[Senate Hearing 106-599]
[From the U.S. Government Printing Office]

                                                        S. Hrg. 106-599

                  2000 FOREIGN POLICY OVERVIEW AND THE
                  PRESIDENT'S FISCAL YEAR 2001 FOREIGN
                         AFFAIRS BUDGET REQUEST



                               BEFORE THE




                                AND THE

                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION


           FEBRUARY 8, 9, 10, 24, 25, 29, MARCH 8 and 23, 2000


       Printed for the use of the Committee on Foreign Relations

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


68-628                     WASHINGTON : 2000


                 JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
CHUCK HAGEL, Nebraska                PAUL S. SARBANES, Maryland
GORDON H. SMITH, Oregon              CHRISTOPHER J. DODD, Connecticut
ROD GRAMS, Minnesota                 JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas                RUSSELL D. FEINGOLD, Wisconsin
CRAIG THOMAS, Wyoming                PAUL D. WELLSTONE, Minnesota
JOHN ASHCROFT, Missouri              BARBARA BOXER, California
BILL FRIST, Tennessee                ROBERT G. TORRICELLI, New Jersey
                   Stephen E. Biegun, Staff Director
                 Edwin K. Hall, Minority Staff Director



                    BILL FRIST, Tennessee, Chairman
ROD GRAMS, Minnesota                 RUSSELL D. FEINGOLD, Wisconsin
SAM BROWNBACK, Kansas                PAUL S. SARBANES, Maryland



               LINCOLN D. CHAFEE, Rhode Island, Chairman
JESSE HELMS, North Carolina          CHRISTOPHER J. DODD, Connecticut
RICHARD G. LUGAR, Indiana            BARBARA BOXER, California
JOHN ASHCROFT, Missouri              ROBERT G. TORRICELLI, New Jersey


                            C O N T E N T S


                            February 8, 2000
   2000 Foreign Policy Overview and the President's Fiscal Year 2001 
                     Foreign Affairs Budget Request


Albright, Hon. Madeleine K., Secretary of State, Department of 
  State..........................................................     7
    Prepared statement...........................................    12
    Clarification of responses given by Secretary Albright during 
      the hearing to questions posed by Senator Grams............    36
    Responses to additional questions submitted by Senator Helms.    58
    Responses to additional questions submitted by Senator Lugar.    96
    Responses to additional questions submitted by Senator 
      Feingold...................................................    98
Ashcroft, Hon. John, U.S. Senator from Missouri, press release 
  entitled ``UN Biosafety Procotol,'' Feb. 4, 2000...............    49
    Article entitled ``Caution Needed,'' from the Economist, Feb. 
      5, 2000, submitted by Senator Ashcroft.....................    48
Feingold, Hon. Russell D., U.S. Senator from Wisconsin, prepared 
  statement......................................................    44
Helms, Hon. Jesse, U.S. Senator from North Carolina, prepared 
  statement......................................................     3

                            February 9, 2000
               A Review of U.S. Foreign Policy Priorities

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, prepared 
  statement......................................................   102
Perry, Hon. William J., Berberian professor and senior fellow, 
  Institute for International Studies, Stanford University; and 
  former Secretary of Defense, Stanford, CA......................   121
Woolsey, Hon. R. James, partner, Shea & Gardner, and former 
  Director of Central Intelligence Agency, Washington, DC........   114
    Prepared statement...........................................   118
    Responses to additional questions submitted by Senator Helms.   142
Zoellick, Hon. Robert B., former Under Secretary of State, 
  Washington, DC.................................................   103
    Prepared statement...........................................   105
    ``A Republican Foreign Policy,'' article from Foreign 
      Affairs, January/February 2000.............................   107

                           February 10, 2000
               U.S. Agency for International Development

Anderson, Hon. J. Brady, Administrator, U.S. Agency for 
  International Development, Washington, DC......................   147
    Prepared statement...........................................   149
    Responses to additional questions submitted by Senator Helms.   177
    Responses to additional questions submitted by Senator Lugar.   178
    Responses to additional questions submitted by Senator Biden.   179
``Africa and AIDS: Focus on the Missions,'' article by Rev. 
  Franklin Graham, from the News & Observer, Raleigh, NC, Feb. 6, 
  2000...........................................................   166

                           February 24, 2000
                       The AIDS Crisis in Africa

AIDS Vaccine Advocacy Coalition, prepared statement..............   264
Bale, Dr. Harvey E., Jr., director-general, International 
  Federation of Pharmaceutical Manufacturers Association, Geneva, 
  Switzerland....................................................   228
    Prepared statement...........................................   231
    Responses to additional questions submitted by Senator Helms.   259
Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, prepared 
  statement......................................................   217
Bill & Melinda Gates Foundation, statement on Senator Kerry's 
  ``Vaccines for the New Millennium Act,'' Feb. 24, 2000.........   199
Boxer, Hon. Barbara, U.S. Senator from California................   190
    Prepared statement...........................................   192
Consumer Project on Technology, prepared statement...............   264
D'Agostino, Father Angelo, Nyumbani Orphanage, Nairobi, Kenya....   252
Durbin, Hon. Richard J., U.S. Senator from Illinois..............   194
Feingold, Hon. Russell D., U.S. Senator from Wisconsin...........   189
Frist, Hon. Bill, U.S. Senator from Tennessee, news release 
  entitled ``Frist Warns AIDS Epidemic to Become Biggest Foreign 
  Policy Challenge in Africa,'' Feb. 24, 2000....................   200
Graham, Rev. Franklin, president, Samaritan's Purse, Boone, NC...   248
    Prepared statement...........................................   250
Kerry, Hon. John F., U.S. Senator from Massachusetts.............   185
    Press release entitled ``Kerry Announces Comprehensive 
      Vaccine Plan,'' Feb. 24, 2000..............................   189
Lurie, Dr. Peter, deputy director, Public Citizen's Health 
  Research Group, Washington, DC.................................   240
Nelson, Benjamin F., Director, International Relations and Trade 
  Issues, National Security and International Affairs Division, 
  U.S. General Accounting Office, Washington, DC, prepared 
  statement......................................................   275
Perriens, J., M.D., prepared statement delivered at the Paris 
  1999 Conference on Community and Home Care for People With HIV 
  Infection......................................................   272
Sachs, Dr. Jeffrey, director, Institute for International 
  Development, Harvard University, Cambridge, MA.................   224
    Responses to additional questions submitted by Senator Helms.   259
Satcher, Dr. David, Surgeon General of the United States.........   201
    Prepared statement...........................................   205
    Responses to additional questions submitted by Senator Helms.   256
Smith, Hon. Gordon, U.S. Senator from Oregon.....................   196
    Prepared statement...........................................   197
Thurman, Sandra, Director, Office of National AIDS Policy, 
  Washington, DC.................................................   208
    Prepared statement...........................................   212
Varmus, Harold, M.D., Director, National Institutes of Health, 
  letter to Robert Weissman, Essential Action....................   270

                           February 25, 2000
           Proposed Emergency Antidrug Assistance to Colombia

Beers, Hon. R. Rand, Assistant Secretary of State for 
  International Narcotics and Law Enforcement Affairs, Department 
  of State.......................................................   285
    Prepared statement...........................................   288
    Responses to additional questions submitted by Senator Helms.   331
    Responses to additional questions submitted by Senator Biden.   313
Ledwith, William E., Chief of International Operations, Drug 
  Enforcement Administration, Washington, DC.....................   296
    Prepared statement...........................................   299
Sheridan, Hon. Brian E., Assistant Secretary of Defense, Special 
  Operations and Low-Intensity Conflict, Department of Defense...   292
    Prepared statement...........................................   294
    Responses to additional questions submitted by Senator Biden.   336
Skol, Hon. Michael, Skol & Associates, Washington, DC............   315
    Prepared statement...........................................   319
    Responses to additional questions submitted by Senator Helms.   334
Vivanco, Jose Miguel, executive director, Americas Division, 
  Human Rights Watch, Washington, DC.............................   321
    Prepared statement...........................................   323
    Letter to Senator Trent Lott, dated Feb. 24, 2000............   325

                           February 29, 2000
    The Future of the International Monetary Fund and International 
                         Financial Institutions


Feingold, Hon. Russell D., U.S. Senator from Wisconsin, prepared 
  statement......................................................   376
Helms, Hon. Jesse, U.S. Senator from North Carolina, opening 
  statement......................................................   344
Shultz, Hon. George P., former Secretary of State and former 
  Secretary of the Treasury......................................   376
Summers, Hon. Lawrence H., Secretary of the Treasury, Washington, 
  DC.............................................................   347
    Prepared statement...........................................   352
    Responses to additional questions submitted by Senator Helms.   368
    Responses to additional questions submitted by Senator 
      Feingold...................................................   371

                             March 8, 2000
     Administration of Foreign Affairs Budget for Fiscal Year 2001

Kennedy, Hon. Patrick F., Assistant Secretary of State for 
  Administration, Department of State............................   390
    Prepared statement...........................................   396
    Responses to additional questions submitted by Senator Biden.   420
Helms, Hon. Jesse, Chairman, Committee on Foreign Relations, 
  letter to Hon. Pete V. Domenici, Chairman, Committee on the 
  Budget, concerning the President's budget request for the 150 
  account........................................................   434
Nelson, Benjamin F., Director, International Relations and Trade 
  Issues, National Security and International Affairs Division, 
  U.S. General Accounting Office, Washington, DC.................   422
    Prepared statement...........................................   425
``12 Agencies Get `Clean' Audits; Senator Thompson `Deeply 
  Disappointed' Only Half Meet Goal,'' article from the 
  Washington Post, Mar. 6, 2000, submitted by Senator Grams......   405

                             March 23, 2000
 Business Meeting to Mark Up the Technical Assistance, Trade Promotion 
              and Anti-Corruption Act for Fiscal Year 2001

Ashcroft, Hon. John, U.S. Senator from Missouri, letters received 
    Andrew Young, GoodWorks International........................   452
    Roger N. Beachy, president, Donald Danforth Plant Science 
      Center.....................................................   453
    L. Val Giddings, vice president for Food & Agriculture, BIO..   454
Gorton, Hon. Slade, U.S. Senator from Washington, letter to Hon. 
  Jesse Helms, Chairman, Foreign Relations Committee.............   480
Helms, Hon. Jesse, U.S. Senator from North Carolina, opening 
  statement......................................................   439
    Prepared statements on the Ashcroft amendment................   457
Roth, Hon. William V., Jr., Chairman, Committee on Finance, 
  letter to Hon. Jesse Helms, Chairman, Committee on Foreign 
  Relations......................................................   442



