Africa and Asia.
        For years, UNDP has been at the forefront of helping developing
    countries establish democratic institutions, market economies and basic
    human rights. It also plays a major role in supporting women worldwide
    as they strive to gain more equal access to the levers of political and
    economic power.
        Like UNDP, UNICEF plays an important role in countries suffering or
    recovering from the devastation caused by civil or international
    conflict. Around the world, UNICEF helps protect children--a society's
    most vulnerable members and its hope for the future.
        President Clinton has proposed a new tax credit to speed the
    development of vaccines for killer infectious diseases--including
    malaria, tuberculosis and AIDS--that disproportionately afflict
    developing nations. And we are asking for an increase of $150 million-
    much of it from this Subcommittee--in our worldwide fight against these
    diseases. I urge your support for these requests.
        I also ask your support for our initiative, in partnership with the
    G-8, to provide debt relief for the most heavily indebted poor
    countries, and to use a portion of that relief to improve basic
    education and health care and conserve the environment.
        And I urge you to restore full funding to our support for
    international family planning. This is the most effective way for us to
    reduce the number of abortions and make it more likely that when
    children are born, they grow up healthy and strong. The money for these
    programs should be provided without restrictions on free speech or that
    might hamper efforts to save lives and protect the health of women and
    children.

    A third major objective of our international affairs programs is to
            support peace

        We know from history that unresolved disputes can erupt into
    violence that endangers allies, creates economic havoc, generates
    refugees and entangles our own forces in combat. So we have a strong
    national interest in helping others--especially in key regions--to
    settle their differences at the bargaining table, rather than the
    battlefield.
        Today, in the Middle East, we need steady congressional backing as
    we work with the parties to find the road to a just, lasting and
    comprehensive settlement. As we have seen so often in recent weeks, the
    legacy of mistrust in the region is hard to overcome and the enemies of
    peace remain active. But never before has the logic of peace been so
    compelling or the opportunity for peace so clear. At this critical
    time, America's commitment to progress on all tracks, and our
    appropriate support for those willing to take risks for peace, must
    remain rock solid.
        In Sierra Leone, we are supporting efforts through the United
    Nations to back the peace process and enable the people of that
    devastated country to begin to recover and rebuild. Success will depend
    greatly on whether the United States and other U.N. members sustain
    their commitments.
        In the Congo, the Lusaka Agreement provides a good basis for ending
    the war, and we have challenged its signatories to live up to their
    obligations under it. The signatories have also agreed to provide
    access, security and cooperation to a United Nations peace mission.
    Such a mission cannot impose a solution, but it can help give the
    parties the confidence they need to implement one.
        Meanwhile, through the African Crisis Response Initiative (ACRI),
    we have trained over 5,000 troops from seven African countries to
    respond quickly and effectively to peacekeeping challenges. Some of
    these soldiers are already participating in peacekeeping operations,
    and starting in September we will expand the training from battalion
    level to include brigade headquarters programs as well.
        In Southeast Europe, in partnership with the European Union and
    others, we have entered into a multi-year strategy for integrating the
    nations of that region into the continent's democratic mainstream. The
    goals of this Southeast Europe Stability Pact are to foster peaceful,
    tolerant societies; build viable economies; and transform the region
    from a source of instability into a full participant and partner in the
    new Europe.
        We are under no illusions about the difficulty of this task. It is
    literally to alter the patterns of history; to replace whirlpools of
    violence leading nowhere with a steady upward tide. This won't happen
    unless the international community follows through on commitments to
    help. And unless regional leaders make the hard choices required to
    create societies based on freedom and law.
        Accordingly, we welcome the commitments made by international
    donors (including international financial institutions) at the Brussels
    Conference two weeks ago of about $6.1 billion in year 2000 funds for
    the region--with $2.28 billion front-loaded for specific ``Quick
    Start'' regional projects. Our Allies are pulling their weight on these
    initiatives, and the U.S. share announced at the Conference was $624
    million.
        Governments in the region are also doing their part by taking steps
    to curb corruption and create a good climate for doing business.
        We are particularly heartened by democratic progress in the former
    Yugoslavia. The recent elections in Croatia were a true breakthrough,
    representing a triumph for civil society and a major turning point away
    from ultra-nationalism and towards democratic values.
        In Bosnia, since the Dayton Accords were signed, free and fair
    elections have been held at all levels. President Djukanovic is
    committed to democratic practices in Montenegro. And increasingly in
    Serbia, people are asking when they will be given the right so many of
    their neighbors have to choose their leaders freely and without fear.
        In Kosovo, our challenge is to prepare the way for democracy by
    bringing the same determination to the task of building stability as we
    did to ending conflict.
        In less than ten months, much progress has been made. Large-scale
    violence has ended. Almost a million refugees and displaced have
    returned home.
        Nevertheless, the situation remains tense and unpredictable. Backed
    by Kosovo's leaders, we have urged citizens to refrain from violence,
    and to cooperate with KFOR, the U.N. mission, and the international war
    crimes tribunal. And we are working with the citizens of Kosovo to
    prepare for municipal elections later this year.
        The President's fiscal year 2000 Supplemental and fiscal year 2001
    budget requests include our share of funds to help Kosovo build a
    democratic society. Combined with the far larger contributions received
    from our allies and partners, these funds will be used to help create
    effective civil administration, spur economic activity, create
    democratic institutions and train and equip an effective police force.

    A fourth purpose of our international affairs programs is to promote
            values that reflect the interests, character and ideals of the
            American people

        We do this because it is right, but also because it is smart.
    Compared to dictatorships, democratic nations are more likely to be
    stable, better able to cope with financial stress, more reliable
    trading partners and less likely to generate refugees or contribute to
    other global problems. Nations that respect the rights of their own
    citizens are also more likely to respect the rights of other countries.
    And because America has interests in every corner of the globe, we
    benefit when those interests are protected by legal systems that are
    independent and fair.
        One hundred years ago, the number of countries with a government
    elected competitively and on the basis of universal suffrage was zero.
    Today, according to Freedom House, it is 120. These include countries
    on every continent, and people of virtually every culture and faith.
        Over the past half-century, we have seen nation after nation gain
    its freedom, but we are not complacent. Because we know that, in many
    countries, the majority of people have yet to see the economic benefits
    that a free society is supposed to generate. And that many new
    democracies are threatened by ethnic divisions, rising crime and weak
    institutions.
        It is by now a truism that what's most important is not a country's
    first election, but rather its second and third. And what matters is
    not simply that people have the right to vote, but that they are
    offered a real choice, under conditions that are truly free and fair.
        Elections, moreover, are but one essential part of democracy.
    Others include markets that reward initiative; police that respect due
    process; legal structures that provide justice; labor organizations
    that are independent; and a press corps that is free to pursue the
    facts and publish the truth.
        These institutions do not arise overnight. Building democracy takes
    many years and much patience. It requires not only the seeds of
    democratic ideals, but also the soil of democratic culture in which
    those seeds may take root and grow.
        That is why the United States is working within global and regional
    institutions to strengthen the commitment to democratic principles and
    assist governments that practice them.
        I am proud of the help that USAID, the State Department and other
    U.S. agencies are providing to nations in transition. From Asia to
    Africa to the Andes, they are training judges, drafting commercial
    codes, advancing the status of women, bolstering civil society and
    otherwise helping to assemble the nuts and bolts of freedom.
        I am pleased that in this work, we have partners such as the
    European Union, Japan, and a host of nongovernmental and private sector
    organizations that are committed to making the new century a time of
    freedom and growth.
        Our task this year is to renew democratic momentum, not out of
    altruism, but because democratic growth is part of the answer to many
    of the economic, political and military challenges that we face.
        In Colombia, we have an urgent and obvious stake in aiding
    President Pastrana's plan to rescue his country--and thereby help to
    rescue ours--from the scourge of cocaine.
        Nigeria's future development will determine whether it is a source
    of chaos and corruption or a driving force for stability and progress
    throughout West Africa.
        Indonesia has long been a leader in Southeast Asia. It now has a
    chance, although under severe stress, to become a model of multiethnic
    democracy, as well.
        Aside from Russia, Ukraine is the largest and most influential of
    the New Independent States. And for the first time since independence,
    it now has a president, a prime minister, and a parliament who support
    both one another and accelerated reforms.
        Later today, I will leave for Kiev, where I will meet with
    President Kuchma and other senior leaders. I will bring with me a firm
    message of American support for a strong and independent Ukraine, and
    for continued progress towards a fuller and richer democracy based on
    the rule of law.
        The President's budget proposes significant investments in each of
    these four key democracies and in promoting democratic practices and
    values worldwide. Support for freedom is in the proudest of American
    traditions--from Washington and Jefferson, to Reagan and Clinton. I ask
    your help in getting a good start on what I hope will be known, with a
    small ``d,'' as the democratic century.
        We complement our support for democratic growth by promoting
    increased respect for human rights, and by contributing to the global
    system of international humanitarian response.
        Americans may be proud of the assistance we provided through
    Defense and foreign operations accounts to help rescue and assist those
    victimized by the recent devastating floods in southeast Africa,
    especially Mozambique. Almost half a million people were either trapped
    by the high waters, or completely lost their homes.
        To date, the United States has provided $10 million in
    International Disaster Assistance and $7 million in food aid. The
    Defense Department has also been authorized to allocate $37.6 million
    in drawdown authority.
        Unfortunately, recovery efforts have only begun, the risk of water-
    borne disease is severe, and substantial additional resources will be
    needed. The floods have undone much of the economic progress achieved
    in Mozambique since the civil war there ended eight years ago.
    Accordingly, we will be consulting with you soon about reprogramming
    roughly $32 million from existing resources. And we will be coming
    forward with a request for $200 million in emergency supplemental
    funds.
        Americans may also be proud of the State Department's support for
    human rights. We report annually on human rights and religious freedom
    in nations around the world. We help support work of the U.N. Human
    Rights Commission and the U.N. High Commissioner for Human Rights. We
    do all we can to shine the spotlight of world attention on places such
    as Burma and Cuba, where courageous democratic voices are suppressed
    and unrepresentative governments have led their societies to ruin. And
    we are the strongest backers of the international war crimes tribunals
    for Rwanda and the Balkans.
        Especially in recent years, the United States has emphasized
    advancing the status of women and girls economically, and protecting
    their civil and political rights. These efforts include initiatives to
    recognize the special needs of women refugees, and to end trafficking
    in human beings.
        The United States has also taken the lead in a global effort to ban
    the worst forms of child labor, and to establish core standards to
    prevent the exploitation of workers overseas, while giving American
    workers a more level playing field on which to compete.
        Moreover, I believe that our citizens are proud to support our
    contributions to the U.N. High Commissioner for Refugees, the World
    Food Program and other agencies and programs that provide desperately
    needed assistance and save many human lives.
        We save lives, as well, by our leadership in global humanitarian
    demining. Our goal is to eliminate the threat posed by landmines to
    civilians everywhere by the end of this new decade. In order to reach
    that goal, we are helping some 30 countries to map and clear their most
    dangerous minefields, train local deminers, and teach children and
    adults how to identify and avoid mines. And through the Leahy War
    Victims Fund, we are working to assist and counsel landmine survivors
    in more than a dozen countries.
        One of our country's most successful overseas programs is the Peace
    Corps. It brings skills and knowledge to those in need while creating a
    huge reservoir of good will for America. President Clinton is
    requesting $275 million for the Peace Corps in fiscal year 2001--an
    increase of $30 million over the fiscal year 2000 enacted level. This
    would keep the Corps on the path to having 10,000 volunteers serving
    overseas by 2003.
        Mr. Chairman, the bill for all of the programs and initiatives I
    have described--plus many more I have not had time to describe--adds up
    to roughly one penny for every dollar the Federal Government spends.
        But that single penny can spell the difference between hard times
    and good times for our people, war and peace for our country, less and
    more freedom for our world.
        The annual budget debate in Washington typically revolves around
    issues that relate to the role of the Federal Government in such
    matters as education and health care. But since the days of Thomas
    Jefferson, the protection of our national security has been one of the
    Federal government's most basic tasks.
        There can be no dispute about this. The need to defend and
    represent America as a whole is what first brought our nation together.
    It is a centerpiece of our Constitution. And it is a responsibility
    that cannot be delegated, subcontracted, privatized or left for others
    to do. It is the solemn responsibility of the Executive and Legislative
    branches in Washington, each according to its role.
        I know that Members of this Subcommittee understand this. And I
    hope you will agree that American diplomacy belongs on the short list
    of budget priorities for the year 2001.
        There are no final frontiers for America. We are not and have never
    been a status quo country. We are doers.
        In the days ahead, we have the chance to add another proud chapter
    in the history of American leadership, in search of peace, in defense
    of freedom, on behalf of prosperity, and in service to our collective
    boss--the American people. I have no doubt that if we are united in
    that quest, we will succeed.
        Thank you very much.

        Senator McConnell. Thank you, Madam Secretary.
        Just a couple of observations before going to questions. As
    I indicated to you on the phone last week, there is not going
    to be a supplemental. Having said that, it is our intent to
    move the foreign operations bill very early. Hopefully we will
    have minimal problems with the President in getting it signed
    this time. We intend to fully fund the $34 million supplemental
    request for Montenegro, as well as the 2001 request. I would
    remind you that it was this subcommittee that figured out a way
    to do the Wye funding last year, and we have been very
    sympathetic to your financial requests and will be so again
    this year.
        Some of the criticisms that I laid out were unrelated to
    funding, but we are going to continue to work with you to try
    to see to it that you have at least the minimum amount of money
    necessary to get the job done.
        I mentioned the embassy and the Bureau for Refugees have
    formally declined to support NGO's operating in Ingushetia and
    Chechnya. What is the reason for that?
        Secretary Albright. Well, first of all, if I might
    generally respond to some of the points you made on Chechnya.
        I think that this is one of the most serious issues that we
    have with Russia at this time and while we are working with
    President Putin in terms of getting economic reforms in place,
    their Duma is considering the START treaty today, and we
    obviously have issues to do with nuclear threat reduction. They
    are working with us in Kosovo and a variety of issues where we
    are cooperating or working with the Russians.
        On Chechnya we are not. We are highly disturbed by what is
    going on there. In every conversation that I have had either
    with President Putin when he was acting President or with
    Foreign Minister Ivanov, it is an issue that we have made very
    clear we have serious problems with. We are working with our
    European friends in Geneva in the Human Rights Commission on
    making clear what needs to happen in Chechnya.
        I spoke with Mary Robinson when I was in Geneva before she
    went. We support the idea of a national commission that would
    investigate what is going on in Chechnya. We have called for an
    OSCE office in Ingushetia. I met with the President of the ICRC
    to work with them on how they get access to Chechnya, how
    international organizations get access. I spoke with the former
    Secretary-General of NATO and now High Representative Solana
    about a strong message on Chechnya.
        There is a concern about the security of people going in
    there, but we are constantly pressing for access by
    international organizations to be able to verify what is going
    on in Chechnya and tell the Russians that for them there is no
    military solution to Chechnya. There can only be political
    dialogue.
        So, I do not think we have a disagreement on this. We are
    pressing on it full bore.
        Senator McConnell. So, the answer to my question is we are
    not supporting the NGO's because of all these other matters we
    have going on with the Russians?
        Secretary Albright. No. It is a security issue. We prohibit
    U.S. Government personnel from traveling to----
        Senator McConnell. Are they not already there?
        Secretary Albright. Well, we have warned Americans about
    their safety. This is the problem. I think that our
    responsibilities are also to warn about the security issues and
    we have been very concerned about it. We have had an American
    kidnapped in 1998, and we have had relief workers who have been
    targets of attack. Six ICRC staffers were killed in 1996.
    Within the last 30 days, we have conducted a thorough review of
    the security situation, and our conclusion is that the security
    risks remain too high for us to change.
        But I think that you might be criticizing me for not
    warning American NGO's and others about going in. We are trying
    to get general access across the board for ICRC and
    international humanitarian groups to be able to go in. Believe
    me I will raise it again.
        Senator McConnell. You mentioned your conversations with
    Mary Robinson. What she is asking for, as I understand it, is
    an international tribunal of inquiry, which is different from
    the term you used, a national commission. That is not what she
    is asking for. Why not support an international tribunal of
    inquiry for Chechnya as called for by the U.N. Commissioner for
    Human Rights?
        Secretary Albright. Well, what we are suggesting actually
    is something that has worked quite well as far as Indonesia is
    concerned where there has been a national commission supported
    by some of the findings of the international commission. We
    believe that at this stage a national commission is something
    that ought to be pursued and that we ought to make very clear
    in Geneva what our serious problems are with the human rights
    and humanitarian situation in Chechnya.
        I flew. I left the President in India, went to Geneva to
    speak not only about China, but Chechnya myself in Geneva. It
    is the first time a Secretary of State has made that kind of an
    appearance before the Human Rights Commission.
        Senator McConnell. So, that means we do not support the
    international tribunal of inquiry that Ms. Robinson is asking
    for.
        Secretary Albright. We are studying the best way to try to
    get the Russians to cooperate with what must happen, which is
    an investigation of what has been happening in Chechnya.
        Senator McConnell. Milosevic's troops systematically burned
    and looted villages, raped, tortured, and expelled hundreds of
    thousands of Bosnians and Kosovars. These crimes caused his
    indictment at the Hague as a war criminal. Russian troops have
    systematically waged the same kind of brutal assault against
    Chechen civilians with the same claim that they are trying to
    eliminate terrorists.
        Why should the Russians responsible for what has happened
    in Chechnya not be indicted like Milosevic and his military
    leadership?
        Secretary Albright. First of all, I do think that these are
    not exactly similar situations, that the kinds of activities
    that Milosevic was involved in was a determined government
    policy to ethnically cleanse. I think that if one studies the
    Chechnya situation carefully, that there are different issues
    going on. My understanding or my analysis of this is that it is
    not a determined government policy to cleanse ethnic Chechens.
    They have created terrible mayhem there. There is no question
    about it. There have been bombings.
        Senator McConnell. Isn't the outcome for the civilians
    indistinguishable?
        Secretary Albright. I think it is very hard to have
    gradations of humanitarian suffering, but I do not compare what
    happened in Bosnia and Kosovo.
        But this does not excuse what is going on in Chechnya. I do
    not want that to be misunderstood. It is a terrible
    humanitarian catastrophe. What the Russians are doing is
    unacceptable. We have made that clear, and we are supporting
    calls for inquiries as to how these violations of human rights
    have been taking place.
        Senator McConnell. Shifting to another part of the world,
    what steps do you intend to take now that Preval has blocked
    the second scheduled election date of April 9? In particular,
    are you considering the suspension of aid and visas for senior
    officials? Are you reviewing the option of freezing bank
    accounts or taking similar measures which we implemented when
    officials obstructed the democratic process in Haiti in the
    past?
        Secretary Albright. Well, first of all, what is now
    happened is they have announced elections for May 21 I believe,
    and we hope very much that they will go forward with those
    elections. Lots of people have, in fact, registered for
    elections in Haiti. We are going to continue to press them to
    have those elections. We believe that it is essential to see
    the parliament by the appropriate date in June. We have had
    conversations with them on a number of levels. And clearly, we
    are disappointed at what has been happening in Haiti and are
    considering a number of ways to make that disappointment clear.
    But at this stage, they have scheduled elections for later in
    May.
        Senator McConnell. Let me ask you what I asked Secretary
    Talbott earlier. Other than the expenditure of $2 billion, can
    you name any way in which you think the situation in Haiti is
    better today than it was before we went in there in 1994?
        Secretary Albright. Absolutely. First of all, I think we
    have to remember why we did what we did in Haiti. In 1994,
    there were thousands of Haitians who were being tortured, who
    really subjected to horrendous things. I know one of the
    disgusting things one heard about was that people had their
    faces ripped off, that horrendous humiliations and economic
    depravations were going on, and thousands of Haitians were on
    rafts coming to the United States and drowning on the way, or
    when they got here, trying to find a way of having a life here.
    And it was a very difficult situation, and I think people need
    to remember that.
        While things are certainly problematic in Haiti, I think
    there is a marked difference in what is happening there. There
    are huge difficulties. I am not going to deny that, but I think
    we have to remember what it was like and what we have gained
    there. I think that we have gained the fact that there are
    these millions of voters who have registered, but there is no
    quick fix for the decades of terrible governance in Haiti.
    There is no question.
        This is probably my last appearance before you, but I
    really believe the important point here, Mr. Chairman, is that
    the problems that we have to deal with are not quickly soluble.
    We have to have, I think in addition to your three C's, is
    stick-to-it-iveness. There is no way that I can tell you that
    by putting in American influence and time and even money that
    you can get a solution immediately. All I can tell you is that
    if we do not pay attention to problems such as Haiti or Kosovo
    or Montenegro or you name it, then we will have more problems
    later on.
        Senator McConnell. You are applying a standard that I am
    not applying to Haiti. I am not saying that there is a quick
    fix or that this is an easy problem. I just cannot find any
    independent observers who believe that anything is better than
    it was 5 years ago.
        Secretary Albright. Well, I dispute that because I think
    that we have managed to alleviate hunger. There have been some
    institutions built. There is increasing access to education and
    health care. There has been some progress on dealing with the
    environmental problems and developing some civil society. The
    civilian police force, although there clearly are problems with
    it, is a vast improvement over earlier forces. I think that
    while I certainly would not give them a good grade, I really do
    think that if you look at it carefully, there have been
    improvements. They have a long way to go and we are unhappy
    with the way a large part of the Haitian evolution is working.
    I am not going to deny that.
        Senator McConnell. Last week the head of Radio Haiti was
    shot dead as he arrived at work--showing that political
    assassinations continue--and he is one of many who have been
    threatened by Aristide. I do not want to spend any more time on
    Haiti, but let me just say we have to agree to disagree on
    this. I cannot see any discernible signs of progress.
        I am going to ask one more question and then let Senator
    Leahy begin.
        Peru is on the front page this morning. It is clear now
    that there is going to be a runoff election, which I gather
    will relieve some of the tension in the streets. But if the
    results in Peru are not determined to be free and fair, does
    the administration intend to suspend assistance? What steps
    might be taken if, at the end of the process here, it is not
    widely considered by international observers to have been a
    free and fair election?
        Secretary Albright. Well, first of all, we are encouraged
    by the fact that there has been a determination to have a
    second round. When I was asked about this 2 days ago, I said
    that it was very important that there was this problem and
    discrepancy between what the government was saying and what
    independent observers were saying, and that it would hurt in
    the long run the credibility and legitimacy of the Fujimori
    government if they did not take into consideration what the
    international observers were pointing out. So, we are heartened
    by the fact that there is going to be a runoff.
        Obviously, we are going to look at this very carefully and
    make the determination once there is a decision--or the
    elections have been held. And I think it is very important for
    us to keep stressing the urgency and importance of having a
    fraud-free election and we will make our determinations after
    that.
        Senator McConnell. Senator Leahy.

                 Opening Statement of Senator Patrick J. Leahy

        Senator Leahy. Thank you. I agree with the chairman,
    fortunately the Fujimori government decided, notwithstanding
    all the fraud that they seem to have perpetrated during the
    election, to finally accept what the people of Peru knew very
    well--there has to be a runoff.
        I also am concerned, as is the chairman, about the
    excruciating choices we are going to have to make in this
    budget. As wealthy as we are, I cannot hep but think that
    future generations will look back and wonder how we could have
    been so shortsighted.
        I know, Madam Secretary, you said nice things about the
    Global Health Act, and I do appreciate that.
        I would just note something that Dr. Foege said at the
    hearing the other day. He talked about the great success we had
    when the United States and other countries came together in the
    1970's to eradicate smallpox. It took an enormous amount of
    effort. It was expensive. But together we eradicated smallpox,
    one of the great plagues of history. His point, though, was
    that had we not had the courage to come together at that time,
    if we had waited another decade, we could not have eradicated
    smallpox. The reason is that with the rise of AIDS, you could
    not immunize millions of people whose immune systems have been
    destroyed by HIV. We would have lost that opportunity. We
    cannot afford to lose other similar opportunities.
        I agree with you about President Pastrana being a
    courageous person. He has impressed me in the meetings I have
    had with him. I am very impressed with his ambassador here. I
    am not convinced, though, that we should approve the Colombian
    aid. At least the administration has not convinced me, but then
    again nobody has taken the time to convince me. I assume that
    the administration has been too busy talking with their
    supporters here on the Hill to take time with me on this issue.
        Now, Chechnya. I am very concerned about Russia's refusal
    to let Mary Robinson visit the sites she wanted to. There are
    NGO's there now who desperately need help and support from us,
    and I think the United States ought to be giving them support.
        I want to applaud you for the strong, principled position
    you have taken on human rights in Turkey, and I hope that
    continues even though they are now talking about buying
    billions of dollars of helicopters. There are reports that
    things are better there, but the Turkish Government has not
    taken adequate steps to protect human rights.
        I mentioned Peru earlier. I will keep a careful eye on the
    situation there. After all, this is the country where, after
    the Peruvian Supreme Court ruled that President Fujimori could
    not run for a third term, he fired the court.
        I would hope that we might move forward with the Madrid
    Protocol Implementation Act to conform our procedures for
    registering a trademark so we have a one-stop international
    trademark registration process. The dispute over voting rights
    of the EU that has held up our joining the Protocol has now
    been resolved. This is not before this committee, but it is
    something that we should look at.
        The administration has an advantage with Senator McConnell
    and I because we both support the concept of foreign aid.
    Unfortunately, we are also severely restricted by the size of
    our budget. We are going to need the administration's help and
    others' in the Congress to be able to get what you need.
        I would ask you--and you may want to submit this for the
    record--we are going to be asked about Kosovo in the Foreign
    Operations bill. Can you submit what the Europeans have
    contributed in aid and troops compared to the United States?
    Not what they have pledged, but what they have actually
    contributed.
        Secretary Albright. Let me go through some of the points
    that you have raised. We actually did have and will continue to
    have conversations about Colombia hopefully, you and I. I find
    that you and I agree so often on things, that I do not find it
    much fun to disagree with you on Colombia. So, let me make my
    pitch here on this.
        I believe that President Pastrana has put together a
    comprehensive plan for dealing with Colombia's very deep
    problems and they obviously have to do with the huge problem of
    the growing of coca and narco-trafficking and the fact that the
    Government of Colombia does not have, yet, total control over
    all its territory in the south, the Putumayo area, and that the
    people who run Colombia, the team that President Pastrana has,
    is in danger all the time in terms of carrying out its plans. I
    thought that the column that Tom Friedman had a couple of days
    ago about how brave the people are to be judges and to take a
    part in this government is something that we need to
    appreciate.
        But the comprehensive Plan Colombia----
        Senator Leahy. I do appreciate that, and I have told
    President Pastrana that several times personally.
        Secretary Albright. I think that he is a remarkable person
    and as a result of his being elected, in contrast to his
    predecessor, we felt that it was important for us to give
    whatever support to his plan.
        So, the plan itself is one which we think is well balanced
    in terms of what it is supposed to do. The biggest problem is
    the narco-trafficking, and so the largest proportion of the
    Plan Colombia goes, in fact, towards the police and towards new
    military battalions that have been created according to the
    Leahy law where everybody has been vetted individually case by
    case to make sure that there are not human rights abuses. So,
    the military is there in order to provide a security
    environment for the police to be able to do its job.
        Money is also devoted to alternative economic growth, to
    the peace process, and to dealing with human rights generally.
        I think they have a huge job. It is important to us because
    of the drug trafficking that comes into this country, and it is
    important to the region.
        I have tried very hard, Senator, in dealing with the
    limited funds we have to focus ourselves as much as possible on
    certain countries. I have chosen four countries that really are
    important for what is going on in them individually and
    regionally. Colombia is one of them. And the supplemental is
    essential because, as President Pastrana himself said, he needs
    the money now. He cannot wait any longer, and we need to
    support him. The Europeans are supporting him. The World Bank
    and the IMF are supporting him, and the Colombians themselves
    are putting up large amounts of money for Plan Colombia.
        Senator Leahy. We had a hearing before the full committee
    on Colombian aid. You were not at that hearing. I was
    singularly unimpressed by it. We did have at least one witness
    suggest to the chairman of the full committee and others like
    myself that we obviously did not understand Plan Colombia and
    probably were not capable of understanding the concerns the
    United States should have there, but would we please just give
    them the money. I thought that was a novel approach. Of course,
    it would make everybody's life easier if we just did that, but
    I am old-fashioned enough to want to know where the money is
    going to go.
        I have yet to have anybody come in and answer some of the
    very specific questions I have. I would just repeat what I have
    said for about 2 months. If somebody has got some time--I know
    it is very, very busy down there, and this is not something you
    should be doing, Madam Secretary. But if somebody in the
    administration has a half hour, an hour free on their schedule
    that they could squeeze me in and answer the specific questions
    that I have asked over and over again--what the long-term cost
    are, what we expect to achieve, in what period of time, I would
    love to hear it. They can call me at home, if they want. I have
    a listed home phone number. I am probably the only Senator who
    does.
        I can tell you right now if the administration does not,
    they will not get my vote for 1 cent of Colombian aid. I just
    thought I would mention that.
        Now, the independent inquiry into actions of the United
    Nations during the 1994 genocide in Rwanda issued its report.
    It concluded that the United States knew of the potential for
    genocide before the killing started, that U.S. officials played
    an active role in discouraging an international effort to halt
    the genocide once it began. The President has apologized for
    our inaction. I understand there has been no formal
    investigation. The administration has not made key documents or
    officials available to the U.N. commission investigating the
    genocide. Should we be looking into U.S. actions during that
    period?
        Secretary Albright. Can I get back to that and answer your
    question first on Kosovo?
        Let me say that we are, just as you are, very concerned
    about how the contributions on Kosovo are working. I spend a
    great deal of time talking to my European counterparts to make
    sure that they, in fact, continue to contribute. They have
    pledged about two-thirds of all assistance for Kosovo, and they
    announced that at two pledging conferences last year. We have
    limited our contributions to 15 percent. We are concerned about
    the length of time that it has taken to get the money there.
        The European commission has disbursed almost $30 million in
    budget support to UNMIK in March and thereby they helped to
    overcome the cash crunch that was going on. They are making
    there contributions across the board and we keep pressing them.
        Part of the problem here is that if we do not have--this
    gets to be a vicious circle because we are not putting up the
    money that we get in there because we are not going forward
    with the Kosovo sup as the chairman has said. Therefore, it is
    an Alfonse Gaston act here. It concerns me a great deal, but
    every phone call that I make to them, they ask me the same
    question. But they are in fact paying the lion's share on this,
    and we can get you the exact disbursements.
        Senator Leahy. We paid the lion's share of the war, though.
        Secretary Albright. Well, nobody is disputing that, and
    that is why I am saying they need to pay that.
        Senator Leahy. Understand, I support the things we are
    doing in Kosovo, but I am just saying we are not going to get
    that money through the Congress unless we can show that they
    are doing their share.
        Secretary Albright. And I think we will do that.
        Senator, I can assure you that we will all spend all the
    time that is necessary to talk to you about Colombia. I know
    your phone number and I use it fairly frequently.
        Senator Leahy. I am not saying that you should have to do
    that, but somebody ought to take the time.
        Secretary Albright. I agree with that.
        On Rwanda, let me say that I spent 4 happy years at the
    United Nations following instructions and doing my share of
    creating policy. I was very unhappy with the instructions that
    I had on Rwanda. I have made that quite clear in a number of
    places.
        But we are about to run into a similar problem. One of the
    things that I am asking for in this budget is funding for
    operations in Sierra Leone and the Congo. One of the reasons
    that the Rwanda process was slow was that because we were
    concerned about how money was spent by U.N. peacekeeping
    operations, we kept asking questions about what the mandate
    was, was there a force, could we afford it? These are the very
    serious questions.
        Now, as it turns out, when one looks back on Rwanda, there
    was an explosion. It was very hard to deal with. There were not
    forces that wanted to go. I do not think the U.S. role was the
    problem. I think the problem was that the system was not
    prepared to deal with it.
        But we are going to have similar problems other places if
    we cannot deal with providing our fair share of peacekeeping
    funds.

                               PREPARED STATEMENT

        Senator Leahy. You are absolutely right, and I agree with
    you on that.
        Thank you, Mr. Chairman.
        I am glad to hear you mention Sierra Leone. I think that is
    one that really does require enormous----
        Secretary Albright. Thank you, and thank you for your
    initiative on the vaccines.
        Senator McConnell. Thank you, Senator Leahy.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Madam Secretary, I won't take a lot of time, but I want to welcome
    you here and I look forward to discussing a number of issues with you.
        We face the same difficulties as in past years, in getting the
    resources we need for Foreign Operations. Each year, we have to make
    excruciating choices--choices which a country as wealthy as the United
    States with so many interests around the world should not have to make.
        I cannot help but think that future generations will look back and
    wonder how we could have been so short-sighted.
        We need your help in trying to get the resources we need. I think
    Chairman McConnell and I feel the same way about this.
        There are many pressing issues that I and other Senators will want
    to discuss today--the Middle East, North Korea, China, Russia,
    Colombia, and Kosovo.
        I want to mention several others, which may not get as much
    attention:
        The first is Chechnya, which was the focus of a hearing in this
    Subcommittee two weeks ago. We are very concerned about Russia's
    refusal to let Mary Robinson, the U.N. High Commissioner for Human
    Rights, visit the sites she wanted to, and the reluctance of the
    Administration to support a U.N.-sponsored Commission of Inquiry into
    reports of atrocities.
        There is no doubt in my mind that the Russians committed war crimes
    in Chechnya, and I think it is important that we say so.
        Second, is Turkey. Two years ago, the Turkish Government pledged to
    meet basic, specific, human rights benchmarks. The Administration said
    it would not support sales of certain military equipment until Turkey
    meets those benchmarks.
        I strongly support Turkey's role in NATO and want to see closer
    U.S.-Turkish relations. But I also want to be sure that after taking a
    strong, principled position on human rights--for which I applaud you,
    we do not back away from that position.
        Third, Peru. All indications are that there was a flagrant attempt
    by President Fujimori to rig the election, and to steal it when it
    appeared that he would not receive enough votes to avoid a runoff.
        It actually began some years ago. When the Peruvian Supreme Court
    ruled that President Fujimori could not run for a third term, he fired
    the court.
        I want to be sure there is no ambiguity in our policy. We should
    make it very clear that if the runoff election is stolen the United
    States will take strong action to isolate Peru, both politically and
    economically, and work to restore democracy to that country.
        Finally, Madam Secretary, I have worked both in the last Congress
    and in this one for passage of the Madrid Protocol Implementation Act,
    to conform our procedures for registering a trademark to the terms of
    the Protocol in anticipation of our eventual ratification of it.
        This treaty will give important help to American businesses by
    creating a ``one stop'' international trademark registration process.
    The dispute over voting rights of the E.U. that has held up our joining
    the Protocol has been resolved, so I hope it will be forwarded without
    delay to the Senate for ratification.
        Madam Secretary, I want to see a strong foreign policy. But that
    takes resources, and despite Chairman McConnell's and my best efforts
    we have not received the budgets we need. We are faced with enormous
    global challenges--in health, the environment, peacekeeping, nuclear
    disarmament, missile proliferation, and the growing gap between rich
    and poor which threatens the stability of many countries, yet we are
    unable to exert the leadership the world needs and expects from the
    United States.
        It is foolhardy, and we are paying a price for it. But the real
    losers will be future generations of Americans.

        Senator McConnell. Senator Campbell.

