[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
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_______________________________________________________________________
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                                 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

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