                       TUESDAY, FEBRUARY 8, 2000

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:40 a.m. in 
room SD-419, Dirksen Senate Office Building, Hon. Jesse Helms 
(chairman of the committee) presiding.
    Present: Senators Helms, Hagel, Grams, Brownback, Thomas, 
Ashcroft, Chafee, Biden, Sarbanes, Dodd, Kerry, Feingold, and 
    The Chairman. The committee will come to order. Well, it is 
a privilege again to welcome a great lady who is very special 
to all of us, the distinguished Secretary of State, Hon. 
Madeleine Albright, who is the first woman to hold that job, 
and how well she has done.
    The official purpose of this hearing, Madam Secretary, as 
you know, is to review the President's foreign affairs budget 
for fiscal year 2001, which was submitted to the Congress 
yesterday. However, this hearing has over the years become much 
more than that. This is our annual ``around-the-world'' hearing 
during which, at the beginning of each year, the Secretary of 
State comes to report to the Senate the state of our Nation's 
foreign affairs, and in the process always engages the 
committee in a wide-ranging discussion of U.S. foreign policy.
    Let me say parenthetically that we welcome a distinguished 
new member of the committee. He has a good name. Well, he has 
two good names. The first one is Lincoln, and the last one is 
Chafee. I am delighted that Senator Chafee, who happens to be 
my seat mate in the U.S. Senate, I am glad you are with us, 
Lincoln, and I enjoyed working with your father so many years 
and look forward to working closely with you in the years to 
    Now, I note with some regret that while we do anticipate, 
Madam Secretary, that you may appear before the committee 
before the end of the year is through, this will be sort of 
your final annual ``around-the-world'' hearing as Secretary of 
State. Madam Secretary, by my count this is your 16th 
appearance before the Senate Foreign Relations Committee. It 
has always been a pleasure to have you with us, and always will 
be, and while we have not always agreed on the multitude of 
matters confronting the Nation during your tenure, I think we 
have accomplished a very great deal together, ranging from the 
expansion of NATO to State Department reorganization, to 
passage of landmark U.N. reform legislation. I must say, with 
all genuine appreciation, it has been a pleasure and a 
privilege to work with you, and the committee is honored to 
welcome you here this morning.
    And to avoid the possible confusion at the United Nations, 
the distinguished Secretary may appreciate my clarifying that 
despite our personal friendship I do not speak for her, and in 
her testimony this morning she will speak for herself and for 
the President of the United States and not for the Congress.
    I said that because I knew that those folks over there and 
those folks over there were waiting for me to say something.
    Tomorrow the committee will hear from a distinguished panel 
of former administration officials regarding foreign policy, 
and on Thursday we will be visited by Mr. Brady Anderson, a 
very gracious gentleman and a good administrator. He heads the 
Agency for International Development.
    Now, this is your first appearance also before this 
committee since the enactment of the James W. Nance and Meg 
Donovan Foreign Relations Authorization Act, which was enacted 
this past November. Now, we all hurrahed that, and I know that 
somewhere up on cloud nine Bud Nance is applauding, too. That 
law, named for two fine Americans, who advised us both, 
authorizes State Department activities for fiscal years 2000 
and 2001.
    It mandates sweeping reforms of the United Nations in 
exchange for payment of arrears, and it authorizes an embassy 
security construction account that will serve as a blueprint 
for increasing the security of the United States Embassies and 
bringing U.S. diplomacy into the 21st century.
    Now, that law, in conjunction with the Foreign Reform and 
Restructuring Act, enacted in 1998, which abolished two Federal 
agencies and integrated their functions in the Department of 
State, will have major impacts on U.S. diplomacy for years to 
come, and I thank you, Madam Secretary, for the considerable 
role you have played in working with this committee in enacting 
those two landmark bills. Without you, it could not have been 
    But, of course, the work of both of these laws has only 
just begun. Now that the U.S. Information Agency and the Arms 
Control Disarmament Agency have been abolished and their 
functions consolidated with the State Department, the 
reorganization is in a crucial phase, and I intend to work with 
you--we all do--to determine where overlap and duplication are 
occurring. I very much appreciate your assurances that savings 
will be found in the fiscal year 2001 budget.
    I know we agreed that ensuring a strong State Department 
will enhance implementation of U.S. foreign policy promises and 
priorities. We are obliged to continue to work together to 
ensure that the U.N. reforms are carried out. Just last month, 
this committee took a visit to the United Nations and held the 
first field hearing of the Foreign Relations Committee in New 
York City.
    And last, I call your attention to the 5-year authorization 
of funds for embassy construction in the authorization bill. 
Senator Grams was instrumental in conceiving this plan, and I 
congratulate him for his good work. The plan provides for a 
clear guidepost to the essential upgrading of U.S. Embassies 
and ensuring the security of U.S. personnel overseas.
    Now, this year, Madam Secretary, the committee hopes to 
consider legislation authorizing U.S. technical assistance, 
trade promotion policy and anti-corruption programs. The 
legislation will address key priorities, including combatting 
narcotrafficking in Colombia through alliances in the Andean 
region and supporting democracy in the Balkans with the passage 
of the Serbian Democracy Act, and policies to strengthen U.S. 
exports, particularly in the agricultural sector.
    And I am going to condense my statement from here on and 
ask that all of it be printed in the record at the conclusion 
of my remarks. We look forward to your testimony on these and 
all of the issues you feel are important, so again I extend a 
sincere welcome to you and look forward to a productive and 
cooperative legislative year by working together.
    [The prepared statement of Senator Helms follows:]

               Prepared Statement of Senator Jesse Helms

    It is my privilege, again, to welcome a great lady who is very 
special to all of us, the distinguished Secretary of State, the 
Honorable Madeleine Albright. The official purpose of this hearing, 
Madam Secretary, is to review the President's foreign affairs budget 
for fiscal year 2001, which was submitted to the Congress yesterday 
    However, this hearing has, over the years, become much more than 
that. This is our annual ``around the world hearing'' during which, 
near the beginning of each year, the Secretary of State comes to report 
to the Senate on the state of our Nation's foreign affairs--and, in the 
process, always engages the Committee in a wide ranging discussion of 
U.S. foreign policy.
    I note with some regret that, while we do anticipate that you may 
again appear before the Committee before the end of the year is 
through, this will be your final annual ``around the world'' hearing as 
Secretary of State. Madam Secretary, by my count this is your 16th 
appearance before the Senate Foreign Relations Committee, and it has 
always been a pleasure to have you with us.
    And while we have not always agreed on the multitude of matters 
confronting the nation during your tenure, we have accomplished a great 
deal together, ranging from the expansion of NATO, to State Department 
reorganization, to passage of landmark U.N. reform legislation. It has 
been a pleasure and a privilege to work with you, and the Committee is 
honored to welcome you here this morning.
    And, to avoid possible confusion at the U.N., the distinguished 
Secretary may appreciate my clarifying that, despite our personal 
friendship, I do not speak for her, and in her testimony this morning 
she will speak for herself and for the President and not for Congress!
    Tomorrow, the Committee will hear from a distinguished panel of 
former Administration officials regarding U.S. foreign policy, and on 
Thursday we will be visited by Mr. Brady Anderson, the Administrator 
for the Agency for International Development (USAID).
    Madam Secretary, this is also your first appearance before the 
Committee since enactment of the James W. Nance and Meg Donovan Foreign 
Relations Authorization Act this past November. The law, named for two 
fine Americans who advised us both, authorizes State Department 
activities for fiscal years 2000 and 2001; it mandates sweeping reforms 
of the United Nations in exchange for payment of arrears; and it 
authorizes an embassy security construction account that will serve as 
a blueprint for increasing the security of U.S. Embassies and bringing 
U.S. diplomacy into the 21st century.
    That law, in conjunction with the Foreign Affairs Reform and 
Restructuring Act, enacted in 1998, which abolished two federal 
agencies and integrated their functicrns into the Department of State, 
will have major impacts on U.S. diplomacy in the years to come. I thank 
you, Madam Secretary, for the considerable role you played by working 
with the Committee in enacting these two landmark bills.
    But, of course, the work of both of these laws has only just begun. 
Now that the U.S. Information Agency and the Arms Control and 
Disarmament Agency have been abolished and their functions consolidated 
in the State Department, the reorganization is in a critical phase. I 
intend to work with you to determine where overlap and duplication are 
occurring and I very much appreciate your assurances that savings will 
be found in the fiscal year 2001 budget.
    I know we agree that ensuring a strong State Department will 
enhance implementation of U.S. foreign policy priorities.
    We also must continue to work together to ensure the U.N. reforms 
are carried out. As you know, just last month this Committee took an 
historic visit to the United Nations and held the first field hearing 
of the Foreign Relations Committee in New York City. My impression is 
that members of the Committee and Ambassador Holbrooke found the visit 
useful and an important step toward ensuring implementation of the 
reforms called for in the bill.
    And lastly, I call to your attention the five year authorization of 
funds for embassy construction in the authorization bill. Senator Grams 
was instrumental in conceiving this plan and I congratulate him for his 
good work. The plan provides a clear guidepost to the essential 
upgrading of U.S. Embassies and ensuring the security of U.S. personnel 
    The President's budget does not include the full funding for this 
embassy upgrade program, but I am hopeful that you will make it a 
priority to ensure funding for this embassy construction plan.
    This year, Madam Secretary, the Committee hopes to consider 
legislation authorizing U.S. technical assistance, trade promotion 
policy, and anti-corruption programs. The legislation will address key 
priorities, including combating narco-trafficking in Colombia through 
alliances in the Andean Region, supporting democracy in the Balkans 
with passage of the Serbia Democracy Act, and policies to strengthen 
U.S. exports, particularly in the agricultural sector.
    There are, as you are well aware, a number of important policy 
issues before you. Your having just returned from Russia (as have some 
members of this Committee), we expect considerable discussion and 
debate in the coming months on the future of U.S. policy regarding 
    You are in the midst of serious and delicate negotiations for peace 
in the Middle East. A number of treaties are under negotiation by the 
State Department that could have major impact on U.S. security policy, 
including economic security and U.S. exports. The Congress will be 
debating the future of U.S. trade policy with China, et cetera, et 
cetera, et cetera,
    We look forward to hearing your testimony on these and any other 
issues you feel are important. So again I extend a sincere welcome to 
you and look forward to a productive and cooperative legislative year 
by working together.

    The Chairman. Senator Biden.
    Senator Biden. Thank you very much, Mr. Chairman. Let me 
begin by also on behalf of the Democrats welcoming Lincoln 
Chafee to the committee. I am sure he has heard it at every 
turn. Your father, Lincoln, was a man of incredible integrity 
and great wisdom, and significant experience, and I do not 
think--well, I know, in my experience, being here 28 years, I 
have never served with a finer man than your father, and I 
welcome you on the committee.
    Senator Chafee. Thank you, Senator.
    Senator Biden. Mr. Chairman, thank you for your opening 
statement, and Secretary Albright for coming before the 
committee. To state the obvious, this is an election year, and 
while Congress may find itself in some difficulty deciding on 
some of the controversial issues that we have to decide upon in 
this year, the world's problems are not going to sort of halt 
and be suspended during this election year until we see who the 
next President of the United States is going to be, and so your 
job goes on right up to Inauguration Day of the next President 
of the United States of America, and there is still much to be 
    First, if I could be presumptuous enough to lay out for you 
what I think, and I do not speak for all Democrats by any 
stretch of the imagination, nor do I presume to speak for the 
Republicans, but I think all of us would acknowledge there are 
four or five things we have to deal with. How we come out will 
depend upon the debate and discussion and the votes here in the 
Congress, but it seems to me we have to reinvigorate our arms 
control discussion with the Russians, help keep the Russians on 
the democratic path, and the jury is still out on Mr. Putin.
    The election, which seems to be a foregone conclusion at 
this point and has not been held yet, will be held in the month 
of March, and it remains in our interest to stay closely 
engaged with Moscow, but if Putin's Government strays too far 
from the democratic road or purposefully helps other countries 
develop weapons of mass destruction, we have to be prepared to 
reevaluate our relationship with him, as I know you have 
already communicated, as I understand it.
    At the same time, literally, it is of vital importance that 
we succeed in our current talks with Moscow regarding strategic 
arms and ballistic missiles. Senator Hagel just led a 
delegation to Moscow and brought the delegation to the 
conference in Munich which has been going on for decades, where 
the defense chiefs of all the NATO countries assemble and those 
on their Armed Services Committee and Foreign Relations 
Committee assemble, and the think tank people of all the 
countries who focus most on defense, and one of the subjects 
was obviously theater nuclear defense, national missile defense 
and its relationship to the ABM treaty, and could it be 
    I need not tell you, much hangs in the balance in terms of 
relations with other countries beyond Moscow, depending on 
whether we can work out a framework whereby we have defense as 
well as deterrence as part of the arrangement with ABM intact.
    We will have a disagreement on that in this body, but I 
think those negotiations are the single most important thing 
that are going on right now, and I realize they are not even 
negotiations yet. We are in the midst of discussions.
    Second, it seems to me we have to maintain our efforts to 
engage China, an emerging great power in Asia. Engagement is 
neither a slogan nor a strategy. It is a hard-headed means of 
advancing our national interest in the region. We can hardly 
ignore China, and it is folly to think we can isolate it.
    I think we have to be very careful, and the chairman and I 
may end up, although we have not--everybody is beginning to 
doubt both of our credibility because we are agreeing so much 
on so many things of late, and I mean that sincerely. I might 
add, by the way, I think the most significant thing we can do, 
and it is the chairman's doing, with your cooperation, is the 
reorganization of the State Department so it comports with the 
21st century, and that was his objective. I played a small 
part, but he did it.
    So we have been agreeing on a lot, but we may not agree on 
the Taiwan Security Enhancement Act which passed the House last 
week. I am concerned that if it is enacted it could yield a 
result not intended by its authors, and that is undermining, 
not enhancing Taiwan's security by upending a careful balance 
struck two decades ago in the Taiwan Relations Act, but I have 
an open mind, but I just hope we really work through it very, 
very closely.
    Further, it seems to me we have to encourage China to 
cooperate with us in seeking regional stability in South Asia. 
I quite frankly do not know how we reach a reasonable 
resolution for the world on the subcontinent of India, between 
India and Pakistan, without China playing a constructive role. 
I do not know how we get there without a constructive role 
being played by China, nor do I think we are likely to 
peacefully resolve without significant dislocation what is 
going on in North Korea without China's constructive 
participation. I do not count on it, but I think we should seek 
    Third, I think we have to quickly authorize assistance to 
our democratic allies in Colombia who are fighting the 
narcotraffickers, and fourth it seems to me we have to continue 
our efforts to bring peace to the Middle East and Northern 
Ireland. Hard-won achievements of this administration and its 
predecessors remain hanging in the balance, and I know that the 
President and you, Madam Secretary, are going to continue to 
work vigorously for peace until next January. Congress has to 
support the administration, as it has been, in these regions, 
but we are going to have to do a lot of talking back and forth 
as we go forward, especially if that peace requires 
    Fifth, it seems to me we have to consolidate our 
achievements in the Balkans, and your budget proposal to meet 
our commitment is essential. As my friend Senator Hagel will 
attest, I pointed out to my colleagues in Europe that they were 
not keeping their promises to fund the civil implementation, 
supporting a stability pact for the region, and the funding of 
the U.N. mission in the Balkans.
    We have won the war, but we could lose the peace if we do 
not hang tough and keep the commitments we made. We are keeping 
them. You are pushing it. I hope we can act quickly on the 
administration's request.
    And sixth, we have to advance our objectives in Africa, and 
that is basically to two ends, helping end destructive wars, 
and fighting the deadly disease of AIDS which threatens not 
only the public health of the continent but also the economic 
and political security.
    And finally, Madam Secretary, it seems to me we have to 
complete the unfinished business from last year, and that is 
the approval of the remainder of the administration's proposal 
for debt relief for the poorest nations.
    So Madam Secretary, to state the obvious, you have got only 
one person's perspective, but I doubt whether many would 
disagree that regardless of how they do it, that they are at 
least four or five of the major issues we have to deal with 
together, and independently here in this body, and I look 
forward to working with you.
    As I said at the outset, you have had a remarkable working 
relationship with the chairman and this committee. I think we 
have done very good things, and in order not to break the mood 
here, I will not even begin to talk about nominations, but I do 
hope we can talk to our friend Mr. Grassley and maybe let our 
people go on a few of those outstanding nominations which are 
for very important posts. That may be a little harder grinding 
than some other things, maybe less important in one sense, but 
in other senses, in terms of the operation of your shop, very 
    I look forward to hearing your testimony, and again I want 
to begin this year by thanking the chairman. He has kept every 
commitment he made about working with the Democrats on this 
committee, and when we disagreed it has been straight up, when 
we have agreed, we have got things done, but at least the 
committee is back on the track of doing its job and getting 
work done thanks to the chairman.
    So I thank you, Madam Secretary.
    The Chairman. Now you may proceed, Madam Secretary.