              Opening Statement of Senator Ben Nighthorse Campbell

        Senator Campbell. Thank you, Mr. Chairman.
        I would like to talk a little bit more about Colombia to
    start with. I appreciated Senator Leahy's comments, and I do
    not know, Madam Secretary, if you read yesterday's article in
    the Washington Times, for whatever it is worth. It mentioned
    our assistance to Colombia, including dozens of Black Hawk
    helicopters and military assistance, that kind of thing. I
    think a lot of Americans are kind of worried after Vietnam
    about our involvement, as you might guess.
        But I noted with interest you said the Colombian
    administration does not have total control. I have to tell you
    that if we do not give them some help, they are not going to
    have any control. It is almost out of control now. So, I
    support, certainly within some parameters, if we knew a little
    bit more about the end game, what you are asking for for
    Colombia.
        But I guess I am kind of from the old school, having been a
    former policeman and a volunteer prison counselor, and I used
    to run a halfway house for ex-convicts that had drug problems.
    I am absolutely convinced that we are not going to win that war
    until we recognize the law of supply and demand exceeds our
    efforts here in Congress. And we put more and more effort, it
    seems, into trying to cut off the supply in Colombia and not
    enough in trying to cut off the Americans' appetite for the
    cocaine that is coming from Colombia.
        I happen to Chair the Treasury Subcommittee, as you know,
    so I work very closely with General McCaffrey. In the last 3
    years, at his request, we put over a half a billion dollars
    into a national ad campaign directed toward youngsters trying
    to get them to reduce drug use, and I think it is having some
    effect. I think it is going down; according to his statistics,
    it is.
        I know we have to attack it from all sides, but I am a
    little bit concerned that we have several agencies now involved
    in it, the State Department, the Treasury Department, the
    Department of Defense. I would like you to give the committee
    at least some peripheral insight on how you are working
    together to try to reduce this in Colombia.
        Secretary Albright. First of all, let me say that I think
    that clearly it is a question of supply and demand. When we
    have talked to any country that is involved in narco-
    trafficking, they say, well, your demand problem is part of the
    issue here and you have to deal with it.
        I believe that General McCaffrey is doing a terrific job in
    pushing forward the program, both domestically and
    internationally. We work very closely with him obviously. We
    each have a portion of the budget and we all coordinate our
    efforts. I think that given the magnitude of the problem, we do
    a pretty good job.
        The whole thing that we are trying to do, the end game in
    Colombia, is to, obviously, deal with the fact that they need
    some kind of alternative economic development so that the
    farmers there do not find it more lucrative to grow coca rather
    than something else. So, that has worked actually in Bolivia
    and Peru. Part of the problem is that the success there has
    created--because of the demand has in fact created the
    possibility of more sales of drugs.
        Now, interestingly enough, the reason that the Europeans
    are ready to contribute to Plan Colombia is because they also
    are having problems with drugs coming into western Europe. So,
    they see that as a national interest issue for them.
        You mentioned, Senator, about Vietnam and analogies. I
    think that everybody is concerned about that. The people that
    are in Government now have all gone through Vietnam in one form
    or another, so I think people are aware of the dangers. We are
    watching that very carefully not to have that kind of a
    commitment, to make clear what our commitments are. As I said,
    our assistance to the military there is purely in order to
    provide this protective pocket for the police to do the job. I
    believe that it is in the U.S. national interest to try to do
    everything we can to work with this Colombian Government that
    is determined to make it work.
        But again it is a tough problem. We have to stay with it
    and we have to do something about demand in the United States.
        Senator Campbell. I thank you.
        Let me, along that line, ask a little bit about organized
    crime. I am a co-chair of the Helsinki Commission, as you know,
    the Organization for Cooperation and Security in Europe. We
    went to Russia last year. And I introduced a proposal calling
    on the OSCE to intensify their efforts to combat corruption and
    organized crime and was accepted by their international
    assembly. I know the close work between that commission and the
    State Department led to the inclusion of specific language in
    the Istanbul OSCE charter and the declaration of corruption and
    organized crime.
        I would just like you to give us a little update on the
    State Department's efforts in trying to reduce international
    organized crime.
        Secretary Albright. I am very glad that you mentioned it,
    Senator, because this has a lot to do with some of the initial
    comments that the chairman made in terms of the different kinds
    of issue that foreign policy involves now.
        We have spent a lot of time in pressing for international
    approaches to how to deal with corruption, bribery, organized
    crime and use a variety of venues to talk about it, whether it
    is in the ASEAN forum or at the OAS or, as you mentioned, OSCE.
    I will get you a detailed follow-up on this, but I just want to
    tell you that your initiative on this is very important and it
    dovetails completely with the kind of thing we are trying to
    do.
        Senator Campbell. Well, I see my time is about up. I did
    have some questions also on corruption in Bosnia and Kosovo and
    costs too. I would like to send those to you in writing, if I
    could, and get some information back.
        Secretary Albright. Certainly.
        Senator Campbell. Thank you. Thank you, Mr. Chairman.
        Senator McConnell. Thank you.
        Senator Murray.
        Senator Murray. Thank you very much, Madam Secretary. Good
    to see you here this morning.
        As you know, one of my constituents has been searching for
    her missing husband for almost 5 years now. Her husband, Don
    Hutchins, was kidnapped in the disputed Kashmir region, along
    with several other westerners, 5 years ago. It is my
    understanding that President Clinton raised his case during his
    visit in Pakistan with General Musharraf and that you were in
    that meeting.
        Can you describe for me what that meeting was and any
    pledges that Pakistan made on behalf of trying to solve this?
        Secretary Albright. The meeting was one, obviously, in
    which a lot of issues came up about Pakistan's government and
    its cooperation, their necessary cooperation on proliferation
    issues, as well as on the issue of Kashmir. The President did
    raise the issue, and General Musharraf said that they would
    take a look at it. They understood it. But he did raise the
    issue and made very clear how important it was and how much it
    determined our whole view of what is going on in the region.
        Senator Murray. Did they give you any response back that
    would indicate that they would continue to pursue it?
        Secretary Albright. They said they would, but I will get
    for you exactly what----
        Senator Murray. I would appreciate that. Thank you.
        As you know, my State that I represent, Washington State,
    is very engaged in Asia. Trade matters a lot to Washington
    State, but we're also home to many of our defense assets that
    are prepositioned for any military conflicts in Asia. So, I am
    very interested in following closely the announced talks
    between North Korea and South Korea. I wanted you to talk a bit
    about what role you think the United States will play in
    supporting those talks and what you think some of the
    implications might be from that.
        Secretary Albright. Well, first of all, I think you know
    that we have been very concerned about developments in North
    Korea for some time and have considered it, obviously, one of
    the most dangerous places in the world, which is why we have
    37,000 troops in South Korea and why we have worked so hard on
    the agreed framework to freeze their nuclear programs at
    Yongbyon and have sought access to their sites and have worked
    with them in terms of getting a missile testing moratorium.
        One of the integral parts of what we have been trying to do
    all along is to get a dialogue between North and South in order
    to work for peace and stability on the peninsula.
        When President Kim Dae Jung came into office, he was the
    father of the Sunshine Policy in which he really has pressed
    very hard for engagement, dialogue with the North Koreans.
    These talks have been announced for June and I think that they
    are very important. We will obviously follow them closely and,
    at the same time, continue with quite a unique relationship
    that has now developed on all these issues among us, the
    Japanese, and the South Koreans so that is a bilateral
    dialogue. There is this trilateral constant work on all the
    issues of concern to us. Then we have the four-party talks
    which are also a very important venue. So, we think this is an
    important step forward.
        This is a carrying out of an agreement that Kim Il Sung
    actually was going to have a summit. He died before he could
    have it, so Kim Jong Il is going to have this. It is historic
    that they are going to get together. It will be more historic
    if they can come to some agreements on some very serious
    issues.
        Senator Murray. We will be watching that closely, and I
    look forward to continuing to talk with you after June and see
    where we go.
        On another topic totally, you mentioned family planning in
    your statement sort of tangentially. I just wanted you to
    elaborate further on that. As you know, many of us were deeply
    disturbed by last year's language that was agreed to in the
    final negotiations, and if you could just talk to us about
    where you see that going this year, I would really appreciate
    it.
        Secretary Albright. Well, I think that I have had to make a
    lot of hard decisions and compromises, and this one troubled me
    a great deal. I had said all along that I felt that the issue
    of family planning and pro life or pro choice is a huge issue
    and one of major discussion in this country. It should not have
    been attached to obligations that we have to fund the United
    Nations or any foreign policy issue. It should be debated on
    its own, and that is what we were all suggesting.
        So, this agreement was made, but the President has come
    back and said he wants family planning funded back at the 1995
    levels without restrictions because we have made quite clear
    that it is un-American, un-democratic I think to have this kind
    of a gag rule. So, we believe that family planning should be
    funded at its full level.
        Senator Murray. Thank you. I appreciate that.
        My time is almost up, but I did want to quickly touch on
    PNTR. You talked about it in your statement and the importance
    of it. We are talking a lot about it here. The debate seems to
    be what will happen if we do it. Can you talk a little bit
    about what would happen in China in terms of stability if we do
    not pass PNTR this year?
        Secretary Albright. Well, I think that the whole purpose of
    our China policy is basically they are a huge country with
    growing power, and we believe that it is more important to
    engage them--not endorse everything that they do but to engage
    them--and work with them on a whole host of issues that are
    important to us--regional stability, nonproliferation issues--
    and to work with them in a way that makes them understand the
    value of being part of the international system.
        I think that PNTR offers us the opportunity to--
    economically it is a lay-down because basically what happens is
    that we will have access to their market, the same way that
    they have access to ours.
        On the economic issue, if we do not do PNTR, when they get
    into WTO, we will not have the advantages of that. The other
    countries will, we will not. We will have given up on a very
    important economic aspect.
        On the strategic aspects of this, I think that it will, in
    fact, give solace to hard-liners in China. China is going
    through massive changes. Clearly every country makes its own
    decisions about how it evolves, but for us to have an influence
    on this I think we need to be able to engage with them. We will
    have shown that we cannot follow through, and I think we will
    have given up on that relationship.
        On human rights, I know this is of major concern to people.
    It is of concern to me. While PNTR is not being done for human
    rights reasons, we have taken this to the commission in Geneva
    where I spoke personally about this and where we are getting
    increasing support. There is no question that there will be
    human rights benefits to PNTR because it will open up China. We
    are already seeing that in terms of trade relationships, and we
    are giving up American influence if we do not pass it.
        Senator Murray. Thank you very much. I appreciate that.
        Senator McConnell. Thank you, Senator Murray.
        Senator Bennett.
        Senator Bennett. Thank you, Mr. Chairman.
        Madam Secretary, you have been before us before, and I have
    shown you pretty pictures and I am going to do it again today.
        The Russian economy, of course, is suffering and the
    Russians are anxious to sell whatever they can to whomever they
    can. I understand that and I applaud that, but here is a
    destroyer that they have put on the market. It was delivered to
    China in February. OK, so they are selling a destroyer, but
    each one of those destroyers carries eight of these missiles,
    the SS-N-22 Sunburn missile. We have recently found out that,
    along with the conventional high explosive warhead, the missile
    has a nuclear capability of 200 megatons, or roughly 15 to 20
    times the size of the weapon that was dropped on Hiroshima. It
    is supersonic and represents a significant threat.
        There is a drawing as to how it works, and if you would put
    up the drawing. The missile takes off in a horizontal fashion
    so that it flies low to avoid radar, then goes up and comes
    down vertically, and represents a fairly significant threat.
        Now, the reason I say threat to the U.S. Navy is this quote
    that ran less than 30 days ago in a relatively small, but I
    understand highly influential Russian newspaper read by the
    elite, owned by an individual who is very close to President-
    elect Putin. It says that we would point out that an air-naval
    formation compromising these destroyers with fighters and new
    long-range radar aircraft is fully capable of fighting as
    equals with the U.S. Navy aircraft carrier formation. And these
    ships are now being sold to China.
        And then to add to my concern--and I was not aware of this
    when I was putting this presentation together--this morning's
    Washington Times, the headline is Beijing Delivered Missile
    Technology to Libya, U.S. Says. And it discloses quoting
    General Michael Hayden, who is the Director of the National
    Security Agency, on the missiles that are being sold to Libya
    by China.
        So, here we have a trade chain that starts in Russia, whose
    economy is in difficulty. They need all of the foreign exports
    they can get. They are selling this kind of technology and
    weaponry to the Chinese, and then in this morning's paper, we
    find that the Chinese are selling weaponry to the Libyans.
        Later on in the story, Secretary Cohen is quoted in one of
    his speeches saying that Libya is trying to develop long-
    range--it says Libya has chemical capabilities and is trying to
    buy long-range missiles. That is the quote from Secretary
    Cohen.
        So, that is the background for my questioning here this
    morning.
        Have you raised the issue of ship and missile sales with
    Moscow?
        Secretary Albright. First of all, let me say that in all
    our arms control discussions with Moscow, we raise our concerns
    about sales, transfer of technology. This is part of our
    discussion and of concern to us. No question about that.
        At the same time, we believe it is very important to go
    forward with our arms control discussions with them because
    this is the only way that we will ultimately get control over
    all of this. As I mentioned earlier today, in the Duma they are
    working on ratifying START. At the same time, we have
    discussions at all levels with them on all these issues.
        I am not going to say we are not concerned about what is
    going on. The Chinese are modernizing their military and we are
    following this very closely. But it goes without saying that
    the U.S. military is fully capable of dealing with these
    issues.
        On Libya, I think that it is known that Libya possesses 300
    kilometer range Scud missiles and is actively pursuing
    acquisition and development of even longer-range systems. As we
    have said before, the United States views Libya's efforts to do
    this as a serious threat to the region and our nonproliferation
    interests. We have engaged in a number of ways in extensive
    efforts to impede the proliferation of missile equipment and
    technology to Libya.
        We take all these reports seriously. I read the paper this
    morning. And we have raised our concerns with the Chinese and
    we are concerned about this. But I am not going to comment on
    intelligence matters.
        Senator Bennett. President Putin will be meeting with the
    Chinese President Jiang fairly soon. Are there any further arms
    deals in the works that they might be discussing that you might
    be willing to talk about?
        Secretary Albright. I would have to check on that. I will
    have to get back to you.
        Senator Bennett. I would appreciate that.
        Finally, have you seen any indication that Russia and China
    are collaborating on cyber warfare or the Russian specialists
    are independently assisting China's cyber warfare program?
        Secretary Albright. Again, Senator, I will get back to you
    on that.
        Senator Bennett. Thank you. I may have some written
    questions to supplement these. I appreciate it.
        Thank you, Mr. Chairman.
        Senator McConnell. Thank you, Senator Bennett.
        Senator Lautenberg.
        Senator Lautenberg. Thanks, Mr. Chairman. I ask consent
    that my full statement be included in the record.
        Senator McConnell. Without objection.
        [The statement follows:]

               Prepared Statement of Senator Frank R. Lautenberg

        Mr. Chairman, I appreciate the opportunity to hear from Secretary
    Albright on the President's budget request for fiscal year 2001. Madam
    Secretary, thank you for your continuing strong leadership of America's
    foreign policy.
        I think we all understand what the challenges of exercising global
    leadership in a complex world.
        Madam Secretary, when you testified before the Senate Budget
    Committee, you heard many encouraging words of support for providing
    the resources necessary to meet these challenges and seize
    opportunities to promote America's values and interests abroad.
        I am deeply disappointed that the Budget Resolution adopted by the
    majority party here did not reflect that priority.
        The Budget Resolution Conference Report which we will consider
    later today sets International Affairs spending levels for fiscal year
    2001 more than thirteen percent below the President's request. Our only
    hope is that the 302(b) allocations to Appropriations subcommittees are
    more realistic.
        Mr. Chairman, I hope we can work together to ensure that the
    Foreign Operations subcommittee receives an allocation sufficient to
    maintain America's global leadership role. Otherwise, we will face very
    difficult decisions about which critical programs to underfund or even
    eliminate.
        Mr. Chairman, in my view, responsible funding for American foreign
    policy must begin this year by fulfilling the President's requests for
    supplemental appropriations.
        I am particularly concerned that, having won the war over in
    Kosovo, we do not have the resources to win the peace there. The
    Europeans need to fulfill their commitment to take the lead, but we
    need to do our part as well.
        Another priority this year--at the turn of the millennium--is debt
    relief for the Heavily Indebted Poor Countries. Americans are
    protesting at the World Bank and IMF meetings because these
    institutions are not doing enough to ease crushing debt burdens through
    the HIPC initiative. But the House didn't even provide a mere $210
    million as America's contribution to the HIPC trust fund for
    multilateral debt relief within a $13.2 billion supplemental
    appropriations bill. We should do our part now, while helping
    developing countries manage their finances and ensuring that the United
    States and International Financial Institutions never again lend
    countries more than they can ever hope to repay.
        While we may have different ideas about how best to help Colombia--
    and America--overcome the scourge of narcotics trafficking, I hope we
    can all agree that this crisis must be addressed without further delay.
        There are many priorities that deserve full funding next year.
        We should sustain our support for peace in the Middle East,
    particularly for our ally Israel. While America must stand ready to
    support implementation of peace agreements in the Middle East, I
    believe it would be premature to discuss aid levels or make commitments
    before the parties themselves commit to a more peaceful future.
        We should help our new NATO allies and aspirants bring their forces
    up to NATO standards, so they will be better able to help us when we
    need them.
        We should strengthen global health programs, even beyond the
    President's request in some areas. In particular, we should restore
    funding for the United Nations Population Fund to $35 million and
    expand bilateral family planning programs, because unchecked population
    growth prevents sustainable economic development and threatens the
    quality of life on our planet. We should not only increase funding to
    combat the scourge of HIV/AIDS, but also make a more substantial
    contribution to international efforts to counter the growing
    tuberculosis epidemic.
        We should also begin paying down our arrears to the Global
    Environment Facility to help developing countries join the global
    effort to counter global climate change.
        Of course, as I noted earlier, these and many other worthy programs
    can only be funded if this subcommittee gets an adequate allocation of
    funds.
        I appreciate the opportunity to hear from Secretary Albright on
    these and other issues.
        Thank you, Mr. Chairman.

        Senator Lautenberg. Madam Secretary, I am glad to see you
    and see that you are still looking so fit after your arduous
    schedule. I must say that in my memory I do not think that
    there was any Secretary that worked harder at the task than you
    have. How you endure it raises interesting questions. You will
    have to tell me about your diet or something one day.
        But you deal with evermore complex problems in ever more
    places, and you deal with them, I think, very, very well. If
    there are glitches along the way, I think it would be fair to
    say it would be almost inhuman not to have that happen, but
    they are rare and far between.
        One I want to talk to you about briefly is Iran. I think
    that you know that I was not enthusiastic about the trade
    emerging from non-essential products, caviar and rugs and
    things of that nature, to help move the situation with Iran
    along. I would love to see some basis for getting them to stop
    their production of weapons and exporting problems as they so
    conveniently seem to do.
        Even as we talk to them, we see a situation where they are
    taking several of their citizens, including 13 Jewish people,
    putting them on trial with the possibility of death sentences
    coming forward. I wonder how do we get serious discussions
    going as they pursue their policies of terrorism, as they
    pursue their policies of inhuman treatment of their citizens
    without letting them know that we take these things very
    seriously. We are not going to stand by and let them conduct
    those kinds of affairs and encourage them that trade is coming
    along with America and that relationships can improve under
    these conditions.
        Secretary Albright. First of all, thank you for your kind
    words.
        If I might just take a minute because the chairman started
    out this way. I think that there is no question that life is
    more complicated now in foreign policy.
        Senator Lautenberg. You almost wish for the days when we
    had one large enemy out there.
        Secretary Albright. Well, it was dangerous but simpler, but
    I have no nostalgia for that.
        What I do think, however--and today's discussion has
    already shown it that the subjects a Secretary of State now
    deals with are quite different. I don't think we talked about
    corruption or drugs or health. Those were not normal foreign
    policy issues. They are now what we do every day because they
    are the kinds of things that affect U.S. national interests in
    addition, obviously, to missile issues, as Senator Bennett has
    raised.
        But it is quite different and I think that what has to
    happen is that we need to look at challenges and opportunities
    from every country across the board. The cold war froze
    everything and now things are defrosted and a lot of issues
    that were hidden are now out there.
        It means that we have to look at countries individually and
    try to figure out if we are better off at using sticks or
    carrots and when to use what. It requires us I think to spend a
    lot more time analyzing change in particular countries than I
    think was necessary before. Before our foreign assistance
    programs were used to try to bring countries into ``our camp.''
    Now we have the responsibility of analyzing how they fit into
    an international scene and what U.S. national interests are.
        So, to get to Iran, we have had a relationship for 25 years
    with Iran that has isolated us from them and them from us for
    good reason. I gave a speech recently which went through the
    history, some of which was difficult from our side, some from
    their side, and I will not repeat all that.
        But we do see some changes going on in Iran that I think we
    need to at least explore, which was the purpose of my
    suggestion of the lifting of the sanctions, which is a very
    small step. We are waiting to have mutually balanced steps to
    see if there are any possibilities for having a different kind
    of relationship with Iran and whether there is a way to help
    support the reform movement. The sanctions that were lifted had
    to do primarily, even though they sound like luxury goods for
    us, are ones that have an effect on the middle class in Iran.
        On the specific question of the Iranian Jews, however, it
    is an issue that has been of huge concern to me. I have raised
    it with the countries that do have relations with Iran, that
    they need to make that point very clear when they go to Tehran.
    I am on the phone daily now with foreign ministers because
    there is a resolution that we are sponsoring in Geneva that
    makes clear that the treatment of the Baha'i and the Iranian
    Jews is unacceptable.
        This morning we got news that the trial has been postponed
    until May 1. That is one possible step in the right direction,
    though some of the things we are still hearing about how the
    trial may be carried out are not acceptable. But it is on our
    radar screen, or more than that frankly. We are making very
    concerted efforts through those that do have dialogue with Iran
    about the importance of this issue.
        [The information follows:]

                                      U.S. Department of State,
                                        Washington, DC, April 14, 2000.
    Hon. Mitch McConnell,
    Chairman, Subcommittee on Foreign Operations, Committee on
            Appropriations,
    U.S. Senate, Washington, DC.
        Dear Mr. Chairman: Secretary Albright asked that I update a
    response she gave to Senator Lautenberg at the April 13 hearing before
    the Senate Appropriations Foreign Operations Subcommittee. The question
    asked about the latest developments in the trial of 13 Jews in Iran,
    and the Secretary reported that after convening the trial, the Judge
    had ordered a delay in the proceedings to a scheduled resumption date
    of May 1. She noted that it was our hope that such a delay would
    contribute to prospects for a favorable outcome in the case.
        When she returned to the State Department, the Secretary was
    informed of new reports that at the initial hearing on April 13, the
    Judge claimed that four of the Jews had previously ``confessed to their
    crime'' and had petitioned the court for leniency. This claim was
    disputed, we are told, by defense attorneys, who seek to declare any
    such ``confessions'' inadmissible, as they appear to have been made
    long before the proceedings and without the presence of attorneys. The
    dispute as to whether such ``evidence'' will be allowed by the Judge
    appears central to whether the Jews will be able to successfully defend
    themselves against these allegations.
        These reports, which indicate a bias on the part of the Judge,
    reflect the lack of fairness and transparency that has characterized
    the Judiciary's handling of this case. The declaration that the trial
    would be off-limits to the public or press is a further worrisome sign.
    While the Secretary continues to hope that the delay announced in the
    trial will prove favorable to the defendants, she asked that I
    emphasize to you our profound skepticism and concern regarding the
    procedures followed in this case by the Iranian government.
        We will continue pressing foreign governments to urge Iran to
    ensure well-being of these individuals and to ensure that they receive
    due process in keeping with accepted international standards.
                Sincerely,
                                                Barbara Larkin,
                              Assistant Secretary, Legislative Affairs.

        Senator Lautenberg. Mr. Chairman, if there is time for one
    more question. I have others I will submit in writing.
        Senator McConnell. Okay. Thank you, Senator Lautenberg.
        Senator Lautenberg. I really appreciate it.
        Numerous war criminals indicted by the international
    tribunal remain at large in the Bosnia, Republika Srpska, and
    elsewhere in the former Yugoslavia. We applaud the French for
    arresting Krasnic, but Karadjic and others still remain at
    large in their sector. How do you feel about our assistance to
    countries and communities in Bosnia using the carrot and stick
    to motivate the arrest of those indicted for those terrible
    crimes? If we want to pursue that policy, I would have to
    understand why did the United States agree to the EBRD funding
    for a bridge in Foca, which is reportedly a nest of war
    criminals and other thugs despite restrictions that I authored
    on providing aid to communities harboring war criminals.
        Secretary Albright. Well, first of all, I do think that the
    arrests of the war criminals, the indictments, and the war
    crimes tribunal are essential to the work that needs to happen
    if we are going to ultimately get peace and justice in Bosnia
    and Kosovo. I think we have been working very hard to be of as
    much assistance on this as possible.
        I think that the problems here are that we are trying to
    use a carrot and stick approach on this in terms of determining
    where our assistance can be helpful in terms of having
    cooperation with the war crimes tribunal and where it cannot.
    We have been as discriminatory as we can be in terms of
    targeting our assistance to the areas where we think they can
    be most helpful.
        Senator Lautenberg. Well, I hope that we will pursue those
    criminals as arduously as is possible and let them know that
    that is a principal issue.
        Secretary Albright. Yes.
        Senator Lautenberg. Thank you very much.
        Senator McConnell. Thank you, Senator Lautenberg.
        Secretary Albright. Senator, I would like to thank you so
    much for everything that you have done to help get our budget
    because we cannot do the job without the money. I fully
    understand that not everything that we have done has come to
    fruition quickly, but part of our problem is that I have come
    here, now my fourth year, asking for more resources. It is very
    hard to make the kinds of choices where you have to triage
    basically in order to be able to carry out our foreign policy
    and we need it. Thank you for your help.
        Senator Lautenberg. If I may respond, Mr. Chairman, just to
    say that I believe there is a price that you pay for
    leadership. The medium with which to settle accounts is either
    aid in the form of funding, advice and programs as opposed to a
    military response, and I think that having financial aid of
    sufficient proportion to protect our leadership in the world is
    far less a price than taking up weapons one day in the future.
        I am sorry, Mr. Chairman. Thank you.
        Secretary Albright. And, Mr. Chairman, you had said that
    there would not be a supplemental and that it would probably be
    in some bill that you hoped the President would sign. I have to
    say that I hope it is something the President can sign, but if
    it does not include our requests that have to do with Kosovo
    and Colombia and Mozambique, it is very hard to do it within
    the budget resolutions that have been passed.
        Senator McConnell. Right. Well, picking up on that, you
    seem to be saying that most of the problems are money related.
    That is sort of the theme through your whole presentation this
    morning. In Kosovo, you said the supplemental was essential to
    our success. Yet, we have committed more than any other donor.
    More importantly, of the $150 million that we gave you last
    year, the Department is holding back $20 million, so if there
    is a shortfall, it is not for lack of congressional support.
        Second, you said there was not enough for peacekeeping to
    address problems in Africa. Last year you asked for $130
    million. We gave you $153 million.
        So, I do not agree that the problems are driven by
    congressional failure to fund.
        Having said that, as I indicated, we plan to move the
    foreign operations bill early in the process. It is going to
    include a number of things that you have asked for and
    hopefully the President will sign it if it is desperately
    needed, as you indicated that it is.
        I want to turn to an area that you and I have a shared
    interest in and that is Burma. May the 26 is the 10th
    anniversary of the election of Aung San Suu Kyi. I am wondering
    if you can give us any signs of hope whatsoever. I notice that
    SLORK has recently changed its name, but I am sure it has not
    changed its approach. Any signs of progress anywhere? Any
    interest in ASEAN in this problem?
        Secretary Albright. First of all, I agree with you. This is
    an issue that you and I have both spent a lot of time on and
    feel strongly about. Several things are happening, though not
    fast enough as far as I am concerned or, more importantly, Aung
    San Suu Kyi is concerned.
        In ASEAN, we have raised the issue a number of times. I
    think that there is somewhat more interest in it. Thailand that
    is now chairman of ASEAN has a more active approach to this and
    is more interested, and Kim Dae Jung's presence has also helped
    in terms of the way that the Koreans have looked at it. So,
    there is somewhat more support, though a lot of it is not
    moving fast enough for sure.
        Secretary-General Kofi Annan has named a new person whom I
    know, Mr. Rozali, a Malaysian, that I am about to be in touch
    with. He is somebody that I knew well when I was in New York.
        But I am dissatisfied. We are also working on another
    resolution in the General Assembly. But it is pathetic, the
    lack of international action on this. I agree with you
    completely.
        Senator McConnell. Well, you will be pleased to know I am
    not blaming that on you. I just think it is an exasperating
    situation and the lack of interest in the region continues to
    astonish me.
        Let me conclude by saying last July you complained to
    several Senators that I was holding up $10 million for the
    Kosovo women's initiative which was to be run by UNHCR, and
    that was entirely true. Given UNHCR's miserable record in
    delivering aid, I wanted a full explanation of how the funds
    were to be spent before they were transferred.
        In deference to the Senators' pleas that the funds were
    urgently needed to provide rape counseling and related
    services, I released the funds.
        In December, I pressed to find out how the funds were being
    spent, with little or no luck. I have now learned that instead
    of providing direct support to groups in Kosovo, the State
    Department agreed to allow three international groups to manage
    the money. As of this week, about half a million dollars had
    actually been received by groups in Kosovo, and that is
    certainly good news.
        The most successful Kosovo women's organization, which has
    a long history of helping victims of abuse and violence, has
    not received any money at all. United States officials in
    Pristina describe the program as ``not particularly
    effective.'' It is providing aerobics and sewing lessons. An
    individual with longstanding interests in women's issues in
    Kosovo described the program as a big waste of money. Most of
    the women here are really angry. Is there anything you can do
    about this disaster?
        Madam Secretary, why are we providing aerobics classes
    instead of rape and abuse counseling? After pressing to get the
    funds released last summer, I am curious as to why the groups
    in Kosovo have received so little.
        Secretary Albright. I am not aware that we are providing
    aerobics.
        But let me just make the following point. We have provided
    money for this women's initiative, and the initiative links
    national and international organizations to provide
    educational, vocational and income generation, micro-credit and
    other assistance. When I have been to Kosovo and met with
    women's groups, they seemed to be satisfied with--or asking for
    more help but not dissatisfied with the way that this program
    is working. This KWI program is working to try to develop,
    formulate the programs that they want to have.
        The Department provided an additional $900 million to
    fund--I am sorry--$900,000 to fund two ongoing programs to
    train a group of local medical professionals to provide
    assistance, with particular emphasis on victims of gender
    violence. We also provided $3.5 million to fund three projects
    aimed at children and adolescents.
        I will look into your specific report to find out who said
    it and why because I do not want to come here and ask for money
    and have it misused. Obviously, we are on the same wavelength
    on this.
        Senator McConnell. On the question of the Colombia funding
    and the Kosovo funding, as I indicated to you earlier in the
    hearing and on the phone last week, let me repeat that I am
    going to try to help you on both those fronts. I am more open
    to the Colombia approach than my colleague, Senator Leahy. It
    is in all likelihood going to be a part of the foreign
    operations bill which is going to move early in the process. I
    hope you will work with us to get a presidential signature, and
    the sooner the President signs it, of course, the sooner you
    will have the funds to pursue these initiatives which you
    indicate are so needed.
        I also want to take this opportunity to congratulate you on
    your service as Secretary. In spite of our feisty exchanges
    from time to time, I admire you greatly. I think you have done
    a fine job, and you have got some months left here in this
    position and I look forward to working with you to try to solve
    as many of these problems as you can on the way out the door.
        Secretary Albright. Thank you very much, Mr. Chairman.
    Working with you is and has been a pleasure, and I actually
    think that the direction of your questioning always sharpens my
    brain and I appreciate it.
        I think the hardest part is, as I look back on what my
    predecessors dealt with, what we are missing here is the
    consensus that our two branches of Government have to have. We
    are going through particularly complicated times in terms of
    assessing American national interests and how the American
    public understands what we are doing. I plan to spend a lot
    more time while in office working with all of you but also
    explaining more to the American public where our national
    interests lie. They are different than they were for 50 years
    and we can recreate enemies, we can decide that Russia or China
    are our major enemies, or we can look for opportunities.
        I hope very much that we will have a chance to work
    together in these months and beyond. Thank you very much. You
    have been great.

                         Additional committee questions

        Senator McConnell. There will be some additional questions
    which will be submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Questions Submitted to Hon. Madeline Albright
                 Question Submitted by Senator Mitch McConnell

        Question. For several years, Congress conditioned assistance on
    privatizing at least 3 of the 9 government-owned enterprises. What is
    the status of privatization of the 9?
        Answer. Privatization has proven highly controversial in Haiti,
    facing opposition both from within the government and from popular
    groups such as labor unions. Since the debut of the Modernization
    Program in 1996, only two firms have been sold. On October 14, 1997,
    then-Prime Minister Rosny Smarth signed a contract to sell 70 percent
    of the flour mill to a consortium of Continental Grain, Seaboard
    Marine, and Unifinance (a Haitian investment firm) for $9 million.
    Legal transfer of the mill, delayed by an employee revolt, took place
    on May 22, 1998. The mill resumed operations in mid-November 1998 after
    being non-functional for nearly six years. It now employs roughly 300.
    The cement factory was privatized on May 7, 1999 to a European/Latin
    American consortium. At year-end it had not yet resumed operations but
    is expected to do so shortly.
        Donor-funded preparations for privatization or modernization of the
    telephone company, the airport, and. the seaport were completed in
    1999, as was IDB-funded work on the electricity sector. We have urged
    the Preval government to privatize these institutions with a minimum of
    delay, but it is now virtually certain that no further privatizations
    will take place until after the presidential elections scheduled for
    November 2000.
                                     ______

                  Question Submitted by Senator Arlen Specter

        Question. Secretary Albright, recently you have stated that ``aside
    from Russia, Ukraine is the largest and most influential of the New
    Independent States. The whole region will be affected by whether it
    slides backward, or continues up the democratic path.''
        I understand that you are making a visit to Ukraine in the near
    future. Please comment on the status of U.S.-Ukraine relations, and the
    progress Ukraine has made towards democratic growth. Additionally, in
    the Administration's view, what roadblocks exist which are precluding
    Ukraine's ``graduation'' from Jackson-Vanik?
        Answer. We believe that Ukraine's success is key to the future of
    the independent countries in transition to democracy that emerged from
    the collapse of the Soviet Union and for that reason have made it a
    priority in our foreign policy since 1991. The U.S. and Ukraine are
    strategic partners. Our strong relationship is symbolized by the annual
    U.S.-Ukraine Binational Commission meeting (Gore-Kuchma) and many other
    high-level interactions, including my April 14 trip to Kiev, the May 8-
    9 visit of Ukrainian Prime Minister Yushchenko to Washington, and the
    President's June visit to Kiev.
        By designating Ukraine a priority country, I wanted to be sure that
    Ukraine continued to get all the attention and support it deserves.
    Ukraine's size, location, and potential make its success an important
    U.S. foreign policy objective, and we remain committed to helping it
    make a successful transition to democracy, market economy and
    integration with Euro-Atlantic structures. That is the message I
    delivered publicly and privately in Kiev, and is the message that
    President Clinton will reiterate during his June visit.
        Ukraine has many problems, including continued economic decline,
    but it has also achieved a great deal in nine years as an independent
    country in developing democratic institutions and an embryonic civil
    society. Ukraine was the first of the former Soviet states to
    peacefully transfer executive power from one president to another and
    its elections, though not always consistent with international
    standards, have consistently represented the will of the people. The
    presidential election of last year--though flawed--did result in a
    renewed popular mandate for reform and integration with the West.
    However, another message I delivered in Kiev was that it is important
    to Ukraine's Euro-Atlantic aspirations that democracy and human rights
    be further strengthened, especially with regard to media freedom.
        Ukraine is in full compliance with Jackson-Vanik, and the
    Administration supports its eventual ``graduation.'' We have told the
    Ukrainian government that graduation is a Congressional decision and
    warned them that Congress looks at many factors--including human
    rights, democracy, economic reform, and relations, with the U.S.--in
    deciding whether to ``graduate'' a country. We have encouraged
    Ukrainian officials to talk to interested groups in the U.S., such as
    the American Jewish community, about Jackson-Vanik graduation. Both
    President Kuchma and Prime Minister Yushchenko respectively met with
    leaders of the Jewish community during their most recent trips to the
    United States.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

        Question. Is there any indication, no matter how slight, that
    Chinese technicians are assisting the nuclear programs of Pakistan or
    any country on the Terrorism list?
        Answer. We continue to closely monitor China's nuclear
    nonproliferation policies and practices. At this time, we have no
    reason to conclude that China has changed its willingness to implement
    its multilateral and bilateral nuclear nonproliferation commitments.
    Since joining the NPT in 1992, we believe China has taken significant
    steps to put into place a comprehensive export control system covering
    both nuclear and dual-use goods. China has declared publicly that its
    regulations prohibit assistance to activities related to nuclear
    explosive devices in addition to assistance to unsafeguarded nuclear
    facilities.
        China does provide assistance to Pakistan's safeguarded nuclear
    program, most notably the supply of the Chasma nuclear power reactor
    that is nearing operational status. Given China's earlier assistance to
    Pakistan's nuclear weapons program, it is possible that residual
    contacts between Chinese personnel and entities involved in Pakistan's
    unsafeguarded nuclear program could occur. But at this time, we have no
    basis to conclude that China has changed its commitment to adhere to
    responsible nuclear nonproliferation norms.
        With respect to other countries on the Terrorism List, China has
    provided assistance to safeguarded nuclear programs in Iran and Syria.
    In Iran, China is now completing two longstanding nuclear projects--
    neither of which raises proliferation concerns. China assured the
    United States in 1997 that these projects would be concluded and that
    no new nuclear projects with Iran would be undertaken. In Syria, China
    provided a small nuclear research reactor--a miniature neutron source
    reactor--and its fuel in the early 1990s; the reactor became
    operational in 1996 and is under IAEA safeguards.
        Question. Is there any indication, no matter how slight, that China
    or Chinese companies are assisting the biological warfare programs of
    any country on the terrorism list?
        Answer. Trade between Chinese entities and countries around the
    world, including terrorism list countries, in dual-use biological
    materials continues. It is unclear how much of the trade the Chinese
    government is aware of. A good deal of this trade in dual-use
    biological materials is undoubtedly for legitimate commercial purposes.
        Further details would be more appropriately discussed in a
    classified setting.
        Question. The Chinese Army's newspaper Liberation Army Daily on
    March 22 stated that the SS-N-22 missiles China has purchased from
    Russia ``can carry nuclear warheads.'' Is it true that the SS-N-22 can
    carry a nuclear warhead?
        Answer. The SS-N-22 is a 65 nautical mile range anti-ship cruise
    missile (ASCM). While the Russians designed the SS-N-22 to carry both
    nuclear and conventional warheads, there is no indication that the
    version to be transferred to China will carry a nuclear warhead.
        Question. On March 15 the Moscow Nezavisimaya Gazeta stated that
    the Sovremenny-class destroyers, the Su-27 aircraft and the ``long
    range radar aircraft'' they have sold to China could make ``an air-
    naval formation'' which is fully capable of fighting as equals with the
    U.S. Navy aircraft carrier formation.'' Is this true?
        Answer. We do not believe the Sovremenny destroyers sold to China,
    even in conjunction with Russian-provided aircraft, will have a
    significant impact on the balance of power in the region. However, we
    keep close watch on any capabilities that might, at some point, pose a
    challenge to U.S. forces, and we continue to discuss regional security
    issues with Russia, including the impact of its arms sales on regional
    stability.
        Question. In the past five years, have you raised the issue of arms
    sales with Moscow? Could you please provide a chronology of your
    discussions on this issue? What was the response?
        Answer. Indeed we have. The U.S. maintains an active dialogue with
    Russia on the issue of arms sales, reflecting our concern about
    regional stability. We discussed the issue most recently at the April
    ministerial.
        The Russians understand the potential impact of their sales on
    Asia-Pacific regional security, particularly in the Taiwan Straight,
    and hope to continue discussing a broad range of regional security
    issues with us.
        Question. Have you asked Moscow not to deliver any more A-50 AWACS-
    type aircraft to China?
        Answer. We have no information that indicates Russia has ever
    transferred A-50 type aircraft to China. However, we have raised with
    the Government of Israel our concern about Israel's proposed sale to
    China of an A-50 modified with the Israeli PHALCON radar.
        The U.S. maintains an active dialogue with Russia on the issue of
    arms sales, reflecting our concerns about regional stability.
        We will continue to monitor closely Russian arms sales to China and
    raise them in a manner consistent with our overall security interests.
        Question. President Putin and President Jiang will meet soon. Are
    they likely to agree to additional arms sales?
        Answer. We have no specific information on military transactions
    that the Chinese and Russians might discuss or conclude during their
    upcoming summit.
        We are aware, however, of the challenges posed by an increasingly
    cooperative Russia China relationship. In particular we closely monitor
    military cooperation (including arms sales) between the two countries.
        We believe, however, that both Russia and China take essentially
    pragmatic stands and, indeed, they continue to have important
    differences in their perceived national interests. That said, we will
    still continue to address with both Moscow and Beijing the issue of
    expanding arms sales and their potential impact on regional stability.
        Question. Is there any indication, no matter how slight, that the
    Russian government or Russian technicians operating independently are
    assisting the Chinese cyberwarfare program?
        Answer. We have checked with appropriate Intelligence Community
    components, and they report no evidence suggesting such assistance. We
    remain watchful of foreign capabilities in this area that could pose a
    threat to the interests of the United States.
        Question. Is there any indication, no matter how slight, that
    Chinese technicians are assisting the nuclear programs of Pakistan or
    any country on the Terrorism list?
        Answer. We continue to closely monitor China's nuclear
    nonproliferation policies and practices. At this time, we have no
    reason to conclude that China has changed its willingness to implement
    its multilateral and bilateral nuclear nonproliferation commitments.
    Since joining the NPT in 1992, we believe China has taken significant
    steps to put into place a comprehensive export control system covering
    both nuclear and dual-use goods. China has declared publicly that its
    regulations prohibit assistance to activities related to nuclear
    explosive devices in addition to assistance to unsafeguarded nuclear
    facilities.
        China does provide assistance to Pakistan's safeguarded nuclear
    program, most notably the supply of the Chasma nuclear power reactor
    that is nearing operational status. Given China's earlier assistance to
    Pakistan's nuclear weapons program, it is possible that residual
    contacts between Chinese personnel and entities involved in Pakistan's
    unsafeguarded nuclear program could occur. But at this time, we have no
    basis to conclude that China has changed its commitment to adhere to
    responsible nuclear nonproliferation norms.
        With respect to other countries on the Terrorism List, China has
    provided assistance to safeguarded nuclear programs in Iran and Syria.
    In Iran, China is now completing two longstanding nuclear projects--
    neither of which raises proliferation concerns. China assured the
    United States in 1997 that these projects would be concluded and that
    no new nuclear projects with Iran would be undertaken. In Syria, China
    provided a small nuclear research reactor--a miniature neutron source
    reactor--and its fuel in the early 1990s; the reactor became
    operational in 1996 and is under IAEA safeguards.
        Question. Is there any indication, no matter how slight, that China
    is using Cuba as an electronic listening post targeted at the United
    States?
        Answer. This question will be responded to promptly at the
    classified/codeword level, marked to the attention of the SAC/FO staff.
                                     ______

             Questions Submitted by Senator Ben Nighthorse Campbell

        Question. When can we expect to see the Initial Report as required
    by the Baumel legislation, Public Law 106-89?
        Answer. The report is undergoing final review and will be
    transmitted to Congress in the next few days.
        Question. Please share with the subcommittee what the most recent
    developments are and what progress has been made over the past 150
    days.
        Answer. The report will soon be transmitted to the Congress
    pursuant to Public Law 106-89.
        Question. Has the administration--including the President during
    his discussions with President Assad--raised the Baumel issue during
    any of the recent Israel--Syria peace talks? Have the Syrians
    demonstrated a willingness to resolve this issue?
        Answer. The President and I have raised this issue repeatedly with
    officials at the highest levels in Syria. It will continue to be a
    regular part of our dialogue with Syria.
        Question. What role does the long-running Baumel issue play in
    achieving a peace agreement between Israel and Syria?
        Answer. The United States will continue to pursue every serious
    lead to ascertain the fate of IDF MIAs Zachary Baumel, Yehuda Katz and
    Zvi Feldman.
        We deeply sympathize with the pain of all the families of the
    missing soldiers and with their determination to continue the search
    for their sons. We will continue our efforts to help them.
        We are in close contact with the Israeli Government and the
    families of the MIAs to help resolve this important issue. The
    President and I have raised this issue repeatedly with officials at the
    highest levels in Syria.
        Question. Do you think that a meaningful peace accord between
    Israel and Syria can be reached without the successful resolution of
    the Baumel issue?
        Answer. As the Middle East Peace Process moves forward we expect
    that these issues will be easier to address. The President and I have
    raised this issue repeatedly with officials at the highest levels. It
    will continue to be a regular part of our dialogue with all relevant
    parties.