                      DEPARTMENT OF STATE

    Secretary Albright. Thank you very much, Mr. Chairman. It 
has been mentioned that I am entering my last year as Secretary 
of State in the Clinton administration, and I obviously have 
done a lot of reflecting about what has been done and what 
still needs to be done, and a lot does have to happen.
    I have been a Senate staffer, I have been a professor, I 
have been a campaign advisor, I have been a talking head, I 
have been a wannabe, I have been Ambassador to the United 
Nations and now Secretary of State.
    Senator Biden. Which one did you like best?
    Secretary Albright. I have not been elected to public 
office, which I regret, and some of my fellow foreign ministers 
around the world who are members of parliamentary governments 
always are reminding me about their very close contact with 
voters. So I have tried to make up for that by traveling 
America as much as I have traveled the world, because I think 
it is very important to know what the American people think.
    Over the last 7 years my previous ideas and criticisms have 
been tested on a daily basis by actually having to make some 
decisions, and I am pleased to say that from my own perspective 
I believe that I have maintained a consistent view about the 
importance of America's leading role in the world.
    My view has really been informed by my personal gratitude 
to the American people for the role that America took during 
World War II and the cold war, and I believe, therefore, in an 
activist, engaged America. I have done a lot of reading and 
listening, and there is a lot of talk about the U.S. role and 
American power, and about priorities, obviously a subject that 
is part of my daily bread, and I believe that we have the 
strongest military and we have to keep it, and we have to have 
an equally strong Diplomatic Service.
    But I also think, out of my conversations with the American 
people, which you have also in a much more intensive way, I do 
not think they want us to forget about our humanity and 
humanitarian concerns, or principles, and our values, and 
therefore I believe in the goodness of American power, and our 
priorities have to reflect those principles and values, and I 
thought I would just say that by way of context for the budget 
and priorities that I am going to set out today.
    I am really very pleased to have a chance once again to be 
here and I do hope it is not my last appearance this year, 
because I think these are always very good exchanges, and 
during the past 3 years I have been honored to work with you in 
what has been a time of progress and accomplishment for 
America, and I do believe that our sense of common purpose has 
contributed to the fact that our Nation has entered this new 
century strong and respected, prosperous, and at peace.
    Together with allies and partners we have helped NATO gain 
new members and train for new missions, and I think we did a 
lot of work on that here in this committee. We have worked for 
peace in Northern Ireland and the Middle East, spurred recovery 
in Bosnia, and ended large-scale strife in Kosovo and in East 
    We backed nuclear stability and democratic reforms in the 
former Soviet Union. We have carried out the sweeping and 
successful restructuring of our foreign affairs agency--I do 
believe, Mr. Chairman, we can be very proud of that work--and 
we have enacted a bipartisan plan to begin paying down our U.N. 
obligations, another very important thing we have done 
    Our ability to work together stems from our shared purpose, 
but also from the more personal bonds reflected in last year's 
State Department authorization bill which, as you pointed out, 
Mr. Chairman, was named for Admiral Bud Nance and Meg Donovan.
    In that spirit, I also want to thank this committee for its 
speed and fairness in approving nominations and very much 
second what Senator Biden said, hoping that we can get a number 
of appointments done this year. It is very important.
    Now, I am told this is an election year, but that does not 
matter to me personally, because when I joined the State 
Department, as I have told many of you, I had all my partisan 
instincts surgically removed. I only mention it because some 
say it is harder for the executive and legislative branches to 
work together in even-numbered years, but we all know that the 
world does not stop even for American elections, and we have to 
work together steadily and agreeably, even when we disagree, to 
seize opportunities and protect our interests against 21st 
century perils.
    My written statement, Mr. Chairman, is quite lengthy, and 
describes our policies around the world, and since I know you 
will read it perhaps at bedtime I promise not to recite it. 
Instead, I will confine my oral remarks to a few of the issues 
where it is most urgent that we work cooperatively this year.
    The first is in supporting democracy. I emphasize this 
because the democratic trends of the past decade are by no 
means irreversible. Amidst progress on every continent, we also 
find that transitions have stalled due to economic crisis, 
ethnic division, or rising crime, and there are a number of 
elected governments that are democratic in name only, 
practicing not government of the people but, rather, stealing 
from the people their riches and rights.
    Our task this year is to renew democratic momentum, not out 
of high-mindedness alone, but because democratic growth is part 
of the answer to many of the challenges, economic, political, 
and military, that we face. For example, we have an urgent and 
obvious stake in aiding Colombian President Pastrana and his 
plan to rescue his country and thereby help 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, and 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. The whole region 
will be affected by whether it slides backward or continues up 
the democratic path.
    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 tradition from Washington and Jefferson to Reagan and 
Clinton, and I ask your help in getting a good start on what I 
hope will be known as, with a small d, a democratic century.
    Second, I ask your support for peace.
    In the Middle East, we will need your steady backing as we 
work with the parties to find the road to a just, lasting, and 
comprehensive settlement. The legacy of mistrust in the region 
is hard to overcome, and the enemies of peace remain virulent 
and active, but never before has the logic of peace been so 
compelling, or the opportunity for peace so clear, and at this 
critical time America's commitment to progress on all tracks 
must remain rock-solid.
    On the Korean peninsula, we have reviewed our policy over 
the past year in close coordination with Seoul and our 
indispensable ally, Japan, and we are backing President Kim 
Dae-jung's policy of engagement with the North and have 
expressed a willingness to improve our relations with Pyongyang 
while it addresses our concerns about its missile and nuclear 
weapons associated activities.
    In Africa, the Lusaka agreement provides a basis for ending 
the war in the Congo, and we have challenged the parties to 
live up to their obligations under it. As they do, we can help 
by endorsing a carefully designed U.N. mission.
    We have learned much over the past decade about the ``do's 
and don'ts'' of such missions, and we must apply these lessons 
firmly and realistically in this case, but we must also be 
resolute in our determination to help the Congo move from war 
to peace.
    Third, I ask your support for promoting the further 
integration of countries into the economic, political, and 
security components of the international system. This is an 
overarching goal that we pursue in diverse areas by a variety 
of means.
    For example, last July, following the conflict in Kosovo, 
we entered into a stability pact covering all Southeast Europe. 
Our goal is to work with local leaders and populations to 
integrate this area of chronic instability into the continent's 
democratic mainstream.
    We have no illusions about the difficulty of this task. It 
is literally to transform the patterns of history, but such 
patterns have been transformed before and, despite all the 
frustrations and setbacks, a new reality is slowly taking 
    Consider the region's hardest case, the former Yugoslavia. 
Yesterday, a new President was elected in Croatia pledged to 
tolerance and economic reform. Since Dayton, elections have 
been held at all levels in Bosnia. Slovenia is democratic. In 
Macedonia there was a peaceful transfer of power last year. In 
Montenegro, President Djukanovic is championing democracy, and 
in Serbia, more and more people are asking when they, too, will 
be given the right to choose their leaders freely and without 
    Finally, in Kosovo, our challenge is to prepare the way for 
democracy by showing the same determination to build peace as 
we did to end the conflict, and I ask your support for the 
President's request for Kosovo and the region. I cannot imagine 
a better gift to the future than a democratic and stable 
Southeast Europe.
    With your permission, Mr. Chairman, I would like to enlarge 
upon this point for just a minute. We all know that the 
politics of hate in Europe exacted an enormous price during the 
last century. It dramatically altered the course of millions of 
lives, and prematurely and tragically ended many millions more.
    After what we have witnessed, not even elections can 
validate intolerance, for democracy is based on respect for the 
rights of every individual. Those who love freedom must be 
vigilant in defending it against those who threaten it, even 
those who would steal its very name. At the same time, we must 
recognize that there are apostles of hate in every country.
    Today, I hope we will renew our vow not simply to remember 
the truth about the Holocaust, but also our duty to rebut those 
who prefer to forget, distort, or deny it. Let us renew our 
pledge to prevent genocide, oppose ethnic cleansing, and 
protect the rights of all, including minorities. These are 
standards which every country in the Euro-Atlantic community 
and beyond should observe, and which every country should 
strive to unite around.
    Now, let us then talk sense to the people of Austria. Let 
us expand our dialog with them while holding their leaders 
accountable to the principles of pluralism and tolerance they 
have just explicitly reaffirmed, and let our communities stay 
focused on the opportunities and challenges that exist in 
Southeast Europe by backing the promise of resources with their 
timely delivery in Kosovo and around the region.
    Mr. Chairman and members of the committee, when we talk 
about integration, we also talk about Russia and its relations 
with the West, which have been strained by political turmoil 
and conflict. Over the past decade, the United States and 
Russia have overcome sharp differences to cooperate in the 
Balkans and on other issues of European security. This past 
week in Moscow I emphasized America's desire to continue 
working with the Russians to curb proliferation, ensure the 
safe handling of nuclear materials, further reduce nuclear 
arsenals, and find common ground on national missile defense. I 
also said that Russia's integration could become isolation 
unless it ends its brutal tactics in Chechnya and pursues a 
political resolution of that conflict.
    Another difficult but vital test of integration is in Asia, 
where it is in our interest to encourage China to participate 
more fully in the world economy and comply more rigorously with 
global norms.
    In the year 2000, we will be consulting closely with 
Beijing on global and regional security issues, including 
proliferation. We support the protection of Tibet's heritage 
and will continue to urge Beijing to open a dialog with the 
Dalai Lama.
    In Geneva, we will seek international support for a 
resolution calling upon China to increase respect for human 
rights. We will continue to implement faithfully our 
obligations under the Taiwan Relations Act, and we will be 
asking Congress to support the administration's agreement to 
bring China into the World Trade Organization by passing 
permanent normal trade relations. If we do not, we will risk 
losing the market access benefits of the agreement and the 
right to enforce them through the WTO. We would also lose the 
opportunity to help China further in the direction of openness 
and the rule of law.
    I also ask you to support integration by helping us to 
assist others to participate more effectively in the economy of 
the 21st century. Specifically, I ask your backing for the 
varied and vital work of USAID in the Africa Growth and 
Opportunity Act, the Caribbean Basin Initiative, and the 
Southeast Europe Trade Preferences Act.
    I ask your support for President Clinton's plan to provide 
debt relief for the most heavily indebted poor countries, and 
to increase our contributions to the fight against killer 
diseases, including HIV/AIDS, and I ask your approval of the 
President's request for full funding without unrelated 
restrictions for international family planning, which reduces 
the number of abortions and saves human lives.
    Finally, I ask your support for American leadership. 
Whether the challenge is protecting our citizens from 
international terror, or our environment from global climate 
change, America cannot lead without resources, not be secure 
unless we lead. Despite President Clinton's strong backing and 
bipartisan support from many of you, our foreign policy enters 
the 21st century living hand-to-mouth. No industrialized 
country contributes as small a share of its wealth to overseas 
development. During the past decade alone, our rate of 
investment has declined by more than a half.
    We also need resources to enhance the security of those who 
work in our diplomatic posts both overseas and here at home 
and, as the tragic Africa Embassy bombings of 1998 remind us, 
our people are on the front lines for America every day and on 
every continent. They deserve, or they have earned the same 
respect and care we afford to our military personnel.
    So I ask your support for the President's budget in its 
entirety, and I do so with clear understanding that the vast 
majority of the funds requested will be spent next year, under 
a new administration. The President's request has nothing to do 
with parties or personalities. It has everything to do with our 
Nation's determination to protect our interests and promote our 
    I remind you that today we devote only 1 penny out of every 
Federal dollar we spend to our international affairs programs, 
but that single penny can make the difference between a future 
characterized by peace, rising prosperity, and law, and a more 
uncertain future in which our economy and security are always 
at risk, our peace of mind is always under assault, and 
American leadership is increasingly in doubt.
    Mr. Chairman and members of the committee, the dawn of the 
millennium has only intensified our awareness of the passage of 
time. We conduct much of our business with technologies that 
barely existed only a decade ago. The patterns of international 
relations that we lived with for so long have been turned 
upside down, and old friends have passed to a better place.
    We live in a world that seems utterly transformed, and that 
will not stop changing. No country is more comfortable in such 
a world than America, but we would be lost except for what has 
not changed, and that is America's purpose. There are no final 
frontiers for America. We are not, and have never been a status 
quo country. We have always believed in the future, and that it 
can be made better than the past. We are doers.
    In the year ahead we have a 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 
the service to our collective boss, the American people. I have 
no doubt that, in that quest, if we are united we will succeed.
    Thank you very much.
    [The prepared statement of Secretary Albright follows:]

     Prepared Statement of Secretary of State Madeleine K. Albright

           america and the world in the twenty-first century
I. Priorities for the New Year
    Mr. Chairman and Members of the Committee, good morning. I am 
pleased to be here to testify regarding the President's proposed Fiscal 
Year 2001 budget request for international affairs, and to review U.S. 
foreign policy around the world.
    In times past, my predecessors have appeared before this Committee 
seeking support for Americans at war, help in responding to a grave 
international crisis, or solidarity in the face of threats posed by a 
totalitarian superpower.
    But now, in this first year of the new millennium, our country is 
at peace. We enjoy record prosperity. Our alliances are united and 
firm. And the ideals that underlie our own democracy have spread to 
every continent, so that for the first time in recorded history, more 
than half the world's people live under elected governments.
    Some might see in this good news reason to sit back, put our feet 
up, and relax, thinking that we are safe now and there is no more great 
work to be done.
    But experience warns us that the course of world events is neither 
predictable nor smooth. And given the pace of our era, we know that 
dangerous threats to our security and prosperity could arise with 21st 
century speed.
    These include the spread of weapons of mass destruction (WMD) and 
the missiles that can deliver them; the plague of international terror; 
the danger of regional tensions erupting into conflicts; the poisonous 
effects of drug trafficking and crime; the risk of renewed financial 
crisis; and the global challenges posed by poverty, disease and 
environmental degradation.
    Three years ago, in my confirmation hearing, I testified that the 
framework for American leadership must include measures to control the 
threats posed by nuclear weapons and terror; to seize opportunities for 
settling regional conflicts; to maintain America as the hub of an 
expanding global economy; and to defend cherished principles of liberty 
and law.
    I said further that our key alliances and relationships were at the 
center of that framework. For these are the bonds that hold together 
the entire international system. When we are able to act cooperatively 
with other leading nations, we create a convergence of power and 
purpose that can solve problems and spur progress around the globe.
    This framework will continue to guide us in the year 2000. Our 
priorities include an even stronger NATO, with ever more robust 
partnerships, still open to new members, developing new capabilities 
and preparing for new missions.
    We will also strive with our partners to build peace in Kosovo and 
integrate all of Southeast Europe into the continent's democratic 
    We will work in consultation with this Committee, our allies, and 
others to respond effectively to the perils of proliferation and the 
promise of arms control.
    We will promote a healthy, open, and growing world economy whose 
benefits are shared more widely both among and within nations, and 
where American genius and productivity receive their due.
    We will focus attention on our complex relationships with Russia 
and China, adhering to core principles, while seeking to advance common 
    We will act resolutely to support peace in key regions such as the 
Middle East, Central Africa, Northern Ireland and the Aegean.
    We will continue our efforts to enhance stability on the Korean 
Peninsula and to ease tensions in South Asia.
    We will strive for even greater cooperation along our borders with 
Canada and Mexico.
    And we will work to strengthen democratic institutions worldwide, 
including the four key countries of Colombia, Indonesia, Nigeria and 
    These and other tasks may seem disparate, but each relates to our 
vision of a secure and prosperous America within an increasingly 
peaceful and democratic world.
    Unfortunately, it remains unclear whether we will have the 
resources we need to provide the kind of leadership our citizens 
deserve and our interests demand.
    Despite President Clinton's strong backing and bipartisan support 
from many in Congress, our foreign policy enters the 21st Century 
living hand to mouth.
    Today, we allocate less than one-tenth of the portion of our gross 
national product that we did half a century ago to support democracy 
and growth overseas. During the past decade alone, our investment 
relative to the size of our economy has declined by more than half. 
Throughout this period, we have been cutting foreign policy positions, 
closing diplomatic posts, and shutting USAID and USIA missions. And we 
still have far to go in partnership with Congress to provide fully 
adequate security for our people overseas. 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.
    On Monday, the President submitted his Fiscal Year 2001 budget, 
including a request for about $22.8 billion for international affairs 
programs. I ask you to support that request in its entirety. And I do 
so with the clear understanding that the vast majority of the funds 
requested will be spent next year, under a new Administration. The 
President's request has nothing to do with parties or personalities; it 
has everything to do with our nation's ability to protect our interests 
and promote our values.
    And I remind you that today, we devote only one penny out of every 
federal dollar we spend to our international affairs programs. But that 
single penny can make the difference between a future characterized by 
peace, rising prosperity and law, and a more uncertain future, in which 
our economy and security are always at risk, our peace of mind is 
always under assault, and American leadership is increasingly in doubt.
    Mr. Chairman, members of the Committee, it has been a great honor 
to work with you these past three years, for they have been years of 
progress and accomplishment for America.
    Because this is an election year, some say it will be harder to 
gain Executive-Legislative cooperation in international affairs. But 
you and I both know that the world does not stand still even for 
American elections. We have an obligation--which I am confident we will 
meet--to work together responsibly on behalf of American interests. And 
this morning, I would like to review with you our agenda for leadership 
in the year ahead.
II. American Leadership Around the World
            (A) Europe and the New Independent States
    Since the end of the Cold War, President Clinton and his 
counterparts in Europe have strived to adapt trans-Atlantic 
institutions to deal with the realities of a transformed world. Where 
once we worked with part of Europe to counter a threat that had 
imprisoned and made dangerous its eastern half, now we work with all of 
Europe to secure peace, prosperity and freedom throughout and beyond 
its borders.
    As a result, we begin the 21st Century with a NATO that has been 
strengthened by new members and prepared for new missions. During the 
Washington Summit last April, Alliance leaders adopted a revised 
Strategic Concept, vowed to develop the capabilities required to 
respond to the full spectrum of threats NATO may face, took its 
partnerships with Europe's other democracies to a new level, and 
pledged to strengthen the European pillar of the Alliance in a way that 
bolsters overall effectiveness and unity. The Allies also underscored 
their commitment to enlargement by adopting a plan to help aspiring 
countries prepare for possible future membership.
    We have also worked to strengthen the Organization for Security and 
Cooperation in Europe (OSCE). At the November summit in Istanbul, OSCE 
members agreed on a new Charter for European Security, recognizing that 
security within societies is as important as security between states.
    Our partnership with the European Union (EU) is another pillar of 
trans-Atlantic security and prosperity. As the EU develops its foreign 
policy capabilities, we are prepared to develop our partnership in 
tandem with it. That is why we used the U.S.-EU Summits this past year 
to improve our ability to act together in fast-breaking crises; manage 
our differences; and improve joint efforts to address global 
challenges. We also strongly support the EU's plan for enlargement, 
including its recognition of Turkey as a candidate for membership.
    These measures are part of a larger strategy for realizing one of 
the most elusive dreams of this century, which is an undivided and 
fully democratic Europe. This goal is also served by our support for 
the Good Friday peace accords in Northern Ireland; our diplomatic 
backing for UN-based talks on Cyprus; our efforts with regional leaders 
to consolidate freedom in central Europe; and our support for Nordic 
and Baltic nations as they move down the road to integration and 
    Unfortunately, there remains a large piece missing in the puzzle we 
have been trying to assemble of a Europe whole and free. And that is 
the continent's southeast corner, where the exploitation of ethnic 
rivalries sparked World War I, contributed to the mayhem of World War 
II, and led to four conflicts this decade, including the recent crisis 
in Kosovo.
    In partnership with the EU and others, we have entered into the 
Southeast European Stability Pact, a multiyear strategy for integrating 
the nations of that region into the continent's democratic mainstream. 
The Pact's goals 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 transform 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 European Commission's intention to secure 11.2 billion 
Euros for these goals during the next six years. And we are encouraged 
by the commitment governments are making to curb corruption and create 
a good climate for doing business.
    We are also heartened by democratic progress in the former 
Yugoslavia. Since Dayton, elections have been held at all levels in 
Bosnia. In Macedonia, there was a peaceful transfer of power last year.
    In Croatia, the just-concluded election process has been a true 
breakthrough, representing a triumph for civil society and a major 
turning point away from ultra-nationalism and towards democratic 
values. In Montenegro, President Djukanovic is championing democracy. 
And increasingly in Serbia, the people are asking when they will be 
given the right to choose their leaders freely and without fear.
    Finally, in Kosovo, our challenge is to prepare the way for 
democracy by bringing the same determination to the task of building 
peace as we did to ending conflict.
    In less than eight months, much progress has been made. Large-scale 
violence has ended. Almost a million refugees and displaced have 
returned home. The Kosovo Liberation Army has effectively met its 
promise to demilitarize. A civilian police is being established and an 
Interim Administrative Council created.
    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 UN mission, and the international war 
crimes tribunal. And we are working with them to prepare for municipal 
elections later this year.
    I urge your support for the President's request for funds to help 
the Kosovars 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 the 
    In Bosnia, we remain deeply committed to full implementation of the 
Dayton Accords. In cooperation with our many partners, we are 
constantly evaluating how best to enable and encourage Bosnians to take 
full responsibility for building a stable, democratic society. The 
President's budget requests the resources we will need to help Bosnians 
continue moving in the right direction.
    As we proceed with efforts to help Europe's new democracies, we 
cannot neglect the health of democracy in older ones. In Austria, we 
are concerned about statements made by Freedom Party head Joerg Haider. 
Regardless of the government's composition, we have made it clear that 
we expect Austria to continue to meet the commitments it has made to 
respect the rights of minorities, foreigners and refugees.
    Further to the east, towards the Caucasus and Central Asia, 
democratic change remains very much a work in progress. In many 
countries, respect for human rights and the rule of law is 
unsatisfactory and economic reforms have been slowed by financial 
turmoil. These problems are aggravated by the lack of a democratic 
tradition, uncertainty about Russia's future direction, and instability 
generated by extremist groups.
    In the year ahead, we will vigorously pursue diplomatic and 
programmatic efforts to help countries in the region find the right 
road. For example, we are pressing ahead as a co-chair of the Minsk 
process in search of progress on Nagorno-Karabakh. We are renewing our 
request for repeal of Section 907 of the Freedom Support Act. We will 
seek progress in implementing CFE commitments, and in insulating 
Georgia from the consequences of the Chechen War. And with Turkey and 
its partners in the Caucasus and Central Asia, we will take steps to 
build on the Baku-Ceyhan pipeline agreement.
    We attach high importance to our strategic partnership with 
Ukraine, knowing that an independent, democratic, and prosperous 
Ukraine is a key to building a secure and undivided Europe. The 
Ukrainian people showed in last year's elections that they want to get 
on with essential reforms. And President Kuchma has vowed to make use 
of this mandate for decisive change. We will do all we can to assist in 
strengthening democratic institutions, improving the investment 
climate, and bolstering the rule of law. We will also deepen our 
cooperation under the NATO-Ukraine Charter and strengthen our joint 
nonproliferation efforts.
    The past year in Russia has been extraordinarily difficult. 
Political turmoil, corruption, terrorist bombings, the war in Chechnya 
and continued economic problems have created hardships for the Russian 
people, and at times strained relations with the West.
    In the months ahead, we hope to re-establish and expand the basis 
for cooperation between our countries. There is new leadership in the 
Kremlin and a new Duma that may prove more constructive and forward-
looking than the one it replaced. Our nations are working together 
again in the Balkans, and consulting closely on arms control and 
nonproliferation issues. We seek to further develop ties between Russia 
and NATO. And it remains very much in our interests to help Russia 
prevent the loss of nuclear materials and expertise, and to assist the 
Russian people in strengthening civil society.
    The key short-term test for Russia's leaders remains the war in 
    Like many others, we have criticized the Russian military for 
indiscriminate shelling and bombing in that region. We understand the 
problems posed by terrorism, but deplore the massive violations of 
human rights. We are concerned about the regional impacts of the 
conflict, including refugee flows. And we also believe that the harsh 
tactics being used will not work.
    As I said last week in Moscow, ``These tactics will not set the 
stage for peace. Only a political resolution of the conflict will do 
that. As long as the fighting continues, it will serve as a magnet for 
extremism that could one day risk the stability of the entire region.''
    It should not be surprising that the Russian transition is proving 
difficult. After all, Communism was a seven-decade forced march to a 
dead end, and no nation went further down that road than Russia. But 
there is also no question that a peaceful and democratic Russia that is 
tackling its economic problems and playing a constructive international 
role can make an enormous contribution to the 21st Century. We have an 
enormous stake in Russian success and will continue to work with 
Russian leaders whenever possible to advance common interests.
            (B) The Middle East