                             EUROPEAN CONTRIBUTIONS

        There have been news accounts about our European allies' not living
    up fully to their obligations in Kosovo.
        Question. What is the U.S. doing to rectify this unsustainable
    situation? Have these efforts been successful?
        Answer. News accounts of the slow pace of disbursement of
    assistance pledged by Europeans for Kosovo are outdated. Our European
    partners seem to disburse their pledges more slowly than we do for two
    reasons: first, most European states and institutions, including the
    European Commission, have fiscal years that start in January. One
    quarter into U.S. Fiscal year 2000, most European donors had just begun
    processing their own expenditures.
        Second, European money has been slower to reach Kosovo because
    European donors are undertaking most of the long-term reconstruction
    assistance, while the U.S. has responsibility for many short-term tasks
    of peace implementation. Reconstruction projects typically have a long
    implementation period and a correspondingly more measured disbursement
    rate. This division of labor became long implementation period and a
    correspondingly more measured disbursement rate. This division of labor
    became necessary when the fiscal year 2000 FOAA prohibited the U.S.
    from undertaking large-scale physical infrastructure reconstruction in
    Kosovo.
        European countries and Canada provide roughly 73 percent of KFOR
    troops on the ground and almost 80 percent if we count the Russian
    Federation (compared to approximately 13 percent for the U.S). Our
    European allies have already disbursed $113.6 million, tantamount to
    more than 85 percent of their pledge, to support UNMIK's civil
    administration.
        In March 2000 alone, the European Commission disbursed euros 30
    million in support for the Kosovo Consolidated Budget, which is
    administered by UNMIK to run the government services of Kosovo.
        Bernard Kouchner, the Special Representative of the Secretary
    General for Kosovo, acknowledged this progress in a letter to Senator
    Warner dated March 18, in which he writes, ``Existing donor pledges
    have now been honored.''
        Moreover, the European Reconstruction Agency of the European Union
    has already opened tenders for more than $115 million in reconstruction
    projects, to be paid by funds allocated less than three months ago.
    This is a blistering pace for movement of funds that the European
    Commission is legally bound to obligate within three years.
        Continuous action of the Administration through repeated demarches
    and constant pressure by the President and the Secretary of State
    contributed to this good performance.
        Question. Has the Administration raised the issue of corruption and
    organized crime with President Putin?
        Answer. The Administrationhas raised the issue of organized crime
    and corruption with Russian President Putin and the Russian government
    on numerous occasions.
        The President and other-high-level Administration officials have
    spoken about the detrimental effects which crime and corruption have on
    fledgling democracies and market economies like Russia.
        President Clinton most recently raised these issues in a letter to
    Putin last month.
        Secretary Albright in her speech at Carnegie Endowment in September
    called upon the Russian government to make fighting corruption a
    priority.
        The Vice President hosted a major Global Forum on Fighting
    Corruption last year that included high-level Russian participation.
    The results of the Forum, including a compendium of best or effective
    practices for combating corruption, have been disseminated to the
    Russian public through a variety of media.
        We are also engaged with the Russians in bilateral and multilateral
    efforts to combat crime and corruption.
        Putin has said he will make fighting corruption a key priority.
        Question. To what extent do issues of corruption and organized
    crime factor into U.S. relations with Russia and the other former
    Soviet states?
        Answer: The vast majority of Russians and citizens of the other New
    Independent States (NIS) are deeply concerned with the crime and
    corruption that has emerged in their countries over the last several
    years. They realize that these activities drain capital, sap energy,
    and undermine investor and other confidence.
        Corruption weakens the development of democratic institutions and
    the ability of the governments of Russia and the other NIS to conduct
    normal business on a day-to-day basis in an effective and efficient
    manner.
        In our dialogue with the NIS, we have made clear the negative
    effects which crime and corruption have on the development of
    democracies and market economies, including the obstacles they pose to
    trade and investment.
        We have also been working with Russia and other NIS for several
    years now, both bilaterally and multilaterally, to combat organized
    crime and corruption.
        Our bilateral programs focus both on the development of rule of law
    and on law enforcement training. In addition, we are building working
    relationships between U.S. and NIS law enforcement counterparts which
    allow us to cooperate effectively on specific criminal cases, and we
    are working to institutionalize our cooperation through the negotiation
    of law enforcement agreements that allow us to share information and
    cooperate in investigations, prosecutions, and the prevention of crime
    according to internationally accepted standards.
        We have also been working on anti-corruption efforts, particularly
    in the area of good governance and transparency, in the NIS.
        Multilaterally, the Russians have been part of discussions in the
    G-8, U.N., OSCE, and COE. They, along with some of the other NIS,
    attended the Vice President's Global Forum on Fighting Corruption in
    February 1999.
        Progress in the NIS depends upon the willingness and ability of
    these countries to pass fundamental anti-corruption and anti-money
    laundering legislation, increase transparency and competition in the
    economy, strengthen law enforcement mechanisms, and establish
    regulatory and oversight mechanisms that allow for efficient
    investigation and prosecution of corruption.
        Question. When we think of corruption and organized crime we often
    think of the economic costs. There are obvious security implications as
    well. How would you assess the export safeguards in place in the NIS to
    ensure that potentially threatening weapons systems are not diverted to
    rogue states, including through corruption and organized crime?
        Answer. Ensuring safeguards are in place in the New Independent
    States (NIS) to deter, detect, and interdict illicit weapons
    trafficking is in U.S. national security interests. We actively engage
    and provide assistance to the NIS to improve their border security and
    export control laws, infrastructure and capabilities to prevent the
    proliferation of WMD materials and technologies and advanced
    conventional weapons, and will continue to do so.
        Our export control and border security assistance has played a
    substantial role in helping the NIS develop effective export control
    laws and procedures.
        Unfortunately, in the NIS, as elsewhere, there are entities and
    individuals that seek to evade these laws. As a result, a key aspect of
    our assistance efforts is to help the NIS prevent export control
    violations from occurring at the practical level, and to deal more
    effectively with those that seek to evade the law. Anticorruption
    training is an essential component of this effort.
        This effort will take time. Still, we have recently seen clear
    indications that our border security and export control efforts in the
    NIS are paying off. For example, Uzbekistan's border guards recently
    seized radioactive cargo in an Iranian truck bound for Pakistan with
    the aid of radiation-detection pagers provided as part of the DOD-
    Customs counter-proliferation program. We have established a position
    in our Embassy in Tbilisi to coordinate export control and border
    security assistance to Georgia.
        Despite these and numerous other successes, we have made it clear
    that, if necessary, we are prepared to impose trade penalties against
    NIS entities that engage in proliferation activity.
        The State Department, in cooperation with other agencies, is
    working to expand our export control, and related border security
    training and equipment assistance programs, including radiation
    detection equipment for Russia, Ukraine, Georgia, Armenia, Azerbaijan,
    Uzbekistan and other NIS countries as part of the Expanded Threat
    Reduction Initiative (ETRI) and the Nonproliferation, Antiterrorism,
    Demining and Related Activities (NADR) account.
        Question. Earlier this year, you identified Ukraine as one of four
    democracies deserving of particular attention this year (the others are
    Colombia, Indonesia, Nigeria). Ukraine's new reformist Prime Minister
    is reportedly taking steps to reverse the dismal economic situation and
    undertaking genuine free-market reforms, and I think we all realize
    that he has a difficult task ahead of him. Among the challenges facing
    Ukraine is corruption. I understand that you will visit Ukraine
    sometime in the near future. Will this issue be on your agenda? What is
    the Administration doing to encourage rule of law in Ukraine and how
    are you working with Kiev to combat corruption and organized crime?
        Answer. Corruption is a major obstacle to genuine reform in
    Ukraine, and indeed throughout the former Soviet Union. It is also a
    major reason why Ukraine has failed to attract needed foreign
    investment, despite its well-educated populace, abundant resources, and
    favorable location. I raised the issue of corruption during my April 14
    meeting in Kiev and with Prime Minister Yushchenko during his May 8-9
    visit to Washington. It was also discussed at some length during our
    Binational Commission meeting with Ukraine last December.
        Much of our assistance is targeted to help Ukraine's growing civil
    society, which over time will make the government more accountable, and
    to developing an independent legal system, without which corruption
    will remain unchecked. However, the primary responsibility for
    combating corruption lies with the Ukrainian government itself.
    President Kuchmal's program of radical reforms cannot succeed if his
    government lacks the trust of the Ukrainian people.
        Question. To what extent did you address issues of democracy and
    human rights during your recent trip to Central Asia?
        Answer. My trip to Central Asia focused on two broad sets of U.S.
    interests in the region: promotion of democracy and economic reform;
    and fostering regional security and stability. We believe that these
    interests are interrelated.
        In Central Asia, I met with the presidents of the three countries
    which I visited. I was frank with them on the need to guarantee their
    citizens' fundamental human rights, including, following flawed
    elections in these countries, the right to peacefully change their
    governments.
        In our discussions, I emphasized that a truly democratic society is
    the best defense against the extremist threats facing the region.
    Democratization and market liberalization may be difficult initially,
    but they are essential to ensure long-term stability and prosperity.
        Also in these countries, I met with a broad spectrum of political
    figures, NGO's, students and human rights defenders, as well as
    independent media to demonstrate support for the development of
    democracy and civil society.
        Question. What is your perspective on reaching a Free Trade
    Agreement (FTA) with Jordan?
        Answer. King Abdullah has taken extraordinary steps on behalf of
    the peace process and economic reform. The Administration believes an
    FTA would help the King show the Jordanian people that doing the right
    thing on peace and economic reform pays off and is acknowledged by
    Jordan's friends.
        An FTA would also promote economic growth and stability in Jordan,
    and Jordan's stability is critical to ensuring lasting and stable peace
    in the entire region. Finally, an FTA would provide Jordan trade parity
    with Israel and the Palestinians, given their own free trade
    arrangements with us.
        We anticipate that the economic impact for the U.S. of an FTA with
    Jordan would be minimal. Jordan's exports to the U.S. were $16 million
    in 1998; U.S. exports to Jordan were $353 million in 1998. However, the
    significance for Jordan would be great.
        Question. Can you please share with the Subcommittee what--if any--
    progress has been made recently in negotiating a new trade agreement
    with Jordan?
        Answer. The Government of Jordan (GOJ) first raised an FTA with the
    Administration in August 1999. At that time, we informed the GOJ that
    accession to the World Trade Organization (WTO) was a critical first
    step toward a bilateral FTA. We worked closely with the GOJ in its
    effort to complete WTO negotiations quickly, including providing the
    GOJ a full-time WTO technical advisor through USAID. Concluding its
    negotiations in near-record time, Jordan officially acceded to the WTO
    in April 2000.
        The Administration has over the last several months been consulting
    with Members of Congress on the feasibility of entering into FTA
    negotiations with Jordan.
        We also recognize that police can play a key role in fighting these
    problems. To that end, we have worked with the United Nations'
    International Police Task Force (IPTF) to establish professional
    responsibility units in both entities to help monitor police standards
    and ethics and investigate alleged police misconduct. These units play
    a key role in deterring police corruption and addressing it when it
    does occur. We also are beginning work on developing stronger anti-
    organized crime capabilities within the police in Bosnia-Herzegovina.
    Two TDY FBI agents currently are in the country to assist in this
    effort.
        In addition, Bosnia-Herzegovina and the other Southeast European
    states made the commitment to implement the Stability Pact's Anti-
    Corruption Initiative, which identifies concrete steps the states of
    the region must take to combat corruption and carry out internal
    reforms. Carrying out such reforms is an integral part of the bargain
    under which the West will assist the countries of Southeast Europe to
    integrate into Euro-Atlantic Institutions if those countries take the
    needed steps to make such integration possible. We and our European
    allies will be monitoring this process carefully.
        In Kosovo, UNMIK Police still have not reached their full strength.
    However, they recognize that organized criminal activity poses a
    serious threat to stability and security and have established a unit to
    begin addressing the problem. We are working closely with key allies
    and UNMIK on an initiative to enhance UNMIK's capabilities in this
    area. our goal is to attack this problem in Kosovo before it becomes
    more sophisticated and entrenched. As the new Kosovo Police Service is
    created, we also will ensure that its organization includes an
    appropriately staffed professional responsibility unit.
        Question. Rampant corruption and uncontrolled organized criminal
    activity in the former Yugoslavia are undermining efforts by the
    international community to create some semblance of the rule of law.
    Nearly five years after the Dayton Agreement, the American head of the
    OSCE mission in Bosnia recently cited corruption as the number one
    obstacle to implementation of the accord. What concrete steps is the
    Administration taking to combat this major predicament in Bosnia and
    Kosovo?
        Answer. We take organized crime and corruption as serious threats
    to stability and to the development of legitimate institutions in the
    Balkans, and around the world. We are working with international
    organizations and our allies to address these threats.
        In Bosnia, corruption and misuse of public funds are serious
    problems, but U.S. investigations have shown that U.S. assistance, and
    other bilateral and multilateral assistance, is distributed under
    effective controls that minimize the risk of loss. Where there have
    been losses, we have taken legal steps to recover assets, such as
    foreclosing on secured reconstruction loans. We and other
    anticorruption themes ranging from the necessary legal framework, to
    election financing, including internal oversight mechanisms.
        The Department of State has also been active in pursuing
    anticorruption activities within other multilateral European
    organizations. We cooperated closely with the European Union to develop
    an Anticorruption Initiative as part of the Stability Pact for
    Southeast Europe, and are participating in the committee that will
    continue its implementation. This initiative calls for those states
    that have not done so to become parties to the two conventions on
    Criminal and Civil Law Against Corruption, and the monitoring mechanism
    (the ``GRECO'') for them, developed by the Council of Europe. The U.S.
    is considering whether to join the GRECO and become party to this
    Criminal Law Convention.
        The Paris-based organization for Economic Cooperation and
    Development manages the continuing process of monitoring implementation
    of the OECD Convention on Combating Bribery of Foreign Public Officials
    in International Business Transactions, and the Department of State
    promotes active U.S. participation in other OECD groups concerned with
    ethics in public service.
        The Department of State, in consultation with other concerned
    agencies, is participating for the U.S. in the Organizing Committee
    established by the Netherlands to assist in preparations for the May
    2001 Second Global Forum on Fighting Corruption. This follows up the
    February 1999 conference in Washington hosted by Vice President Gore,
    who committed the U.S. to cosponsor the follow-up meeting. In March,
    the Department assisted Romania to host a regional ministerial
    conference on fighting corruption for twenty Central and East European
    governments, in preparation for the Second Global Forum.
        All members of the U.N. will be invited to the Second Global Forum;
    Romania and the European Commission are also participating with the
    U.S. in the Dutch Organizing Committee. In April, the U.N. Crime
    Commission transmitted a resolution to the fall U.N. General Assembly
    that will define procedures for the U.N. to begin to work on a new
    global instrument against corruption. The Department also is consulting
    closely with European and other governments concerning this new global
    initiative. Finally, in its substantial international crime control and
    criminal justice training and assistance programs, the Department of
    State and U.S. law enforcement agencies are providing substantial
    assistance to countries in Central and East Europe to develop and
    implement aspect of their national anticorruption programs.
        Question. What is the State Department doing to ensure fighting
    corruption remains a top priority within the OSCE and other
    multilateral organizations in Europe?
        Answer. You have previously noted that the Department of State and
    Helsinki Commission, which you Co-Chair, worked closely together to
    introduce into the Istanbul OSCE Charter and Declaration language
    addressing the importance of combating corruption. Specifically, the
    Declaration charged the OSCE's Permanent Council with reporting to the
    2000 OSCE Ministerial on how best to contribute to efforts to combat
    corruption. The Chairman-in-Office has created a working group that
    will address this question and draft a report to the 2000 Ministerial.
        On March 3 the Department organized an interagency team, led by the
    Office of the Vice President, and including a member of your staff,
    that traveled to Vienna and briefed the OSCE anticorruption working
    group on the results of the 1999 Global Forum on Fighting Corruption.
    The team's presentations focused on how best to combat corruption among
    public officials, and outlined a series of meaningful contributions the
    OSCE could make donors are conditioning our aid on measurable progress
    in rooting out corruption, creating a climate conducive to private
    enterprise, breaking down barriers to flows of goods and people, and
    promoting human rights and the rule of law.
        We are working with the Office of the High Representative (OHR) to
    implement significant financial reforms. In addition, the OHR's
    Comprehensive Judicial Reform and Comprehensive Anti-Corruption
    Strategies were developed with U.S.Assistance. The Anti-Corruption Task
    Force, led by Ambassador Robert Frowick, coordinates our efforts with
    OHR and the EC's Customs and Fiscal Assistance Office. We have focused
    our resources in a number of specific areas: (1) cleaning up the
    customs services; (2) reforming tax administration and public sector
    accounting; (3) privatizing the banking system; (4) re-designing key
    aspects of the BiH Courts; and (5) providing for a transparent
    privatization process. We recently have undertaken to increase our
    efforts by augmenting the personnel resources of the Anti-Fraud Unit
    with new hires of international investigators, auditors and prosecutors
    to work in the field with their Bosnian counterparts.
                                     ______

               Questions Submitted by Senator Frank R. Lautenberg

                          GLOBAL ENVIRONMENT FACILITY

        Question. Last year, the Foreign Operations Appropriations bill
    provided only $36 million for the Global Environment Facility, even
    though those skeptical of the Kyoto Protocol should be among the
    strongest supporters of environmental measures in underdeveloped and
    developing countries. What contribution could the GEF make to promoting
    environmentally sustainable development if the U.S. would begin paying
    down our arrears, as the President's budget requests?
        Answer. Paying down our arrears will help the Global Environment
    Facility (GEF) promote sustainable development practices by conserving
    species, restoring the ozone layer and assisting developing countries
    to deal with environment problems. The atmosphere, the oceans and
    species protection are all global in nature. Nothing we do here at home
    can protect these resources from permanent damage caused elsewhere.
    Unsustainable development practices in Asia, Latin America and Africa
    pose an increasing threat to the global environment. Unless these
    regions adopt cleaner and more environmentally ``friendly'' approaches
    to economic development, their practices could negate all the combined
    efforts at environmental protection and conservation efforts of the
    U.S. and other industrialized countries. However, the developing world
    cannot afford the full cost of the changes necessary. For that reason,
    the GEF is designed to pay only the incremental costs associated with
    protecting the global environment. GEF projects promote more
    responsible paths toward economic development and seek to make utmost
    efforts to involve the private sector as well as all relevant
    stakeholders in civil society.
        While the GEF is the financial mechanism for the U.N. Framework
    Convention on Climate Change, it is not entrusted with serving as the
    financial mechanism for the Kyoto Protocol. Nevertheless, payment of
    our arrears to the GEF will enhance the ability of developing countries
    to address climate change through cleaner and more efficient energy
    development, including through the utilization of renewable sources of
    energy, and by identifying and preserving sinks for greenhouse gases
    through forest preservation and more efficient land management and
    agricultural practices.
        In sum, through the GEF's efforts in promoting environmentally
    sustainable development across the range of its focal areas, we will be
    helping to ensure that the earth's bounty will be passed on to our
    children as intact as possible.
        Madam Secretary, I understand you will soon be leaving for Ukraine.
    I wish you every success in your mission, because a stable and
    democratic Ukraine is central to our shared goal of a Europe whole and
    free.
        Question. What are the prospects for Ukraine implementing economic
    reforms on a more aggressive timetable?
        Answer. A decisive majority of the Ukrainian people clearly
    demonstrated in the last election that they want a Western path for
    their country. They reelected as President Leonid Kuchma, a man
    associated with reform and western integration. President Kuchma's
    renewed mandate provides a window of opportunity for Ukraine to move
    forward with the reforms needed to grow its economy and cement its
    place in Europe. He made a good start in choosing as his Prime Minister
    Viktor Yushchenko, and together they have taken some bold steps to
    reform Ukraine's economy and improve its relations with the West. In
    particular, efforts to streamline the government and deregulate the
    economy can help create a favorable climate for investment.
        However, much remains to be done to reach the critical mass of
    reforms needed to turn the economy around. Energy and agricultural
    reform and privatization are priorities. We remain committed to
    Ukraine's. success, and will provide assistance, both political and
    material, in support of genuine reform efforts.
        Question. What does President Putin's rise to power in Russia mean
    for Ukraine's security and independence? Are you concerned that Russia
    will continue to use its economic leverage over Ukraine to prevent
    closer relations with the West?
        Answer. The Ukraine-Russia relationship is central to the future of
    Europe. The U.S. is committed to the successful transition of both
    countries to peaceful, stable free market democracies. Ukraine and
    Russia have made great progress in resolving difficult bilateral issues
    connected with the break-up of the former Soviet Union, including
    division of the Black Sea fleet and other military equipment, the
    status of Crimea and other border issues, and the status of the Russian
    minority in Ukraine. We hope to see current and future issues between
    these two countries, such as energy relations, resolved in the same
    spirit of cooperation and friendship, and with due respect for each
    other's independence and sovereignty. The U.S. strongly supports
    Ukraine's and Russia's aspirations to integrate more closely with the
    Euro-Atlantic community, and we will remain engaged to this end. The
    pace and extent of this integration should depend on each country's
    readiness and willingness to associate itself with the values and
    responsibilities of the West.
        Question. I know the Poles have been eager to assist Ukraine follow
    the path to democracy and a market economy under the rule of law. Have
    they been helpful?
        Answer. The United States and Poland share similar objectives with
    regard to Ukraine. We both want to see a successful market democracy in
    Ukraine that can help stabilize the region and make a positive
    contribution to the peace and prosperity of Europe. Through the Poland-
    America-Ukraine Cooperation Initiative (PAUCI) we are working closely
    with both Poland and Ukraine to facilitate the transfer of the
    important lessons learned from Poland's successful embrace of market
    economics to its neighbor. The Polish-American Freedom Foundation will
    also help disseminate Poland's experiences. Poland also serves as an
    important bridge for Ukraine into Euro-Atlantic institutions. Ukraine's
    participation in KFOR since April 1999, an important symbol of its
    western orientation, will be continued in partnership with Poland
    starting July 1 when elements of the Polish-Ukrainian Peacekeeping
    Battalion arrive in Kosovo. Poland and other allies will help us
    finance to motivate and direct action by individual governments in this
    regard.
        Also, the April 11-14 OSCE Economic Forum in Prague included, as a
    result of our efforts, a special Anticorruption Session. The 16-member
    U.S. delegation to the Forum was led by Assistant Secretary of Commerce
    Patrick Mulloy, and again included a member of the Helsinki
    Commission's staff. The theme of the Forum was Post-Conflict
    Rehabilitation, and Assistant Secretary Mulloy's opening statement
    focused on the grave threat corruption poses to all OSCE activities in
    rebuilding post-conflict economies and societies.
        Further, the Department introduced during the Forum a pilot
    proposal, for which we will provide $75,000 in funding, to have the
    OSCE's Bosnia Mission undertake a public education and journalist
    training program focused on corruption and its corrosive impact on the
    political process. We are currently working with the Bosnia Mission on
    this proposal and hope to attract matching funds from other OSCE
    participating States.
        We also succeeded at the Forum in having ``Transparency, Good
    Governance, and Economic Issues'' adopted as next year's Economic Forum
    Theme. This will allow us to highlight at the Forum, and at the
    preparatory seminars leading up to the Forum.
                                     ______

               Questions Submitted by Senator Barbara A. Mikulski

        Question. Have you considered appointing a high level envoy--
    someone with the stature of former Senators George Mitchell or Paul
    Simon--to lead U.S. efforts to resolve the Armenia Azerbaijan conflict?
        Answer. The Administration will bring to bear whatever diplomatic
    resources are required to help resolve the conflict. I appointed our
    current Special Negotiator Carey Cavanaugh because of my confidence in
    his abilities and high estimation of his extensive experience both with
    the Nagorno-Karabakh conflict and with mediating other regional
    disputes. Ambassador-designate Cavanaugh enjoys the confidence of the
    parties and of America's OSCE Minsk Group Co-Chair partners. The
    current Minsk Co-Chair Process is moving in a promising direction.
        Clearly, for the peace process to succeed, it will require intense,
    sustained effort at a high level, involving not only Armenia,
    Azerbaijan and the Karabakhis but also Russia, France, Turkey, and
    other OSCE members. We intend to engage with President Putin on this
    issue at the Moscow Summit in June, convinced that our cooperation is
    crucial to finding a viable solution.
        Question. What steps need to be taken to end the trafficking of
    women in the United States? What tools do you need to prevent these
    women from being brought here? Are international agreements necessary--
    or is it more a matter of stronger law enforcement and penalties?
        Answer. The U.S. anti-trafficking strategy established by the 1998
    Presidential Directive has a three-tiered focus on prevention,
    protection of victims and prosecution. In order to combat the
    trafficking of women into the United States, we must root out
    trafficking at its source by providing economic alternatives to
    populations that are vulnerable to the wiles of traffickers and with
    publicity and education campaigns. We must also provide protections for
    victims including funding for shelters, medical treatment and safe
    reintegration.
        Domestically, we need comprehensive legislation with punishments
    for perpetrators and a range of protections for victims. We also need
    the resources necessary to implement legislation as well as to fully
    realize the potential of our anti-trafficking strategy. We need
    additional resources to work with other governments supporting their
    efforts to prosecute traffickers, by training their police and
    immigration officials on how to apprehend them, giving their lawyers
    the tools to prosecute them and their legislatures the know-how to
    draft tough laws to punish them. We must continue our support of
    international efforts through our cooperative partnerships with other
    countries to fight trafficking.
        In the U.S., no comprehensive law against trafficking immigration
    Officials on how to apprehend them, giving their lawyers the tools to
    prosecute them and their legislatures the know-how to draft tough laws
    to punish them. We must continue our support of international efforts
    through our cooperative partnerships with other countries to fight
    trafficking.
        In the U.S. no comprehensive law against trafficking exists.
    Currently, our laws do not provide protection to trafficking victims
    and there are gaps in our criminal laws that make it difficult to
    prosecute and punish traffickers. We must enact legislation that will
    strengthen and institutionalize advances made as well as obtain new and
    necessary tools to combat trafficking and protect victims. Due to the
    economic difficulties in some countries traffickers lure victims with
    promises of employment in the U.S. It is important that new anti-
    trafficking legislation address economic assistance.
        New legislation must not, however inflict mandatory sanctions on
    foreign governments, as some have proposed, because such sanctions will
    make the problem of trafficking in persons worse, not better. Sanctions
    would thwart the cooperative multilateral efforts, such as the proposed
    U.N. protocol on trafficking, that are the best way to solve what is a
    transnational problem; undermine the crucial efforts of NGOs working to
    help victims abroad; and have the unfortunate effect of cutting off
    U.S. foreign assistance, including law enforcement training. Sanctions
    could also exacerbate economic conditions in certain countries and hurt
    potential trafficking victims who are lured into trafficking due to
    economic desperation.
        International efforts and agreements are an essential weapon in the
    fight against trafficking because trafficking is a global problem. An
    estimated 50,000 women and children are trafficked into the U.S.
    annually--a number that does not even include the many men that are
    trafficked as well. These victims are primarily from Southeast Asia but
    increasingly from the New Independent States and Latin America.
    International cooperation is necessary especially with source countries
    to effectively prevent trafficking in the U.S. The Asian Regional
    Initiative Against Trafficking (ARIAT) conference cosponsored by the
    United States and the Philippines is a good example of the benefits of
    a cooperative partnership with other countries. Delegates, who included
    government, U.N. and NGO representatives, developed and endorsed a
    regional action plan against trafficking in persons, especially women,
    within, from and through the Asia-Pacific region.
        Negotiations will resume in June on the draft U.N. trafficking in
    persons protocol supplementing the U.N. Convention against
    Transnational Organized Crime which the U.S. sponsored. To be
    successful, the Protocol requires agreement from all participating
    nations. There appears to be broad support among participating nations
    for a protocol that includes trafficking in all its forms. Upon
    completion, the Protocol will be an historical instrument of
    international cooperation to fight trafficking and protect victims. We
    also need stronger law enforcement and penalties as part of our
    comprehensive initiatives to combat trafficking.

                             CONCLUSION OF HEARINGS

        Senator McConnell. That concludes our hearings. The
    subcommittee will stand in recess subject to the call of the
    Chair.
        [Whereupon, at 12:07 p.m., Thursday, April 13, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2001

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses. The statements and
    letters of those submitting written testimony are as follows:]

                   Prepared Statement of Rotary International

        Chairman McConnell, Senator Leahy, members of the Subcommittee,
    thank you for this opportunity to testify on behalf of Rotary
    International in support of the polio eradication activities of the
    U.S. Agency for International Development (U.S. AID). As you know, 2000
    is a water shed year in the battle to eradicate polio. The penultimate
    goal of the international polio eradication initiative, the
    interruption of polio transmission, is within our grasp. We remain on
    track for our primary target: certification of eradication by 2005.
    This monumental effort, toward which countless millions have
    endeavored, has required the commitment and fortitude of a climb to
    Everest's peak. As we near our goal--a world free of polio--we cannot
    become complacent. We cannot allow the daunting challenges that lie
    before us to diminish our resolve. As with an expedition to scale
    Everest, the most difficult stage of our journey, the stage most
    fraught with the risk of failure, is the final push to the summit.
        I would like to take this opportunity to thank you Chairman
    McConnell, Senator Leahy and members of the Subcommittee for your
    tremendous commitment to this effort. Without your support of U.S.
    AID's polio eradication activities, the battle against polio would be
    impossible. We appreciate the long-term investment you have made
    through U.S. AID to strengthen the basic health care infrastructure of
    many polio-endemic countries. This solid infrastructure has provided
    the foundation on which the polio eradication program has succeeded.
    Additional support of the polio eradication program further strengthens
    this infrastructure because it gives confidence to the health care
    workers, provides dramatic assistance to families who no longer suffer
    the ravages of polio, and provides hope that other diseases can also be
    eliminated.
        The global eradication strategy is working. In 1985, when Rotary
    began its PolioPlus Program, 100 nations around the world suffered
    under the burden of polio. The Western Hemisphere has now been polio-
    free for nearly 9 years, and today polio is confined only to Sub-
    Saharan Africa, parts of the Middle East, and South Asia.
        Thanks to the polio eradication efforts over the last decade,
    approximately three million children who might have been polio victims
    are walking and playing normally. Tens of thousands of public health
    workers have been trained to investigate cases of acute flaccid
    paralysis and manage immunization programs. Cold chain, transport and
    communications systems for immunization have been strengthened. A
    network of more than 140 polio laboratories has been established.
        Significant challenges lie before us. Continued political
    commitment is essential both in polio endemic countries, to support the
    acceleration of eradication activities, and in donor countries, so that
    the necessary human and financial resources are made available. Access
    to children everywhere is needed, particularly in countries affected by
    conflict. Truces must be negotiated if National Immunization Days are
    to proceed in these countries. The continued leadership of the United
    States is critical if we are to overcome these challenges.
        Rotary International is a global association of more than 29,000
    Rotary clubs, with a membership of over 1.2 million business and
    professional leaders in 160 countries. In the United States today there
    are some 7,500 Rotary clubs with 400,000 members. All of our clubs work
    to promote humanitarian service, high ethical standards in all
    vocations, and international understanding.
        In the United States, Rotary has formed the USA Coalition for the
    Eradication of Polio, a group of committed child health advocates that
    includes Rotary, the March of Dimes Birth Defects Foundation, the
    American Academy of Pediatrics, the Task Force for Child Survival and
    Development, and the U.S. Committee for UNICEF. These organizations
    join us in expressing our gratitude to you for your staunch support of
    the international program to eradicate polio. Over the past four years,
    you have recommended that $25 million be appropriated for the polio
    eradication activities of U.S. AID. This investment has helped to make
    the United States the leader among donor nations in the drive to
    eradicate this crippling disease. We remain on target for certification
    of eradication in 2005.

                        FISCAL YEAR 2001 BUDGET REQUEST

        For fiscal year 2001, we are again requesting that your
    Subcommittee specify $25 million for global polio eradication in U.S.
    AID's budget. These funds will support U.S. AID's delivery of vaccine
    and the development of the infrastructure necessary to maintain its
    Polio Eradication Initiative. This would maintain funding at the same
    level as the past four years, providing much-needed stability to the
    program and ensuring that the U.S. remains a leader in the global polio
    eradication effort. In addition, we are seeking report language similar
    to that included in the fiscal year 2000 Committee report, specifying
    that this funding is meant to be in addition to the resources for the
    regular immunization program of U.S. AID, and is intended to supplement
    other related activities. It is important to maintain this level of
    funding due to the increased costs of the accelerated eradication
    program recently approved by the World Health Assembly. These funds
    will be applied to the most challenging countries, such as Angola,
    India, Nigeria, Bangladesh and Democratic Republic of the Congo.

      ERADICATING POLIO WILL SAVE THE UNITED STATES AT LEAST $230 MILLION
                                    ANNUALLY

        In 1998 the Chairman of the House Committee on International
    Relations commissioned the General Accounting Office to investigate the
    soundness of WHO cost estimates for the eradication or elimination of
    seven infectious diseases. The United States was a major force behind
    the successful eradication of the smallpox virus, and the GAO concluded
    that the eradication of smallpox has saved the United States some $17
    billion to date. Even greater benefits will result from the eradication
    of polio.
        Although polio-free since 1979, the United States currently spends
    at least $230 million annually to protect its newborns against the
    threat of importation of the poliovirus, in addition to its investment
    in international polio eradication. Globally, over $1.5 billion U.S.
    dollars are spent annually to immunize children against polio. This
    figure does not even include the cost of treatment and rehabilitation
    of polio victims, nor the immeasurable toll in human suffering which
    polio exacts from its victims and their families. Once polio is
    eradicated and immunization against it can be discontinued, tremendous
    resources will be unfettered to focus on other health priorities.

               PROGRESS IN THE GLOBAL PROGRAM TO ERADICATE POLIO

        Thanks to your leadership in appropriating funds, the international
    effort to eradicate polio has made tremendous progress.
      --Since the global initiative began in 1988, 3 million children in
            the developing world, who otherwise would have become paralyzed
            with polio, are walking because they have been immunized.
      --The number of polio cases has fallen from an estimated 350,000 in
            1988--of which 35,000 were reported--to approximately 6,000
            reported cases in 1999. More than 180 countries are polio-free,
            including 4 of the 5 most populous countries in the world
            (China, U.S., Indonesia and Brazil).
      --Almost 2 billion children worldwide have been immunized during NIDs
            in the last 5 years, including 147 million in a single day in
            India. During 74 National Immunization Days, 16 Sub-National
            Immunization Days and 7 Mopping-up activities conducted in
            1999, over 450 million children received oral polio vaccine.
            This represents nearly 75 percent of all the world's children
            under the age of five.
      --Approximately 6,000 confirmed polio cases were reported to WHO for
            1999. The annual increase in reported cases since 1996 is
            expected because of the intensified global eradication efforts.
            This increase does not reflect a lack of progress in polio
            eradication. Rather, the increase is caused by substantial
            improvements in the quality of surveillance, particularly in
            India. As surveillance has improved, a higher percentage of
            polio cases occurring are identified and reported.
      --Of the three types of wild poliovirus, Type 2 is on the verge of
            extinction, with the known pockets of circulation localized to
            northern India and Bangladesh.
      --All polio-endemic countries in the world have conducted NIDs--most
            recently in Sierra Leone and Democratic Republic of the Congo.
            The achievement of successful NIDs and implementation of APF
            surveillance in Somalia and Sudan shows that polio eradication
            strategies can be implemented in all countries.
           the role of the u.s. agency for international development
        In April of 1996, with the support of the 104th Congress and in
    response to the strong urging of your Subcommittee, U.S. AID launched
    its own Polio Eradication Initiative to coordinate agency-wide efforts
    to help eradicate polio by 2000. For the past four years, despite
    decreases in the overall Child Survival budget, Congress has directed
    that $25 million be allocated to U.S. AID's international polio
    eradication efforts. Some of U.S. AID's achievements in the past, and
    their planned Polio Eradication Initiative activities in 2000, include:
      --U.S. AID was one of the driving forces behind the eradication of
            polio in Latin America and the Caribbean. Since the
            certification of polio eradication in the Americas in 1994,
            U.S. AID has turned its attention to the polio endemic
            countries of Africa and Asia, and to finding ways to use
            American expertise to enhance immunization services globally. A
            major breakthrough was the development of the heat-sensitive
            vaccine vial monitor, which is saving an estimated $10 million
            annually by reducing vaccine wastage. U.S. AID developed the
            monitor in conjunction with a private U.S. firm at the request
            of WHO and UNICEF. The monitor is now used on every vial of
            oral polio vaccine used worldwide.
      --Through technical assistance projects and financial support to
            international organizations, U.S. AID supports national and
            sub-national immunization days (NIDs and SNIDs), mop-up
            campaigns, surveillance, the laboratory network, and the
            training and social mobilization that make these programs
            succeed.
      --U.S. AID joined forces with Voice of America (VOA) in 1997 to take
            advantage of their radio broadcasting network to raise
            awareness of polio eradication and to expand community-level
            participation. To date more than 900 broadcasts supporting
            eradication have been heard in 22 countries, reaching scores of
            listeners in remote areas. These broadcasts include radio
            dramas and contests of various kinds, all in local languages.
            In 1998, WORLDNET TV received funds to add TV broadcasts to
            further spread the message about polio eradication and the
            importance of routine immunization.
      --U.S. AID is supporting Surveillance Medical Officer positions in
            Bangladesh, India, and Nepal; and the officers already in place
            have had a significant and rapid impact. The quality of
            laboratory sample collection and testing has also markedly
            improved.
      --U.S. AID is supporting NIDs, surveillance, labs, social
            mobilization, microplanning, training, monitoring and
            evaluation in Africa and India, and surveillance and labs in
            Latin America.