    We begin the new century with new hope in the Middle East, where 
our primary objective remains a just, lasting and comprehensive peace 
between Israel and her Arab neighbors.
    Last month, Israeli Prime Minister Barak and Syrian Foreign 
Minister Shara journeyed to West Virginia, for intensive talks. 
Chairman Arafat later met with President Clinton in Washington. And 
last week in Moscow, I co-chaired with Foreign Minister Ivanov a very 
successful ministerial meeting of the Multilateral Steering Group.
    All this activity reflects that progress is now possible on all 
tracks of the peace process. But reaching agreement on any of the 
bilateral tracks remains a formidable task. President Clinton and I 
will continue working with the parties to help them narrow differences 
and identify compromises that satisfy core needs.
    At this critical moment, it is essential that the United States 
remain steady in its support for peace. I congratulate Congress for 
providing funds late last year to implement the Wye River and Sharm-el-
Sheikh interim accords. I hope we will have your continued backing now, 
as we seek to ensure the security and promote the prosperity of our 
friends in the region.
    As we strive to bring peace closer between Arabs and Israel, we 
must also explore opportunities for constructive change elsewhere--for 
example, in Iran.
    Over the last two years, there have been unmistakable signs of 
public support in Iran for a more open approach to the world. We have 
welcomed President Khatemi's calls for people-to-people dialogue, his 
verbal condemnation of terrorism, and his regret over the 1979 hostage 
episode. The upcoming Parliamentary elections could provide evidence 
that the trend towards openness is gathering speed.
    At the same time, Iran continues to pursue some policies that we 
strongly oppose. The United States recognizes that there are 
conflicting forces at work in Iran, as there are in many nations. Our 
hope is that the Iranian people will want and be able to choose 
approaches that lead to better relations.
    Elsewhere in the Gulf, we remain focused on containing the threat 
posed by the Iraqi regime's aggression and WMD capabilities.
    Last December, the UN Security Council approved a Resolution 
establishing the means and mandate for resuming on-site weapons 
inspections in Iraq, including a clear roadmap for assessing 
compliance. The United States will work with Dr. Hans Blix, Executive 
Director of the new Commission, towards fulfilling the Council's 
    We will also continue to make the point that lifting sanctions in 
the absence of compliance by Baghdad with its WMD obligations is not an 
option. The Iraqi Government has shown no evidence that it has learned 
the lessons of the past nine years. That is why we are working for the 
day when the aspirations of the Iraqi people are realized, and a new 
government makes it possible for their country to rejoin the family of 
nations as a responsible and law-abiding member. To this end, we have 
increased our financial and other assistance to the Iraqi National 
Congress, and made clear that a change in Baghdad would lead to a 
change in U.S. policy.
    At the same time, we remain committed to alleviating the hardships 
faced by the Iraqi people. Since 1996, the ``oil for food,'' which we 
strongly support and helped conceive, has substantially improved 
nutrition. In Northern Iraq, where assistance is distributed by the UN 
rather than the Iraqi Government, child mortality rates are lower than 
they were prior to the Persian Gulf War.
    America's interest in a stable and prosperous Middle East also 
depends on whether the nations there work together to reform their 
economies, attract investment, move in the direction of democracy and 
create opportunities for their citizens. During the year 2000, we will 
be active in promoting these principles in our discussions with the 
region's leaders and peoples.
            (C) The Asia Pacific
    No part of the world will play a greater role in determining the 
character of the 21st Century than the Asia Pacific. The region's 
stability and its continued development and democratization are of 
profound interest to the United States. This is reflected in my ten 
visits to the area since becoming Secretary of State.
    The United States is deeply committed to meeting our obligations to 
treaty allies (Australia, Japan, the Republic of Korea (ROK), the 
Philippines, and Thailand), while striving to promote economic and 
security cooperation with all countries. To this end, we are working 
with friends and partners to strengthen existing regional institutions, 
such as APEC, ASEAN and the ASEAN Regional Forum, and to enhance 
dialogues between and among nations.
    Our most important bilateral relationship in the Asia Pacific is 
with Japan, with whom we work closely on a full range of security, 
economic and global issues. In recent years, we have modernized our 
defense cooperation, negotiated steps to liberalize trade, and 
developed a common agenda for action on matters such as global climate 
change, international crime, and development in Africa.
    Another ally, the Republic of Korea, has become a source of 
regional stability under the able leadership of President Kim Dae-jung. 
Over the past two years, the ROK implemented painful economic reforms 
that have enabled it to emerge from the Asian financial crisis. Even as 
it struggled with these difficult domestic issues, it demonstrated 
regional leadership by contributing to the peace operation in East 
    We fully support President Kim's policy of engagement with the 
Democratic People's Republic of Korea (DPRK). This policy seeks to 
reduce the DPRK's isolation, address humanitarian needs and prevent 
destabilizing military incidents.
    Over the past year, former Defense Secretary William Perry and the 
State Department's Counsellor, Ambassador Wendy Sherman led a 
comprehensive review of our own policy toward the DPRK, in close 
coordination with the ROK and Japan. As a result, we have expressed our 
willingness to improve relations with the DPRK as it addresses our 
concerns about its missile and nuclear weapons programs.
    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. We will continue such 
discussions at the end of this month, and anticipate additional talks 
at a higher level about one month later.
    The DPRK's nuclear weapons-associated activities is 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.
    Our policy towards the DPRK reflects our desire for permanent 
reconciliation on the Korean Peninsula. The question of ultimate 
reunification is one for Koreans to decide through peaceful means, and 
we strongly encourage North-South dialogue. We also support the Four 
Party Talks, which include China, the United States and both Koreas. We 
and our allies want to engage the DPRK in a comprehensive manner so 
that all sides may address issues of concern. But we are under no 
illusions. Further progress depends on the DPRK's further willingness 
to engage seriously with us.
    We believe the new century can generate new momentum and mutual 
benefits in our relations with China. As the President said in his 
State of the Union Address, ``Congress should support the agreement we 
negotiated to bring China into the WTO, by passing Permanent Normal 
Trade Relations (NTR).'' If we do not grant permanent NTR, we will risk 
losing the market access benefits of the agreement, and the right to 
enforce them through the WTO. The result is that our competitors in 
Asia and Europe would reap those benefits while American farmers and 
businesses would be left behind.
    The economic benefits we will gain by approving Permanent NTR for 
China do not conflict with our other interests. Once in the WTO, China 
will be required to follow international trading rules, open its 
regulations to public scrutiny and reduce the role of state-owned 
enterprises. This will encourage growth in the rule of law, and hasten 
the development of a more open society.
    During the year 2000, we will be consulting closely with China on 
global and regional security issues, including nonproliferation, South 
Asian security, and Korean stability. We will seek to prevent tensions 
from increasing across the Taiwan Strait, and promote cooperation in 
the South China Sea. We will urge Beijing to open a dialogue with the 
Dalai Lama regarding the protection of Tibet's religious, cultural and 
linguistic heritage within China. And as we purse engagement with the 
PRC, we will continue our commitment to faithful implementation of the 
Taiwan Relations Act.
    Although the Chinese people enjoy greater freedom of choice in 
economic and many personal matters than in the past, progress in the 
area of political and other civil rights is lacking. Examples in 1999 
include the harsh prison sentences received by leaders of the China 
Democracy Party, an intensified reeducation campaign to control Tibetan 
monasteries, continued pressure on underground churches, and efforts to 
repress the Falun Gong spiritual movement. As a result, we will work 
for a Resolution expressing concern about human rights in China at the 
UN Human Rights Commission in Geneva next month.
    Last year was a time of historic change in Indonesia, Southeast 
Asia's largest nation. The Indonesian people deserve great credit for 
conducting free, fair and peaceful elections. The new government, led 
by President Abdurrahman Wahid, merits broad support as it strives to 
stabilize the economy, curb corruption, establish the rule of law, cope 
with regional crises, and address past abuses of human rights.
    These goals are simple to identify, but difficult to achieve. The 
new President is widely respected for his humanity and wisdom. But to 
succeed, he must make tough decisions and explain them in terms his 
people will understand and accept. President Clinton is requesting $144 
million this year to aid Indonesia's quest for a stronger, stabler 
    Elsewhere in the region, we will continue to work with the UN, the 
Philippines, Australia, Thailand, and others to bring lasting peace and 
democratic rule to East Timor. And we will press for a meaningful 
dialogue in Burma between the government and the democratic opposition, 
led by the National League for Democracy (NLD). Burmese authorities 
must understand that the path to acceptance and progress lies in 
movement towards a popularly supported government in Rangoon. In 
Cambodia, we continue to work with the government and UN to bring 
senior Khmer Rouge leaders before a tribunal that meets international 
            (D) South Asia
    Last week, the White House announced that President Clinton will 
visit South Asia. His itinerary will include India, the world's largest 
democracy, with whom we seek deeper cooperation on issues that include 
nonproliferation, economic reform, science and the environment. The 
President will also visit Bangladesh, a nation of more than 100 million 
people, and a friend and partner on matters of both bilateral and 
regional concern.
    In nearby Pakistan, we are encouraging the military authorities to 
make good on their pledge to return the country to elected rule in a 
timely manner.
    As for relations between India and Pakistan, longstanding tensions 
have heightened as a result of the recent Indian Airlines hijacking and 
the aftermath of last year's Kargil crisis. Our policy is to encourage 
dialogue aimed at narrowing differences and preventing violence, and we 
intend to remain actively engaged with both countries toward this end.
    In Afghanistan, we have joined with neighboring countries in 
seeking an end to the civil conflict, the closing of terrorist camps, 
and increased respect for human rights, which include women's rights.
            (E) The Western Hemisphere
    The nations of Latin America and the Caribbean have made historic 
strides in building democracy over the past two decades, but serious 
problems remain in many countries, including political instability, 
economic inequality, corruption and crime. Fortunately, there is a 
general consensus across the region about how to deal with these 
challenges, and a willingness to work cooperatively on them. At the 
heart of this consensus is a commitment to free trade and economic 
integration. In recent years, every major economy in the region has 
liberalized its system for investment and trade; and we are making 
progress toward achieving a Free Trade Area of the Americas (FTAA) by 
    But the fruits of recent economic growth have not been evenly 
distributed. While much of the region's population enjoys improved 
living standards, many others have not seen any appreciable benefit. 
About a third of Latin America's people live on $2 a day or less, and 
income inequality is greater here than in any other region.
    There is a real risk that support for democracy and free markets 
will erode if these economic disparities are not addressed. Last 
month's events in Ecuador serve as a warning of what can happen when 
significant portions of a population feel left behind.
    That is why the 1998 Santiago Summit of the Americas put special 
emphasis on improving the quality and accessibility of education, 
especially to the urban and rural poor, and to indigenous populations. 
We are also working through the Summit process to promote judicial 
reform, good governance and other steps to broaden access to the 
benefits of economic growth.
    I believe that history will regard this period as a turning point 
in our relations with Mexico. Issues such as migration, counter-
narcotics and cross-border law enforcement will never be easy. But in 
recent years, we have developed effective mechanisms, such as the 
Binational Commission and the High Level Contact Group, to address such 
challenges, while also exploring ways to spur mutual economic growth.
    One of our most important priorities this year will be to support 
Colombian President Andres Pastrana's comprehensive plan to fight drug-
trafficking, restore fiscal responsibility, and secure peace in his 
country. As you know, President Clinton has asked that Congress provide 
an additional $1.27 billion over the next two years for this purpose. 
We are asking others in the international community to join in this 
effort. The IMF has already approved a new $2.7 billion program, and we 
are endorsing Bogota's request for nearly $3 billion in loans from the 
World Bank and the Inter-American Development Bank.
    As I made clear to President Pastrana when I visited Cartagena last 
month, our support for Plan Colombia rests on the Colombian 
government's commitment to continue to take appropriate action against 
human rights violators--whether those violators are military, 
paramilitary, guerrilla or just plain criminals. Under President 
Pastrana's leadership, there has already been solid progress on this 
issue, but more remains to be done.
    Neither criminals nor conflict respect national borders. 
Accordingly, we must also step up our support for counternarcotics and 
alternative development programs for Colombia's neighbors. It is not 
enough to drive drug criminals out of Colombia. Our goal must be to 
drive them out of business--once and for all.
    In Haiti, we are helping authorities and civil society prepare for 
legislative and local elections to be held this spring. And we will be 
doing our share to assist the new UN Mission in Support of Haiti, which 
will be providing technical assistance on law enforcement and human 
    In Cuba, Fidel Castro continues to justify his pariah status by 
jailing dissidents and refusing to hold free and fair elections. Last 
year, the international outcry against his dictatorship grew even 
stronger. In April, the UN Commission on Human Rights adopted a Czech-
Polish resolution expressing concern ``at the continued violation of 