                      OTHER BENEFITS OF POLIO ERADICATION

        Increased political and financial support for childhood
    immunization has many documented long-term benefits. Polio eradication
    is helping countries to develop public health and disease surveillance
    systems useful in the control of other vaccine-preventable infectious
    diseases. Already, much of Latin America is free of measles, due in
    part to improvements in the public health infrastructure implemented
    during the war on polio. As a result of this success, measles has been
    targeted for eradication in the Americas by the year 2000. The disease
    surveillance system--the network of laboratories and trained personnel
    built up during the Polio Eradication Initiative--is now being used to
    track measles, Chagas, neonatal tetanus, and other deadly infectious
    diseases. NIDs have been used as an opportunity to give children
    essential vitamin A, as well as polio vaccine. The campaign to
    eliminate polio from communities has led to increased public awareness
    of the benefits of immunization, creating a ``culture of immunization''
    and resulting in increased usage of primary health care and higher
    immunization rates for other vaccines. It has improved public health
    communications and taught nations important lessons about vaccine
    storage and distribution, and the logistics of organizing nation-wide
    health programs. Lastly, the unprecedented cooperation between the
    public and private sectors serves as a model for other public health
    initiatives.

            RESOURCES NEEDED TO FINISH THE JOB OF POLIO ERADICATION

        The World Health Organization estimates that $1 billion is needed
    from donors for the period 2000-2005 to help polio-endemic countries
    carry out the polio eradication strategy. The estimated shortfall for
    the years 2000-2001 now stands at approximately $300 million. In the
    Americas, some 80 percent of the cost of polio eradication efforts were
    borne by the national governments themselves. However, as the battle
    against polio is taken to the poorest, least-developed nations on
    earth, and those in the midst of civil conflict, many of the remaining
    polio-endemic nations can contribute only a small percentage of the
    needed funds. In some countries, up to 100 percent of the NID and other
    polio eradication costs must be met by external donor sources. We are
    asking that the United States continue to take the leadership role in
    meeting this shortfall.
        The United States' commitment to polio eradication has stimulated
    other countries to increase their support. Belgium, Canada, Germany,
    and Italy are among those countries that have followed America's lead
    and have recently announced special grants for the global Polio
    Eradication Initiative. Japan has also expanded its support to polio
    eradication efforts in Africa. Germany has made major grants that will
    help India eradicate polio by 2000. In December 1999 the United Kingdom
    announced two grants totaling U.S. $94.6 million for polio eradication
    efforts in India and Africa. The Government of India will receive U.S.
    $62.6 toward its Pulse Polio Initiative over the next two years. In
    addition, the U.K. will grant a total of U.S. $32 million to African
    nations that are poliovirus reservoirs, affected by conflict or both.
    These nations include Nigeria, Ethiopia, Somalia, Sudan, DR Congo and
    Angola.
        By the time polio has been eradicated, Rotary International expects
    to have expended approximately $500 million on the effort--the largest
    private contribution to a public health initiative ever. Of this, $373
    million has already been allocated for polio vaccine, operational
    costs, laboratory surveillance, cold chain, training and social
    mobilization in 120 countries. More importantly, we have mobilized tens
    of thousands of Rotarians to work together with their national
    ministries of health, UNICEF and WHO, and with health providers at the
    grassroots level in thousands of communities.
        Polio eradication is the most cost-effective public health
    investment, as its benefits accrue forever. The world will begin to
    ``break even'' on its investment in polio eradication only two years
    after the virus has been vanquished. We are on the brink of
    eradication, but we are not there yet. The most difficult challenges
    still lie before us. These include countries in conflict and reservoir
    countries such as Angola, India, Ethiopia and Bangladesh. By fully
    funding U.S. AID, you will ensure our success.
        When we reach the summit, we will be able look out upon a world in
    which the scourge of polio is a thing of the past. This will be our
    gift to the children of the twenty-first century.
        Thank you for this opportunity to testify.
                                     ______

      Prepared Statement of the American Society of Tropical Medicine and
                                    Hygiene

        Mr. Chairman and members of the Subcommittee, the American Society
    of Tropical Medicine and Hygiene appreciates the opportunity to present
    its views on fiscal year 2001 priorities relevant to programs under the
    Subcommittee's jurisdiction. ASTMH is a professional society of 3,500
    researchers and practitioners dedicated to the prevention and treatment
    of infectious and tropical infectious diseases. The collective
    expertise of our members is in the areas of basic molecular science,
    medicine, vector control, epidemiology, and public health.
        The Society thanks the members of this Subcommittee for their
    previous commitment and support for the programs administered by the
    U.S. Agency for International Development (U.S. AID) targeted to
    combating the global burden of tropical and infectious disease. Your
    support for these important programs has resulted in tremendous
    progress in combating disease. World health experts estimate that U.S.
    AID's child survival programs have helped drop infant mortality rates
    in the developing world to their lowest levels ever, and since 1985,
    have saved 25 million children's lives.
        Despite this progress, we are sure every member of the Subcommittee
    would agree that the global burden of tropical and infectious diseases
    remains staggering and poses a tremendous threat to us all. According
    to the World Health Organization, infectious diseases account for more
    than 13 million deaths a year. Over the course of an hour, the WHO
    reports that 1,500 people will die from an infectious disease--over
    half of them children under five.
        The WHO has identified the seven infectious diseases that caused
    the highest number of deaths in 1998. HIV/AIDS, TB, malaria, and
    hepatitis B and C are either spreading or becoming more drug resistant,
    while lower respiratory infections, diarrheal diseases, and measles
    appear to have at least temporarily peaked. Malaria alone is estimated
    to cause up to 500 million clinical cases and up to 2.7 million deaths
    each year, representing 4 percent to 5 percent of all fatalities.
    Tragically, every 30 seconds a child in the world dies of malaria.
        Most of these deaths occur in developing countries where there is
    extreme poverty and lack of access to basic health care and essential
    drugs. However, with the enormous volume of travel and trade today and
    the interconnection of the world economies, infectious diseases do not
    respect borders.
        In June 1996, President Clinton issued a Presidential Decision
    Directive calling for a more focused U.S. policy on infectious disease.
    The State Department's Strategic Plan for International Affairs lists
    protecting human health and reducing the spread of infectious diseases
    as one of the U.S. strategic goals, and Secretary Albright in December
    1999 announced the second of two major U.S. initiatives to combat HIV/
    AIDS. The unprecedented U.N. Security Council session devoted
    exclusively to the threat to Africa from HIV/AIDS in January 2000 is
    measure of the international community's concern about the infectious
    disease threat.
        A January, 2000, unclassified report from the CIA's National
    Intelligence Council entitled ``The Global Infectious Disease Threat
    and Its Implications for the United States,'' suggests that infectious
    diseases are likely to account from more military hospital admissions
    than battlefield injuries. The report assesses the global threat of
    infectious disease, stating ``New and reemerging infectious diseases
    will pose a rising global health threat and will complicate U.S. and
    global security over the next 20 years. These diseases will endanger
    U.S. citizens at home and abroad, threaten U.S. armed forces deployed
    overseas, and exacerbate social and political instability in key
    countries and regions in which the United States has significant
    interests.''
        U.S. AID programs targeted to the prevention, treatment and control
    of tropical and infectious disease are now more important than ever to
    the nation's foreign policy objectives and U.S. strategic interests.

                    U.S. AID CHILD SURVIVAL AND DISEASE FUND

        The ASTMH strongly supports U.S. AID's Child Survival and Disease
    Programs which have long been at the forefront of international efforts
    to alleviate morbidity and mortality among the world's most vulnerable
    populations--children under five years of age. These programs include
    critical activities in developing nation's to prevent and treat
    infectious diseases, such as vector control strategies, improving the
    capacity of the public health infrastructure through training programs
    and technical assistance, providing immunizations, oral rehydration
    therapy, vitamin A supplementation, and HIV/AIDS prevention and
    treatment activities.
        The Society is pleased that the President has recognized the
    importance of these programs by requesting a slight increase for the
    Child Survival and Disease Fund, resulting in a total budget of $659
    million in fiscal year 2001. Within this account we also support the
    President's call for increasing funding for HIV/AIDS health activities
    by $54 million above the fiscal year 2000 level, resulting in an
    allocation of $244 million for HIV/AIDS activities in fiscal year 2001.
        The ASTMH urges the Subcommittee to at least support the
    President's request and respectfully urges the Subcommittee to do
    better. The ASTMH has endorsed The Global Health Act of 2000,
    legislation calling for an additional $1 billion above fiscal year 2000
    levels for federal programs that support activities targeted to child
    survival, the health and nutrition of pregnant mothers, and combating
    infectious diseases including HIV/AIDS and malaria. This legislation
    specifically calls for an additional $475 million targeted to prevent,
    control and combat infectious diseases including HIV/AIDS and malaria,
    and would authorize an additional $325 million to help child and family
    survival through nutrition and health advice for pregnant women and
    mothers, along with programs for child survival and infant care, such
    as immunizations.
        We believe an increase of this magnitude for these important
    activities is a cost- effective, sound investment towards improving
    global health and protecting the health and well-being of Americans at
    home and abroad, given the enormous human and economic costs we face as
    a nation with the spread of emerging and re-emerging infectious
    diseases and the burden of disease on developing countries. We urge the
    Subcommittee to provide the highest possible funding level for the U.S.
    AID Child Survival and Disease Fund programs to help achieve this goal.

                         MILLENNIUM VACCINE INITIATIVE

        The ASTMH also asks the Subcommittee to work with your colleagues
    and the Administration in supporting efforts to encourage research and
    development on vaccines and drugs to combat malaria, tuberculosis, HIV/
    AIDS and other infectious diseases causing more than 1 million deaths
    annually and to ensure that these products are accessible to
    populations in developing countries most impacted by these diseases.
    These efforts, that are embodied the President's Millennium Vaccine
    Initiative and legislation pending before Congress, fosters
    partnerships with federal agencies, industry, non-profit organizations,
    the World Bank, and other international organizations to combat the
    scourge of infectious diseases.
        Specific initiatives proposed to provide incentives to accelerate
    the research, development and production of vaccines and drugs include
    enhance R&D tax credits and new tax credits for sales of vaccines,
    contributions to international organizations such as the Global
    Alliance for Vaccines and Immunizations (GAVI) for the purchase and
    distribution of vaccines and drugs in developing countries, and
    measures that will improve the public health infrastructure in
    developing countries in order to expand immunizations, prevent and
    treat infectious diseases, and build effective delivery systems for
    basic health services.
        The Society would specifically like to thank Senator Kerry for
    advancing these important initiatives through the introduction of S.
    2132, and we wish to thank the members of this Subcommittee who have
    been strong and tireless advocates for efforts to improve access to
    vaccines and therapies in the developing world.
        The Society believes that through this Subcommittee's support, U.S.
    AID will play an important leadership role in this critical multi-
    lateral efforts. These initiatives represent a necessary first step to
    marshal the collective will and resources of government, industry,
    foundation, international organizations, and individuals to make the
    kind of commitment necessary to bring these deadly diseases under
    control until we have them totally conquered. The Society urges your
    strong support for this unique and important opportunity.
        We know you understand the need for greater resources to be
    directed to tropical and infectious disease programs, and we understand
    that you face many difficult decisions as you develop the funding
    priorities that will be reflected in your fiscal year 2001 bill.
        As we begin the 21st century we find ourselves with many
    opportunities to expand our efforts at controlling and preventing
    tropical and infectious diseases. Control of global infectious disease
    threats is not just a development issue, it is also a national security
    issue for the United States and a health concern for every American.
    Investments in global infectious disease programs are clearly a win-win
    for the country--by helping others we are also launching the best
    defense to protect the health of our nation.
        The American Society of Tropical Medicine and Hygiene appreciates
    the opportunity to present its views. Thank you for your consideration
    of these requests.
                                     ______

     Prepared Statement of the American Hellenic Institute Public Affairs
     Committee, Inc.; the Hellenic American National Council; the Hellenic
      American Women's Council; the Cyprus Federation of America; the Pan
    Laconian Federation of U.S.A. and Canada; the Pan Cretan Association of
      America; and the Pan Karpathian Educational Progressive Association
        Chairman McConnell, Senator Leahy and Members of the Subcommittee:
    I am pleased to present testimony to the Subcommittee on behalf of the
    organizations listed above on the Administration's foreign aid
    proposals.
                                     CYPRUS

        We support the amount of $15 million in humanitarian aid for
    Cyprus. This aid is an important symbol of U.S. support for Cyprus and
    of the U.S. commitment to achieving a comprehensive solution. We
    further believe that the Administration should follow the lead set by
    Congress and publicly call for the immediate demilitarization of
    Cyprus.

                                     TURKEY

        I am also pleased to note certain improvements in the general
    stability of the Southeast European and Eastern Mediterranean regions
    as well as in the wider Middle East. These include a PKK-declared
    cease-fire inside Turkey, better relations between Greece and Turkey,
    new opportunities for progress in the Middle East, and the
    strengthening of the reform forces in Iran.
        As the result of the actions of the 104th Congress and the 105th
    Congress, military assistance and economic grant aid to Turkey are no
    longer part of the Administration's aid proposals. The decision of the
    Administration finally to eliminate aid for Turkey was due, I am
    convinced, in substantial part because of the role of the Congress.
        The American Hellenic Institute Public Affairs Committee (AHIPAC)
    believes that the elimination of aid for Turkey was fully justified in
    the interests of the United States. Designed as an incentive to Turkey
    to reform its domestic structures and resolve international problems,
    aid did not achieve its purposes. Instead of resolving international
    problems, Turkey continued an intransigent approach with regard to the
    Aegean, Cyprus and Armenia. On the domestic front, successive reports
    by the State Department including the 2000 report issued February 25,
    2000, have shown that Turkey has failed to curb the power of its
    military and has continued a pattern of gross human rights violations.
        Against this background of Turkey's resistance to reform, AHIPAC
    has argued that U.S. military and economic support for Turkey rendered
    our country an accessory to Turkey's massive ethnic cleansing and
    genocidal actions against its 20 percent Kurdish minority and
    aggression against Cyprus. It has made the U.S. complicit in Turkey's
    human rights abuses generally against its citizens, including
    widespread torture. AHIPAC is very pleased that with regard to Turkish
    aid policy this sad chapter in U.S. relations with Turkey has at long
    last come to an end.

       YEAR 2000 GREEK AMERICAN POLICY STATEMENTS: THE POSITIVE ROLES OF
                               GREECE AND CYPRUS

        As the committee considers appropriations for overall U.S. policy
    in the region for the future, we hope you will take full advantage of
    the positive opportunities deriving from the close U.S. relationships
    with Greece and Cyprus. As the Year 2000 Greek American Policy
    Statements (Exhibit 1) make clear, Greece and Cyprus are vigorous and
    stable democracies. Their economies are rapidly modernizing. They are a
    source of regional political leadership, economic investment, and
    commercial expertise.
        Greece is the only regional state that is a member of both the
    European Union and NATO. Greece is the strategic and economic key for
    the U.S. in the Balkans and Eastern Mediterranean to bring peace,
    stability, economic progress and democracy to the region. U.S.
    Ambassador to Greece R. Nicholas Burns has stressed Greece's key role
    for U.S. interests in the region. During his visit to Athens in
    November 1999, President Clinton described Greece as the ``powerhouse
    of Southeast Europe.'' In a speech on February 2, 2000 Under Secretary
    of State for Political Affairs Thomas Pickering described the U.S.
    relationship with Greece in the following terms:

        ``Greece is the region's wealthiest country, with the strongest
    economy, one now on the threshold of joining the European Union's
    Economic and Monetary Union. Greece can serve as an economic locomotive
    for the region, demonstrating by example and by deed the rewards of
    privatization, competitive markets, private sector investment, and job
    creation. Greek companies can be a driving force in regional
    reconstruction and development. We want to work closely with Greece.''

        Cyprus has established itself as a regional center of international
    business and finance and started substantive accession negotiations
    with the EU on November 10, 1998. These negotiations made significant
    progress throughout 1999. Cyprus meets the key EU targets for joining
    the European Monetary Union. By basing its policies in Southeastern
    Europe on close ties with Greece and Cyprus, the U.S. could materially
    advance its interests in regional stability, economic development, and
    increase in democratic institutions.
        Together, Greece and Cyprus offer the key relationships for the
    advancement of American interests and values in the region.

                            TURKEY: A NEGATIVE ROLE

        By contrast, Turkey represents a negative factor in Southeast
    European and Eastern Mediterranean affairs. It has failed to submit its
    unilateral territorial claims against Greek sovereign territory in the
    Aegean to binding international arbitration; it continues to block
    progress on Cyprus; and, as the 1999 State Department Human Rights
    Country report on Turkey makes clear, it continues its gruesome record
    of domestic human rights abuses.
        Turkey's depredations against the Kurds in a war in which the
    Turkish military has killed over 30,000 Kurds, scorched 3,000 villages
    and created 2,500,000 refugees inside Turkey far exceed those of Russia
    in Chechnya.
        Sadly, and to the grave detriment of U.S. interests and values, the
    Administration operates a double standard toward Turkey. I noted
    vigorous condemnation of Russia's actions by Deputy Secretary Strobe
    Talbott, you and Ranking Member Senator Leahy in a recent exchange
    before the Committee, but the Administration turns a blind eye to
    Turkey's obstructionism and abuses. Its policies toward Turkey amount
    to gross appeasement. The Congress should step in to reverse this
    counterproductive policy and to insist that U.S. policy in the region
    is based around the positive roles being played by Greece and Cyprus
    rather than on Turkey's a negative role. A policy of this kind would
    much better reflect American values and interests.
        In its decision of December 10-11, 1999 to accept Turkey as a
    candidate for accession subject to certain criteria, the European
    Council recognized the need for Turkey to make substantial improvements
    before accession negotiations can begin. In addition to requiring
    Turkey to conform to the same accession criteria as all other candidate
    states, the EU identified three areas of especial concern: the Aegean,
    Cyprus, and human rights. Turkey has accepted that it must comply with
    these requirements, but has made no prgress to date. Attached as
    Exhibit 2 is my speech of March 11, 2000 which discusses this subject
    in detail.

     THE NEED FOR CONGRESSIONAL LEADERSHIP TO REVERSE THE ADMINISTRATION'S
                    COUNTERPRODUCTIVE POLICY OF APPEASEMENT

        The immediate reaction by Congress with regard to Turkey should be
    to mandate an immediate halt to all arms sales and transfers to Turkey.
    Turkey is in the process of selecting tenders for a $4 billion sale of
    advanced attack helicopters. There is no external military
    justification for this purchase. Instead the helicopters will be used
    in Turkey's war of terror against its Kurdish minority and in its
    ongoing oppression of its own people.
        In addition to an arms ban, the Congress should eliminate any trade
    preferences or other benefits for Turkey, freeze any loan programs for
    Turkey and instruct U.S. representatives in multinational agencies to
    vote against any aid or loans for Turkey. I urge the members of this
    committee to take the lead in such efforts and to call for hearings on
    a critical review of U.S.-Turkey relations.

                             HUMAN RIGHTS IN TURKEY

        In addition to national interest consideration, the case for a
    critical review of U.S. policy toward Turkey is based on fundamental
    American principles and values. Turkey's appalling human rights record
    and general lawlessness has been on record for many years. We derive no
    satisfaction from restating certain of the salient points here.
        Turkey's oppression of its own citizens pains us all the more
    deeply as we have no quarrel with the Turkish people. We salute the
    brave Turkish citizens struggling for human rights and the rule of law.
    Our dispute is not with the Turkish people, but with the forces in the
    Turkish military and Turkish government that deny its own people the
    basic norms of civilization that we take for granted in the U.S.
        The State Department's 1999 Human Rights Country report states:

        ``Despite Prime Minister Yilmaz's stated commitment that human
    rights would be his government's highest priority in 1998, serious
    human rights abuses continued.  . . . Extrajudicial killings, including
    deaths in detention from the excessive use of force, `mystery
    killings,' and disappearances continued. Torture remained widespread.
    Police and Jandarma antiterror personnel often abused detainees and
    employed torture during incommunicado detention and interrogation.''

        The 52-page country report on Turkey in the 1999 State Department
    Human Rights Report, released on February 25, 2000, offers discouraging
    proof that Turkey has made no progress in improving its dismal human
    rights record. Much of the language is carried forward from earlier
    reports. The first paragraph highlights the pervasive and anti-
    democratic role played by the military in Turkish governance, saying
    that ``the military exercises substantial influence over government
    policy and actions.''
        Subsequent sections list a catalogue of violations of basic human
    rights and democracy, torture, minority persecution, infringements on
    religious freedom and civil and press liberties, and abuses of women's
    issues. Some of the prominent examples under these headings are:
      --Abuses by the security forces: ``Members of the security forces,
            including police `special teams,' other Turkish National Police
            personnel, village guards and Jandarma committed serious human
            rights abuses.''
      --Torture: ``Torture, beatings and other abuses remained widespread,
            at times resulting in deaths.''
      --Infringements of civil liberties: ``Limits on freedom of speech and
            of the press remained a serious problem--at least 18
            journalists remained imprisoned at year's end--the police and
            Jandarma continued to limit freedom of assembly and
            association. The police harassed, beat and abused and detain a
            large number of demonstrators.''
      --Minority persecution: ``The situation in the southeast remained a
            serious concern. The [Turkish] government has long denied the
            Kurdish population, located largely in the southeast, basic
            political, cultural, and linguistic rights.''
      --Freedom of the press: according to Turkey's Human Rights
            Foundation, at year's end approximately 60 journalists were
            under arrest or had been convicted
      --Religious persecution: ``The Authorities monitor the activities of
            the Eastern Orthodox Church and their affiliated operations.
            The Ecumenical Patriarchate in Istanbul consistently expressed
            interest in reopening the seminary on the island of Halki in
            the Sea of Marmora. The seminary has been closed since 1971
            when the state nationalized most private institutions of higher
            learning. Under current restrictions, including a citizenship
            requirement, religious communities remain unable to train new
            clergy''
      --Women's issues: ``Spousal abuse is serious and widespread--beating
            in the home is one of the most frequent forms of violence
            against women.'' Some abuse of children, and child labor remain
            serious problems. Discrimination against women persists.''
        This report shows that Turkey has a record of human rights abuses
    that is comparable with that of a rogue state like Iraq, an isolated
    Third World country such as Burma or a communist state such as China.
    It is remarkable that these abuses are taking place in a country which
    is a NATO ally.
        Turkey's national torture policy has been a matter of public record
    for many years. In 1990 the distinguished law journal The Record of the
    Bar of the City of New York devoted a 125 page article to the subject
    of ``Torture in Turkey'' (45 Record pp. 6-131, 1990). A forty page
    follow-up article 4 years later found no improvement.
        Other independent human rights organizations such as Amnesty
    International in its statement of March 3, 2000 and the comprehensive
    November 1999 report ``Arming Repression: U.S. Arms Sales to Turkey
    During the Clinton Administration,'' produced jointly by the World
    Policy Institute and the Federation of American Scientists, have drawn
    attention to the fundamental moral unacceptability of treating Turkey
    as a normal ally of the United States.

               THE DARK SIDE OF THE U.S. RELATIONSHIP WITH TURKEY

        During the Cold War, U.S. relations with Turkey went largely
    unexamined. Today the dynamics have changed. The Cold War has been over
    for 9 years. The Abdullah Ocalan case has brought to the front pages
    one of the most underreported stories in modern public policy, namely
    the dark side of the U.S. relationship with Turkey involving Turkey's
    horrendous human rights record and genocidal war against the Kurds in
    Turkish Kurdistan.
        We now need to confront the grisly reality that in their 15-year-
    long war against its Kurdish minority, the Turkish military forces have
    killed close to 30,000 Kurds, death squads have assassinated hundreds
    of Kurdish leaders, scorched earth military campaigns have destroyed
    over 3,000 Kurdish villages removing by force over 2,500,000 Kurds from
    their homes. And the Turks have done so in large part using U.S.
    supplied arms such as attack helicopters and armored personnel
    carriers. The accuracy of these facts is attested by objective
    observers such as Amnesty International, Human Rights Watch, and
    others. These horrors far exceed anything that has happened in Kosovo.
    This is a matter of intense national shame to American values and
    principles.
        Mr. Chairman, this should trouble all of our consciences. Our
    nation's involvement in these terrible acts is an affront to the
    fundamental issues of our time: freedom, democracy, decency, and human
    rights, the values we fought for in World War II and against Soviet
    communism. The fact that the Administration is turning its back on
    these values is a scandal far exceeding those with which we in
    Washington and throughout the Nation have been so narrowly concerned
    over the past year. Despite all their impressive rhetoric of commitment
    to democracy, in their approach to Turkey, the State and Defense
    Departments are in fact siding with aggression, tyranny, crimes against
    humanity, ethnic cleansing and genocide.
        the u.s., nato, yugoslavia, turkey and cyprus: a double standard
        In making the case for action against Serbia, President Clinton and
    others cited the need to oppose aggression. Once again NATO member
    Turkey is guilty on that count.
        Turkey's invasion of Cyprus and occupation of 37.3 percent of
    Cyprus in 1974 is external aggression and a violation of the U.N.
    Charter preamble and Article 2 (4), and the North Atlantic Treaty
    preamble and Article 1, and customary international law. Further,
    Turkey violated U.S. laws because it illegally used U.S. supplied arms
    and equipment in its invasion of Cyprus. This clear, unambiguous
    violation of international law eclipses in its implications for
    international order the internal action taken by Serbia in Kosovo.
        Ever since 1974, the U.S. and NATO have tolerated and appeased the
    Turkish military's ethnic cleansing and crimes against the Greek
    Cypriots in Cyprus.
        The actions of the U.S. and NATO regarding Cyprus from 1974 to date
    are a stain on the honor of both, particularly because of the U.S.
    accessory role in Turkey's 1974 invasion of Cyprus which the State
    Department has been attempting to cover-up ever since.
        The parallel between Turkey's invasion and occupation of Cyprus and
    Iraq's invasion and occupation of Kuwait is clear. The U.S. should be
    as forceful in ridding Cyprus of its aggressor, Turkey, as it was in
    Kuwait. At a minimum, NATO should suspend Turkey from the alliance
    until Turkey is in compliance with the North Atlantic Treaty and the
    U.N. Charter.
              the two prime determinants of u.s. policy on turkey
        Mr. Chairman, the Administration's policies toward Turkey remain
    deeply flawed. AHIPAC urges Congress to demand a critical review of
    U.S. policy toward Turkey. For this to be successful it will be
    necessary to focus on the two prime determinants of the policy.

                      POLICIES DRIVEN BY CAREER OFFICIALS

        While the President, Secretary of State and Secretary of Defense
    have the final responsibility for this policy, they do not drive it. It
    is driven by a small group of career foreign service officers in State
    together with their counterparts in the Defense Department and on the
    National Security Council. Over the years these officials have shaped
    U.S. policy toward Turkey with the end effect of violating U.S. laws
    and making our country a direct accessory in Turkey's destabilizing
    role in the region.
        These officials, past and present, assert that the U.S. is acting
    as an ``honest broker'' in the region. The truth is otherwise. Laurence
    Stern, the distinguished foreign affairs correspondent and foreign news
    editor for the Washington Post, punctured that myth in his book The
    Wrong Horse (1977, page 7) when he wrote that:

        ``One of the most important keys to an understanding of the Cyprus
    muddle is the realization that the United States, far from being a
    disinterested broker to the disputes of the past, was a deeply involved
    participant.''

                           STATE DEPARTMENT COVER-UP

        The lack of political will and a strong pro-Turkish tilt in the
    State Department and other agencies have corrupted this vital area of
    U.S. foreign policy. Instead of open, democratic government we have
    witnessed a cover-up of the State Department's accessory role in
    Turkey's 1974 invasion of Cyprus and its pro-Turkish tilt. It has led
    to an Orwellian denial that the Cyprus problem is one of aggression and
    occupation by Turkey with the active participation of the U.S through
    the State Department. It has led to a failure to act on the U.S.' clear
    moral responsibility to redress the problem. It has caused our
    government to abandon the rule of law regarding Turkey.
        The State Department's cover-up and other failures have seriously
    damaged U.S. national interests and cost the U.S. treasury billions of
    dollars in wasted military and economic aid to Turkey.

                     TURKEY'S PAID U.S. AGENTS OF INFLUENCE

        The second determinant of this pro-Turkish policy is from Turkey's
    several paid U.S. ``agents of influence'' registered with the
    Department of Justice under the Foreign Agents Registration Act.
    Alongside the role of career officials, the Congress should also
    investigate the role played by these agents. Turkey has spent an
    average of $3-$4 million annually on several lobbying firms for over a
    decade. Turkey has recently entered into a $1.8 million contract with a
    group involving former Congressmen Bob Livingstone, Gerald Solomon and
    Stephen Solarz to lobby support for arms sales to Turkey.
        The impression given is that the foreign policy of this country is
    for sale to the highest bidder. For citizens committed to a foreign
    policy based on American interests and American values, it is highly
    disquieting that foreign money and that former high officials on the
    payroll of a foreign government should exert an influence of this
    nature on American policy making. The U.S. lobbyists for Turkey also
    bear responsibility as accomplices to Turkey's crimes. Congress should
    demand an accounting.

                  THE U.S., CYPRUS, TURKEY AND THE RULE OF LAW

        Mr. Chairman, the rule of law, not advanced weaponry, is a core
    principle of American diplomacy and the surest instrument for advancing
    American interests in the world. All too often U.S. policies have
    failed to apply the rule of law in the Aegean and Eastern Mediterranean
    against persistent violations by Turkey. Despite these violations, the
    U.S. has given assistance and supplied arms to Turkey far beyond its
    legitimate defense needs and inconsistent with its role in NATO. This
    appeasement and application of a double standard vis-a-vis Turkey has
    damaged U.S. interests. We call upon the Administration and all U.S.
    government agencies, particularly the State Department, to correct
    these failures and to apply the rule of law rigorously in all contacts
    with Turkey.
        Nowhere is the rule of law more neglected than with regard to
    Cyprus where the coddling and appeasement of Turkey by the
    Administration are the main obstacles to a settlement of the Cyprus
    problem. The lack of political will is in the State and Defense
    Departments.
        A comprehensive settlement is attainable if the Congress and the
    Executive Branch were to respond to Turkey's aggression in the same
    manner as President Eisenhower responded to aggression when he
    condemned and reversed the invasion of Egypt by Britain, France, and
    Israel in October 1956. On that occasion he said:

        ``There can be no peace without law. And there can be no law if we
    were to invoke one code of conduct for those who oppose us and another
    for our friends.''

        The following are several examples of the United States, led by the
    State Department, not applying the rule of law to Turkey, all to the
    detriment of U.S. interests:
        (1) the failure to apply U.S. and international law to Turkey's
    ethnic cleansing and genocidal war against its 20 percent Kurdish
    minority;
        (2) the failure to apply U.S. law and international law to Turkey's
    several invasions of northern Iraq, for military actions against Kurds
    in northern Iraq, including massive invasions with up to 35,000 troops;
        (3) the failure to apply U.S. and international law to Turkey's
    periodic bombing of Kurds in Iraq;
        (4) the failure to apply U.S. and international law to Turkey'
    continuing occupation of 37.3 percent of Cyprus with 35,000 troops;
        (5) the failure to apply international law to the Aegean Imia
    islets issue;
        (6) the failure to apply the Iran-Iraq Sanctions Act to Turkey'
    deals with Iran and Libya;
        (7) the failure to apply U.S. and international law to Turkey's
    violations of religious freedom against Christians and Jews in Turkey,
    including the illegal closing of the Halki Patriarchal School of
    Theology;
        (8) the failure to apply international law to Turkey' illegal
    embargo on Armenia;
        (9) the failure to apply the Geneva Convention of 1949 to Turkey's
    80,000 illegal settlers;
        (10) the failure to apply the terms of the NATO Treaty to Turkey
    for its invasion of Cyprus; and
        (11) the failure to condemn Turkey's violation of the U.N. Charter
    by Turkey's threats of war against Greece in the Aegean regarding
    Greece's internationally recognized right to extend its territorial
    waters from 6 to 12 miles.

                                NATO AND CYPRUS

        We have long called for a NATO force on Cyprus under U.N. auspices
    and acting in full respect of Cyprus' sovereignty as a component of a
    settlement of the Cyprus problem. However, under pressure from the U.S.
    government, NATO has applied a similar double standard to Turkey on the
    rule of law.
        While NATO is taking action to promote Albanian autonomy in the
    Serbian province of Kosovo, it is conspicuously silent on the
    aspirations for autonomy of the Kurds. This is a double standard, pure
    and simple.
        NATO's toleration of Turkey's aggression against Cyprus in
    violation of its own Treaty and the U.N. Charter is a stain on NATO's
    record and honor. NATO should call for the immediate removal of
    Turkey's illegal occupation forces and settlers from Cyprus and the
    demilitarization of Cyprus coupled with a military force to augment the
    U.N. peacekeeping force. If Turkey refuses to cooperate, NATO should
    consider appropriate action to bring Turkey into compliance.
        To conclude, Mr. Chairman, we support the following legislative
    initiatives:
        1. We support the amount of $15 million in humanitarian aid for
    Cyprus. We urge the Administration to follow Congress' lead and call
    publicly for the immediate demilitarization of Cyprus. We call upon the
    Administration to give full support for Cyprus' accession negotiations
    with the European Union and to reject any attempt by Turkey to delay or
    interfere with these. During 1998 we deplored the Clinton
    Administration's heavy-handed pressure on the government of Cyprus'
    efforts to acquire defensive weaponry. The State Department
    manufactured the issue 2 years ago and intimidated Cyprus into altering
    the contract. We support military aid for Cyprus to purchase the U.S.
    patriot anti-missile system.
        2. Although military aid to Greece was also halted by the
    Administration, we support military aid for Greece as long as Turkey
    keeps its illegal 35,000 man army of occupation and its 80,000 illegal
    colonists/settlers in the occupied territory of Cyprus, and maintains
    its 125,000 man Army of the Aegean aimed at Greece's Aegean islands. A
    clear message to Turkey would be sent if Congress appropriated some
    military aid for Greece. We condemn Turkey's threats on Greece's
    national sovereignty in the Aegean and Turkey's threats of war against
    Greece in the Aegean regarding Greece's internationally recognized
    right to extend its territorial waters from 6 to 12 miles. These
    threats are in violation of the U.N. Charter Preamble and Article 2 (4)
    and the NATO Treaty Preamble and Article 1.
        3. We oppose any sale or transfers of U.S. weapons to Turkey as
    contrary to the best interests of the U.S.
        4. We believe that the Congress should eliminate any trade
    preferences and any other benefits for Turkey, freeze any loan programs
    for Turkey, instruct U.S. representatives in multinational agencies to
    vote against any aid or loans for Turkey, and should consider economic
    sanctions against Turkey.
        5. The Senate Foreign Relations and Armed Services Committees
    should hold hearings on a critical review of U.S.-Turkey relations.
        Turkey is the main security threat to U.S. interests and to Greece
    and Cyprus in the Aegean and Eastern Mediterranean. A close U.S.
    relationship with Greece and Cyprus represents the best counter to this
    threat to U.S. interests. For the White House and career officials in
    the State Department, the Defense Department and on the NSC to deny
    this is to deny reality.
        Thank you, Mr. Chairman.

                 Exhibit 1.--American Hellenic Institute, Inc.

                        GREEK AMERICAN POLICY STATEMENTS

        Prepared by the American Hellenic Institute (AHI) and approved by
    the Order of AHEPA and its Cyprus and Hellenic Affairs Committee, the
    Hellenic American National Council (HANC), the Hellenic American
    Women's Council (HAWC) and the Cyprus Federation of America
        The policies set forth herein are based in each case on the
    question of what is in the best interests of the United States.

    Section 1.--Overview and main themes

        1. The political, security and economic landscape in Southeast
    Europe and the Eastern Mediterranean regions underwent significant
    changes in 1999. At its December 10-11, 1999 Helsinki Council, the
    European Union decided to grant candidate status to Turkey under
    conditions which, in effect, require Turkey to resolve the Aegean and
    Cyprus issues. As a result of this important decision the resolution of
    these problems becomes an integral part of the EU's institutional
    agenda. The G8 and U.N. sponsored a new initiative over Cyprus leading
    to proximity talks in New York and Geneva. Further rounds are to take
    place later this year. The Kosovo crisis underlined Greece's pivotal
    regional role. In the wake of the tragic earthquakes in Greece and
    Turkey the pace of contact between Greece and Turkey has accelerated,
    including an exchange of visits by the two foreign ministers which
    resulted in a series of agreements for mutual cooperation. There are
    now hopes of better relations between the two countries.
        2. These changes underline the enduring validity of the policy
    themes advocated by the American Hellenic Institute since its founding
    in 1974 and reiterated in successive Greek American Policy Statements
    about U.S. interests in Southeastern Europe and the Eastern
    Mediterranean and their relation to U.S. values. These are that:
      --These interests are best served by applying the rule of law in
            international affairs in the same manner as we apply it in
            domestic affairs;
      --U.S. values and principles must remain paramount;
      --Aggression against Cyprus must not be allowed to stand just as
            Iraq's aggression against Kuwait was reversed;
      --Any eventual Cyprus settlement should not reward aggression but be
            based on democratic norms and U.N. resolutions;
      --Greece is the pivotal nation for U.S. interests in the Southeast
            Europe and Eastern Mediterranean regions;
      --Cyprus is an important partner for U.S. strategic interests in the
            Eastern Mediterranean; and
      --Turkey should be treated in the same way as other countries and
            should not be the beneficiary of U.S. double standards on the
            rule of law and human rights.
        3. These positions rest on the critical insight that the Southeast
    Europe and Eastern Mediterranean regions are of strategic importance to
    the United States. For too long U.S. administrations have failed to
    follow sensible or realistic policies aimed at addressing the region's
    long-standing problems. Greece and Cyprus offer an opportunity to break
    away from this negative pattern of events and make a decisive advance
    for U.S. national interests in the region.
        4. Greece is the key for the U.S. and EU to stability and peace in
    the Eastern Mediterranean and the Balkans. It is the only state that is
    a member both of the EU and NATO. By 2001 Greece expects to be a full
    member of EMU. While holding clearly articulated positions on regional
    issues affecting its vital national interests, Greece has committed
    itself to the rule of law and to the principles of non-aggression in
    seeking solutions. Its role in the December 10-11. 1999 EU Helsinki
    summit was positive and responsible.
        5. We call upon the United States to take advantage of this
    positive reality by developing a ``special relationship'' with Greece
    for mutual benefit and commensurate with the latter's potential to
    advance U.S. interests. U.S. Ambassador to Greece Nicholas Burns has
    articulated Greece's importance to the U.S. in the region. He also
    influenced President Clinton's reference to Greece in his November 1999
    visit as the ``powerhouse of Southeast Europe.''
        6. We call upon the U.S. to recognize the integrity of Greek
    sovereign territory and to uphold international law, especially in
    relation to the Aegean. This is the position adopted by the U.S. House
    of Representatives and also by the EU. We call upon the U.S. to
    repudiate any unilateral challenges to Greek sovereign territory.
        7. The Administration and Congress must put aside the failed
    policies of the past years and in their place embrace rational and
    sensible polices aimed at making the most of the regional opportunities
    for progress. The principal requirement for the U.S. is to expand and
    deepen its relationships with Greece and Cyprus. Both are vigorous and
    stable democracies with rapidly modernizing economies. They are a
    source of regional political leadership, economic investment, and
    commercial expertise. Greece is the only regional state that is a
    member of both the European Union and NATO and by 2001 will be a full
    member of EMU. With difficult conditions likely to continue in the
    southern Balkans, Greece's investment capital and commercial expertise
    will be critical.
        8. Cyprus' stature as a regional center of international business
    and finance continues to grow. Its accession negotiations with the EU,
    which started substantively on November 10, 1998, are progressing
    smoothly and at its Helsinki summit the EU committed itself to
    admitting Cyprus irrespective of a settlement of the Cyprus problem.
    Alone of the current applicant countries Cyprus meets the full criteria
    for EMU entry. By basing its policies in Southeastern Europe on close
    ties with Greece and Cyprus, the U.S. could materially advance its
    vital interests in regional stability, economic development, and
    increase in democratic institutions.
        9. By contrast, Turkey has failed to respond to the improved
    regional climate. It continues to impede regional progress. It has
    played a negative role and is the prime cause of many of the region's
    problems. In drawing attention to Turkey's negative role, AHI and other
    Greek-American organizations stress that their dispute is not with the
    Turkish people but with Turkey's military-controlled government and its
    political and diplomatic agents. We support the efforts of the brave
    Turkish citizens seeking to promote democracy, establish the rule of
    law and secure human rights for all Turkish citizens.
        10. Turkey's failure to adhere to normal international standards is
    in large part because of the disproportionate and anti-democratic
    influence of the Turkish military over Turkish governance as set forth
    in the Turkish constitution. In a landmark speech in September 1999,
    Chief Justice Sami Selcuk of Turkey's Supreme Court of Appeal described
    this constitution as having ``almost no legitimacy'' and stated that it
    ``was an obstacle to democracy and it had to be changed.'' He said that
    ``Turkey could not enter a new century with a constitution whose
    legitimacy was almost zero.''
        11. Turkey has continued and extended its illegal territorial
    claims against sovereign Greek territory, introduced new and
    unacceptable conditions for negotiations about Cyprus, continued its
    harassment of the Ecumenical Patriarchate, and further stained its
    already notorious human rights record against pro-democratic forces and
    ethnic and religious minorities inside Turkey. In the words of the
    State Department's own 1999 Annual Country Human Rights Report,
    ``extrajudicial killings, including deaths in detention from excessive
    use of force, `mystery killings,' and disappearances continued. Torture
    remained widespread.''
        12. In its decision to accept Turkey as a candidate member, the EU
    recognized these deficiencies and set out firm criteria to be met by
    Turkey before accession negotiations can start. The U.S. should
    recognize the full implications of the EU decision and state that the
    main impediment to progress on the region's problems lies with Turkey
    and its military-controlled government. Within Turkey, the EU decision
    confronts the country with far-reaching questions about whether it is
    ready to undertake the profound political, constitutional, societal and
    economic restructuring necessary for Turkey to become a democracy and
    join the international mainstream.
        13. On separate occasions in 1999 President Clinton apologized for
    excessively close past U.S. relationships with the Guatemalan and Greek
    militaries. The time is long overdue for the U.S. to apologize for its
    actions in supporting Turkey's invasion of Cyprus in 1974 and to
    distance itself from the Turkish military.
        14. The U.S. must conduct a thorough review of U.S. policy toward
    Turkey where successive administrations have ignored the rule of law
    and basic American values. In place of this failed approach, a new
    policy is needed which holds Turkey to the same standards of democratic
    governance and human rights observance as other countries. Until this
    happens, the U.S. interests in terms of regional stability, advancement
    of democratic values and commercial opportunity will languish. We
    therefore call upon the Administration and the Congress to reinforce
    the positive developments already under way in Greece and Cyprus and to
    conduct a critical review of their approach to Turkey.
        15. The rule of law is a core principle of American diplomacy and
    the surest instrument for advancing American interests in the world.
    All too often U.S. policies have failed to apply the rule of law in the
    Aegean and Eastern Mediterranean against persistent violations by
    Turkey. Despite these violations, the U.S. has given assistance and
    supplied arms to Turkey far beyond its legitimate defense needs. This
    appeasement and application of a double standard to Turkey has damaged
    U.S. interests. We call upon the Administration and all U.S. government
    agencies, particularly the State Department, to correct these failures
    and to apply the rule of law rigorously in all contacts with Turkey.
        16. We have long called for a NATO force on Cyprus under U.N.
    auspices and acting in full respect of Cyprus' sovereignty as a
    component of a settlement of the Cyprus problem. However, under
    pressure from the U.S. government, NATO has applied a similar double
    standard to Turkey on the rule of law. NATO's toleration of Turkey's
    aggression against Cyprus in violation of its own Treaty and the U.N.
    Charter is a stain on NATO's record and honor. NATO should call for the
    immediate removal of Turkey's illegal occupation forces and settlers
    from Cyprus and the demilitarization of Cyprus coupled with a military
    force to augment the U.N. peacekeeping force. If Turkey refuses to
    cooperate, NATO should consider appropriate action to bring Turkey into
    compliance.
        17. The continuing progress in Cyprus' accession negotiations with
    the EU and the EU confirmation that a solution of the Cyprus problem is
    not a precondition for Cyprus' EU accession presents a favorable
    opportunity to make progress on the Cyprus problem, the continuation of
    which is an affront to international law and to U.S. values, as well as
    a threat to regional stability. A new initiative under G8 and U.N.
    auspices is underway. We call upon the United States to intensify
    efforts to reach a fair settlement based on democratic principles that
    respect the rights of all Cypriots, does not reward aggression and
    accords with normal constitutional principles. We call upon the U.S.
    not to exert pressure on the Cyprus government for further concessions,
    for example to recognize the occupied areas as a equal sovereignty.
        18. Resolution of the issues relating to the Aegean and Cyprus
    require a reciprocal attitude of statesmanship on the part of Turkey.
    To date this has failed to materialize, primarily because its military-
    controlled government and constitution inhibit Turkey's evolution as a
    modern, democratic state. In addition to its continuing intransigence
    on the Cyprus problem, Turkey has engaged in a series of destabilizing
    actions toward Greece and Cyprus and continues to violate international
    law.
        19. In its December 10-11, 1999 Helsinki decisions, the EU required
    Turkey to undertake fundamental changes, including resolution of the
    Aegean and Cyprus issues. The U.S. must follow this approach. For too
    long the U.S. to its detriment has followed a counter-productive
    approach to Turkey. It has overlooked Turkey's violations of the norms
    of international behavior and thereby retarded the reform forces within
    Turkey working to modernize the country. By its past and continuing
    military and economic assistance to Turkey the U.S. has distorted the
    balance of power in the region and encouraged new patterns of Turkish
    belligerence and intimidation. The U.S. has acted as an accessory in
    these and other acts by Turkey against the rule of law in national and
    international affairs.
        20. The favorable circumstances in Greece and Cyprus provide an
    opportunity to reverse this approach. Within Turkey itself reform-
    minded forces are beginning to make themselves heard. The U.S. must
    support these forces. The U.S. has the power and duty to bring about a
    change in Turkey's attitudes. We call upon the Administration to
    undertake a critical review of United States-Turkey relations.
        21. Pending the outcome of this review we call upon the
    Administration to halt all arms sales and transfers to Turkey, to
    forbid the participation by U.S. contractors in any Turkish military
    procurement bidding processes, to freeze any loan programs for Turkey,
    and to instruct its representatives in multinational agencies to vote
    against any aid for Turkey.
        22. Turkey's violations of international law and human rights have
    caused immense damage in terms of human loss and suffering and of
    material loss. The European Court of Human Rights (ECHR) has already
    determined that Turkey must compensate those who have suffered property
    losses as a result of its illegal 1974 invasion and continuing
    occupation of parts of Cyprus. The U.S., EU and the world community
    must insist that Turkey comply with the ECHR's decisions and judgments.
    Further, as Turkey prepares to join the family of democratic nations,
    consideration should be given to require Turkey to compensate the
    victims of earlier acts of ethnic cleansing, crimes against humanity
    and genocide. We call upon the Administration to open appropriate
    negotiations with Turkey on behalf of any such victims who are now U.S.
    citizens.

    Section 2.--Legislative priorities

        We call upon the Congress:
        1. To pass legislation endorsing the positive role played by Greece
    in regional affairs and mandating the Administration to strengthen
    U.S.-Greece ties;
        2. To pass legislation endorsing the EU application of
    conditionality to Turkey's status as a candidate member and requiring
    the Administration to make regular reports to Congress of Turkey's
    progress or otherwise to meet this conditionality;
        3. To pass legislation mandating the Administration to pursue a
    settlement of the Cyprus problem in strict accordance with the existing
    framework established by U.N. resolutions and without seeking to
    extract unfair concessions from the Cyprus government;
        4. To hold hearings on a critical review of U.S. policy toward
    Turkey;
        5. To hold hearings on the State Department's cover-up of its role
    in supporting Turkey's invasion of Cyprus in 1974;
        6. To hold hearings into actions by the State Department and other
    government agencies that contravene U.S. or international law with
    regard to Cyprus, Greece and Turkey;
        7. To pass legislation similar to Amendment 19 to H.R. 2415 passed
    by unanimous voice vote in the House of Representatives on July 21,
    1999 requiring the Administration to apply international law by
    recognizing the islands and islets of the Aegean described or delimited
    by the Treaty of Lausanne and successor treaties and agreements as
    sovereign Greek territory;
        8. To pass legislation enforcing the provisions of S. 1067 ``The
    Code of Conduct on Arms Transfers Act'' and H.R. 1757 ``The European
    Security Act'' as they apply to arms transfers to Turkey and to ensure
    that no arms transfers take place so long as Turkey continues to
    violate U.S. and international law, the U.N. Charter, the NATO Treaty,
    the 1949 Geneva Convention and relevant treaties and agreements with
    specific reference to Greece and Cyprus;
        9. To pass legislation similar to HR 1361, the Turkish Human Rights
    Act, introduced in the House on April 17, 1997 by Representatives Rob
    Andrews (D-NJ) and John Porter (R-IL) to prohibit military and economic
    aid to Turkey unless the Secretary of State determines that Turkey
    permits international human rights monitoring organizations to report
    on the human rights situation in Turkey; has ceased to deny human
    rights to the Kurdish people; has taken action to demilitarize Cyprus
    and provide support for democracy there; has ceased to blockade U.S.
    and international assistance to Armenia; and has ceased its
    restrictions on religious freedom;
        10. To pass legislation providing for economic and trade sanctions
    against Turkey including the removal of any current trade benefits and
    MFN status until Turkey has removed all its armed forces from Cyprus
    including its illegal occupation forces; removed all Turkish settlers
    from Cyprus; has returned the occupied areas of Morphou and Famagusta
    to the government of Cyprus under U.N. auspices for the immediate
    resettlement of displaced persons; restored churches in the occupied
    areas illegally converted to mosques in violation of the Geneva
    Convention of 1949; and agreed to a constitution for Cyprus based on
    normal democratic principles; and
        11. To remain seized of the provisions of Section 2804 of the 1999
    Appropriations bill passed on October 22, 1998 and signed into law
    calling upon the United States to use its influence with the government
    of Turkey to guarantee the security of the Ecumenical Patriarchate in
    Istanbul and to reopen the Halki Theological School and to ensure that
    the actions called for in the new law are put into effect.

    Section 3.--List of issues and supporting details

        A detailed discussion of the issues facing the U.S. of particular
    concern to Greek Americans is set forth on our web site at
    www.ahiworld.org. The issues include: Aegean, Cyprus, Greece,
    Ecumenical Patriarchate and the Halki Patriarchal School of Theology,
    Arms sales and transfers to Turkey; Turkey, and other issues including:
    Albania, Armenia, Former Yugoslav Republic of Macedonia (FYROM), Kurds,
    and NATO.

                Aegean

        1. We support the adherence to internationally recognized law,
    treaties and agreements regarding the territorial integrity and
    sovereign rights of a state, including the United Nations Charter and
    the NATO Treaty. Regarding the Aegean, we specifically refer to the
    Lausanne Treaty of 1923, the Italy-Turkish Convention of January 4,
    1932, the Italy-Turkish Protocol of December 28, 1932, the 1947 Paris
    Peace Treaty, under which the Dodecanese Islands and adjacent islets
    were ceded by Italy to Greece, and the Law of the Sea Convention.
        2. We commend the EU for making a settlement of Turkey's unilateral
    claims against sovereign Greek territory in the Aegean a precondition
    for the start of accession negotiations with Turkey and call upon the
    U.S. Government to recognize and uphold the aforementioned treaties and
    agreements and to repudiate any challenge to them, specifically by
    Turkey.
        3. We call upon the U.S. Government to recognize and state publicly
    that the islets of Imia are Greek sovereign territory in accordance
    with the 1947 Paris Peace Treaty under which the Dodecanese Islands and
    adjacent islets were ceded by Italy to Greece, the 1932 Italy-Turkey
    Convention of January 4, 1932, the Italy-Turkey Protocol of December
    28, 1932 in which Imia is specifically named as belonging to Italy, the
    Lausanne Treaty of 1923, and international law.
        4. On February 15, 1996 the European Parliament passed a resolution
    (342 to 21 with 11 abstentions) stating the islets of Imia belong to
    Greece and condemned Turkey's aggressive threats to established
    sovereignty in the Aegean. In a February 1, 1996 statement to Greece,
    Italy supported the Greek legal position regarding the 1932 Italy-
    Turkey Protocol. Also, on February 7, 1996 France stated that it
    unequivocally recognized Greece's sovereignty over the Imia islets.
        5. We call on Congress to pass legislation similar to Amendment 19
    to H.R. 2415 passed by unanimous vote in the House of Representatives
    on July 21, 1999 expressing the sense of Congress that:
              (1) the water boundaries established in the Treaty of
            Lausanne of 1923 and the 1932 Convention between Italy and
            Turkey, including the Protocol annexed to such Convention, are
            the borders between Greece and Turkey in the Aegean; and
              (2) any party, including Turkey, objecting to these
            established boundaries should seek redress in the International
            Court of Justice at The Hague.''
        6. In Madrid on July 8, 1997 Turkey signed an Agreement with Greece
    under the auspices of Secretary of State Madeleine Albright, abjuring
    the use of force to settle problems between the two countries. Turkey
    also undertook to respect international law. On December 3, 1997, in
    Brussels, Turkey and Greece reached another agreement in the NATO
    framework to respect each other's airspace.
        7. Turkey has repeatedly violated these agreements and continues to
    do so today, whether in the form of illegal military overflights,
    through new territorial claims, or other actions. We call upon the U.S.
    to insist that Turkey adhere to these agreements, specifically by
    desisting from territorial claims in the Aegean and from violating
    Greek airspace. We condemn Turkey for its numerous and continuous
    threats on the territorial integrity of Greece.
        8. We condemn Turkey's threats of war against Greece in the Aegean
    regarding Greece's internationally recognized right to extend its
    territorial waters from 6 to 12 miles, and note that Turkey itself has
    exercised this right by extending its territorial waters from 6 to 12
    miles in the Mediterranean Sea and Black Sea despite the fact that it
    is not a signatory of the Law of the Sea Convention. The United States
    has also extended its territorial waters to 12 miles. The Turkish Grand
    National Assembly passed a resolution on June 8, 1995, authorizing the
    Turkish government to use force if Greece extends its territorial
    waters to 12 miles.
        9. We note that Turkish threats of war and the June 8, 1995 Turkish
    National Assembly resolution are violations of Turkey's undertakings in
    the Madrid Agreement of July 8, 1997, the United Nations Charter,
    article 2 paragraph 4, and the NATO Treaty preamble and article 1. The
    U.N. Charter, article 2 (4) states:

        ``All members shall refrain in their international relations from
    the threat or use of force against the territorial integrity or
    political independence of any state, or in any other manner
    inconsistent with the Purposes of the United Nations.''

        The NATO Treaty contains similar language.
        10. We call on the U.S. government, in its own self interest and as
    the world's leader, to make a formal protest of Turkey's threats of war
    (casus belli) regarding the Aegean, made on a number of occasions and
    to state that Greece has the right to extend its territorial waters
    from 6 to 12 miles in accordance with the Law of the Sea Convention.
        11. We refute the Turkish claims concerning the application of the
    Law of the Sea Convention to the continental shelf and territorial
    waters, and questions pertaining to national air space. Turkey is free
    to go to the International Court of Justice at The Hague, if it thinks
    it has a supportable case. This is the position adopted by the EU.
        12. We call upon the U.S. and the international community to apply
    the strictest standards of nuclear non-proliferation to Turkey and to
    ensure that Turkey cannot divert any civilian nuclear facility to
    military use.

                Cyprus

        1. We support the unity, sovereignty, independence and territorial
    integrity of the Republic of Cyprus.
        2. We support a settlement of the Cyprus problem based on a
    constitutional democracy embracing the key American principles of
    ``majority rule, the rule of law, and the protection of minority
    rights'' as called for by former President George Bush in 1988, and
    upholding the ``fundamental principles of human rights and democratic
    norms and practices'' as called for in the 1992 campaign statement of
    then Governor Clinton. We call for the provision for and implementation
    of the three basic freedoms, namely, freedom of movement, of property
    and of residential settlement. A constitutional settlement in Cyprus
    should be based on democratic principles that respect the rights of all
    Cypriots. We support efforts by the international community to reach a
    practical formulation of these principles.
        3. We welcome the EU decision of December 10-11, 1999 that a
    resolution of the Cyprus problem is not a precondition for Cyprus'
    accession to the EU. Cyprus' accession to the EU would confer economic,
    political, social, and cultural benefits to the whole island. We call
    upon the U.S. to continue its support for Cyprus' accession to the EU
    and to insist that Turkey cease all efforts to interfere with this
    process.
        4. We condemn Turkey's attempts to hinder these negotiations, and
    further condemn the Turkish threat of annexation of the occupied part
    of Cyprus with Turkey if such accession transpires. Such actions, which
    the international community views as an attempt to dismember Cyprus,
    were condemned as illegal and invalid by SCR 541 (1983) of November 18,
    1983. SCR 550 (1984) of May 11, 1984, called upon all states to refrain
    from recognizing the occupied areas and from assisting or facilitating
    them in any way.
        5. The Cyprus problem is fundamentally a question of invasion and
    occupation by Turkish armed forces with the illegal use of American-
    supplied arms and equipment. There is no legal difference between
    Turkey's invasion and occupation of Cyprus and Iraq's invasion and
    occupation of Kuwait. We welcome the statement by Chairman Ben Gilman
    (R-NY) of the House International Affairs committee in a speech on July
    28, 1999 marking the 25th anniversary of Turkey's illegal invasion of
    Cyprus that:

        ``Last week nearly two thousand people joined in a symbolic human
    chain around the Capitol to mark the 25th anniversary of the Turkish
    occupation of northern Cyprus and to demand a peaceful and just
    settlement to the Cyprus problem. For me it was a very moving occasion.
        ``Everyone, including our State Department officials, understands
    that the impasse on Cyprus is caused by the position of Ankara and of
    Denktash.
        ``I believe that the Administration, including the President should
    use all the influence at our disposal to convince the Turkish side that
    they must return to the negotiating table and that a refusal to do so
    will have consequences for Turkey's relations with the U.S.''

        6. We call for:
      --insistence by the U.S. that Turkey and the Turkish Cypriots comply
            with the provisions of Security Council Resolutions 1217 (1998)
            and 1218 (1998) and 1251 (1999) and 1283 (1999);
      --the removal of all Turkish troops including Turkey's illegal
            occupation forces from Cyprus;
      --the removal of all illegal Turkish colonists from Cyprus and a
            census under U.N. auspices of the illegal Turkish colonists;
      --the restoration to their original condition of the churches
            illegally converted to mosques in violation of the 1949 Geneva
            Convention;
      --the speedy return of the occupied areas of Morphou and Famagusta/
            Varosha to the government of Cyprus under United Nations
            auspices for the immediate resettlement of displaced persons;
      --cessation of all efforts by Turkey to interfere with Cyprus'
            accession negotiations with the European Union;
      --cessation of all measures to integrate the occupied areas of Cyprus
            with Turkey;
      --abandonment of Turkey's demand for recognition of the occupied
            areas as a sovereign state.
        7. We call upon the Administration to state its support for the
    immediate and complete demilitarization of Cyprus. We support the use
    of NATO forces for security purposes in Cyprus upon the
    demilitarization of Cyprus.
        8. Pending demilitarization we support the fundamental right of the
    Republic of Cyprus to acquire arms to defend itself. We call on the
    U.S. to supply sufficient arms and equipment to the Republic of Cyprus
    to deter any potential attack by Turkey.
        9. We call on the Administration and the U.S. Congress in the
    interests of the United States to consider sanctions against Turkey if
    it fails to cooperate.
        10. We applaud the European Court of Human Rights ruling of July
    28, 1998, awarding damages to Ms. Titina Loizidou in the amount of an
    estimated $608,000 and another estimated $355,000 in costs and ordering
    Turkey to pay the damages and costs. This ruling followed from the
    ECHR's December 18, 1996 decision which found Turkey accountable for
    the continuing violation of human rights by its 1974 invasion and
    present day occupation of 37.3 percent of Cyprus. The 11 votes to 6
    ruling in the case of Loizidou vs. Turkey stated that the denial of
    access to the applicant's (Loizidou) property and consequent control
    thereof is imputable to Turkey, and amounts to a violation of the
    applicants property rights under Article 1 of Protocol No. 1 of the
    European Convention on Human Rights.
        11. We condemn the actions of the illegal Turkish Cypriot regime,
    the Turkish military commander in Cyprus, and the Turkish government
    and military leadership, which regularly result in human tragedy,
    including:
      --October 13, 1996, Turkish troops shot and killed Mr. Petros
            Kakoullis, 58, a Greek Cypriot who accidentally wandered into
            the zone illegally occupied by Turkey while collecting snails
            with his son-in-law. According to eyewitness reports, Mr.
            Kakoullis was observed standing stationary and with his hands
            up. He was shot by two Turkish soldiers. After he fell to the
            ground he was shot again.
      --August 11-14, 1996--Turkish Cypriot security forces, led by the
            Turkish military, murdered two Greek Cypriots during a peaceful
            demonstration at the Green Line. Tassos Isaac was beaten to
            death on August 11 by a ravenous gang of Turks, the Grey
            Wolves, with Turkish security forces looking on. Solomos Spirou
            Solomou (Isaac's cousin) was shot to death, also by Turkish
            Cypriot security forces on August 14.
      --June 3, 1996--Turkish troops shot and killed an unarmed Greek
            Cypriot guardsman inside the U.N. buffer zone.
        We condemn these horrific and barbarous acts. The 1997 State
    Department Human Rights report issued January 30 states that ``there
    has not been any significant investigation by the Turkish Cypriot
    authorities of the killings.'' We call on the U.S. government to take
    steps to ensure the apprehension and trial of the perpetrators.
        12. We note the statement by Turkish Cypriot leader, Rauf Denktash,
    on March 1, 1996 that members of the Turkish Cypriot militia, which was
    and is today under his control, in 1974 killed the 5 Americans and the
    missing Greek Cypriots in their custody. DNA tests have identified the
    remains of one of the missing Americans. A U.S. government
    investigation has concluded that the remaining four are most probably
    dead. We call upon the U.S. government to investigate thoroughly the
    validity of the Denktash statement and determine the circumstances in
    which the 5 Americans met their fate at the hands of the Turkish
    invasion forces and the Turkish Cypriot militia in 1974, identify the
    responsible parties and bring criminal charges. We further call upon
    the U.S. government to insist upon a proper accounting for the 1,619
    Greek Cypriots who have been missing since the Turkish invasion.

                Greece

        1. We call on the United States to develop a ``special
    relationship'' with Greece as it has with the UK and Israel. The United
    States and Greece share common interests in the Eastern Mediterranean
    and Balkans. Greece is the key source of stability, prosperity, and
    peace in the Eastern Mediterranean and the key nation in the Balkans
    for the advancement of U.S. strategic, democratic, economic and
    stability interests in the Balkans. Greece played a leadership role in
    the successful European intervention in Albania in April 1997. In 1999
    Greece played an important role in the diplomatic and military efforts
    with regard to the Kosovo crisis. Greece is now playing a key role in
    the Balkan reconstruction program.
        2. Greece, a proven ally since WW1, played a pivotal role in the
    defeat of Hitler in World War II and an historic turning point role in
    the defeat of communism in the Greek civil war (1946-49) with U.S. aid
    under the Truman Doctrine but no U.S. combat troops. Greece, Great
    Britain and France are the only nations which were allies of the U.S.
    in four wars in this century.
        3. We support Greece's right under international law to extend its
    territorial waters from 6 to 12 miles.
        4. Despite warming relations between Greece and Turkey, the
    security threat against Greece from Turkey remains real. Foreign
    military sales to Greece should be sufficient to deter aggression from
    Turkey and, at a minimum, to ensure a military balance in accordance
    with congressional policy and the U.S.-Greece Defense Cooperation
    Agreement.

                Ecumenical Patriarchate and the Halki Patriarchal School of
                        Theology

        1. Religious freedom is a basic human right as is the right of
    minorities to practice their religion freely and without interference.
    We therefore condemn the chronic persecution of Orthodox Christians in
    Turkey, the harassment of the Ecumenical Patriarch and the attacks on
    the Patriarchate in Istanbul, including the January 12, 1998 arson
    attack on the Church of Agios Therapon in Istanbul in which a 73-year
    old sexton, Vasilios Hadriaopolous, was murdered.
        2. We welcome the passage of Section 2804 of the 1999
    Appropriations bill passed on October 22, 1998 and signed into law
    containing provisions calling upon the United States to use its
    influence with the government of Turkey to guarantee the security of
    the Ecumenical Patriarchate in Istanbul and to reopen the Halki
    Theological School. The legislation states:

        ``It is the sense of Congress that the United States should use its
    influence with the Government of Turkey to suggest that the Government
    of Turkey--
              ``(1) recognize the Ecumenical Patriarchate and its
            nonpolitical, religious mission;
              ``(2) ensure the continued maintenance of the institution's
            physical security needs, as provided for under Turkish and
            international law, including the Treaty of Lausanne, the 1968
            Protocol, the Helsinki Final Act (1975) and the Charter of
            Paris;
              ``(3) provide for the proper protection and safety of the
            Ecumenical Patriarch and the Patriarchate personnel; and
              ``(4) reopen the Ecumenical Patriarchate's Halki Patriarchal
            School of Theology.''

        The Patriarchate issue was introduced at AHIPAC's initiative in the
    104th Congress through H.Con.Res. 50. This was carried forward in the
    105th Congress in the form of H.Con.Res 6. Congressman Mike Bilirakis
    (R-FL) introduced both resolutions which attracted numerous co-
    sponsors. We congratulate Congressman Bilirakis for his determination
    and persistence throughout this process.
        3. We condemn the desecration of Orthodox Christian cemeteries in
    Istanbul.
        4. On regular occasions in recent years senior Turkish politicians
    have threatened that the Agia Sofia Byzantine cathedral should be
    converted into a mosque. We call upon the Administration to inform
    Turkey that any such action would be regarded as a clear attack on the
    religious freedom of and basic respect for Orthodox Christians
    worldwide.
        5. We condemn the restrictions imposed by Turkey on the
    celebrations of the Saint Nicholas Festival, a saint worshipped by
    Christians throughout the world.
        6. We call on the U.S. government to protest these actions and to
    call on the government of Turkey:
      --to ensure religious freedom in Turkey;
      --to provide the proper protection of the Patriarchate and the
            Ecumenical Patriarch;
      --to establish conditions to prevent the recurrence of threats
            against the Patriarch and to ensure that the Patriarchate is
            free to carry out its mission; and
      --to permit persons to work at the Patriarchate without being Turkish
            citizens.
        7. We condemn the illegal closing by the Turkish Government in 1971
    of the Halki Patriarchal School of Theology, which closing is also in
    violation of Turkey's obligations under the U.N. Charter and other
    international agreements, and call on the U.S. government to make a
    formal request to Turkey to reopen the Halki Patriarchal School.
        8. We call for legislation to halt all arms sales and transfer to
    Turkey and to apply sanctions against Turkey until Turkey removes
    official restrictions on Christian churches and schools, and protects
    Christian clergy and property from acts of violence.
        9. We call upon Congress to enforce the provisions of all U.S.
    legislation regarding worldwide religious persecution, including that
    of Christians in Turkey.

                Arms Sales and Transfers to Turkey

        1. Despite the end of the Cold War, the Southeast European and the
    Eastern Mediterranean region remains excessively and dangerously armed.
    This is highly disadvantageous to regional economic development and the
    rational allocation of resources.
        2. We call upon the United States to halt the sale and transfers of
    arms to Turkey. Turkey's excessive military inventory, already far
    beyond its legitimate defense needs, already threatens the regional
    balance. A cessation of new supplies will reduce tensions and remove
    the cause of the regional arms race.
        3. In as much as Turkey represents the major obstacle to a peaceful
    resolution of the Aegean and Cyprus issues and is the primary cause of
    tensions in the region, we oppose any sale of advanced U.S. weapons to
    the military controlled government of Turkey as contrary to the best
    interests of the United States and regional stability.
        4. We condemn the ongoing negotiations to sell advanced weaponry,
    including attack helicopters, to Turkey.
        5. We believe the continued sale of advanced U.S. weapons to the
    military controlled government of Turkey jeopardizes the balance of
    military power between Greece and Turkey and threatens regional
    stability.
        6. We oppose the sale of any U.S. arms to the Turkish government as
    such sales violate U.S. laws because of Turkey's massive human rights
    violations in Turkey and Cyprus and the continuing illegal occupation
    of 37 percent of Cyprus, now in its 26th year.
        7. We congratulate the congressional and grassroots efforts against
    arms sales to Turkey. However, Turkey is undertaking a major
    modernization of its armed forces. Congress and the grass roots
    community must remain alert to any Turkish attempts to purchase
    advanced weapons systems beyond the amounts stipulated by U.S. laws.
        8. We support the introduction of S.1067 ``The Code of Conduct on
    Arms Transfers Act'' and HR 1757 ``The European Security Act'' in the
    106th Congress. This legislation would condition arms exports on
    minimum standards of conduct, basic respect for human rights, non-
    aggression, democratic form of governance, and participation in the
    U.N. Register of Conventional Arms.
        9. We call upon the Administration to ensure and Congress to
    monitor that no military technology or U.S. arms reach Turkey in
    violation of end user restrictions as the result of its military
    relationship with Israel. We call upon the Administration and Congress
    to ensure that the Turkish-Israel relationship is not misused for
    aggressive action against third parties.

                Turkey

        1. We believe that a critical review of U.S.-Turkey relations is
    long overdue. This need arises from Turkey's undemocratic constitution
    under which the military controls foreign and national security policy
    as well as strongly influencing domestic policy. When combined with
    Turkey's excessive military strength, this strong military influence
    threatens regional stability. Turkey's continuing violations of
    international law and unreliability as an ally require a critical
    review of U.S.-Turkey relations.
        2. The facts about Turkey's violations of international law and
    internal human rights abuses are set out in numerous reports including
    the November 1999 report ``Arming Repression: U.S. Arms Sales to Turkey
    During the Clinton Administration'' produced jointly by the World
    Policy Institute and the Federation of American Scientists and the
    State Department's 1999 Country Report on Turkey which stated
    ``extrajudicial killings, including deaths in detention from excessive
    use of force, `mystery killings,' and disappearances continued. Torture
    remained widespread.''
        3. We call on the U.S. government to conduct:
      --a reassessment of the thesis that Turkey's strategic value to the
            U.S. is such that the U.S. must forgo its fundamental
            principles and values and acquiesce in all aspects of Turkish
            policies; and
      --a reassessment of the U.S. policy of appeasing Turkey in current
            issues of dispute between Turkey and Greece and between Turkey
            and Cyprus.
        4. We offer the following recent actions by the Turkish government
    as reasons for such a review:
      --Throughout 1999 Turkish officials raised unacceptable new demands
            with regard to Cyprus;
      --In January 1999 Turkish Prime Minister Bulent Ecevit questioned the
            U.S. right to use Turkish facilities for operations against
            Iraq;
      --In January 1999 the Turkish military barred the majority Virtue
            party from participating in the negotiations to form a new
            Turkish government;
      --Since the end of the Gulf War and continuing into 1999 Turkey has
            condoned the smuggling of oil from Iraq into Turkey, thus
            undermining international sanctions against Iraq and providing
            Iraq with a valuable source of hard currency to threaten U.S.
            interests.
      --Throughout 1999 senior Turkish officials made repeated territorial
            demands against sovereign Greek territory in the Aegean;
      --Throughout 1999 and 1998 senior Turkish officials have raised what
            Ambassador Holbrooke has described as ``unacceptable demands''
            in relation to Cyprus;
      --In January 1998 the Turkish Constitutional Court banned the Refah
            party, barred its leaders from political participation, and
            confiscated its property;
      --In June 1997 the Turkish military carried out a de facto coup to
            remove the democratically elected coalition government of the
            Refah and True Path parties;
      --In October 1996 shoot-to-kill policies by Turkish troops in Cyprus
            claimed another Greek Cypriot civilian life (see section on
            Cyprus);
      --In September 1996 Turkey refused to assist the U.S. in its
            operations against Iraq;
      --In August 1996 Foreign Minister Tansu Ciller claimed that the green
            line between the Government controlled area of Cyprus and the
            illegally occupied northern zone represented one of Turkey's
            international boundaries;
      --From August to December 1996 Turkey concluded significant
            commercial contracts with Iran and Libya in violation of U.S.
            laws and policy; and concluded a trade agreement with Cuba in
            opposition to U.S. policy; and
      --In January 1996 Turkey sought to provoke hostilities with Greece
            over Aegean territories that are overwhelmingly accepted by the
            international community as Greek (see section on Aegean).
        5. Turkey's numerous and continuing violations of United States
    laws, the United Nations Charter, the North Atlantic Treaty and
    international law by its continuing aggression in and occupation of
    Cyprus, its illegal shipment of arms to the Azeris and to the Balkans,
    its threats against Greece in the Aegean and Western Thrace, its
    massive and horrendous human rights violations against its Kurdish
    citizens and its policy of torture nationwide, must not be tolerated or
    condoned any longer. The appeasement of Turkey's violations of the rule
    of law and the application of a double standard on the rule of law and
    human rights to Turkey must end. Turkey is the source of tension in its
    region, not the solution.
        6. We call for legislation to halt all arms sales or transfers to
    Turkey; to implement sanctions against Turkey; and to require U.S.
    representatives in multilateral agencies to vote against any aid to
    Turkey until:
      --Turkey allows free and unfettered monitoring of the human rights
            environment within its territory by domestic and international
            human rights monitoring organizations, including but not
            limited to the Turkish Human Rights Association, the
            Organization on Security and Cooperation in Europe, Amnesty
            International, and Human Rights Watch;
      --Turkey recognizes the civil, cultural, and human rights of its
            Kurdish citizens, ceases its military operations against
            Kurdish civilians, and takes demonstrable steps towards a
            peaceful resolution of the Kurdish issue;
      --Turkey takes demonstrable steps toward the total withdrawal of its
            military forces, and illegal Turkish settlers from Cyprus and
            demonstrates its support for a fair settlement recognizing the
            sovereignty, independence and territorial integrity of Cyprus
            with a constitutional democracy based on majority rule, the
            rule of law and the protection of minority/human rights;
      --Turkey lifts its blockade of U.S. and international assistance to
            Armenia;
      --Turkey lifts official restrictions on Christian churches and
            schools, and offers sufficient protection against acts of
            violence and harassment against the clergy and vandalism
            against church and school property; and
      --Turkey is in compliance with the United Nations Charter and
            relevant U.N. resolutions, the North Atlantic Treaty, the
            Helsinki Final Act of the Conference on Security and
            Cooperation in Europe, the U.N. Universal Declaration of Human
            Rights, the European Convention on Human Rights and is not
            engaged in a consistent pattern of gross violations of
            internationally recognized human rights (within the meaning of
            sections 116 and 502B of the United States Foreign Assistance
            Act of 1961, as amended).
        7. We cite the compensation paid by the government of Germany to
    holocaust victims and to the state of Israel and by the government of
    Japan to victims of its actions in Asia before and during World War II.
    We call for compensation from the government of Turkey:
      --to the victims of Turkey's illegal invasion of Cyprus in 1974;
      --to the owners of property in Cyprus illegally taken, occupied and
            used by the Turkish authorities since 1974;
      --to the victims of the September 1955 Turkish pogrom against its
            Greek citizens in Istanbul;
      --to the Greek and Jewish citizens of Turkey who were damaged by the
            Varlik capital tax imposed by Turkey in the 1940s;
      --to the victims of the Turkish genocide against the Pontian Greeks;
            and
      --to the victims of the slaughter of innocent civilians in Smyrna by
            the Turkish army in 1922.