human rights and fundamental freedoms in Cuba.'' And in November, at 
the Ibero-American Summit in Havana, many world leaders met for the 
first time with Cuban dissidents and called on the Cuban government to 
show greater respect for human rights and democracy.
    Over the past two years, President Clinton has taken a series of 
steps to reach out to the Cuban people and help prepare for a peaceful 
transition to democracy. Our goal is to strengthen people-to-people 
ties and encourage the development in Cuba of peaceful activities 
independent of the government.
            (F) Africa
    In Africa, our challenge is to address pressing security and 
humanitarian concerns, while helping to realize the continent's great 
human and economic potential.
    An increasing number of Africa's leaders understand that the 
continent's future prosperity depends on trade and foreign investment. 
They are working to create a better environment for doing business, by 
privatizing state-run enterprises, revamping commercial codes, and 
adopting sound fiscal policies. As a result, annual economic growth has 
averaged nearly 4 percent over the past five years.
    The United States has a direct stake in seeing Africa's economic 
progress continue. It means better opportunities for our workers and 
companies. And it means that African nations could be stronger partners 
and less dependent on outside aid. So I urge Congress to complete its 
good work to date and grant final approval to the African Growth and 
Opportunity Act. This measure would provide essential support for 
economic reform, and expand our trade with one of the world's largest 
under-developed markets.
    In Africa, as elsewhere, we can have the most impact where we have 
strong regional allies. And in Africa, the two most influential nations 
are Nigeria and South Africa.
    Nine months ago, President Obasanjo became Nigeria's first elected 
leader since 1983. Since then, he has waged a vigorous campaign to 
stamp out corruption and revive his country's economy. But he faces 
daunting obstacles.
    After years of military rule, Nigeria must rebuild its democratic 
institutions, reinvigorate its Parliament, reform its legal system, and 
reinvent its military under civilian control. It must also cope with 
complex regional issues, including ethnic strife. Around the world, few 
democratic transitions are as fragile or as important. Depending on its 
course, Nigeria can be a powerful factor for instability or stability 
within the region. I ask your support in providing the resources 
required to help Nigeria's democracy put down roots and grow.
    The United States greatly values its friendship with South Africa. 
Under Presidents Mandela and Mbeki, South Africa has moved well along 
the democratic path, but still faces urgent challenges. President Mbeki 
has been working energetically to sell off state-run enterprises, 
attract private sector investment, improve education and reduce crime. 
In the year ahead, we will do all we can to assist and broaden our 
partnership with South Africa's leaders and people.
    South Africa and Nigeria are the two anchor nations of Africa. 
Increasingly, epidemic disease is the continent's albatross. Statistics 
are not adequate to describe the human destruction being caused 
especially by HIV/AIDS. Over the next decade, tens of millions of 
children in sub-Saharan Africa will be orphaned by the disease, infant 
and child mortality may double and, in many countries, average life 
expectancy will decline sharply.
    In his State of the Union Address, President Clinton proposed a new 
tax credit to speed the development of vaccines for diseases like 
malaria, TB, and AIDS that disproportionately afflict developing 
nations. And he is requesting an increase of $150 million in our 
worldwide fight against AIDS and other killer diseases. I urge your 
support for these requests.
    This past month at the United Nations Security Council in New York, 
we made Africa our special focus. In addition to discussing the AIDS 
crisis, we also led sessions on the conflicts in Angola, Burundi and 
the Democratic Republic of Congo.
    Because of its location and size, and because of the number of 
countries involved, the conflict in Congo could be described as 
Africa's first world war. The continent cannot hope to meet the 
aspirations of its people until this war is history.
    The Lusaka agreement, signed last summer, offers a solid framework 
for ending the Congo war. And the international community--including 
the United States--has a responsibility to support this process. The 
Lusaka signatories have agreed to provide access, security and 
cooperation to international peacekeepers. So I am asking Congress to 
support a United Nations peace mission for Congo, consisting of 500 
observers and roughly 5,000 troops for logistics and protection, with 
most of the soldiers coming from African countries.
    We have learned much over the past decade about the ``do's and 
don'ts'' of UN missions. We must apply these lessons firmly and 
realistically in this case. But we must also be resolute in our 
determination to help Congo move from war to peace.
    In addition, I hope you will support the United Nations 
peacekeeping force for Sierra Leone. I visited that nation last fall 
and met with victims of its terrible civil war. The parties have agreed 
on a plan for healing wounds and building peace. We should help them do 
    Finally, I hope the Senate will ratify the UN Convention to Combat 
Desertification, which would enable the United States to be a better 
partner with Africa in preserving agricultural land and making more 
efficient use of natural resources.
III. Global Opportunities and Threats
    America is a global power with worldwide interests. Many of the 
actions and initiatives we undertake are directed, as I have discussed, 
at particular countries or parts of the world. Other policies are more 
encompassing and can best be considered in global terms.
            (A) Protecting American Security
    The first of these is our strategy for ensuring the fundamental 
security of our citizens and territory. Fortunately, Cold War dangers 
belong to an earlier millennium. But today, we face a variety of other 
threats, some fueled by technology's advance; some by regional rivalry; 
some by ambition or hate.
    Accordingly, our armed forces must remain the finest in the world. 
But we also need first-class diplomacy. Because 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.
    At the same time, our diplomacy is stronger because we have the 
threat of force behind it. It is by combining force and diplomacy, for 
example, that we protect Americans from the threat posed by nuclear 
    Here, the military deterrent provided by our armed forces and the 
technological edge they enjoy are indispensable. But we will all sleep 
better if our deterrent never has to be used. The diplomatic challenge 
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, and the Chemical and Biological 
Weapons Conventions, designed to prevent WMD from spreading or falling 
into the wrong hands.
    Moreover, our Expanded Threat Reduction Initiative (ETRI) (building 
on the 1992 Nunn-Lugar legislation) 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.
    Our policy includes diplomatic efforts to restrain missile 
development, an option that a number of countries have voluntarily 
foregone. Thirty-two nations are cooperating to limit technology 
transfers through the Missile Technology Control Regime. And we are 
doing all we can to prevent known proliferators from gaining access to 
advanced missile technology.
    We understand, however, that nonproliferation efforts may not be 
enough. To protect our forces and allies abroad, we are working to 
develop Theater Missile Defense Systems.
    To protect ourselves at home, we are developing and testing a 
limited National Missile Defense system, with a decision on deployment 
possible as early as this summer. This decision will take into account 
threat, technological feasibility, affordability, and the overall 
strategic environment including our arms control objectives.
    But for NMD deployment to occur under the Anti-Ballistic Missile 
(ABM) Treaty, certain changes in that agreement would be necessary. We 
have been discussing these with other nations, including Russia.
    As I told Acting Prime Minister Putin in Moscow during a visit last 
week, the United States believes that the ABM Treaty contributes much 
to strategic stability. It reassures leaders in both capitals about one 
another's capabilities and intentions. And it has given us the 
confidence needed to pursue mutual reductions in nuclear arsenals.
    On the other hand, the strategic environment has changed greatly in 
the 28 years since the Treaty was signed. The Gulf War showed the 
dangers of theater-range missiles in hostile hands. And tests of 
longer-range missiles by other nations raise concerns that must be 
    To date, Russian leaders have opposed any modifications in the ABM 
Treaty, and questioned severely the potential impact of such changes on 
the entire system of international arms control.
    We have made clear that the limited changes we are contemplating 
would not undermine Russian security. In fact, because Russia and the 
United States are vulnerable to the same threats, we are prepared to 
cooperate with Moscow on missile defense. It is in our mutual interests 
to consider arrangements that would preserve the essential aims of the 
ABM Treaty, while protecting us from the new dangers we both face.
    Unfortunately, our consideration of NMD has aroused concerns not 
only in Russia, but also in Western Europe and elsewhere. I have had to 
address fears expressed by my counterparts that America is intent on 
going it alone, disregarding the interests of former adversaries and 
current allies alike.
    These fears were highlighted by the Senate's vote last fall on the 
Comprehensive Nuclear Test Ban Treaty (CTBT). The Administration made 
no secret of its disappointment with that vote. We believe that the 
CTBT is very much in America's national security interests. It would 
outlaw nuclear tests by others, while locking in a technological status 
quo that is highly favorable to the United States.
    So we are determined to continue fighting for the Treaty. But that 
does not mean fighting with Congress. The world's leading nation cannot 
remain divided on how to respond to the world's gravest threats. The 
Administration and Congress have worked together in the past on such 
key security issues as the Chemical Weapons Convention and NATO 
enlargement. We must put aside partisan distractions and work together 
    To this end, I am very pleased that General John Shalikashvili has 
agreed to advise the Administration while reaching out to Senators to 
find ways to narrow differences and gain bipartisan support for the 
CTBT. I hope Senators will take advantage of the opportunity to enter 
into a dialogue with General Shalikashvili so that he may formulate 
informed recommendations, and so that we may make wise choices about 
our options for moving forward.
    In considering the arguments for and against a nuclear test ban, 
Americans must resist the temptation to think that the strength of our 
armed forces means we no longer need help from others. It is simply 
impossible to halt the spread of weapons of mass destruction unless 
countries work together.
    International cooperation is also essential to safeguard our 
citizens from other threats. As we saw several times during the past 
decade, when America's military is called upon to act, we will often do 
so as part of a coalition. Accordingly, I ask your support for our 
security assistance programs, which contribute to the health of 
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 
    Another area where international cooperation is 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. In recent years, the 
number of terrorist strikes has declined, but their severity has risen.
    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 
    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 offer 
rewards for terrorist suspects, and 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 suspected 
terrorists to 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.
    And 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 the front line of defense at airports, diplomatic 
missions and other facilities frequented by our citizens while 
            (B) Sustaining American Prosperity
    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 
    The State Department values highly its partnerships with America's 
private sector. We consult regularly with business, agriculture and 
labor leaders. We work hard, both in Washington and in our diplomatic 
missions, to help our citizens take advantage of business 
opportunities, to enforce the protection of contractual and property 
rights, to promote responsible labor and environmental standards, and 
to combat corruption which harms foreign societies while discriminating 
against U.S. firms.
    In addition, since President Clinton took office, the 
Administration has negotiated more than 300 trade agreements, including 
the Uruguay Round and agreements on information technology, financial 
services and basic telecommunications. These agreements have helped us 
to find new markets, raise living standards and fight inflation. Today, 
more than eleven million U.S. jobs are supported by exports, and these 
are good jobs, paying--on the average--significantly more than non-
trade related positions.
    This morning, I urge your support for the Administration's 
initiatives to restore the momentum for liberalizing global trade. As 
President Clinton made clear in his recent speech to the World Economic 
Forum, ``open markets and rule-based trade are the best engine we know 
of to lift living standards, reduce environmental destruction and build 
shared prosperity.''
    The inability of the World Trade Organization (WTO) to agree on the 
terms of a new trade round during its December meeting in Seattle 
reflects the complexity of the issues involved. Our priorities include 
broadening market-access liberalization, strengthening and extending 
WTO rules, and addressing the concerns of both developing countries and 
civil society.
    The WTO must also proceed with internal reforms so that it is more 
open in its methods and meetings, and therefore seen clearly to be a 
public interest, not a special interest, organization.
    There is no question that changes to the global economy have 
created new challenges for the trading system. We want to work with our 
partners to enhance market access for the least developed countries 
through our respective preferential programs. We want to engage the WTO 
and the International Labor Organization (ILO) in a constructive 
dialogue, including consideration of the relationship between core 
labor standards, trade policy and social development. And we will 
continue to work to ensure that trade rules support, not undermine, the 
ability of governments to protect the environment.
    In addition, I urge members of this Committee to help us support 
American prosperity by backing agencies such as the Export-Import Bank, 
the Trade and Development Agency, and Overseas Private Investment 
Corporation, which help our businesspeople take advantage of new 
markets abroad.
    In this era, American prosperity depends on the prosperity of 
others. So I ask your support for the full range of our efforts to 
promote development around the world.
    Last year, the Earth's population surpassed six billion human 
beings. More than one billion of them live on less than a dollar a day. 
More than half have never made a telephone call. The new millennium has 
dawned on a world divided as much as ever before between those who have 