    Other regional issues

                Albania

        1. We continue to be concerned about the threat to the Greek
    Orthodox community in Southern Albania (also known as Northern Eperus)
    by denying and restricting the full legal, educational (including Greek
    language instruction), religious, voting and employment rights
    guaranteed to the minority by international agreements signed by
    Albania. We continue to be concerned about the personal security of the
    Greek minority population which is regularly victimized through
    kidnapping and ransom demands.
        2. We call on the United States government, in its own interest and
    the interest of maintaining peace and stability in the southern
    Balkans, to undertake an intense diplomatic dialogue with the
    government of Albania to ensure that the issues of the rule of law and
    minority and human rights cited above are resolved.

                Armenia

        1. We support the Humanitarian Aid Corridor Act which was passed by
    the Congress and signed into permanent law as part of the 1997 Foreign
    Aid Bill. The act calls for a halt in U.S. economic and military
    assistance to any country blocking U.S. assistance to another country,
    which consequently includes the Turkish blockade of U.S. assistance to
    Armenia. The Turkish embargo on aid to Armenia includes U.S.
    humanitarian and pharmaceutical aid.
        2. We believe it is in the U.S. interest to insist that the Turkish
    government lift its blockade of Armenia.
        3. We strongly disagree with the Administration's waiver, on
    national security grounds, of the Humanitarian Aid Corridor Act as it
    applies to Turkey. The application of this waiver is contrary to the
    national security interests of the United States. We urge Congress to
    pass legislation removing economic aid from the President's waiver
    authority.
        4. We believe it is in the interests of the United States to
    commemorate on a regular basis the Armenian Genocide of 1915-23 and
    strongly to urge Turkey to recognize this tragic historical event in
    its past.
        5. We support legislation similar to H.Con.Res. 47 in the 104th
    Congress and other efforts which commemorate the Armenian Genocide, and
    call for the recognition of the Genocide by the government of Turkey.
    This includes initiatives which place sanctions on U.S. aid to Turkey
    until the Turkish government takes all appropriate steps to acknowledge
    and commemorate the Genocide committed against the Armenian population
    of the Ottoman Empire from 1915 to 1923.

                Former Yugoslav Republic of Macedonia (FYROM)

        1. We call on the United States, in its own self-interest, to
    support a name for this Former Yugoslav Republic which does not include
    the word ``Macedonia.''
        2. Classical Macedonia's Hellenic Heritage is well documented by
    archaeological evidence and the writings of internationally known
    historians. Since antiquity, the name Macedonia has referred to a
    geographic region and not to a specific nationality.

                Kurds

        1. The capture of the PKK leader Abdullah Ocalan on February 16,
    1999 has focused world attention on the aspirations of the Kurdish
    people for self-determination. It has also highlighted the brutally
    repressive measures used by the Turkish military, including genocide,
    ethnic cleansing and other crimes against humanity, to suppress these
    aspirations. It is a matter of intense shame for American values and
    principles that U.S. supplied weapons are used for these genocidal
    purposes.
        2. The Kurdish people have an equal right to self-determination as
    the Kosovo Albanians and other peoples to whom the U.S. and NATO has
    provided support. We call upon the U.S., NATO, and other international
    organizations to show an equal concern for Kurdish rights and to take
    equivalent action as in the Balkans to ensure that Turkey respects
    these rights.
        3. The mass flights of Kurds from Turkey in December 1997/January
    1998 demonstrate that Turkey's ethnic cleansing and genocidal war
    against its Kurdish minority is making their life intolerable in
    Turkey. We believe the United States in its own best interests should
    support political and cultural freedom and autonomy for the Kurds in
    Turkey and Iraq
        4. We believe it is in the best interests of the United States and
    to stability in the region to support the political rights of the
    Kurdish minorities in Turkey, Iraq, and Iran. If the popular wills of
    the Kurds call for a federal solution to their problem, the U.S.
    government should honor that decision. Such a decision will bring
    stability to a volatile region, and help establish the foundations of
    civil society and economic progress. We note that Turkey refuses to
    give minority rights and human rights to its 20 percent Kurdish
    minority, while claiming equality for the 18 percent Turkish Cypriot
    minority.
        5. We call for the immediate halt by the government of Turkey of
    its military and paramilitary operations (with the illegal use of U.S.
    supplied and produced weapons and of retired military personnel as
    technical advisers) against the Kurdish minority and its massive
    violations of human rights and ethnic cleansing of its Kurdish minority
    which is genocidal in nature.
        6. We cite the recent reports by the U.S. State Department, World
    Policy Institute and the Federation of American Scientists, Human
    Rights Watch, and Amnesty International which highlight Turkey's use of
    U.S. weapons in committing human rights violations against its Kurdish
    citizens. We call on the United States government to stop supplying
    arms to the government of Turkey based on the stated reports.
        7. We call on the United States in its own self-interest to halt
    all assistance to Turkey, of whatever nature, until Turkey ceases its
    military and paramilitary operations and its massive human rights
    violations against its Kurdish minority.
        8. We are saddened that the U.S. military and economic assistance
    to Turkey over the past fifteen years of Turkey's ethnic cleansing
    against the Kurds makes the U.S. an accessory to Turkey's crimes
    against its Kurdish minority.

                NATO

        1. We have long called for a NATO force on Cyprus under U.N.
    auspices and acting in full respect of Cyprus' sovereignty as a
    component of a settlement of the Cyprus problem. However, under
    pressure from the U.S. government, NATO has applied a double standard
    to Turkey on the rule of law. NATO's toleration of Turkey's aggression
    against Cyprus in violation of its own Treaty and the U.N. Charter is a
    stain on NATO's record and honor. NATO should call for the immediate
    removal of Turkey's illegal occupation forces and settlers from Cyprus
    and the demilitarization of Cyprus coupled with a military force to
    augment the U.N. peacekeeping force. If Turkey refuses to cooperate,
    NATO should consider appropriate action to bring Turkey into
    compliance.
        2. Turkey's invasion and occupation of Cyprus are a continuing
    violation of the NATO Treaty. On January 21, 1998, Turkey's banning of
    the Welfare Party was called ``strong-arming'' by the Washington Post
    which described Turkey's membership in NATO as an ``embarrassing
    anomaly.'' The implication is that if Turkey were seeking to join NATO
    today, it would not be eligible. We call on the U.S. to encourage NATO
    members to apply pressure to Turkey to abide by the clear and
    unambiguous requirements of the NATO Treaty to desist from aggression
    against other states and to reform the constitution of Turkey to
    reflect normal Western standards of civilian democracy.
        3. We call upon NATO to take appropriate action to bring Turkey
    into compliance with the NATO Treaty preamble and article 1, the U.N.
    Charter article 2 (4) and international law.

     Exhibit 2.--Remarks of Eugene T. Rossides, at the Legislative Policy
    Conference, Presented by the American Hellenic Institute in Cooperation
    with the AHI-Boston Chapter, and co-sponsored by the Order of AHEPA and
                      the Foundation for Hellenic Studies

    THE EUROPEAN UNION SUMMIT: IMPLICATIONS FOR U.S. POLICY TOWARDS GREECE,
     CYPRUS AND TURKEY AND THE CHALLENGES FOR THE GREEK AMERICAN COMMUNITY

        It is a great pleasure to be in the City of Boston where the
    American Revolution started, which resulted in the Declaration of
    Independence passed by the Continental Congress on July 4, 1776 and
    Later the adoption of our Constitution and Bill of Rights. These are
    the most important documents in modern political history. It is the
    values and principles set forth in these documents that we are fighting
    for today regarding the Cyprus and Aegean issues.
    The European Union Helsinki Summit
        The American Hellenic Institute endorses the European Union
    Council's decision at its December 10-11, 1999 meeting in Helsinki to
    accept Turkey as a candidate for EU accession status subject to certain
    conditions being met by 2004. AHI applauds the EU's imposition of these
    conditions and urges that they be strictly applied.
        The conditions are that:
        1. Turkey's unilateral claims in the Aegean are to be referred to
    the International Court of Justice at The Hague ``within a reasonable
    time;''
        2. EU accession talks with Cyprus will continue and that Cyprus'
    accession will not be contingent on a settlement of the Cyprus problem;
    and
        3. Turkey's candidacy of the EU will not enjoy any special favors
    or derogations, but Turkey will be expected to satisfy all of the 1993
    Copenhagen accession criteria covering issues such as human rights and
    democratic governance. Turkey will also have to adhere to the entire
    corpus of EU law and regulations (the acquis communitaire).
        The AHI welcomes these conditions and congratulates the EU for its
    insight and insistence--greatly in contrast to the U.S.--that Turkey
    must undertake substantial changes in its internal and external
    policies before it can commence accession negotiations.
        The Helsinki EU Council actions are historic for a number of
    reasons:
        First, the EU resisted U.S. pressure and held firm to the
    conditions required for Turkey to be considered for accession status.
    The conditions are applicable to all states seeking accession status.
    In the December 1998 EU Summit, the U.S., led by Ambassador Richard
    Holbrooke openly pressured the EU to accept Turkey for accession status
    without conditions. The EU held firm then and in December 1999. It is
    ironic and a sad commentary on U.S. diplomacy when the EU is upholding
    basic American values against pressure from the U.S. to disregard them
    for Turkey.
        Second, as a result, Turkey had to accept the EU conditions if it
    wanted to get into the EU. The conditions are known as the Copenhagen
    Criteria, which were set forth in the 1993 Copenhagen European Council
    meeting. As stated in Copenhagen, membership in the EU requires that
    the candidate country has achieved:
      --stability of institutions guaranteeing democracy, the rule of law,
            human rights and respect for and protection of minorities;
      --the existence of a functioning market economy as well as the
            capacity to cope with competitive pressure and market forces
            within the Union;
      --the ability to take on the obligations of membership including
            adherence to the aims of political, economic and monetary
            union; and
      --has created the conditions for its integration through the
            adjustment of its administrative structures, so that European
            Community legislation transposed into national legislation is
            implemented effectively through appropriate administrative and
            judicial structures.
        The Luxembourg European Council (December 1997) also underlined
    that ``as a prerequisite for enlargement of the Union, the operation of
    the institutions must be strengthened and improved in keeping with the
    institutional provisions of the Amsterdam Treaty.''
        Third, the conditions for candidate status for Turkey adopted at
    Helsinki require Turkey, in effect, to resolve the Aegean and Cyprus
    issues.
        Fourth, as a result of this important decision the resolution of
    the Aegean and Cyprus problems have become an integral part of the EU's
    institutional agenda.
        Fifth, Turkey voluntarily accepted the conditions, which are based
    on the Copenhagen Criteria. Turkey no longer can complain that it is
    being mistreated and discriminated against. And it has no alibi for
    non-cooperation because of rejection from the EU.
        Sixth, Greece can no longer be charged with preventing Turkey
    becoming a candidate for accession status.
        Seventh, It also gives support to the efforts of AHI to have
    Congress pass legislation concerning the Aegean and Cyprus, which place
    conditions on Turkey similar to the EU conditions.
        While the conditions are clear in intent they could be more
    specific in wording, particularly regarding Cyprus. Regarding the
    Aegean, the Helsinki decision mentions referring it to the
    International Court of Justice at The Hague ``within a reasonable
    time.'' Regarding Cyprus, the Helsinki decision states positively that
    Cyprus' accession will not be subject to a political settlement of the
    Cyprus issue. By implication and reference to the Copenhagen Criteria,
    Turkey will have to resolve the Cyprus issue if it wants to achieve
    accession status. The language regarding Cyprus is not as direct as it
    could be.
        The Helsinki decision gives Turkey until 2004 to make changes
    sufficient to accord it accession status, which means accession
    negotiations could begin.
        The EU outcome is positive but implementation is the crux. Turkey's
    progress regarding the conditions it committed to voluntarily must be
    analyzed and carefully monitored. And this is where the Greek American
    community has an important role to play.
    The Challenge for the Greek American Community
        The challenge for the Greek American community is:
        (1) to monitor and analyze Turkey's actions and conduct regarding
    the Helsinki conditions, and
        (2) to keep the Congress, the Executive Branch, the media and the
    academic community informed as to the status of progress or lack of
    progress by Turkey.
        Our motto should be trust but verify as President Ronald Reagan
    stated in his dealings with the Soviet Union. In my judgement Turkey
    will do everything possible to gain admission into the EU without
    meeting the EU's conditions.
        AHI stresses that those who have supported Turkey's candidacy now
    have a heavy responsibility to ensure that Turkey honors these
    conditions. This responsibility falls especially on the U.S. All too
    often the U.S. has accepted Turkey's promises, for example in 1978 to
    negotiate seriously about Cyprus in exchange for the lifting of the
    arms embargo, only to see Turkey go back on its word. Also, there was a
    virtual pledge that if the embargo was lifted, that Varosha would be
    returned to the Government of Cyprus under U.N. supervision for the
    immediate resettlement of 35,000 refugees.
        And of course, in 1974 Turkey said it invaded Cyprus to restore the
    status quo ante in accordance with the Treaty of Guarantee. And today
    Ecevit, who initiated the 1974 invasion, says Turkey solved the Cyprus
    problem in 1974.
        Another example of Turkey's readiness to break solemn undertakings
    is its failure to respect its promises given to Secretary of State
    Madeleine Albright in Madrid on July 8, 1997 to pursue a policy on non-
    aggression and non-belligerence with respect to its relations with
    Greece.
        More currently, Mr. Kevin McKiernan, in an article in the Los
    Angeles Times on March 3, 2000, page A17, wrote the following:

        ``Last month, Turkey blocked an EU delegation from visiting Leyla
    Zana, the imprisoned Kurdish member of parliament who has received the
    EU's peace prize. Then a Kurdish educational foundation was indicted on
    criminal charges of `inciting separatist propaganda'' because it
    advertised a scholarship in an Istanbul newspaper for students who
    could `read and write in Kurdish.'
        ``Two weeks ago, the government ordered a CNN television affiliate
    off the air for 24 hours because a reporter asked a guest wheter
    history might one day regard Ocalan as a Turkish version of South
    African revolutionary Nelson Mandela.
        ``A few days later, Turkey arrested the Kurdish mayors of three
    cities on vague charges of separatism. Subsequently, authorities
    arrested hundreds of supporters who were peacefully protesting the
    detention of the mayors.''

        With regard to Turkey's accession to the EU, the U.S. adopted an
    irresponsible attitude toward conditionality, placing pressure on the
    EU to give special favors to Turkey. The Helsinki decision embracing an
    impartial approach as to all applicant countries has rightly rejected
    this approach. In the future there must be no repetition by the U.S. of
    this pattern of appeasement.
        AHI proposes to monitor Turkey's compliance or lack thereof with
    the EU conditions and will publish periodic reports on this subject
    which will be sent to the Congress, the Executive Branch, the media,
    the academic community including think tanks, our members and the Greek
    American community.
        We will work with the grass roots and in particular with AHEPA to
    have them keep their elected representatives and senators informed. AHI
    will do it from Washington and it is most important that the grass
    roots community does it throughout the nation.
        Helsinki has not changed the pro-Turkish attitudes by career
    officials in the State and Defense Departments and on the NSC. The U.S.
    is the main country that can apply adequate pressure on Turkey to
    comply with the Helsinki conditions. It is up to the Greek American
    community in the interests of the U.S., to see to it that the U.S. does
    apply such pressure on Turkey.
        The U.S. must signal firmly to Turkey that the U.S. stands behind
    the EU conditions, that it will actively support their implementation
    and that any non-fulfillment by Turkey would have adverse consequences
    for its relationship with the U.S.
        The U.S. should urge Turkey to dispel doubts about its good faith
    by taking immediate steps with regard to Cyprus and the Aegean.
    Although of long-standing duration, neither of these matters is in
    essence complicated. In each case Turkish aggression and intransigence
    is the root cause.
        Regarding Cyprus, proximity talks started on December 3, 1999 in
    New York and new talks will take place in Geneva on Monday, January 31,
    2000. The EU decision removes any excuse for intransigence or
    obstructionism by the Turkish side. The U.S. should inform Turkey that
    it expects rapid progress, including a specific timetable for the early
    removal of its armed forces from Cyprus.
        Regarding the Aegean, the U.S. should press Turkey to take its
    claims to the International Court of Justice at The Hague for binding
    arbitration within 6 months.
        By taking these actions, the U.S. would signal to Turkey that it is
    abandoning its decades-long policy of appeasement and double standards
    toward Turkey and that it now has the political will to achieve early
    settlements of the Aegean and Cyprus matters. This would greatly
    benefit the U.S. interest in achieving region-wide peace, stability,
    democracy and prosperity.
        Thank you
                                     ______

                   Prepared Statement of New York University

        After the Allies' victory in World War II the United States faced
    an enormous challenge of rebuilding in Europe and Asia. Through the
    Marshall Plan and other creative public policies and programs a
    foundation was laid for the peace and prosperity that has developed in
    the second half the 20th-century. Now having defended its democratic
    system and won the Cold War the United States faces a new challenge of
    encouraging the development of democratic political systems and market
    economies around the world. The struggle for democracy and economic
    freedom will require new weapons, but success in this battle may depend
    as much on American ingenuity and technological superiority as did our
    previous victories.
        Today, the United States government has many programs that support
    democratic and market economy capacity building. Through its direct aid
    programs, its Fulbright and other scholar exchange programs, the Muskie
    and Ron Brown fellows programs, and through various foreign visitor
    programs, our government is making a strategic investment in developing
    leadership around the world. Indirectly, America's investment in higher
    education has paid off in international dividends: American
    universities are the destination of choice of more students who leave
    home to study than any other education system to the world. During
    their stay and time of study in U.S. these international students are
    exposed to American institutions, American values, American freedom,
    which they can take with them when they return to their homes.
        Preparing professionals to design, plan and manage the delivery of
    public services in such fields as health and other social services,
    housing, education, public safety, transportation, the environment is
    central to the mission of the Robert F. Wagner Graduate School of
    Public Service at New York University. And, we are seeing a significant
    increase in interest from other countries in American approaches to
    public service delivery and public policy. One of the most diverse
    graduate schools of public service in the country, Wagner's growing
    international student population comes from 43 countries, including
    Argentina, Azerbaijan, Belgium, China, Colombia, Denmark, France,
    Indonesia, Italy, Mexico, Russia, South Korea, Spain and Thailand. And
    Wagner's presence, in turn, through programs and exchanges, has reached
    countries like Colombia and Chile and former Communist countries like
    the Ukraine and Albania.
        Building on its strong presence throughout the world and its
    reputation as a premier center for the training of public service
    professionals, Wagner is ready to launch a new initiative--the
    International Center for Democratic Public Service. The aim is simple
    yet profound: to help strengthen democracy throughout the world. We
    have a proven track record in doing just that.

                  PROGRAMS AND ACTIVITIES OF THE WAGNER SCHOOL

        Reflecting the increasingly global connection among governments at
    all levels, the Wagner School's International Initiative has allowed
    students, scholars, policymakers, and officials--here and around the
    world--the opportunity to deepen their understanding of public
    administration, health policy management and urban planning. The Wagner
    School curriculum is continually evaluated in order to incorporate a
    global perspective, and thus better address the ever-changing
    professional needs of our students. We also have a series of
    international academic partnerships with the National Institutes of
    Public Administration/University programs in Public Administration to
    develop capability for ``in-country'' executive development and faculty
    and student exchange programs.
        In addition, we have formal degree granting programs with Ecole
    Nationale des Travaux Publics de L'etat (ENTPE), Lyon, France; Escola
    Superior d'Administracio i Direccio d'Empreses (ESADE), Barcelona,
    Spain; Instituto Tecnologico Autonomo de Mexico (ITAM), Mexico City,
    Mexico; Korea University, Seoul, Korea; and Universidad de Santiago de
    Chile, Santiago, Chile.
        We are using the Internet and telecommunications technologies
    extensively in our partnerships with universities around the world.
    Building on our experience using televideoconferencing in courses with
    Europe, Latin America, and Asia, we are now introducing this technology
    in our work with Mozambique. By substantially avoiding the time and
    money costs of faculty and student travel in educational partnerships,
    we believe modern distance learning technologies will enable the Wagner
    School to dramatically widen and deepen the reach of its professional
    educational programs committed to building capacity for democratic
    public service in the nations of the world and for the international
    organizations serving the people of those nations.

       MASTERS OF SCIENCE IN MANAGEMENT OF INTERNATIONAL PUBLIC SERVICE
                                 ORGANIZATIONS

        A big part of the load of responding to humanitarian crises around
    the world and of civil society capacity building in support of health,
    education, social services, human rights protection, and electoral
    reform is carried by a wide range of international public service
    organizations. International NGOs, many based in the United States, had
    become major players on the world scene. Over the past decade these
    organizations have grown in scope and scale at a remarkable pace. In
    the same period of time the service delivery parts of the United
    Nations system, such as UNICEF and the Department of Peacekeeping
    Operations, have been given new and more complex assignments. At the
    same time funders are demanding greater evidence of successful
    performance and imposing more rigorous standards of accountability.
    Drawn from all regions of the world, managers of these organizations
    need to be equipped with the intellectual and professional tools that
    allow them to respond flexibly, sensitively and creatively to rapidly
    evolving demands to manage the delivery of services, sometimes in
    emergency or crisis situations. For this, they will need intellectual
    and professional tools of the highest caliber.
        Building on its well-established program of management education
    for professionals in the public and non-profit sector, the Wagner
    School offers a Masters of Science in Management of International
    Public Service Organizations--the only one of its kind in the country--
    designed to address the need of the international community for well-
    trained managers. This year's class includes students from 17 countries
    in Asia, Africa, Latin America, the Middle East, Central Europe and the
    former Soviet Union, as well as staff from United Nations agencies such
    as UNICEF, UNHCR, UNDP, and UNIDO.
        The MS program incorporates the best of the Wagner management
    curriculum, including strategic management, information management and
    financial management, with international perspectives and examples that
    will prepare students to become effective and efficient managers of
    global organizations that must understand and respond to the needs of
    local populations. Our clinical approach and New York location allow
    participants to immediately apply their knowledge, either through part-
    time work with their own organization or through internships with the
    U.N. and New York based international NGOs.

                AMERICAN INTERNATIONAL PUBLIC AFFAIRS INSTITUTE

        To prepare international university students interested in public
    administration in the United States, Wagner's American International
    Public Affairs Institute (AIPAI) offers a one-month intensive program
    to introduce these students to American culture and institutions at the
    local, state and federal level so that they can gain a greater
    understanding of the role of public policy and public service
    management in the U.S. and, in some instances, prepare them for
    graduate studies in public service in the U.S. service. Serving 25-30
    students per summer, AIPAI is designed to prepare international
    students coming to the United States to study public administration,
    public policy analysis, management, urban planning and international
    affairs at the graduate level.
        The program involves total immersion in English through lectures by
    distinguished faculty and public officials as well as discussion
    sessions, presentations, debates, negotiation exercises, extensive
    writing experiences, and social activities. Students benefit from the
    wide array of political and cultural organizations available in New
    York City and get a first hand view of American governmental
    institutions through a study week in Washington D.C.

                               CAPACITY BUILDING

        The Wagner School faculty is contributing to a range of public
    service capacity building projects worldwide. For example, Wagner
    faculty have worked with the University of Tirana, Albania, to
    establish a graduate program in health administration, and with the
    Albanian Ministry of Health to develop a policy analysis unit. We have
    helped identify, encourage, and support successful efforts of public
    management innovation in Colombia.
        Our leadership development program in Ukraine will bring 50
    government leaders to the United States and to the European Union over
    the next year, and our faculty development partnership with Edouard
    Mondlane University in Maputo will introduce a new curriculum in public
    policy analysis of the next two years. Our Muskie and Freedom Support
    Act Fellowship programs provide scholarships for graduate students from
    Central and Eastern Europe who aim to pursue careers in the public,
    private, and nonprofit sectors. These fellowship programs, administered
    by the Soros Foundation, support highly qualified men and women
    pursuing a Master of Science degree in management in all three of
    Wagner's principal programs. For the 1999-2000 academic year, the
    School is hosting five fellows from Estonia, Georgia, Kazakhstan and
    Latvia.
                    THE INSTITUTE FOR PUBLIC ADMINISTRATION

        Wagner is affiliated with the Institute for Public Administration,
    an organization that for over 90 years has provided technical expertise
    to governments worldwide. IPA's recent projects include: An
    Infrastructure Study of four metropolitan cities: Tokyo, London, Paris
    and Los Angeles for the New York/New Jersey Port Authority, and Urban
    Land Use and Management in China, in which IPA helped formulate
    recommendations concerning China's transformation of a communal system
    of urban land ownership to a market system.

                            NYU--A GLOBAL UNIVERSITY

        Wagner's strong links internationally fit well within the overall
    direction of New York University, which has fully established itself as
    a global university. With academic programs in Athens, Dublin,
    Florence, London, Madrid, Nanjing, Paris and Prague, NYU is also the
    founding institutional member of the League of World Universities, an
    organization that brings together the leaders of 47 great urban
    universities from all five continents to address issues of higher
    learning worldwide. More international students enroll in NYU than any
    other University in the country. NYU Law School has a Global Law
    Program, NYU/Mt. Sinai Medical School has a Global Health Center, and
    the international business department of the Stern School of Business
    is world-renowned.
        Finally, location is destiny. NYU is located in a heart of what is
    arguably the capital city of the world. New York is the international
    center for media, commerce, banking, NGOs and home to the United
    Nations. We use these real world resources to prepare future leaders
    and managers for real world situations.

               INTERNATIONAL CENTER FOR DEMOCRATIC PUBLIC SERVICE

        Building on the Wagner School's existing programs and seeking to
    bring together its expertise and resources in one enterprise, we are
    proposing to create an International Center for Democratic Public
    Service. Through the establishment of this Center, Wagner will
    strengthen its own educational and research programs and seek to play a
    catalyzing role by bringing together major actors and stakeholders
    including academics, business leaders, public servants, NGO leaders and
    students to focus on the major health and social issues facing the
    global scene today. The International Center for Democratic Public
    Service will offer a constellation of activities and programs, designed
    to foster debate, dialogue, creative exploration of solutions and
    sharing of research and field experience in a pro-active setting
    designed for learning and doing. Under the auspices of such a Center,
    Wagner intends to undertake the following types of activities and
    programs described below:
      --Capitalize on distance learning and communication technology
            capabilities, to form academic partnerships with selected
            academic and research institutions around the world. This
            provides another means to facilitate dialogue and exchange and
            to engage in capacity building across national borders. This
            collaboration with other academic institutions will strengthen
            and build upon the current knowledge and the various global
            perspectives of each institution. Such partnerships will allow
            Wagner to develop new curricula, to explore and test distance
            learning and to increase the capacity of partners to prepare
            students for public management internationally and within their
            own countries.
      --Expand the MS degree in the Management of International Public
            Service Organizations in response to growing demands for
            managerial efficiencies and accountability for the U.N. system
            and the growing NGO sector that is taking on increasing
            responsibility in the provision of services to populations
            worldwide. Already a large number of staff from U.N. agencies
            and NGOs have enrolled in the MS program. Under the Center, we
            will be able to better serve greater numbers of these
            individuals, teaching them how to meet the growing demands of
            the United States and the international community for more
            effective and transparent management.
      --Offer a wide range of intensive executive development courses
            varying in duration to meet the specific needs of managers of
            programs, heads of departments and divisions, such as health
            professional managers, senior international staff from the U.N.
            system and other executives in the public service domain. The
            advanced management program provides management skills in any
            or all of the following: managing people, resources, finance,
            assets, information, programs and strategic management. The
            program can lead to an MS degree or advanced professional
            certificate in finance management or policy analysis in health,
            the nonprofit or governmental sectors and understanding.
            Alternatively, managers can select from over 100 courses to
            meet their specific needs.
      --Sponsor for thematic issues to bring together leading thinkers and
            practitioners in the health and social sectors with the goal of
            strengthening strategy and practice on social sector
            development in the face of the pressures of the market and
            economic mandates. These will include major stakeholders in the
            global arena and, through televideo hookups with locations
            across the globe, students, the next generation of leaders, as
            well as academics from partner universities. It will provide
            these practitioners and researchers with reliable information
            on social trends, give access to the most up-to-date research
            and literature on social development and relevant public
            service activities, and enable a dialogue with social
            innovators and entrepreneurs from around the world. It will aim
            to create the networks and alliances to foster sustainable
            social development.
      --Bring distinguished visiting scholars and practitioners to New York
            University to address the most pressing and contemporary issues
            of the day through master classes, short programs, seminars and
            semester-long courses.
      --As more countries grapple with emerging public service issues, we
            will use our partnership with the Institute of Public
            Administration (IPA) to provide technical assistance and
            consultation on these issues on a greater scale.
        The Wagner School is uniquely positioned to develop the
    International Center for Democratic Public Service.
      --The Wagner School has developed a strong international focus in its
            curriculum. Our International Initiative allows students the
            opportunity to deepen their understanding of public service
            through international comparisons and experience.
      --The Wagner School has a proven record of expertise with capacity
            building in emerging democracies. There is becoming a growing
            need for these services.
      --The location of the Wagner School in New York provides additional
            comparative advantages including its proximity to the
            headquarters of the United Nations as well as numerous
            international NGOs and headquarters of some of the world's
            major private sector firms. With Washington DC only a few hours
            away, the offices of the major multi-lateral institutions,
            embassies and the offices of other government personnel are
            within easy reach as well. Access to the intellectual resources
            of these organizations--as well as top-level government
            officials--provides opportunities for collaboration for
            learning and research purposes as well as for internships,
            debates and other joint activities. The presence of a large
            internationally-oriented population of potential students and
            course participants and finally, the marketing power of its
            campus in the heart of one of the most diverse and captivating
            cities in the world, attracts student from abroad as well as
            from the U.S..
      --The Wagner School is a part of New York University, which is
            quickly being recognized as a ``Global University'' and offers
            the opportunity for close partnership with some of the most
            widely respected law, medical and business programs in the
            world.
        To launch and sustain the Center, the University is seeking funding
    from a wide variety of sources: corporations, foundations, and private
    donors. We are requesting funds in the amount of $5 million from the
    federal government to create ``smart'' classrooms capable of the most
    advanced use of telecommunications and data delivery, which will enable
    us to support exchanges of international scholars and institutional
    partnerships needed to develop effective public service practice and
    scholarship worldwide. Furthermore, we would like to use a significant
    portion of funding to expand our executive development, degree granting
    and fellowship programs to provide leaders from countries in need with
    the skills they need to effectively lead their agencies and
    organizations.
        The demands on public servants today do not respect national
    boundaries. They include the spread of disease, the movement of people,
    the organization of crime, new threats to the environment, and economic
    crises. In the same way, no nation has a monopoly on solutions, and the
    availability of ``best practices'' has dramatically increased as
    technology has shrunk the world and the global economy has homogenized
    cultures. The knowledge, understanding and skills on which public
    service depends are increasingly linked in a world-wide web of
    communications and relationships. The International Center for
    Democratic Public Service can serve as a catalyst for these
    communications and relationships, to contribute to the spread of
    effective and responsive democracy throughout the world.
        Thank you for your consideration of this important initiative.
                                     ______

                 Prepared Statement of Florida State University

        Mr. Chairman, I would like to thank you and the Members of the
    Subcommittee for this opportunity to present testimony before this
    Committee. I would like to take a moment to briefly acquaint you with
    Florida State University.
        Florida State University is a comprehensive Research I university
    with a liberal arts base. The University's primary role is to serve as
    a center for advanced graduate and professional studies while
    emphasizing research and providing excellence in undergraduate
    programs. Faculty at FSU have been selected for their commitment to
    excellence in teaching, for their ability to perform research and
    creative activities, and for their commitment to public service. Among
    the faculty are numerous recipients of national and international
    honors, including four Nobel laureates and eight members of the
    National Academy of Sciences. Our scientists and engineers do excellent
    research, and often they work closely with industry to commercialize
    their results. Florida State ranks third this year among all U.S.
    universities in revenues generated from its patents and licenses,
    trailing only Columbia University and the entire University of
    California system. Having been designated as a Carnegie Research I
    University several years ago, Florida State University currently
    exceeds $100 million per year in research expenditures. With no
    agricultural or medical school, few institutions can match our success.
        Florida State attracts students from every county in Florida, every
    state in the nation, and more than 100 foreign countries. The
    University is committed to high admission standards that ensure quality
    in its student body, which currently includes some 192 National Merit
    and National Achievement scholars, as well as students with superior
    creative talent. We consistently rank in the top 25 among U. S.
    colleges and universities in attracting National Merit Scholars.
        At Florida State University, we are very proud of our successes as
    well as our emerging reputation as one of the nation's top public
    universities.
        Mr. Chairman, let me tell you about a project we are pursuing this
    year involving legal education in developing countries.
        Florida State University proposes to design, develop, and deliver a
    high quality program of instruction in basic legal principles for
    students and professionals in Central and Eastern Europe, the Newly
    Independent States of the Former Soviet Union and other emerging
    democracies with the cooperation of the College of Law of England and
    Wales and the Open University of Great Britain. The proposed program
    will:
      --Build upon an existing collaboration between FSU and the European
            leaders in distance education with a long history of excellence
            in instructional design and educational methodology.
      --Enlist the collaboration of the schools to create innovative
            applications of educational technology.
      --Adapt existing course materials for use in the target countries.
      --Utilize networks that have been established by other organizations
            committed to reform of legal institutions in the former
            Communist countries.
      --Deliver programs through existing educational institutions in the
            countries where the courses will be completed, or through
            established professional and academic networks and non-
            governmental organizations.
        The proposing institutions have established partnerships and have
    used important developments in instructional technology and materials-
    based, supported distance learning which can have an immediate and
    broad impact on legal education in developing countries. Given this
    potential, funding will be sought from U.S. AID for $2 million in
    fiscal year 2001 that will advance our common goal of assisting
    emerging democracies in building open societies through improved legal
    education.
        Mr. Chairman, this is just one example of the many outstanding
    activities going on at Florida State University that will make
    important contributions to solving some key problems and concerns that
    we face today. Your support would be appreciated, and, again, thank you
    for an opportunity to present these views for your consideration.
                                     ______

       Prepared Statement of the American Farm Bureau Federation and the
                       National Corn Growers Association

        The American Farm Bureau Federation and the National Corn Growers
    Association appreciates the opportunity to provide the Subcommittee
    with our recommendations regarding fiscal year 2001 funding for the
    U.S. Agency for International Development (U.S. AID). Our testimony is
    focused on the need for additional funding for the agriculture and
    child survival programs of the U.S. AID.
        Over two billion people suffer from malnutrition and dietary
    deficiencies. More than half of all child deaths, worldwide, are due to
    malnutrition. Approximately 500 million women suffer from iron
    deficiency anemia. At least 400 million people have Vitamin A
    deficiency and of that number, more than 100 million are young
    children. As many as 3 million children die annually as a result of
    Vitamin A deficiency and 14 million suffer from clinical eye problems.
    Some 40,000 people die from malnutrition and hunger related causes
    every day. Every year, almost 12 million children die before they are
    five from preventable causes. Much of this human suffering can be
    alleviated if we were to (1) increase U.S. AID funding for plant
    genomics and plant biotechnology research to enhance micronutrients in
    food and to create ``edible vaccines'', and (2) if we were to target
    funding for the training of scientists and plant breeders from
    developing countries in biotechnology.
        In the past few years, there have been significant advances in
    basic plant science, primarily in plant genomics and biotechnology.
    These advances will allow us to create new hybrids and varieties that
    will
      --Improve human and animal health;
      --Reduce worldwide malnutrition by increasing yields and developing
            more nutritious crops; and
      --Reduce environmental problems for crop and livestock growers. The
            industrialized world has benefited primarily from these
            advances so far. Any technology to feed the world must be
            available to the developing countries.
        On April 4, 2000, a major breakthrough in plant genomics occurred
    when Monsanto announced that it had completed a ``working draft''
    sequence of rice. More importantly, Monsanto announced that it would
    make the entire sequence available to the International Rice Genome
    Sequencing Project. Releasing this information will accelerate the
    development of improved varieties of rice and other crops. This was an
    important ``first step'' towards bridging the gap between the
    industrialized and the developing countries. However, much more
    research remains to be done and we need a significant public effort to
    build upon the ``working draft'' sequence of rice.
        If biotechnology is ever going to reach its full potential, the
    developing world must have complete access to the technology and have
    the ability to use it to solve local problems. U.S. AID should play a
    lead role in bringing this technology to developing countries. Since
    one of the major goals of U.S. AID has been to improve child survival,
    a principal component of U.S. AID's efforts to achieve sustainable
    improvements in child survival should be the use of biotechnology to
    enhance the micronutrient value of foods and to deliver vaccines and
    medicines through food.
        We believe that the agricultural program of the U.S. AID should
    work with the international agricultural research centers,
    universities, and the private sector to develop crops that will improve
    infant and child health and nutrition and reduce infant and child
    mortality. Using biotechnology to increase the yields and the
    nutritional value of key food staples of the poor in developing
    countries can provide an affordable and effective means of reducing
    malnutrition and increasing child survival in a sustainable manner.
        Many of the efforts to improve child survival have not been self-
    sustaining. Providing vitamin and mineral supplements, increasing
    detection and treatment abilities, and providing nutrition education do
    not solve the problems or establish a means by which the problems can
    be addressed on a continuing basis without the need for huge infusions
    of cash. We can create a self-sustaining program by using biotechnology
    to increase critical micronutrients (e.g., Vitamin A, iron) in food
    crops and alleviate dietary deficiencies. The crops can then be grown
    on an annual basis and ensure constant access to the essential vitamins
    and minerals.
        For example, providing capsules has been the emphasis of the U.S.
    AID programs to reduce Vitamin A deficiency. While laudable, this
    approach will require annual expenditures in perpetuity. A better
    approach would be to attack the problem at its root, modifying the diet
    by using today's technology, plant biotechnology, to develop food that
    has enhanced Vitamin A. This past year, rice varieties were developed
    that contained enhanced levels of Vitamin A and iron. These varieties
    contain enough beta-carotene to supply all of a person's Vitamin A
    needs. They are called ``golden'' because the high beta-carotene level
    turns the grain a yellow color. This was only a first step and much
    more research must be done before golden rice will be available for
    farmers to grow. In addition, we can also use this same process to
    create high beta-carotene maize, cassava, wheat, banana, canola, or any
    other crop that is preferred by the poor in developing countries. Once
    the research is completed and the varieties are in the fields, a self-
    sustaining program will be in place and scarce resources can be devoted
    to other high priority needs. Increasing Vitamin A intake is recognized
    as one of the most cost-effective interventions for child survival.
    Golden rice and golden maize can provide self-sustaining methods for
    addressing Vitamin A and iron deficiencies. A critical component of all
    efforts aimed at incorporating nutrition into child survival activities
    must include the truly sustainable approach of increasing the
    micronutrients in food to address specific and general nutrition needs.
        In the area of child immunization, U.S. AID focuses on traditional
    delivery mechanisms that, in turn, require refrigeration, sterile
    atmospheres and equipment, syringes, vaccine vial monitors that
    indicate whether the vaccine has been overexposed to heat, and safe
    injection practices. In many areas, these requirements cannot be met in
    a satisfactory manner or they are prohibitively costly. In addition,
    biohazards are created and dealing with bio-hazardous waste becomes a
    problem. Finally, these methods of delivering vaccines are not self-
    sustaining as costs associated with handling will continue to rise.
        We have opportunities with plant biotechnology to deliver ``edible
    vaccines'' without the need for any of these complicated handling
    procedures, without the need for refrigeration or sterile equipment,
    and we can deliver them in a sustainable manner through the
    regeneration of plants. For example, the use of plant biotechnology has
    made it possible for significant advances to be made in delivering the
    Hepatitis B vaccine in bananas and corn and the cholera vaccine in
    potatoes. Research is underway in a wide range of areas, including
    edible vaccines for bacterial tooth decay, lung infections, and
    sexually transmitted diseases. Robust research in these areas will
    allow us to have self-sustaining programs for vaccine delivery. U.S.
    AID immunization efforts should include using plant biotechnology for
    the delivery of the vaccines.
        Finally, we recognize that only the scientists and plant breeders
    working in the developing world understand the specific needs of the
    poor and local farmers. It is critical that they have the skills in
    biotechnology to develop varieties and hybrids that meet the needs of
    the local populations. With sufficient training, in their own country
    and, perhaps, training in the U.S., they will be able to help meet the
    needs of the local farmers and the poor in their own countries.
        With the significant advancements made in plant genomics and
    biotechnology, we believe that the U.S. AID should focus on achieving
    sustainable improvements in agriculture and child survival by using
    biotechnology to develop sustainable solutions to malnutrition,
    micronutrient deficiencies, and delivery of vaccines. Specifically, we
    urge the Subcommittee to include additional funding in the fiscal year
    2001 foreign operations appropriations bill the following, managed
    through the agriculture program at U.S. AID:
      --$30 million for plant genomics and plant biotechnology research
            grants to international agricultural research centers,
            universities, and private entities to develop crops with
            increased content of critical micronutrients aimed at
            alleviating micronutrient deficiencies and to use biotechnology
            to enhance yields of local varieties;
      --$10 million for the international agricultural research centers to
            develop golden rice (i.e., Vitamin A enhanced) and begin work
            on golden maize for long-term, sustainable solutions to Vitamin
            A deficiency;
      --$5 million for competitive grants to develop ``edible vaccines''
            where the vaccines are genetically incorporated into food
            plants; and
      --Target funding for training scientists and plant breeders from
            developing countries in biotechnology to ensure that the full
            benefits will be available in developing countries.
        Biotechnology in medicine has given us the tools to treat heart
    disease, multiple sclerosis, hemophilia, and acquired immune deficiency
    syndrome. We believe that foods enhanced with biotechnology will enable
    the poor in developing countries to receive the proper level of
    essential vitamins and minerals and much needed vaccines. The U.S. AID
    should enhance, significantly, its role in ensuring that the developing
    countries have access to and reap the full benefit of plant
    biotechnology.
        Thank you for this opportunity to present our views.
                                     ______

                 Prepared Statement of the University of Miami

        Mr. Chairman and Members of the Subcommittee: Thank you for
    allowing me to appear before you today to discuss an important new
    initiative at the University of Miami and its Institute for Cuban and
    Cuban-American Studies.
        The Castro era may be coming to an end in Cuba, if for no other
    reason than geriatric reality. Fidel Castro and his brother Raul are in
    their 70s with deteriorating health.
        The passing of the Castro brothers may ensue in a period of slow
    and peaceful transition or may lead to fast and violent change. In
    either case, United States policy makers must be ready to deal with
    these and other scenarios that may develop in U.S.-Cuban relations. A
    migration crisis, protracted violence, the emergence of anti or pro-
    U.S. factions within the transition leadership, all will require
    careful responses from the United States.
        If a pro-U.S. democratic transition regime emerges, the United
    States tasks may be to provide immediate humanitarian relief and to
    link humanitarian aid to democracy building. The United States may be
    called upon to assist in rebuilding civil society and beginning the
    task of economic reconstruction.
        The transition completed and a new government installed through
    free, internationally supervised elections, the United States would
    work with other democratic countries to help rebuild Cuba's
    legislative, judicial, media, and educational institutions as well as
    to encourage the growth of independent political parties and implement
    military reforms.
        A violent post-Castro transition or a civil war in Cuba may require
    the United States to deal with migration issues, an activated Cuban-
    American population, threats to the United States naval base at
    Guantanamo, pressures for United States involvement, and, possibly,
    even the eventual use of American military forces.
        It is clear that given the proximity of Cuba to the United States;
    the role of the Cuban-American community; and our own vital interest in
    Latin America and the Caribbean region changes in Cuba will have
    significant impact on the United States. The United States should be
    prepared to deal with these changes and to respond quickly to problems
    and opportunities that may arise in the island.
        One of the clear lessons from changes in Eastern Europe and the
    Soviet Union is that we were unprepared to deal with transitions in
    that region of the world. Unexpecting the depth of change, we were
    caught by surprise. Not knowing clearly what role we should play, we
    looked confused and indecisive.
        The time to start preparing for Cuba's transition is now. We can
    best advance our long term goals, in the meantime, by maintaining the
    present policy; by waiting patiently for a regime in the island that is
    willing to provide meaningful and irreversible changes and then
    offering that regime aid, trade, tourism and investments, as a carrot
    to accelerate change in the island; by assisting nascent independent
    institutions in Cuba; by studying and learning from other transitions
    to democracy and by encouraging the Cuban-American community to build
    consensus around transitional issues.
        The University of Miami seeks support to prepare United States
    government officials for the inevitable transition that will take place
    in Cuba. The Cuba Transition Project at the University of Miami is
    designed to provide policy makers, analysts and others with accurate
    information, incisive analysis and practical policy recommendations.
        The Cuba Transition Project will be developed over a three-year
    period. Clearly, if transition were to take place in Cuba at a fast
    pace the products of the Cuba Transition Project will be accelerated to
    meet United States government and Cuba's changing needs. On the other
    hand if transition is slow the studies and policy recommendations will
    be completed within the time scheduled and these will remain as the
    basis for continuous studies and monitoring of the Cuba scene.
    Regardless of the speed of transition, the studies and the resources
    developed will be of invaluable assistance to United States policy
    makers dealing with Cuba.
        During the first stage of the project (fiscal year 2001) the
    following objectives will be accomplished.
      --Establishment of a Research Center which will include offices for
            researchers; facilities for holding briefings and seminars;
            website; database.
      --Organize Research Programs. Four initial research units are
            planned: 1. socio-economic conditions; 2. statistical database;
            3. political system and decision- making; 4. critical issues
            and emergency needs.
      --Organize Task Forces. Priority topics to include: Legal reform,
            macro-economic issues, agriculture, the future of sugar and
            tourism, international trade, immigration, multi-lateral
            financial institutions, privatization, telecommunications,
            basic education, U.S.-Cuba relations, justice and rule of law,
            education, the environment, institutional reform, micro- and
            small-business development, transportation, regulation,
            utilities and infrastructure, health and nutrition, AIDS, aging
            and social security, employment, labor markets, and social
            welfare policy, foreign investment, crime and corruption and
            the transformation of the value system generated by 40 years of
            communist rule.
      --Organize Study Groups. Priority topics to include: civil-military
            issues; governability and state reform; civil society
            development; race, ethnicity and cultural pluralism; political
            culture and value transformation.
        Once transition in earnest takes place in Cuba, and United States
    policy permits, we will emphasize a professional development and
    education component. This part of the Cuban Transition Project will be
    dedicated to direct assistance and advisement to Cuban professionals
    and potential policy makers. The objectives of this unit will be
    achieved through seminars, support groups, professional and academic
    exchange, and direct consulting. A special facility will be established
    at the University of Miami to provide distance learning capabilities
    able to train large numbers of Cubans in a variety of subjects. As
    needed, group seminars will be offered in Cuba and Miami and Cubans
    will be brought to the University of Miami campus for specialized
    training. A satellite facility will be established in Cuba as soon as
    politically and legally possible.
        The University of Miami is uniquely qualified to assist the United
    States government with transitional issues in Cuba. The University is
    located in a multi-lingual city and community, 90 miles away from Cuba.
    The University has one of the largest bilingual faculties of Research I
    university in the nation. Its academic orientation has been, since its
    founding, toward Latin America and the Caribbean. Its schools of Law,
    Business, Medicine, and Communications will be key components in
    preparing and training future leaders in a democratic Cuba. The
    University has the finest and most extensive collection of Library
    materials on Cuba. The Cuban Heritage collection at the Richter Library
    is considered the best and most comprehensive collection worldwide.
        The University of Miami has had a program of Cuban Studies since
    1964. The Institute for Cuban and Cuban American Studies directed by
    Professor Jaime Suchlicki coordinates Cuba related activities of the
    University, including the Emilio Bacardi Moreau Chair in Cuban Studies;
    the John J. Koubek Memorial Center and other components related to Cuba
    and Cuban-American Studies. The Institute offers courses on Cuban
    history, culture, and international relations, produces publications
    and sponsors original research and studies. The Institute houses Cuba
    On-Line, the most comprehensive current and historical database on Cuba
    and is in the process of becoming the Secretariat of the Association
    for the Study of the Cuban Economy (ASCE), the most prestigious non-
    partisan group of academics and researchers studying Cuba and its
    economy.
        For fiscal year 2001, the University of Miami Institute for Cuban
    and Cuban-American Studies seeks $5 million through the United States
    Agency for International Development to establish and develop this
    important new initiative, the Cuban Transition Project. Our human and
    physical capabilities as well as our commitment to help the U.S.
    government develop policy-relevant advice and programs to deal with
    Cuba's transition, makes the University and its Institute for Cuban and
    Cuban-American Studies unique to carry out this delicate and important
    task.
        Mr. Chairman, we know that this will be a difficult year as you and
    Members of the Subcommittee seek to establish funding priorities in
    your bill. My colleagues and I at the Institute for Cuban and Cuban-
    American Studies hope that it will be possible for you to support
    implementation and development of our new and vital initiative, the
    Cuban Transition Project.
                                     ______

                 Prepared Statement of the World Wildlife Fund

        On behalf of WWF's 1.2 million members, I welcome the opportunity
    to present testimony on the fiscal year 2001 Foreign Operations
    Appropriations bill. Known worldwide by its panda logo, World Wildlife
    Fund is dedicated to protecting the world's wildlife and the rich
    biological diversity that we all need to survive. The leading privately
    supported international conservation organization in the world since
    1961, WWF has sponsored more than 2000 projects in 116 countries.
        One of society's enduring legacies will be the strength of our
    commitment to preserve the complex natural systems we call the ``web of
    life.'' In only a few decades, growing human numbers and consumption
    levels have led to wholesale destruction of wild habitats around the
    globe and an accelerating degradation of the planet's environment.
        Many of the programs funded in the foreign operations budget over
    the years have helped to make conservation of biological diversity a
    reality. Other worthwhile development programs cannot effectively
    address global problems without biodiversity preservation. For example,
    one of the most cost-effective solutions to potable water is keeping
    intact the world's watersheds and wetlands. Polluted drinking water in
    turn is a primary cause of the spread of infectious diseases. Medical
    solutions to current and future diseases depend on plants and wildlife.
        In recent years, international conservation programs in the 150
    account--especially the bilateral programs--have been stymied by
    steadily shrinking funds. We applaud you, Mr. Chairman, Madame Ranking
    Member, and other members of this subcommittee, for your role this past
    year in inserting committee report language directing U.S. AID to
    reverse this budgetary decline in the agency's biodiversity
    conservation work. Congress directed U.S. AID in fiscal year 2000 to
    restore funding for its natural resource management programs and other
    biodiversity conservation activities. In addition, this subcommittee
    appropriated $13 million to implement the Tropical Forest Conservation
    Act. As you recall, this law was the brain child of Rep. Rob Portman
    and Senator Richard Lugar and was passed by the 105th Congress with
    overwhelming support.
        The subcommittee's initiatives in 1999 set the stage for the
    administration to follow suit with its fiscal year 2001 ``Greening the
    Globe Initiative.'' WWF strongly supports this request. The initiative
    proposes $33 million in additional funds for U.S. AID's biodiversity
    conservation programs, a total request of $100 million for this
    activity. The administration's initiative also requests $37 million for
    implementing the Tropical Forest Conservation Act, a three-fold
    increase. While these funding levels are modest compared to the levels
    of funding authorized by the law, they are critical to maintain the
    momentum created by the subcommittee to reinvigorate U.S. AID's
    historic role in setting the standard and inspiring other donor
    governments to fund global conservation efforts.
        Of course, the bottom line is what this funding can achieve to
    preserve the ``web of life.''
        In Brazil's Atlantic Forest, U.S. AID, in partnership with WWF and
    other conservation NGOs, is assisting industry and local communities to
    protect and sustainably manage this globally outstanding forest. The
    Atlantic Forest--in Brazil, Argentina and Paraguay--is one of the most
    endangered rain forests in the world, with only seven percent of the
    original forest remaining. The forest is home to the critically
    endangered golden lion tamarin. More than 52 percent of the tree
    species and 92 percent of the amphibians in the Atlantic Forest are
    found nowhere else on Earth. The forest's major threats are urban
    development, logging, associated road building and agricultural
    expansion. The local NGO, Fundacao Vitoria Amazonica, has partnered
    with WWF and developed a management plan for Jau National Park,
    Brazil's largest park.
        In 1998, Brazil's President Fernando Henrique Cardoso committed to
    triple the area of Amazonian forest under formal protection. The 62
    million acres of new parks and preserves is the largest conservation
    step ever in the Amazon. Brazil's pledge is in partnership with WWF,
    the World Bank, and GEF, which will help finance, plan and manage the
    newly protected forests.
        In Namibia, AID supports the Living in a Finite Environment (LIFE)
    project, which has established a remarkable system of communal
    conservancies. The Republic of Namibia inherited a legacy of apartheid
    policies, under which virtually all of the country's natural
    resources--including the best land--had been directed to the well-off
    five percent minority. For the first time the rural population, as
    conservancy members, now legally benefit from the country's natural
    resources. Individuals and communities, with the help of local
    organizations, are learning to sustainably manage their natural
    resources.
        In some instances, native species of wildlife have been
    reintroduced on the conservancy lands. Locally enforced land-use zoning
    helps protect wildlife from poaching. The program has created income-
    generating activities such as the production of thatching grass,
    operating community tourist campsites, and joint venture lodge
    developments. In one year, the value of benefits more than doubled in
    the form of cash revenues to conservancies, salaries to conservancy
    staff, enterprise operators, or in-kind donations (i.e., game
    donations). The government of Namibia has enacted new legislation under
    which four million acres have been declared conservancy lands.
    Namibia's innovative approach will generate income for local
    communities in a model program that benefits wildlife while meeting
    human needs.
        In the Galapagos Islands of Ecuador, AID funding has resulted in
    improvements in natural resource management and protection of the
    island's incredibly rich biodiversity. Remarkably, these islands have
    retained nearly 95 percent of the biodiversity present a thousand years
    ago. However, the islands are threatened by overfishing, introduced
    species that compete with the native wildlife, and a rapid influx of
    people. WWF has had a long-term presence on the islands, working with
    local partners to preserve and protect the rich biodiversity.
        In 1998, the government of Ecuador passed the ``Galapagos Special
    Law'' creating a 40-mile-wide marine sanctuary around the islands and
    banning ``industrial scale'' fishing in the area. The law also ensures
    that tourist revenues go to support island conservation, including
    combating invasive species and empowering local institutions to have a
    say in managing the islands' resources.
        In Russia, by supporting projects that promote responsible resource
    management-such as sustainable forestry, creation of protected areas,
    training programs for scientists and managers--U.S. AID is investing in
    a long-term program to protect resources that are important not only to
    Russia, but to the U.S. and the international community. Russia's
    forests account for one-fifth of the world's timber supply. The
    country's well-known Lake Baikal accounts for one-fifth of the world's
    liquid supply of fresh water. The Caspian Sea and parts of Siberia
    harbor tremendous reserves of oil and natural gas. Thus the role of
    these and other Russian resources in affecting world-wide environmental
    and national security issues (climate change, water use rights, etc.)
    is critical.
        With the help of U.S. AID funds, WWF has supported a variety of
    programs, from anti-poaching brigades protecting Siberian tigers to
    purchasing fire-fighting and communications equipment to improve on-
    the-ground management operations.
        U.S. AID's support for environmental projects in Russia is
    enormously beneficial for another reason. Throughout Russia,
    environmentalists are at the forefront of testing and defining the
    principles of democracy. Because of their activism, they are perhaps
    more bold and energetic than any other group in the country in using
    the media, the court system, the rule of law to force their new-found
    ``democracy'' to work. Examples include former Alexander Nikitin, whose
    arrest by the KGB for his publication on Russia's disposal of nuclear
    waste was overturned in federal court; the environmental law
    organization ``EcoJuris,'' which has repeatedly challenged the Russian
    government's implementation of forestry and other environmental laws;
    the NGO ``Glasnost Defense Fund'' which works to promote free press and
    protect journalists who exercise this right.
        What can happen when biodiversity funding is cut or insufficient?
    In Nepal, for example, AID is considering cutting funding for community
    forestry, in effect closing out its biodiversity programs. Community
    forestry in Nepal is considered to be one of the more progressive and
    unique approaches to forest management. It is a blend of laws and
    regulations that address difficult management issues at the core of
    many forestry projects--land tenure, sustainable forest management,
    biodiversity conservation, local ownership of forest products, and
    income generation. Implementation of Nepal's Community Forestry Act
    began in 1995 and already has yielded impressive results. Species
    diversity has rebounded in degraded forests and incomes have increased
    due to marketing of surplus forest products. A number of policy and
    implementation issues are emerging that seek to undermine the forestry
    law and regulations. AID's continued technical support and access to
    decision-makers is currently needed to bolster the long-term
    sustainability of Nepal's community forestry activities.
        The country programs described above are evidence of how AID's
    support has established innovative solutions to conservation problems.
    The success of these activities has been a key component in persuading
    host governments to establish and enact groundbreaking conservation
    policies, including legally establishing conservancies in Namibia or a
    marine sanctuary in the Galapagos Islands. These enacted policies--what
    WWF calls ``Gifts to the Earth''--establish permanence for these
    programs after AID and other donors close out their presence.
        As in the Russian example above, an important related benefit of
    conservation programs in general is institutionalization of democratic
    processes, as local citizens learn to manage, benefit and demand a say
    in their communities' resources.

                 MULTILATERAL PROGRAMS TO CONSERVE BIODIVERSITY

        Global Environment Facility (GEF).--The largest percentage of GEF's
    projects is devoted to conserving biodiversity. WWF urges the
    subcommittee to fund the full request for fiscal year 2001 for the U.S.
    contribution to the GEF. We further hope that Congress will examine the
    ongoing, important work in global conservation of this relatively young
    institution, setting aside the political controversy surrounding the
    Kyoto Protocol.
        International Conservation Programs, Department of State.--
    Consumption is a primary driving force for the human assault on the
    environment. Thus, implementation of the Convention on Illegal Trade of
    Endangered Species of Flora and Fauna (CITES) is critical in regulating
    trade in endangered species. WWF urges the subcommittee to direct the
    Secretary of State to meet the full U.S. contribution for fiscal year
    2001 to the core budget of the CITES Secretariat. This contribution is
    part of the administration's $5.5 million fiscal year 2001 request for
    the International Conservation Programs of the State Department's
    International Organizations and Programs (IO&P) account. The
    conservation programs fund such critical programs as the Ramsar
    Convention on Wetlands of International Importance and the World
    Conservation Union (IUCN).
        International Development Association (IDA).--As the single most
    important source of development finance for the world's poorest
    countries, IDA can address environmental degradation, extreme poverty,
    and other root causes of political and economic instability. WWF calls
    on the subcommittee to fund IDA at the requested level of $835.6
    million, which includes $803.4 million for the U.S. scheduled
    contribution to IDA-12, plus $32.1 million to clear arrears.

                    ADEQUATE FUNDING FOR FOREIGN ASSISTANCE

        Mr. Chairman and Madame Ranking Member, and members of the
    subcommittee, I have attempted to show how conserving and managing our
    natural resources is fundamental to achieving such basic human needs as
    clean air and water and to provide medicines. Yet one of the first
    programs AID officials cut due to insufficient funds is biodiversity
    conservation. The key to long-term development is sustainability of
    resources. Ignoring sustainability in development is like trying to
    keep a tree strong while chopping its roots away. Therefore, we urge
    the subcommittee to appropriate adequate funds for bilateral and
    multilateral foreign assistance and to ensure that AID's strategic
    objective of protecting the environment is effectively integrated into
    its development policies. Cutting foreign aid levels that represent
    barely one percent of the federal budget risks maintaining a hobbled
    foreign aid policy that focuses more on survival than on achievement.

                       PROPOSED LANGUAGE ON BIODIVERSITY

        Attached is proposed language on biodiversity conservation that WWF
    urges the subcommittee to adopt. Language of this nature is essential
    to maintain the momentum created by this subcommittee.

                                   CONCLUSION

        Finally, Mr. Chairman, WWF urges subcommittee members to visit
    conservation project sites to get a first-hand look at the bilateral
    and multilateral programs that help protect our natural global systems.
    Restoring the fundamental balance between human enterprise and the
    biological diversity upon which we all depend is a long-term
    commitment. The choices our government and other governments make today
    will have far-reaching consequences for our future generations. We ask
    for and need your commitment in this and future years.

                                   ATTACHMENT

        Proposed Committee Report Language to accompany the fiscal year
    2001 Foreign Operations Appropriations Subcommittee Legislation:
        The Committee has repeatedly urged that AID make biodiversity a
    high priority. The Committee therefore welcomes the administration's
    request to seek $100 million for biodiversity conservation in fiscal
    year 2001, including straightlining funding of the Office of
    Environment and Natural Resources at fiscal year 2000 levels plus
    additional funding reflective of overall agency increase for
    biodiversity conservation in fiscal year 2001. It requests the
    administration to dedicate this total to actual biodiversity
    conservation activities. The Committee also requests that the
    difference between the $100 million and fiscal year 2000 figures should
    be new and additional funds.
        AID biodiversity activities should continue to emphasize the use of
    non-government organizations (NGOs) through cooperative agreements and
    other innovative, cost-effective financing vehicles.
                                     ______

    Prepared Statement of the Migration and Refugee Services, United States
                              Catholic Conference

        The United States Catholic Conference's Migration and Refugee
    Services (MRS) is pleased to present views on the Migration and Refugee
    Assistance (MRA) account and the Emergency Refugee and Migration
    Assistance (ERMA) fund. MRS is proud of the record of the Catholic
    Church in welcoming refugees and other newcomers to our country. Today,
    MRS works with 114 Catholic dioceses in 46 states to resettle refugees
    from all over the globe. In calendar year 1999, MRS helped to resettle
    21,500 refugees in the United States, representing 94 ethnicities and
    50 nationalities.
        Church teaching has long supported the protection of and respect
    for the right of an individual to live in security and to flee life-
    threatening situations, particularly those stemming from political
    oppression and persecution. The principal inspiration for our work
    comes from the teachings of Jesus and Catholic social teaching, which
    Pope John Paul II most recently articulated on his trip to the Holy
    Land:

        ``Dear refugees, do not think that your present condition makes you
    any less important in God's eyes! Never forget your dignity as his
    children! Here at Bethlehem the Divine Child was laid in a manger in a
    stable; shepherds from the nearby fields were the first to receive the
    heavenly message of peace and hope for the world. God's design was
    fulfilled in the midst of humility and poverty. The Church, through her
    social and charitable organizations, will continue to be at your side
    and plead your cause before the world.'' \1\
    ---------------------------------------------------------------------------
        \1\ Speech of the Holy Father John Paul II, Dheisheh Refugee Camp,
    Palestinian territories, Wednesday, March, 22, 2000.

        In line with our teaching, the Catholic Church in the United States
    has long welcomed immigrants and refugees to our shores. Since the
    Refugee Act of 1980, MRS, working with our government and diocesan
    resettlement programs throughout the country, has resettled some
    650,000 refugees, more than 32 percent of the total resettled
    population.
        MRS strongly supports the U.S. Refugee Program, which has helped so
    many refugees over the years. We are gratified that it has done so much
    good in the world and believe strongly that it can and should do even
    more. We respectfully ask this Subcommittee to continue its own support
    for a strong refugee effort by appropriating at least $700 million for
    the Migration and Refugee Assistance (MRA) account, or $42 million more
    than the Administration has requested in its fiscal year 2001 budget
    submission.
        Additionally, the Emergency Refugee and Migration Assistance Fund
    (ERMA) represents a vital funding source which allows the United States
    to provide immediate assistance to emergency refugee situations
    worldwide. Over the past two years, the U.S. government has used the
    fund to respond effectively to crises in Kosovo and East Timor. In a
    world which spawns refugee crises on a regular basis, the ERMA fund is
    necessary to ensure that fleeing refugees receive important life-
    sustaining assistance. We ask the Subcommittee to approve the $20
    million budget request for ERMA for fiscal year 2001.

                            U.S. REFUGEE ADMISSIONS

        Refugees are not unlike other migrants, with one tragic difference.
    Often driven outside their country, refugees cannot return home for
    fear of persecution. Having already suffered, sometimes unspeakably,
    they often face years in crowded, primitive, dangerous refugee camps.
    For some of these people, whether they be fleeing Bosnia, Burma or
    Afghanistan, resettlement in a third country may be their only hope for
    a life of peace, dignity, and hope.
        And yet the United States has been curtailing its response to
    refugees by reducing the number who may come to our country to begin a
    new life. The annual ceiling for refugee admissions into the United
    States fell from 142,000 in fiscal year 1992 to 78,000 in fiscal year
    1997, a drop of 45 percent. In 1999, our government increased refugee
    admissions to 85,000, a commendable response to the Kosovo refugee
    crisis. Over a longer period, refugee admissions have been reduced even
    more dramatically, from 207,000 in fiscal year 1980 to a proposed
    76,000 funded admissions for fiscal year 2001. This reflects a
    disturbing trend, especially considering the presence of more than 13.5
    million refugees in the world today.\2\
    ---------------------------------------------------------------------------
        \2\ World Refugee Survey, 1999, U.S. Committee for Refugees, p. 3.
    ---------------------------------------------------------------------------
        A primary concern of the Catholic bishops in the refugee area is
    that the United States employ a generous refugee program which reflects
    its humanitarian tradition. Without such a program, our nation cannot
    provide global moral leadership with regard to refugee protection,
    leading other governments to reduce their assistance to the world's
    persecuted and homeless. This Subcommittee, as the Senate appropriator
    of funding for refugees, plays a crucial role in maintaining that
    leadership.
        Last year, the global refugee picture became more complicated.
    Commendably, in the face of the outflow of refugees from Kosovo, the
    Administration requested, and Congress appropriated, supplemental
    funding allowing our country to welcome up to 20,000 Kosovars. For the
    following year, fiscal year 2000, the Executive Branch asked Congress
    for funding to accommodate up to 90,000 refugees for resettlement,
    another welcome step forward.
        However, Congress appropriated only $625 million of the $660
    million requested, causing the State Department to reduce its funded
    admissions ceiling for the current fiscal year by 5,000 refugees. Now,
    we are focused on fiscal year 2001, and the Executive Branch has again
    shifted into reverse, having requested funding for only 76,000 refugee
    admissions, which could expand to 80,000 if certain cost savings are
    realized. This is clearly insufficient to the need.
        Sadly, there exists no lack of refugees in today's troubled world.
    In Africa alone, there are close to three million refugees because of
    conflicts in Sierra Leone, Sudan, Ethiopia, Eritrea, the Democratic
    Republic of the Congo, and Congo-Brazzaville, among others. We are
    pleased that the State Department has for two years running raised the
    regional admissions ceiling for Africa, to 18,000 for fiscal year 2000.
    We ask this Subcommittee to approve the funding for another meaningful
    increase in African admissions in fiscal year 2001. Given the great
    need in Africa, where the alternative to resettlement can easily be
    many years in a refugee camp, we believe there should be 25,000
    admissions in fiscal year 2001.
        The refugee situations in much of the rest of the world are not
    much brighter. Whether one thinks of East Timorese, Afghans, Iraqis, or
    Burmese, ordinary people--many of them poor and defenseless--find
    themselves uprooted in foreign lands. Many have no prospect of return
    to their homes and face the prospect of languishing in refugee camps
    for many years.
        Thus, the decline in U.S. refugee admissions is not due to a drop
    in that part of the world's refugee population needing resettlement.
    Nor is it due to a poor U.S. economy, or a refusal by Americans to
    welcome refugees, or an inability on the part of the refugee
    resettlement agencies, like ours, to find shelter and jobs for new
    arrivals. It is due rather to a lack of political will to meet fully
    our humanitarian responsibilities, a situation we ask this Subcommittee
    to help redress.

                              FAMILY REUNIFICATION

        The centrality of the family is a cardinal tenet of Catholic social
    teaching. It should be no surprise that the U.S. Catholic bishops are
    fervent supporters of policies within the U.S. Refugee Program that
    promote the reunification of refugee families.
        It is thus our view that family reunification must remain a
    cornerstone of U.S. refugee policy.
        Unfortunately, there appears to be a belief among some that
    refugees with refugee relatives in the United States (designated P-3,
    P-4, and P-5) are not ``real'' refugees. That is wrong: all refugees
    must satisfy the same criteria. Nor do refugees who are relatives
    displace others more deserving: in fact, their very designation puts
    them in line behind those who are P-1, in immediate danger, and P- 2,
    those of humanitarian interest to the United States.
        Refugees who are the subject of petitions should not ipso facto be
    considered to have a less compelling claim to persecution than those in
    other categories. Often, their personal stories are more disturbing
    than those of refugees given other designations. And choosing them for
    possible U.S. resettlement offers the prospect of an additional
    benefit: bringing together a family split by violence.
        Discussions are ongoing within parts of the government about the
    possibility of deemphasizing the family-based priorities to make more
    room for what are being called ``rescue'' cases. That, in our view, is
    a false choice.
        Even if family cases were less compelling, the proper response
    would be not to deemphasize them but to expand the annual refugee
    ceiling, as we and other refugee organizations have long urged. If, as
    we strongly contend, the family-based cases are generally as compelling
    as any others, that is all the more reason for a more generous program.
        In sum, we remain concerned about a developing trend toward less
    and less timely reunification of families based upon a mistaken belief
    that the current low admissions ceilings require further restrictions
    on refugee family members. This Subcommittee can help by appropriating
    the funds necessary for a more generous overall program. Preserving
    families should remain a key objective of U.S. refugee policy.

                    FUNDING FOR REFUGEE PROTECTION OVERSEAS

        The MRA account also funds the U.S. contribution to overseas
    assistance for refugees, funds which help feed, clothe, and protect
    refugees in countries of first asylum.
        Here, too, the worldwide needs far outstrip available resources.
    Particularly bereft of adequate financing are African programs, where
    the international community spends much less per refugee than in places
    like Kosovo. To our credit, the United States has tried to increase its
    attention to Africa. Our assistance to Kosovo, for example, was not
    taken from our support for African refugees, as was the case with some
    donors. And the disparity between aid for African refugees and aid for
    refugees elsewhere is a problem our government recognizes and would
    like to remedy.
        Nevertheless, the Administration's MRA request for fiscal year 2001
    gives inadequate support to assistance to refugees overseas. It
    contains no increase from last year, and will result in cutbacks for
    most regions, including Africa. It is ironic that, at a time when the
    U.S. government is attempting to put a new emphasis on Africa, overseas
    assistance requested for the continent is at its lowest in three years.

                          INTERNALLY DISPLACED PERSONS

        We have not yet mentioned the mass of the world's internally
    displaced people, so vast that their numbers exceed those of refugees.
    According to the World Refugee Survey of 1999, produced by the U.S.
    Committee for Refugees, there are more than 17 million internally
    displaced persons on all continents throughout the world. While
    internally displaced persons share many of the same characteristics as
    refugees, such as fear of persecution and separation from their homes,
    international refugee law does not protect them because they remain
    inside their own countries.\3\ In reality, internally displaced persons
    are often attacked by their own governments and often do not receive
    humanitarian assistance.
    ---------------------------------------------------------------------------
        \3\ World Refugee Survey, 1999, U.S. Committee for Refugees, p. 8.
    ---------------------------------------------------------------------------
        The United States' Permanent Representative to the United Nations,
    who visited Africa in December, recently told a group of voluntary
    agency directors that he was appalled both at the suffering of these
    unfortunate people and at the inadequacy of the care they receive from
    the international community. Correctly, he noted that the misery they
    endure is no less severe than that of refugees. The protection they are
    offered is often less, as well, since many of the internally displaced
    live in countries where their prime oppressor is their own government.
        We welcome this additional focus on the plight of the displaced,
    and agree that the international agencies must be better organized in
    their response. The same is true for our own government, where no one
    agency has responsibility for internally displaced persons.
        Here is one example of the problems facing the internally
    displaced. Bishop John Cummins, Bishop of Oakland and member of the
    Bishops' Committee on Migration, recently traveled to East Timor on a
    fact-finding mission and to express solidarity with the Catholic
    bishops of East Timor. He found that approximately 100,000 East
    Timorese remain in refugee camps in West Timor, prevented from
    returning to their homes. The conditions in the West Timor camps are
    appalling, with 500 to 700 refugees having died since last year from
    various illnesses and the infant mortality rate on the rise.\4\ Reports
    indicate that there are tens of thousands more East Timorese spread
    throughout Indonesia. We urge our government to increase pressure on
    the Indonesian government to allow these remaining refugees to return
    to their homeland.
    ---------------------------------------------------------------------------
        \4\ Refugees International, East Timorese Refugees in Indonesia,
    Press Release, February 23, 2000.
    ---------------------------------------------------------------------------
        The MRA account may be used to assist the internally displaced,
    whether in those instances in which the United Nations decides to help
    a given population or when the State Department funds such assistance
    more directly, as in the case of Colombia. As the numbers of internally
    displaced in the world grow, we ask that assistance to them be
    increased, another reason why the MRA account should be generously
    funded.

                          UNACCOMPANIED REFUGEE MINORS

        Of all refugees those likely to suffer the most permanent damage
    from their ordeal are unaccompanied minors--children whose parents are
    dead or missing. According to estimates, unaccompanied minors
    constitute five percent of refugees worldwide, numbering well over
    600,000. In 1997, the United States resettled one of them. In 1998, we
    took four; in 1999, 34. This country must do more to protect these
    extremely vulnerable children.
        MRS and our colleagues from Lutheran Immigration and Refugee
    Services (LIRS) are equipped to provide the special care these children
    need and have been working with the State Department and with UNHCR to
    increase the number of those offered resettlement here, starting with
    Sudanese children at Kakuma camp in northern Kenya. The process has
    been slow, but we hope that some of the Kakuma youth will finally enter
    the United States this fiscal year.
        For fiscal year 2001, we recommend that UNHCR refer, and the United
    States resettle, 500 unaccompanied boys and girls. Mr. Chairman, these
    young people, who have experienced severe trauma and dislocation, hold
    no hope of normal lives without an opportunity for resettlement in a
    third country such as the United States.

                             THE CAPACITY QUESTION

        Many agree that there is a real need in the world to resettle more
    refugees. But what about our capacity to absorb more refugees? Has not
    our long involvement with the Indochinese, Bosnians, Kosovars, and
    other refugees produced a variant of compassion fatigue?
        Not at all. Our own programs find no lack of American families
    enthusiastic about sponsoring and assisting refugees. One indicator is
    the magnitude of the cash and in-kind contributions that come through
    our dioceses--resources which supplement the modest but welcome
    government outlay. Last year these contributions amounted to some $12
    million, all coming from ordinary--or should I say extraordinary--
    working Americans. Our colleague refugee resettlement agencies report
    the same generous enthusiasm.
        For those who question the commitment of the American people to
    refugee resettlement, Kosovo provides a ringing response. The
    overwhelming demonstrations of support and offers of aid from the
    public to the Kosovars have been well documented. Agencies, including
    ours, were deluged with offers of assistance for the Kosovars to whom
    our government offered protection. When Americans see persons in
    desperate need, they are quick to help. We are convinced that if our
    public were shown the sufferings of the Sudanese in Kenya or the
    Burmese in Thailand in the same detail as they witnessed the
    desperation of the Kosovars they would react in the same generous way.

                                   CONCLUSION

        We appeal to this Subcommittee to appropriate $700 million for the
    MRA account, an amount which is $42 million over the Administration's
    request and within the current authorization. This would permit up to
    100,000 refugee admissions for fiscal year 2001. With this level of
    funding, the United States will be better placed to pursue important
    refugee-related objectives: an admissions ceiling more in keeping with
    our historic levels; an adequate emphasis on family reunification of
    refugee families; a renewed resettlement program for unaccompanied
    refugee minors; increased assistance to refugees in Africa and
    elsewhere; and increased attention to the needs of the world's
    internally displaced people.
        It is the view of the Catholic bishops that the United States must
    make a renewed commitment to refugee protection globally. By so doing,
    we serve our own vital interests and act as an example to other
    nations. Perhaps more importantly, we honor the democratic values we
    espouse, continue a tradition of compassion which has long
    characterized our nation, and offer a beacon of hope to suffering
    refugees around the world. As a model of democracy and freedom to
    millions around the world, we can and must do more to provide safe
    haven to those who flee persecution.
        MRS thanks the Subcommittee for its past support for this very
    special humanitarian effort as well as for the opportunity to present
    our views on a program which is of great concern to the Catholic
    bishops of the United States.
                                     ______

               Prepared Statement of the American Bar Association

        Mr. Chairman and Members of the Subcommittee: My name is Rona Mears
    and I am the Chair of the American Bar Association's Section of
    International Law and Practice. This written testimony is being
    submitted for the record on behalf of the ABA at the request of William
    G. Paul, President of the Association.
        This statement describes the ABA's technical legal assistance
    projects that promote the rule of law and democracy around the world.
    With over 400,000 members, the ABA is the largest voluntary
    professional organization in the world. Our members--lawyers, judges,
    and law professors, among others--have generously donated, and continue
    to donate, their time, energy and resources to facilitate the rule of
    law and democratization in countries throughout the world. Due in large
    part to the efforts of these volunteers, ABA projects are able to yield
    tremendous leverage and to provide a significant return on the United
    State's financial investment in foreign legal assistance projects. For
    these reasons, we hope that these programs continue to receive
    Congressional support.

                                   BACKGROUND

        Carefully-designed foreign aid programs serve the American people
    through promoting democracy abroad. Successful foreign aid programs
    make a significant difference for reform-minded governments wavering
    between greater democracy or a return to autocratic rule. Democratic
    regimes are less likely to engage in terrorist activity and spawn
    costly and tragic regional conflict. In the absence of conflict,
    nations and international organizations can devote their resources to
    economic development and democracy-building toward a more stable world
    order. It is truly in the best interest of this country to support
    democratic transitions and promote the rule of law abroad.
        In addition, research increasingly demonstrates that without
    transparent, effective legal structures, economic and social
    development cannot take place. Problems of health, education and the
    environment cannot be addressed effectively in an atmosphere of
    corruption and suspicion. Social and economic ills can only be
    addressed by governments possessing a full measure of international
    credibility and popular participation. Support for programs to advance
    the rule of law benefit all of us through allowing us to effectively
    address our mutual international concerns.

                                  ABA PROJECTS

        The American Bar Association adheres to a set of organizational
    goals established by its Board of Governors, including its eighth goal,
    ``to advance the global rule of law.'' To more effectively address this
    goal, in February of 2000, the ABA established two regional councils
    for Africa and Latin America, thereby enabling four regional entities
    to promote the global rule of law. The Africa Law Initiative and the
    Latin America Law Initiative join the Central and East European Law
    Initiative (CEELI) and the Asia Law Initiative Council (ALIC) to
    provide a framework to respond to requests for assistance worldwide.
    Under Council auspices, the ABA's specialized sections and committees
    can provide expertise in virtually every area of law, including but not
    limited to such areas as commercial law development, legal and judicial
    reform, legal education and constitutional-strengthening.
        Four core values govern all ABA international legal technical
    assistance. The ABA's projects must respond to an invitation from the
    host country; provide a comparative approach and neutral advice; manage
    international legal technical assistance projects to enable ABA members
    to provide expertise primarily on a pro bono basis; and, abide by and
    enforce applicable conflict of interest guidelines.
        While there are a multitude of projects in the planning,
    development and implementation stages, the following is a summary of
    some of the major international technical legal assistance projects and
    initiatives undertaken by the American Bar Association.

                    CENTRAL AND EAST EUROPEAN LAW INITIATIVE

        The most comprehensive technical legal assistance project of the
    ABA is the Central and East European Law Initiative (CEELI). Shortly
    after the fall of the Berlin Wall in 1990, CEELI was organized by the
    ABA Section of International Law and Practice to provide technical
    legal assistance to the emerging democracies in Central and Eastern
    Europe. By 1992, CEELI began to provide assistance to the Newly
    Independent States of the former Soviet Union (``NIS'').
        Through a variety of program components, CEELI is making available
    U.S. legal expertise to assist countries that are in the process of
    modifying or restructuring their laws and legal systems. CEELI has
    focused on work in several critical priority areas: constitutional
    reform; judicial restructuring; bar reform; criminal law and procedure
    reform; commercial law; legal education reform; and has helped develop
    and/or institutionalized self-sustaining indigenous non-governmental
    organizations (NGOs) in more than 22 countries.
        Designed to respond to the needs of the countries, CEELI has
    emphasized long-term engagement and nurtured projects that facilitate
    extensive consultations with policy makers, legal scholars, judges, and
    attorneys in each country. Accordingly, CEELI has developed individual
    country plans that address the particularized circumstances of each
    locale. CEELI accomplishes its work primarily through resident liaisons
    and legal specialists, working pro bono, who spend one to two years
    working on a daily and continuous basis with local partners. CEELI
    liaisons often live and work in places where the comforts of life that
    you and I often take for granted do not exist.
        Over the course of the past ten years, CEELI has established itself
    as a fundamental force for law reform in Central and Eastern Europe and
    the NIS. To date, CEELI has conducted 610 Technical Legal Assistance
    Workshops; assessed over 450 draft laws; placed 238 long-term liaisons
    and 215 legal specialists in the region; hosted over 47 Central and
    Eastern European law school deans; sent dozens of U.S. legal reform
    experts to assist in law school reform; and has placed a variety of
    students from the NIS in LL.M. programs throughout the United States.
    The credit for this remarkable achievement goes to the over 5,000
    American attorneys, judges, legal scholars, and private practitioners,
    who have, as acts of public service, given their time and expertise to
    make this project successful.
        When calculating the in-kind contributions of volunteer legal
    professionals at an understated rate of $150 per hour, CEELI has
    yielded over $72 million of pro bono service. Considering the modest
    CEELI budget in comparison to funding allocated to consulting firms,
    the exceptional programmatic impact and financial leverage that an NGO
    can achieve by using qualified volunteer professionals in a public
    service project is indisputable. This model of a volunteer professional
    assistance project is a viable and cost-effective alternative to other
    uses of U.S. government funding by, for example, for-profit firms.
    Congress has voiced strong support for CEELI and its ability to
    leverage U.S. taxpayer dollars (H.R. Rep. No. 524, 103rd Cong., 2d
    Sess., 82 (1994); S. Rep. No. 287, 103rd Cong., 2d Sess., 76 (1994);
    H.R. Rep. No. 128, 104th Cong., 1st Sess., 80 (1995); H.R. Rep. No.
    143, 104th Cong., 1st Sess., 31 (1995); S. Rep. No. 143, 104th Cong.,
    1st Sess., 42 (1995); S. Rep. No. 000, 104th Cong., 1st Sess., 40
    (1995); H.R. Rep. No. 600, 104th Cong., 2d Sess., 31 (1996); S. Rep.
    No. 35, 105th Cong., 1st Sess., 25 (1997); H.R. Rep. No. 176, 105th
    Cong., 1st Sess., 32 (1997); H.R. Rep. No. 719, 105th Cong., 2d Sess.,
    39 (1998); S. Rep. No. 255, 105th Cong., 2d Sess., 27 (1998); S. Rep.
    No. 81, 106th Cong., 1st Sess. (1999), H. Rep. No. 254, 106th Cong.,
    1st Sess. (1999)).

                             AFRICAN LAW INITIATIVE

    Children's rights project

        The American Bar Association Section of Legal Education has
    initiated a three-phase project to enhance the quality of juvenile
    justice and to help build the human and institutional capacities for
    protecting children's rights in four African countries: Kenya,
    Tanzania, Uganda, and Malawi. A children's rights team has been
    established to implement this project, with overall coordination
    provided by the ABA African Law Initiative. The team is made up of the
    ABA Section of Legal Education, the ABA Center on Children and the Law,
    the ABA Juvenile Justice Center, the Loyola University School of Law
    (Chicago) Civitas Child Law Center, and the Northwestern University
    School of Law.
        The Children's Rights Project will reach out to legal aid
    organizations, the courts, and law schools. The program will focus not
    only on increasing knowledge of the laws that exist for protecting
    children's rights--both among the legal community and the public--but
    will also emphasize the practical nuts and bolts issues of implementing
    laws affecting children. During the first phase of the project, African
    child law specialists will undertake a two-week United States study
    tour during which they will visit a wide variety of child welfare
    organizations, agencies and juvenile courts in Washington and Chicago.
    The emphasis will be on practical techniques useful to the
    participating Africans. The second phase of the project will be a
    workshop to be held in Nairobi, Kenya bringing together leading child
    rights advocates from the four participating African countries and from
    the United States. The final report from this workshop will contain
    concrete recommendations for legal system improvements that will
    increase the quality of juvenile justice and child protection. During
    the third and final phase of the project, United States children's law
    specialists will visit the participating African countries for extended
    visits to follow-up on the workshop recommendations by working closely
    with legal aid organizations, law schools, and the courts.
        The ABA African Law Initiative, with funding from the Office of
    Citizen Exchanges, is also continuing its work on clinical legal
    education, curriculum development, and law library development at
    African law schools. The new Children's Rights Project will build on
    the African Law Initiative's previous clinical legal education work by
    helping to structure clinical experiences for law students so they may
    assist children and youth who have previously not had representation.
    Mozambique law initiative
        The objective of this initiative is to assist the Ordem dos
    Advogados de Mozambique (the Mozambican Lawyer's Association) and other
    indigenous organizations in the development of legal and judicial
    reform in Mozambique by organizing assessment/training trips and
    seminars on continuing legal education, commercial law, intellectual
    property, law firm management, and the role of lawyers in human rights.
    The first assessment/training visit took place from March 18-28, 2000,
    with a former Chair of the ABA's Section of International Law and
    Practice travelling to Maputo, Beira, and Nampula for a series of
    meetings and presentations concerning the legal system and corruption
    in Mozambique.
        Mozambique attained independence from Portugal only twenty-five
    years ago. The civil war which engulfed the country shortly after
    independence and continued into the 1990s was not conducive to the
    development of democratic institutions or the rule of law. For much of
    this period, the only law school in the country was closed. For this
    reason, there was no real formation of lawyers in any significant
    numbers until recently, and even today the number is small. In recent
    years, however, with political democratization, a move towards a market
    economy, and significant privatization, the need for a vastly expanded
    and strengthened legal system has become apparent. The Ordem was
    authorized in 1994 and began to operate in 1996.
        The recent program included meetings with governmental officials,
    non-governmental organizations, business groups, legal educators and
    others concerned with the legal infrastructure and corruption in
    Mozambique. These meetings provided not only for an assessment and
    exchange of substantive legal information, but also served as an
    opportunity for Ordem to strengthen its organizational presence and
    establish a dialogue with the various groups. Seminars were held in
    each of the three cities at a local university, providing an
    unprecedented opportunity for dialogue between various constituencies
    within the legal community and with civil society more generally.
        The visits strengthened the Ordem dos Advogados de Mozambique, and
    the understanding between the ABA and the Ordem. This better
    understanding will help inform follow-up efforts that may ensue to
    strengthen the rule of law, civil society and the anti-corruption
    movement in Mozambique.

    Organization for the Harmonization of Business Law in Africa

        In early December of 1999, the ABA, with funding from the
    Department of State, sent two members to Yaounde, Cameroon to
    participate in the Conference on the Organization for the Harmonization
    of Business Law in Africa (or L'Organisation pour l'Harmonisation en
    Afrique du Droit des Affaires, commonly known by its French acronym
    ``OHADA'').
        OHADA was created pursuant to the Treaty of October 17, 1993, which
    entered into force in July 1995. It seeks to encourage both internal
    economic development and foreign investment by establishing uniform
    commercial laws and enforcement mechanisms in the sixteen OHADA Member
    States which have joined it to date. While the current OHADA members
    are almost exclusively former French colonies located in West and
    Central Africa, membership is available to any African country.
    Pursuant to the OHADA treaty, six Uniform Acts have been enacted to
    date covering business organizations, sales and contracts,
    securitization, bankruptcy, collection/foreclosure remedies, and
    arbitration law. In 1998, members of the OHADA Joint Court of Justice
    and Arbitration expressed interest in the ABA's providing substantive
    comments on the Uniform Acts and also in possible judicial exchange
    and/or training efforts.
        During the late Summer of 1999, ABA's Section of International Law
    and Practice, in cooperation with the International Judicial Relations
    Committee (IJRC) of the U.S. Judicial Conference, organized and
    recruited nearly 50 attorneys and federal judges to assist in reviewing
    and commenting on the OHADA Uniform Acts. Six separate teams were
    formed, which in turn prepared written reports identifying the
    strengths and weaknesses of each OHADA Uniform Act and making specific
    recommendations for improvement. (One recommendation common to all of
    the reports, for example, was a recognition of the critical need for an
    authoritative, indeed an official, English language version of the
    OHADA Uniform Acts.)
        The ABA-IJRC Report (distributed in both English and French) was a
    central topic of discussion at the conference and, in many attendees
    views, indicated the interest of the foreign investor community in an
    effective and understandable Uniform Acts in OHADA This report is being
    distributed to the OHADA Council of Ministers and to each judge on the
    OHADA Joint Court, as well as to the U.S. embassies and bar
    associations of each West and Central African country. Follow-on
    activities, including judicial training and materials, are currently
    being explored.

                          ASIA LAW INITIATIVE COUNCIL

        The ABA's Asia Law Initiative Council initiated several activities
    last year in China. Among these was a program of support for the
    development of a system of legal aid designed to provide leadership in
    fulfilling the promises made by Presidents Clinton and Jiang for
    cooperation in the field of law. While the bombing of the Chinese
    Embassy in Belgrade forced postponement of the planned joint legal aid
    conference, during the year 2000 the ABA expects to move forward with
    this conference.
        Under its Agreement with the All-China Lawyer's Association the ABA
    has brought to the U.S. several Chinese lawyers to serve as interns in
    U.S. law firms. These interns passed a rigorous selection process in
    China. They are working in U.S. law firms in Chicago, New York and
    Dallas under the aegis of the ABA's Section of International Law and
    Practice.
        With Ford Foundation support, the ABA expects to repeat its highly-
    successful trial demonstration program. Previously hosted by the
    National Judges College of the Supreme People's Court in Beijing, the
    succeeding trial will branch out to expose additional members of the
    Chinese judiciary to U.S. trial techniques and to a course of law in
    such specialized areas as domestic violence and criminal law. The last
    case was heard by over 200 judges and was videotaped for use by the
    judiciary throughout the P.R.C. The Berlin Judge's Association
    participated, providing a comparative overview of the common law and
    civil code traditions. A new feature of this program is that, along
    with the ABA and the Berlin Judge's Association, the Chinese
    participants may be expected to demonstrate their trial of the case
    selected.
        Through its Section of Business Law, the American Bar Association
    is collaborating with the Chinese University of Political Science and
    Law and Temple University and has established a Center for the Study of
    Business Law in Beijing. The Center can offer seminars and conferences
    on U.S. and international business law to Chinese lawyers, judges,
    government officials and law students. The Center for the Study of
    Business Law will advance the development of a commercial legal
    framework and promote the rule of law and the development of a market
    economy in China.

           UNITED NATIONS DEVELOPMENT PROGRAMME: LEGAL RESOURCE UNIT

        The American Bar Association (ABA) and the United Nations
    Development Program (UNDP) entered into a Project Cooperation Agreement
    in October 1999 to establish a Legal Resource Unit within the ABA
    Section of International Law and Practice. The mission of the ABA/UNDP
    Legal Resource Unit (LRU) is to provide a legal resource capability to
    service UNDP global governance programs and projects supporting legal
    reform and democratic institution building. The primary task of the LRU
    is to assist UNDP Country Offices to identify candidates capable of
    providing legal advice, normally on a pro bono basis, on the drafting
    of legislation, judicial reform, building of legal institutions
    including professional groups and associations, and other legal
    dimensions of governance.
        The LRU commenced operations on February 1, 2000, and stands ready
    to assist UNDP Country Offices in identifying and sourcing legal
    expertise worldwide. The functions of the LRU will be prioritized to
    reflect UNDP program needs, and will support countries in a wide array
    of substantive legal areas, including:
      --Reform of legal institutions and systems, including reform of
            constitutional frameworks
      --Support to electoral bodies and drafting of electoral laws
      --Improvement of legislative drafting and parliamentary practices
      --Reform of public sector regulations and processes Strengthening
            anti-corruption measures
      --Support for decentralization and strengthening of local
            institutions
      --Development of the capacity of independent lawyers associations
      --Legal education and judicial training
      --Legal services to the indigent and underrepresented
      --Other law-related areas as needed
        The LRU will focus mainly on the identification of legal experts
    based upon requests from UNDP Country Offices and, in the case of
    UNDP's inter-country activities, from the appropriate UNDP Headquarters
    Units including Regional Bureaus. Legal experts will be identified from
    a wide variety of sources in order to best serve UNDP program
    objectives in a given country bearing in mind language considerations,
    cultural norms and the legal traditions of the country to be assisted.
    In doing so, the LRU will draw from the ABA's worldwide membership and
    will also network with the International Bar Association, and other
    national bar associations and professional organizations.

                                   CONCLUSION

        The United States plays a unique leadership role in worldwide
    democratic and economic development. Targeted foreign assistance to
    establish and enhance strong legal systems and institutions grounded in
    the rule of law is a critical component of that development.
    Establishment of a government based on the rule of law is a necessary
    prerequisite to creating a lasting democratic society and a vibrant
    market based economy. Advancing these objectives globally is vital in
    ensuring the protection and promotion of U.S. national security and
    economic interests. Rule of law programs such as we have described
    above are a cost-effective mechanism through which to advance both the
    interests of the citizens of the participating countries and U.S.
    foreign policy interests. While we appreciate the difficult task your
    Subcommittee has in allocating very limited resources, we strongly
    believe that that legal assistance programs are a wise investment of
    U.S. dollars which result in substantial benefits for U.S. citizens and
    businesses.
        For these reasons, we respectfully urge Congress to support the
    ABA's technical legal assistance programs through the appropriations
    process.
                                     ______

    Prepared Statement of the American Councils for International Education

        On behalf of the American Councils, I am submitting this statement
    in support of continued funding for U.S. assistance to the countries of
    the former Soviet Union. As president of the American Councils, I head
    the leading U.S. educational and exchange organization working in the
    foreign Soviet Union; as a Russian language professor at Bryn Mawr
    College, I am a long-time student and observer of the Russophone world,
    beginning with my collegiate studies in the late 1960s. The American
    Councils administers a wide array of educational exchange and training
    programs on behalf of the U.S. Government, and others, in the former
    Soviet Union, including the Future Leaders High School Exchange
    Program, the Edmund S. Muskie Graduate Fellowship Program, the Junior
    Faculty Development Program, and the Excellence in Teaching Awards
    Program.
        The American Councils has also had the privilege since last summer
    of working with the U.S. Congress on the new Russian Leadership
    Program, administered through the Library of Congress under the
    leadership of the Librarian, Dr. James H. Billington. This program
    provides a special and new opportunity to foster direct and individual
    dialogue between legislators and other political leaders of Russian and
    the United States.
        Since the breakup of the Soviet Union, Congress has played a lead
    role in conceptualizing and defining U.S. assistance to the New
    Independent States. With the enactment of the FREEDOM Support Act in
    1992, and the subsequent annual foreign operations funding legislation,
    congressional bipartisan leadership has steered a thoughtful course for
    our federally-funded aid to this region. In steering that course,
    Congress has had to balance a set of interconnected concerns: promoting
    transition to a free market economy while constraining trade with rogue
    nations; fostering democratic rule while monitoring human rights;
    building mature relations among nations while staying ``on-message''
    regarding U.S. interests. From my perspective that exercise has been
    successful by and large.
        At the more specific level where my organization and the U.S.
    Government partner to provide programs and activities under FSA, I also
    believe that an appropriate balance has been achieved, along with a
    fair amount of innovation and creativity. A significant portion of the
    assistance that supports democratic reforms and the building of a free-
    market economy has flowed through the U.S. Agency for International
    Development to the Bureau of Educational and Cultural Affairs in the
    U.S. Department of State (prior to October 1, 1999, to the U.S.
    Information Agency). This fiscal year, $97 million of the $839 million
    appropriated for NIS assistance will be spent on exchange and training
    programs administered in this fashion. The American Councils, through
    its U.S. staff and its network of 47 offices in the 12 NIS countries,
    will administer a large array of programs accounting for a significant
    portion of that money reprogrammed to ECA.
        These programs--administered by us and a cross-section of other
    U.S. NGOs and educational institutions--represent the delivery of
    assistance directly to individuals. As a percentage of the U.S.
    assistance to this region, these programs have grown since their
    initiation in the early 1990s, and particularly in the past several
    years, there has been an affirmative decision, advocated by the
    Administration and supported on Capitol Hill, that such direct,
    grassroots assistance to individuals and local, private groups is a key
    method to achieving our foreign policy goals in these countries.
        By virtually any measure, these programs have been extremely
    successful in delivering assistance to the NIS. They have empowered new
    entrepreneurs, instigated key economic and social reforms, informed new
    democratic movements, spread U.S. business practices and American
    English, and exposed many thousands of individuals--both Americans and
    citizens of the NIS--to each other in settings that foster mutual
    understanding.
        In all of these exchange programs, for which foreign assistance
    dollars are essential to their delivery, there is an indispensible
    component provided by American and American institutions. Whether
    hosting a high school student for a year, serving as a faculty mentor,
    or providing tuition remissions for a graduate degree, significant
    costs associated with the conduct of these programs is provided at no
    cost to the U.S. Government. Not only does this save the taxpayers
    money, it provides our citizens and our institutions with ownership of
    the programs and their participants. Exchangees from the NIS witness
    this partnership daily during their programs, and it is in itself one
    of the fundamental lessons of civic responsibility that we teach to the
    citizens of the former Soviet Union
        A couple of examples are illustrative of the impact of these
    programs:
      --Under the Muskie and FSA graduate fellowship programs, nearly 2200
            graduate students in such fields as business, journalism, law,
            economics, and public and educational administration have come
            to the United States and received their graduate degrees. The
            overwhelming majority have returned to the region to take jobs
            in their fields. Many of them, particularly in the business
            sector, are aggressively recruited for employment. According to
            our alumni records, at least 30 hold either elected or senior
            appointed positions in national or regional governments
            including four members of parliament (a Kyrgyz and three
            Georgians). One of the outcomes of these students' experiences
            in the United States has been remarkable and consistent growth
            in the number of students who apply and the quality of those
            applications. For next fall's enrollments, more than 6500
            students applied for only 366 slots. This program has become
            the premier American educational fellowship for NIS students.
      --With the passage of the FREEDOM Support Act, no exchange program
            received more attention or was viewed as skeptically as the
            Future Leaders High School Exchange Program, championed by
            then-Senator Bill Bradley. It has proven to be a model program
            for reaching the next generation of NIS leaders. In the time
            since the program was launched, nearly 8000 NIS high school
            students have come to the United States (including the 950 here
            now). Another 1155 will attend U.S. high schools for the coming
            school year. While we might not expect high school students to
            be agents of change for a decade or more, in the NIS these
            students are the new generation of leaders immediately. The
            alumni have started small businesses, become English-language
            reporters, and done interpretation work. Among the alumni of
            all the programs we work with, the high school returnees are
            among the most likely to do public service work and to start
            local NGOs. The program is also an extremely effective public
            demonstration of a free and open competition: last fall, over
            49,000 students applied for the program, which begins with an
            English language test and a review of their eligibility. The
            recruitment is structured to ensure that only qualified
            students are selected, and the outreach for participants means
            our American recruiters visit virtually every oblast and region
            of the NIS. So positively is viewed this competitive process
            that we have heard from NIS secondary school principals that
            they treat the selection of one of their students to
            participate in this program as a validation of their academic
            excellence--like having a National Merit winner in a graduating
            class.
      --One aspect of affecting change in the transformation of the post-
            Soviet states is to ensure that the educational systems are
            able to produce graduates who are each capable of prospering in
            a free and open society. We work on two FSA-funded programs,
            working with teachers, teacher trainers, and school
            administrators, that are intended to help ensure the reform of
            NIS education. Like all of the programs we run, these two--
            Excellence in Teaching Awards and Partners in Education--are
            run as open competitions that reward merit and achievement. In
            the case of the teaching excellence awards program--started
            initially in Ukraine and Russia--70 teachers from five
            countries will participate in an intensive eight-week program
            in the United States that will explore alternative teaching
            methods, curricullar reforms, and educational resources to
            promote educational reform. Included in this program are two
            dozen U.S. teachers selected by virtue of their own recognized
            excellence, who work both during the two-month professional
            training and subsequently during a two-week visit to the NIS
            teachers' own schools. In addition to rewarding achievement,
            personal initative, and merit, these two teacher programs give
            our assistance a multiplier effect of teaching future NIS high
            school students based on this U.S. experience.
      --The cultures of the NIS have long valued knowledge and higher
            learning, and national literacy rates are high. The recognized
            value of advanced education is very strong, and joining the
            academic community as a faculty member is well regarded. Since
            1994, U.S. assistance has supported the Junior Faculty
            Development Program (JFDP); a program we have administered
            since 1998. As the name suggests, this program brings promising
            faculty to the United States to improve their teaching
            methodology; aid in their development of new curricula; network
            for professional development; and build linkages to U.S.
            faculty and colleges. Initially offered in only three countries
            (Kazakhstan, Russia, and Ukraine), this program will include
            participants in nine of the 12 NIS countries this fall. So high
            is demand for this type of access to the U.S. higher education
            community that even in small countries like Moldova--where this
            program has just been introduced--the applicant pool numbers
            and quality are superb: 55 completed applications for three
            slots. This program, like most that we administer, could grow
            by factors of two or three and the excellent quality of the
            participants would not be diminished.
        With each of these programs, and others we administer for the U.S.
    Government, ourselves, and other funders, we also find powerful
    reinforcing connections with and among different programs. The teacher
    programs mentioned above, for example, are aided by high school student
    exchanges in at least two ways: we identify likely candidates for the
    teacher programs as we recruit high school exchange students; and we
    use high school exchange alumni both to nominate candidates and to
    serve as selection committee members. These teacher programs also
    augment long-standing privately and publicly funded linkage programs
    between U.S. and NIS high schools by encouraging American communities
    to act as hosts.
        The American Councils experience with administering these U.S.
    Government programs assures me that they are providing direct
    assistance to individuals and private entities that need and value the
    aid; that it delivers the results the U.S. Congress anticipated in
    directing aid to this region; and that we can and must do more to
    continue the work we as a nation have started.
        Given the importance of our nation's relationship to the NIS, and
    the critical need for a successful transition to free democratic and
    open societies in these countries, I believe that it is essential to
    maintain adequate funding for U.S. assistance to the NIS. In that
    regard, I do not believe that the Administration's request for fiscal
    year 2001 is sufficient. That request seeks a lower level of funding,
    and makes no provision for rebalancing expenditures by country.
        In the initial years of the FREEDOM Support Act assistance, funding
    channeled through PVOs and exchange organizations to deliver assistance
    to individuals and private institutions was generally balanced in its
    allocation by country, using a formula that assigned aid largely in
    relation to the population of each country. While funding decisions
    included important assessments about how and where aid should be
    delivered, such as carefully regulating the flow of assistance to
    Azerbaijan, the preponderance of aid flowed to the leading countries of
    the region including Russia, Ukraine, Kazakhstan, and Uzbekistan. For
    exchange programs--with which I am most familiar--this balancing of
    resources was a careful and thoughtful division of slots for virtually
    all of the programs. It made sense, in essence, to have the
    demographics of the exchange program participant pools match the
    approximate profile of the countries involved. Indeed, these efforts
    have been charged with a responsibility to be inclusive of minority
    groups, women, and individuals from regions not historically reached by
    exchange programs. As the decade of the 1990s has rolled over to 2000,
    that thoughtful balance has been recalibrated. Special attention has
    been paid to the south Caucasus and Ukraine. Countries like Belarus and
    Tajikistan have generally not been favored. For both strategic and
    political reasons, there is much to justify these changes. I am
    particularly pleased with the special attention given to Ukraine, which
    makes both strategic sense to the United States and its Western allies,
    and cultural sense given the size and history of the country and its
    place in Europe. Similarly, there are powerful arguments in terms of
    educational and economic development to pay special attention to a
    country like Armenia. This nation, too, has a special and important
    history with a strong sense of its place in the region.
        I am concerned, however, that in concentrating our assistance
    dollars in a couple of countries, we jeopardize our chances for
    meaningful and balanced transformation in the region as a whole. I
    believe Congress should carefully assess where its resources are
    flowing and consider recalibrating its allocations to respond to
    critical needs in countries that are increasingly disfavored in aid.
    This is an especially important exercise, in my view, because we tend
    to treat assistance dollars as a fixed pie, where of necessity a few
    more dollars for one country means less for another.
        In particular, I would urge that Congress consider providing
    additional funding for Russia and key states in Central Asia.
        The case of maintaining a robust assistance package for Russia is
    clear. The Russian Federation is a Eurasian nuclear power, home to more
    than 147 million people (by official count), that covers 11 time zones,
    and is the unambiguously dominant cultural influence in the region.
    Virtually every aspect of social, political, and economic interaction
    in the NIS is tied in fundamental ways to Russia. Whether its the
    western Eurasian interlocking power grid or the integrated security
    arrangements in various parts of the Caspian Region and Central Asia,
    Russia is the proverbial 800-pound bear--when it moves, the whole
    region pays attention. As a consequence, true stability in the NIS
    region requires a stable Russia. In the absence of such stability as a
    free-market economy and democratic society, there is little realistic
    chance of developing these characteristics among the component pieces
    of the former Soviet Union.
        I believe that we can deliver the human capacity, world outlook,
    and agents of change to Russia without rewarding its objectionable
    practices for which Congress is rightly concerned. To do so, our
    Russian assistance should be focused on aid to individuals and the
    fledgling nongovernmental organizations that have a commitment to work
    with U.S. private sector groups like the American Councils and our
    colleague institutions. By approaching our assistance in this manner,
    the United States is able to encourage change, promote the transition
    we as a nation seek, and foster connections to a new generation of pro-
    democratic leaders. This approach also ensures that we do not reward
    those governmental entities in Russia that are impeding change or are
    opposed to the transformation we believe is in the interests of both
    the United States and Russia.
        For the nations of Central Asia, we must not neglect their
    development and the opportunities for long-term transformation in a
    region that has no practical experience in modern statehood prior to
    the break-up of the Soviet Union. And yet despite the lack of that
    historical experience, this region has an extremely long tradition of
    both international commerce and advancing higher learning. In terms of
    cultural disposition, this region is ideally suited for the message our
    American aid has regarding market development and educational reform.
        Our strategic interests--both for security and commerce--demand
    that we pay special attention to this region. The Central Asian
    Republics sit in a sensitive part of the world, with Russia to their
    north; the Middle East to the south; and China to the east. Significant
    natural resources--oil and gas not the least of them--make this
    region's economic development critical for the United States. Stable
    free market economies with developing democracies in these five states
    should be central objectives for our assistance to this region.
        Each of these countries has responded to their new found freedom
    differently and the results are clearly mixed. But Uzbekistan has
    embraced educational reform with its own resources, modeling after the
    FSA programs a large college fellowship program for its brightest
    students to study in the United States and elsewhere in the West (the
    American Councils administers this Uzbek program in the United States).
    Kyrgyzstan is being admitted to the World Trade Organization, making it
    the first country of the former Soviet Union to do so. Tajikistan has
    finally apparently crafted a peaceful solution to its civil war and
    formed a coalition government that hopes to provide it with a period of
    stability. Kazakhstan has made important progress on economic reform
    and development.
        Our grassroots assistance in this region is both extremely popular
    and very effective. Applicant pools for these programs are very deep
    and high in quality. For example, when the American Councils introduced
    the JFDP program recruitment in Uzbekistan this past fall, we received
    the largest pool per slot: 33 applicants for each finalist position.
    Students from this region excel when on-program, have high return
    rates, and get good job and academic placements upon their return. And
    yet our comparative allocation of resources to these countries
    continues to slip. Our level of activity in this region has reached the
    point where we are at risk of undermining the programs because we
    simply are unable to support anything approaching an adequate number of
    participants. Using Uzbekistan as a frame of reference, in this coming
    school year's FSA undergraduate program--which we also administer--
    there are only 9 slots out of 305 scholarships NIS-wide. There were 608
    completed Uzbek applications for those slots! Last year, 460 Uzbeks
    applied for only 9 scholarships. While the Uzbek example is dramatic,
    the situation is similar in the other four countries of Central Asia.
    Our risk here is that increasingly when U.S. assistance is trumpeted,
    individual Central Asians won't know of anyone that has gone on the
    program.
        One final note about the important ways we spend NIS assistance
    funds. The American Councils is also very privileged--with a number of
    other highly regarded academic groups--to participate in the State
    Department's Title VIII Program for Research and Training on Eastern
    Europe and the Independent States of the Former Soviet Union. For a
    number of years, funds for these critically valuable advanced research
    activities supporting American scholars has come from NIS assistance
    (and SEED funding). While not traditionally thought of as assistance,
    in fact the policy analysis provided by many of the Title VIII-
    supported scholars provides important and timely information of
    relevance to U.S. policy making, including how to direct and refine our
    assistance. This funding is very modest, but very valuable. I urge you
    to continue to support this component of our research and training for
    Americans.
        Thank you for your continued interest in and support of U.S.
    assistance for the NIS. I believe we are making real progress in our
    efforts to transform the societies of this region, and I hope you will
    be able to support funding at level no lower than the current year's
    appropriations.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    Albright,, Hon. Madeleine K., Secretary of State, Office of the
      Secretary, Department of State.................................   199
        Prepared statement...........................................   206
        Questions submitted to.......................................   235
        Summary statement............................................   203
    American:
        Bar Association, prepared statement..........................   288
        Councils for International Education, prepared statement.....   292
        Farm Bureau Federation, prepared statement...................   277
        Hellenic Institute Public Affairs Committee, Inc., prepared
          statement..................................................   252
        Society of Tropical Medicine and Hygiene, prepared statement.   250
    Antezana, Hon. Oswaldo, Minister of Agriculture for Bolivia......    58

    Bennett, Hon. Robert F., U.S. Senator from Utah, questions
      submitted by.................................................150, 236
    Brundtland, Gro Harlem, M.D., M.P.H., Director-General, World
      Health Organization; Chair, Global Alliance on Vaccines and
      Immunization...................................................   169
        Prepared statement...........................................   172
    Burns, Hon. Conrad, U.S. Senator from Montana, opeing statement..    10

    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado:
        Opening statement............................................   223
        Questions submitted by.......................................   238
    Cyprus Federation of America, prepared statement.................   252

    Daulaire, Nils, M.D., M.P.H., president and CEO, Global Health
      Council........................................................   181
        Prepared statement...........................................   183

    Ernoult, Nathalie, program manager, North Caucasus, Action
      Against
      Hunger.........................................................   118
        Prepared statement...........................................   119

    Feinstein, Hon. Dianne, U.S. Senator from California:
        Opening statement............................................     9
        Questions submitted by.......................................    37
    Florida State University, prepared statement.....................   276
    Foege, William, M.D., M.P.H., professor of international health,
      Emory University; and advisor, Bill and Melinda Gates
      Foundation.....................................................   177
        Prepared statement...........................................   179
    Ford, Douglas, senior researcher, Physicians for Human Rights....   113
        Prepared statement...........................................   114

    Hellenic American:
        National Council, prepared statement.........................   252
        Women's Council, prepared statement..........................   252

    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, questions
      submitted by...................................................    35

    Jimenez, Dr. Ramon, Attorney General for Ecuador.................    56

    Kirk, Robin, Americas Division, Human Rights Watch...............    64
        Prepared statement...........................................    69

    Lautenberg, Hon. Frank R., U.S. Senator from New Jersey:
        Prepared statements.........................................11, 229
        Questions submitted by..................................34, 36, 243
    Leahy, Hon. Patrick J., U.S. Senator from Vermont:
        Opening statements..............................4, 74, 90, 155, 218
        Prepared statements........................6, 75, 92, 142, 156, 222

    Mahmoud, Adel, M.D., Ph.D., president, Merck Vaccine Division....   187
        Prepared statement...........................................   189
    McConnell, Hon. Mitch, U.S. Senator from Kentucky:
        Opening statements.........................1, 71, 87, 125, 153, 199
        Prepared statements........................3, 73, 89, 127, 154, 201
        Questions submitted by.................................85, 148, 235
    Migration and Refugee Services, United States Catholic
      Conference, prepared statement.................................   284
    Mikulski, Hon. Barbara A., U.S. Senator from Maryland, questions
      submitted by...................................................   245
    Moreno, Ambassador Luis Alberto, Colombian Ambassador to the
      United States..................................................    43
        Prepared statement...........................................    45
    Murray, Hon. Patty, U.S. Senator from Washington, opening
      statement......................................................   193

    National Corn Growers Association, prepared statement............   277
    New York University, prepared statement..........................   272

    Pan Cretan Association of America, prepared statement............   252
    Pan Karpathian Educational Progressive Association, prepared
      statement......................................................   252
    Pan Laconian Federation of U.S.A. and Canada, prepared statement.   252
    Pickering, Hon. Thomas, Under Secretary of State, Department of
      State..........................................................     1
        Prepared statement...........................................    16
        Summary statement............................................    11

    Rotary International, prepared statement.........................   247

    Schuerch, Hon. William E., Deputy Assistant Secretary, Department
      of the Treasury, letter from...................................   138
    Specter, Hon. Arlen, U.S. Senator from Pennsylvania:
        Opening statement............................................     8
        Question submitted by........................................   236
    Steinberg, Donald K., Ambassador, Special Haiti Coordinator,
      Department of State............................................    71
        Prepared statement...........................................    78
        Question submitted to........................................    85
        Summary statement............................................    76
    Stevens, Hon. Ted, U.S. Senator from Alaska:
        Opening statement............................................     6
        Prepared statement...........................................     7
    Summers, Hon. Lawrence H., Secretary, Office of the Secretary,
      Department of the Treasury...................................125, 153
        Prepared statements........................................131, 160
        Summary statements.........................................128, 157

    Talbott, Hon. Strobe, Deputy Secretary of State, Office of the
      Deputy Secretary, Department of State..........................    87
        Prepared statement...........................................    95
        Summary statement............................................    93
    Taylor, William, Ambassador, Department of State.................    87

    University of Miami, prepared statement..........................   279

    Wilhelm, Gen. Charles, Commander in Chief, U.S. Southern Command,
      Department of Defense..........................................    21
        Questions submitted to.......................................    35
    World Wildlife Fund, prepared statement..........................   281

                                 SUBJECT INDEX

                                  ----------

                             DEPARTMENT OF DEFENSE

                                                                       Page

    Additional committee questions...................................    35
    Action plan......................................................    22
    Air interdiction efforts.........................................    40
    Alternative production...........................................    39
    Bachilleres......................................................    30
    Colombia:
        Coca production in...........................................    39
        Counternarcotics battalion...................................    21
        Drug trade...................................................    38
        Pilots.......................................................    32
        Strategy.....................................................    27
        Support to...................................................    36
    FARC:
        Control......................................................    37
        Eradication in areas.........................................    38
    Forward operating locations......................................22, 35
    Fourth brigade...................................................    39
    Helicopters......................................................    22
    Human rights.....................................................    29
        Colombia, abuses in..........................................    39
    Military:
        Counterdrug efforts..........................................    36
        Guerrillas, effectiveness against............................    37
    Paramilitaries...................................................    26
    Plan Colombia:
        Funding allocations..........................................    37
        Helicopter assistance........................................    37
    UH-60s...........................................................    31
    Vietnam..........................................................    32

                              DEPARTMENT OF STATE

    Additional committee questions...................................34, 85
    American national security interests, pursuing...................    78
    Cooperation, building on past....................................    80
    Expectations, unmet..............................................    79
    Progress since 1995, areas of....................................    78
    U.S. policy: The road ahead......................................    79

                         Office of the Deputy Secretary

    Armenia..........................................................   107
    G-8 meetings.....................................................   102
    Russia:
        Policy toward................................................    93
        Resolution criticizing.......................................   108
    War crimes.......................................................   100

                            Office of the Secretary

    Additional committee questions...................................   235
    European contributions...........................................   239
    Global environment facility......................................   243

                           DEPARTMENT OF THE TREASURY

                            Office of the Secretary

    Additional committee questions...................................   148
    Combating infectious diseases as a moral and an economic
      imperative.....................................................   161
    Ecuador..........................................................   148
        Debt, rescheduling...........................................   151
    IFC and MIGA, privatization of...................................   150
    Make a real difference, the ability to...........................   162
    MDBs and debt reduction programs, the case for strong support for
      the............................................................   131
    President's Millennium Vaccine Initiative........................   163
    Reform agenda....................................................   135
    Regional development banks, role of..............................   150
    Request, fiscal year 2001........................................   132
    Russia, new IMF credits for......................................   151