much, and those who have not. It is in America's interest to help those 
who most need help to pull themselves up. For we have learned from 
experience that desperation can breed conflict, generate uncontrolled 
refugee flows, provide fertile ground for criminals and terrorists, and 
contribute to global problems such as environmental degradation and 
epidemic disease.
    We also know that sustained efforts to promote development can 
produce sustained progress. Between 1960 and 1990, the average life 
expectancy in the developing world rose by 17 years, infant mortality 
was cut in half, the rate of child immunization more than doubled, and 
the percentage of children in school increased from less than half to 
more than three quarters.
    Obviously, the challenge of development today is different than in 
the past. The world is multi-polar, technology-driven, energized by 
more open markets and awash in enterprise, ideas and information.
    Those who are succeeding are first adapting. To be effective, 
external assistance must be matched by internal energy and reform. 
Democracy must be practiced, markets must be opened, investment 
encouraged and corruption stopped. Marginalized sectors of the 
population must be given access to the knowledge and skills they will 
need to compete in the 21st Century. And governments must lead in 
educating their populations about wise environmental and health 
practices, including awareness about HIV/AIDS.
    Neither the United States, nor any other country or institution, 
can bring sustainable development to a nation whose government is 
incompetent or corrupt. But we can, and should, do all we can to help 
those trying to help themselves gain the capacity to do so 
    Accordingly, I ask your vote for legislation to promote investment 
and trade, including the Africa Growth and Opportunity Act, the 
Caribbean Basin Initiative, the Southeast Europe Trade Preferences Act, 
and further extension of the Generalized System of Preferences.
    I ask your support for President Clinton's 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 address 
social problems and conserve the environment.
    I ask your approval of our request for funds to support all of the 
varied and vital work of USAID, the world's finest and most versatile 
development organization.
    And I seek your backing for other vital economic, technical and 
humanitarian assistance programs such as those administered by the 
Multilateral Development Banks, the Inter-American and African 
Development Foundations, our Peace Corps volunteers, UNICEF, the UN 
Development Program, and the UN High Commissioner for Refugees.
            (C) Safeguarding the Environment
    The United States also has a major foreign policy stake in 
protecting the global environment and in working to prevent 
transboundary environmental problems that could harm our interests, 
lead to conflicts or contribute to humanitarian disasters.
    As societies grow and industrialize, the absorptive capacities of 
the Earth will be severely tested. Misuse of resources can produce 
shortages that breed conflict, famine, refugee flows and further acts 
of environmental destruction.
    That is why we have incorporated environmental goals into the 
mainstream of our foreign policy, and why we are pursuing specific 
objectives in areas such as forestry management, coral reef protection 
and the conservation of marine resources in every part of the world.
    Priorities for the year 2000 include (1) helping to shape an 
effective global response to the challenge of climate change; (2) 
working to promote and gain world acceptance for a science-based 
standard for biosafety; (3) gaining international agreement to phaseout 
the production of twelve persistent chemical toxins; (4) developing 
multinational strategies for responding to the costly problem of 
invasive species, protecting coral reefs, and managing transboundary 
water resources; and (5) defeating efforts to weaken protections for 
            (D) International Family Planning
    Last year, with this Committee's leadership, Congress approved 
legislation enabling the United States to begin paying down the arrears 
we owe to the United Nations. Unfortunately, that law included unwise 
restrictions on our support for international family planning. I ask 
your help in seeing that these restrictions are not attached to 
legislation this year.
    Contrary to what some believe, the United States does not provide 
any funds to perform or promote abortions overseas. Instead, our 
assistance is used for family planning services that reduce abortions, 
promote maternal and child health, and save lives.
    Pregnancy-related complications kill an estimated 600,000 women 
every year. They are the leading cause of mortality among women of 
reproductive age in developing countries. And experts believe that 
perhaps one in every four of these deaths could be prevented through 
access to family planning.
    Family planning also saves the lives of children. Eleven million 
boys and girls die each year before reaching the age of five. Many 
could be saved if births were spaced further apart, and mothers bore a 
higher proportion of their children during their healthiest 
reproductive years. Accordingly, President Clinton is asking Congress 
this year to return U.S. support for international family planning to 
1995 levels. Moreover, we believe that private groups overseas should 
be able to exercise their right of free speech and publicize their 
views for or against reproductive rights without fearing loss of U.S. 
funding. The restrictions imposed upon such groups this year should not 
be carried over into next.
            (E) Fighting International Crime and Narcotics
    A third global objective of our foreign policy is to fight and win 
the struggle against the hydra-headed evil of international crime.
    Drug cartels and crime syndicates have expanded their operations 
since the end of the Cold War, in part by capitalizing on the same 
technological advances that have aided legitimate international 
    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; fight corruption; train police, prosecutors and judges; 
close criminal front companies; halt illegal smuggling and money 
laundering; negotiate extradition treaties; and bring criminals to 
    In regard to illegal narcotics, we have pursued a comprehensive 
strategy that includes support for eradication, interdiction, 
alternative development, the seizure of drug assets and the extradition 
to the United States of drug kingpins.
    These efforts are paying good dividends in our own hemisphere. Peru 
has cut coca cultivation by more than 66 percent over the past four 
years, and Bolivia by 55 percent since 1997. And as I have discussed 
earlier, we have greatly stepped up our efforts to assist authorities 
in Colombia in their battle against drugs and crime.
    In the New Independent States, we continue to focus our efforts on 
law enforcement training and helping legislators to draft anti-crime 
and corruption laws. We are also negotiating agreements that will allow 
our own law enforcement officers to cooperate more effectively with 
their counterparts in these countries.
    In Africa, Nigeria is the key. A significant portion of the heroin 
interdicted in the U.S. is traceable to Nigerian smuggling 
organizations. Because of the new government in that country, the 
prospects for improvement are encouraging. It is essential, however, 
that we have the flexibility in administering our programs to devote 
sufficient resources to this continent.
            (F) Human Rights, Democracy and the Rule of Law
    A core element in American foreign policy is our support for 
democracy, the rule of law, religious tolerance and human rights. We 
view these not solely as American or Western values, but as universal 
norms applicable to all people.
    In 1900, no country in the world had a government elected on the 
principle of universal suffrage in multiparty, competitive elections. 
Today, according to Freedom House, 120 nations representing 58% of the 
world's population, fit this definition. Our goal, in partnership with 
others, is to preserve and strengthen democracy where it exists and to 
lend appropriate support to democratic aspirations where it does not.
    Earlier in this statement, I mentioned some of the specific 
programs we use to aid democratic transitions, support free and fair 
elections and help democratic forces build civil society.
    These programs reflect our ideals and serve our interests.
    We know from experience that democratic governments tend to be more 
successful at preventing conflicts, maintaining stability, spurring 
social progress, and building prosperous economies than regimes that 
fear their own people.
    I personally look forward to attending in Warsaw in June a 
conference convened by democracies from Europe, Asia, Latin America and 
Africa. Its purpose will be to affirm the value of democratic 
principles and draw attention to the many facets of true democracy. 
These go far beyond holding elections to include a free press, 
independent political parties and labor organizations, and a legal 
system that protects the civil, political and economic rights of the 
    We also support democratic principles by striving to elevate global 
standards of human rights and respect for the rule of law. Our goal is 
to make the 21st Century an era of steady progress in each of these 
areas, not a time of consolidation or settling for the status quo.
    Accordingly, the United States will continue to support democratic 
ideals and institutions however and wherever we can effectively do so.
    We will continue to advocate increased respect for human rights, 
vigorously promote religious freedom, urge accountability for crimes 
against humanity wherever they occur, and firmly back the international 
criminal tribunals for Rwanda and the Former Yugoslavia.
    We will support efforts to help women gain fair access to the 
levers of economic and political power, work with others to end the 
pernicious trafficking in women and girls, and renew our request for 
Senate approval of the Convention to Eliminate All Forms of 
Discrimination Against Women. We will push for global ratification of a 
Convention to ban the worst forms of child labor, and expand 
partnerships with the private sector to eliminate abusive working 
conditions in factories abroad, especially those producing for the U.S. 
    And we will remain leaders in the international effort to prevent 
harm to civilians from anti-personnel landmines. Through the 
President's ``Demining 2010'' Initiative, we are working with official 
and nongovernmental organizations everywhere to detect, map, mark and 
destroy mines; increase mine awareness; improve mine detection 
technology; and care for the victims of mines.
IV. Public Diplomacy
    Last October 1, the State Department and United States Information 
Agency (USIA) merged. This was a key step in the reorganization of our 
foreign policy institutions called for by the Administration and 
    The merger enabled us to make public diplomacy a core element in 
our approach to foreign affairs by bringing new expertise and 
perspectives into our policymaking team.
    Public diplomacy advances U.S. interests by helping others to 
understand our society, culture and values, and builds long-term mutual 
ties through the Fulbright scholar and student programs. It can also be 
a very practical tool for influencing events. During the conflict in 
Kosovo, for example, our Internet Assistance Initiative helped us to 
manage data generated by the massive humanitarian effort, while also 
aiding refugees in locating loved ones who had become separated. More 
recently, we used public diplomacy to warn against a breakdown of the 
constitutional order in Ecuador.
    In addition, the State Department's International Visitors Program 
has been remarkably successful at identifying world leaders early in 
their careers. Past participants include no less than three dozen 
current Presidents and Prime Ministers.
    I congratulate Members of the Committee for your support during the 
reorganization process, and urge your backing for the full range of 
public diplomacy programs in the year to come.
V. Managing for Security and Success
    Mr. Chairman, one of my key goals has been to ensure that I leave 
behind a State Department that is more modern, better managed, more 
diverse, and more effectively organized than when I took office. With 
bipartisan Congressional backing, we have made significant progress. 
The Department's integration with ACDA and USIA has been successful. We 
have greatly improved passport and consular services. We have 
modernized communications, gone on-line, and upgraded training. Guided 
by the Report of the Overseas Presence Advisory Panel, we are striving 
to ``rightsize'' our diplomatic posts, and achieve better inter-agency 
teamwork under our chiefs of mission abroad and the President and 
Secretary of State here at home.
    Above all, we are concentrating on improved security for our 
personnel, our posts and the information we handle.
    Since August 1998, the Africa Embassy bombings have served as a 
searing reminder that the protection of our diplomatic missions demands 
unrelenting vigilance and a fresh influx of resources.
    Since that tragedy, with help from Congress, we have made a 
significant downpayment towards our unmet construction needs, while 
increasing training and hiring additional security personnel. The 
President's budget request includes $500 million in FY 2001 funds for 
facility replacement, $200 million for enhanced perimeter security, $16 
million for new security professionals, and $328 million for recurring 
costs associated with security upgrades. It also seeks advance 
appropriations of more than $3 billion between FY 2002 and FY 2005 to 
continue replacing our highest-risk embassies and consulates.
    Within the Department, David Carpenter, the first law enforcement 
professional to serve as Assistant Secretary of State for Diplomatic 
Security, has taken a number of steps to tighten security. These 
include enhanced perimeter protection, a tougher escort policy, and a 
new surveillance detection program now operational at most of our 
    I have personally placed a strong emphasis on ensuring the 
protection of classified information and the security of our 
facilities. My message is clear that security is everybody's business, 
every day.
    In the days immediately prior to Millennium Eve, I was in almost 
constant contact with Assistant Secretary Carpenter and our Counter-
Terrorism Coordinator, Michael Sheehan, as we worked with other U.S. 
and foreign agencies--amidst a plethora of threats--to deter, detect 
and prevent terrorist acts.
    During the year ahead, I will have no higher priority than to see 
that security in every aspect of Department operations, both internally 
and in responding to external threats, is first rate both in effort 
expended and results achieved.
VI. Conclusion
    Mr. Chairman, the dawn of the millennium has only intensified our 
awareness of the passage of time. We conduct much of our daily 
communications and business through technologies that didn't exist or 
were in their infancy only a decade ago. The patterns of international 
relations we lived with for so long have been scrambled beyond 
recognition; the new patterns shift like a kaleidoscope with every turn 
of the calendar's page.
    We live in a world transformed, that will not stop changing. No 
country is more comfortable in such an environment than America, but we 
would be lost except for what has not changed, and that is America's 
    Some decades ago, when Cold War tensions were at their highest, 
Walter Lippman wrote about the realities of his time in words that 
serve as a warning to ours:

          With all the danger and worry it causes . . . the Soviet 
        challenge may yet prove . . . a blessing. For . . . if our 
        influence . . . were undisputed, we would, I feel sure, slowly 
        deteriorate. Having lost our great energies [and] daring 
        because everything was . . . so comfortable. We would . . . 
        enter into the decline which has marked . . . so many societies 
        . . . when they have come to think there is no great work to be 
        done . . . and that the purpose of life is to hold on and stay 
        put. For then the night has come and they doze off and they 
        begin to die.

    Our challenge is to prove Lippman wrong; to employ our energy, 
retain our daring, and understand that our responsibilities are similar 
in magnitude, if not so obviously in drama, as those fulfilled by our 
    It is true we face no Hitler or Stalin. But it is as great a 
mission to create the conditions under which such evil does not again 
threaten us, as it would be to oppose such evil if and when it did.
    There are no final frontiers for America. We are not and have never 
been a status quo country. We have always believed that the future can 
be made better than the past. We are doers.
    In the year 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.

    The Chairman. Well, you have not lost any of your 
eloquence. A very fine statement. We tried to figure this thing 
based on the number of Senators here, and I am delighted to see 
all of you. We will have a first round of 6 minutes.
    Madam Secretary, the President's fiscal year 2001 budget 
for foreign affairs calls for an increase of $2.8 billion, or 
14 percent over the fiscal year 2000 funding levels, and is 
part of a highly political budget that increases spending 
authority by almost $50 billion throughout the Federal 
    Now, we want to work with you to find additional funds for 
projects like upgrading U.S. Embassies, but it is kind of 
difficult when the President's offsets to some of these 
increases have been debated and rejected already by Congress.
    My question, based on that premise, laying aside the many 
spending increases, what savings will be achieved in the fiscal 
year 2001 budget from the organization of the State Department?
    Secretary Albright. Mr. Chairman, I think I will take 
justified pride in the reorganization of the State Department, 
an issue we have worked on together. I believe the 
reorganization is a very important step forward and, as we have 
all said, we could not have done it without each other. But it 
was a step taken primarily to enhance foreign affairs 
coordination, and it was not undertaken, at least in my belief, 
as a cost-saving measure.
    As we notified Congress, we need to invest $219 million of 
previously appropriated moneys to cover the one-time cost of 
the merger with USIA and ACDA. At this point in the process I 
have to be frank with you, we have not achieved savings. This 
is normal for any merger of big organizations, whether they are 
in the government or private sector.
    However, we believe that in time the Department will 
realize future savings through efficiencies made possible by 
our more streamlined foreign affairs organizations and 
structures. We know that to be the case already in terms of how 
we are dealing with new technologies that we have to acquire. 
Clearly we will streamline, but reorganization is not a cost-
savings activity at this stage.
    The Chairman. Do you have more employees or fewer in the 
two agencies, or in what were the two agencies? How do the 
personnel compare?
    Secretary Albright. I will have to get you the figures on 
that, but obviously we have fewer and the reductions are taking 
place by attrition. We wanted to make sure that people were 
able to find appropriate jobs.
    [The following information was subsequently supplied:]

    The USIA merger with State has resulted in a net decrease of 202 
positions. Most of the reductions were realized by small decreases in 
many offices. Significant reductions (i.e. more than ten) were made in 
the following areas:

   25 details (mainly to State) were abolished and the 
        incumbents assigned to State vacancies;

   11 positions in the USIA/Operations Center and various 
        commissions were abolished and the incumbents reassigned;

   39 positions were moved to reimbursable funding which would 
        come out of other agencies;

   14 incumbents were assigned to vacancies funded by other 

    Reductions to achieve these savings were made through attrition and 
appropriate jobs have been found for all of the USIA personnel 
transferred to State.

    The Chairman. I want to track that as the months go by and 
make sure our promises to the American people were justified.
    Now, let me ask you just one little item, and this is just 
for the purpose of illustrating a problem I have. Is it really 
necessary, Madam Secretary, to cut U.S. funding for the Tibet 
office by $1 million, as the President's budget proposes, to 
fund this enormous budget increase? Now, why was that cut out? 
Surely the $1 million would be lost in all of the billions and 
billions of dollars we are talking about.
    Secretary Albright. On that issue, Mr. Chairman, our issue 
was basically with an earmark. We did not specifically continue 
the new earmark. As you know, we generally oppose new earmarks. 
However, we will be looking at how the performances of the 
programs we have with Tibet accomplish effectively the goals 
that you and we have. We will continue to fund the office using 
some of the East Asia/Pacific regional funds that we requested 
in 2001. So it is more a matter, sir, of opposing earmarking, 
rather than not devoting funds to it.
    The Chairman. I think I understand what you are saying, but 
does the disposition of the office change under the President's 
proposed budget?
    Secretary Albright. Well, you know, we have a Tibet 
coordinator, Julia Taft, who is working very hard on it. It is 
not an issue so much of funds as of our ability to make our 
statements and our position well-known to Beijing, which we 
continue to do, I assure you, at every meeting that we have.
    The Chairman. All right. Send me, if you will, or have 
somebody send me, the number of employees that staff the Tibet 
    [The following answer was subsequently provided:]

    The Coordinator, Julia Taft, has one full time assistant. 
In addition, a Foreign Service officer from the Bureau of 
Population, Refugees, and Migration (PRM) is responsible for 
managing PRM's $2 million for programs for Tibetans in India 
and the FY 2000 $1 million earmarked ESF funds for economic and 
cultural assistance programs for Tibetans in Tibet.

    The Chairman. Now, during the past 4 months, the 
administration officials have stated repeatedly that Russia 
will isolate itself if it continues its war in Chechnya, yet 
Moscow's indiscriminate use of force in Chechnya has only 
increased, and relations with Moscow continue as if this war 
were simply a diplomatic inconvenience. Now, what is the United 
States doing to bring this brutality to an end?
    Secretary Albright. Well, first of all, Mr. Chairman, I 
believe it is very important to put your question into context, 
and that is, what is it that we foresee, or what role should we 
have in our contacts with Russia as we move into the 21st 
    I have believed in the fact that the Soviet Union was the 
cause of terrible discomfort not only to its own people but to 
the countries that were a part of the Soviet empire, and 
created tremendous unease and problems, to understate it, for 
the rest of the world. The changing Russia, however, is a 
country with which I believe we need to have engagement in 
order to make sure that it continues to travel down the road 
toward democracy and economic reform.
    I have just, as you know, come back from a trip to Moscow, 
where I spent 3 hours with Mr. Putin. I made very clear to him 
that we continue to have a very important arms control agenda 
with Russia, one in which we have to try to make sure that we 
deal with new threats while pursuing deep cuts that do not 
undercut our strategic deterrent.
    But let me say this on Chechnya. I made very clear to him 
that what they were doing in Chechnya was not acceptable. They 
see it, Mr. Chairman, as an issue of terrorism, and one does 
have to grant them the fact that they do have a problem with 
terrorism. They had three buildings blown up in Moscow. But 
Chechnya is not only an issue of terrorism. I made clear that 
their brutality toward innocent civilians and what they were 
doing with refugees was not acceptable, that they needed to 
have a political dialog in order to end it, and that there was 
no military solution.
    I think, however, Mr. Chairman, that for us to not have 
contacts with Russia would be cutting off our nose to spite our 
face. While we can be very angry at the way they are handling 
Chechnya--and I do believe they are isolating themselves, 
because I have talked to other foreign ministers--I think we 
cannot recreate the enemy. It is essential for us to have 
dealings with Russia across the board.
    The Chairman. Yes or no. Do you consider the invasion of 
Chechnya as it has been described, as a war of liberation?
    Secretary Albright. No.
    The Chairman. Thank you. Senator Biden.
    Senator Biden. Thank you very much, Mr. Chairman. I think 
it is very important that you be able to finish such an 
important question that you started, so I for one do not mind 
you taking the extra time.
    Madam Secretary, I will be as brief as I can with my 
question if you could be as brief as you could with your 
answer, without in any way making it incomplete.
    On the Balkans, I am really pleased that you are pushing in 
your budget for the additional moneys for the stability pact as 
well as for the aid directly that we promised to Mr. Kouchner, 
the United Nations, essentially, high commissioner there, and 
we are making a lot more progress there than I think some 
suggest, but I think it all can come a cropper if Kouchner does 
not get another couple of thousand police in place soon.
    We are the ones supplying most of the police, and if they 
do not get the funding for infrastructure that is needed--I 
mean, we are talking about water and lights and sewer and 
things that make a nation able to function, so my question is 
this, and it is hard for a Secretary to answer this, I guess, 
bluntly, but you have a reputation for being blunt.
    Are you satisfied with our European friends, that they are 
keeping their commitments on both the stability pact and the 
peace process, and they are two different things, as we both 
know, and the peace process within the Balkans, and 
particularly Kosovo, and if you are not satisfied at this 
point, are you optimistic or pessimistic we can actually get 
the job done, that they will actually come through? And I am 
not asking you to single out any nation.
    Secretary Albright. Let me just say, first of all, I 
believe that what we did as a NATO alliance in Kosovo was 
essential. As I have said a number of times, I would much 
prefer answering questions such as you have just asked, or more 
hostile ones on the subject, than to have said we did nothing.
    I think history would have judged us very, very severely on 
that, and so I do think that we need to remember that we saved 
thousands of lives, created a climate for the safe return of 
thousands of refugees and provided an opportunity for the 
people of Kosovo to rebuild their lives.
    Now, I think that there has been demonstrable success under 
Mr. Kouchner and UNMIK, and violent crime is down. The civil 
authorities are functioning. Some of the Kosovar police force 
is being trained, judges are being appointed, basic services 
and utilities are being put into place, and education is being 
restored, and we are hoping that there will be elections this 
year. There are preparations for that underway.
    Now, one of the problems that really has happened is that 
there is a slowness in the money getting to Kosovo. I speak to 
Mr. Kouchner very frequently, and he is in dire straits. He 
calls and he says, I do not have the money to pay the teachers 
and the police, and it makes it very hard if we are criticizing 
the UNMIK operation and then he does not get his money.
    I think what has to happen here is that we said that we 
would bear a burden, a share of this, but that obviously the 
Europeans have to do more. They have pledged quite a 
substantial sum of money, but there is a slowness in the 
delivery of it, and frankly there was a slowness in the 
delivery of ours.
    We just released $10 million on Friday, which they will not 
get for 2 or 3 weeks. However, for every dollar that we have 
spent other donors have contributed about $4 on average. The 
ratio for fiscal year 2000 is closer to $6 for every dollar we 
spend, so they have taken on the major bulk of this.
    I spend a large portion of my day calling either EU 
Commissioner Patton about making the money available, or 
individual European governments. I think they need to 
contribute, but I hope that we do not tie together their 
contributions and ours.
    Senator Biden. I do not think we should do that either, 
Madam Secretary, and I imagine we may be confronted with that 
    What I am suggesting to you is that I think the degree to 
which we are likely to be confronted with that will be in 
direct proportion to how persuasive you are able to be with 
them to move rapidly on this.
    My time is about up. I would just conclude with one 
comment. I think the most dangerous part of the world right 
now, one person's view, is South Asia. I think the one place 
that has the greatest potential to get out of control the most 
rapidly is South Asia, India and Pakistan. I do not predict 
that will happen, but I do suggest that if it does, that is the 
place where things could come a cropper very quickly, and with 
no pun intended, a very big bang, and the question about 
whether there is a deployment of weapons that have been 
developed is of significant consequence.
    There is a hair trigger based on geography and proximity, 
and a pattern of being not at all reluctant to go to war with 
one another over the past 30 years, so my question is, when 
Assistant Secretary Inderfurth just had meetings with General 
Musharraf--I believe I am pronouncing that correctly--and I 
wonder whether or not you are able to--and if you want to wait 
until the second round, Mr. Chairman, for the Secretary to 
answer, but at some point if you could give me a sense of 
whether or not, what issues did he address with Musharraf, and 
what actions are we pursuing Pakistan to proceed with, I would 
like to know that, if it is possible, and again, I do not want 
to hold up my colleagues.
    The Chairman. Let's keep it in context. I think it is an 
important question to answer now.
    Secretary Albright. First of all, Senator Biden, I agree 
with you it is a very dangerous place, and we have been working 
very hard. Deputy Secretary Talbott has been intimately 
involved, as have I, in trying to get them to come on board on 
the CTBT, which is very important, and to limit their 
proliferation plans.
    We have had a number of conversations with Mr. Musharraf on 
several fronts. They involved getting him to move toward a 
constitutional civil government, and telling him this is 
something we are watching carefully. We are also seeking his 
cooperation in dealing with terrorist problems as we are very 
concerned about Osama bin Laden. Those are the three major 
areas we have been working with the Pakistanis.
    Senator Biden. I will pursue this on a second round. Thank 
you, Mr. Chairman.
    The Chairman. Senator Hagel.
    Senator Hagel. Thank you, Mr. Chairman. Welcome, Madam 
Secretary. Senator Biden referenced a delegation of Members of 
the Senate and the House that followed you by 24 hours in 
Russia, and I wanted to thank you and your Department, 
especially Ambassador Collins, Madam Secretary, for their 
support and assistance.
    When we were there, a day after you, we met with the 
speaker of the Duma and a number of senior committee chairmen, 
as well as the chairman of the Federation Council.
    I watched your conversation last night with Jim Lehrer, and 
admittedly it was during a time I was reading my 7-year-old 
``Captain Underpants,'' and so I may have missed parts of your 
conversation. I want to refer to something that the chairman 
and Senator Biden talked about, and you mentioned in your 
conversation with Jim Lehrer last night, and again in your 
testimony on the issue of Chechnya, that is, where the Russians 
go from here.
    I believe you said to Mr. Lehrer last night that you had 
suggested to President Putin that they needed to work their way 
out of this not just militarily, but for the long-term, 
    You talked, I think, about the possibility of an assessment 
committee or organization coming in. My question is this: How 
detailed was your conservation with President Putin on Russia's 
intentions? Are they thinking about a diplomatic resolution? 
How did he respond to your suggestion about an outside 
assessment group coming in?
    Secretary Albright. Senator Hagel, first of all let me say 
that we discussed your CODEL with acting President Putin, and 
he was prepared to see you, but I gather you all got snowed in 
somewhere, so that created some problems.
    I think he indicated he really wanted to get together with 
Members of Congress in order to try to establish some kind of 
dialog. I think it would be very useful.
    I hope we can have a longer discussion about acting 
President Putin. I know he is on everybody's mind, and he is a 
mixed bag. I mean, there are certain aspects to him where I see 
him as being very pragmatic and a problem-solver, and in other 
cases I found him in denial. Chechnya is one of those cases.
    I think that the Russians have decided for their own 
reasons that they have to take Chechnya. I think from their 
perspective they have decided they need to liberate it. As I 
say, I do not agree with that. I think they believe they can 
solve the problem the way they are solving it now. I do not 
believe that, and so it was the one area where we just plain 
disagreed. And they see the situation in Chechnya all in terms 
of terrorism, which it is not.
    I spoke to him about the fact that the forces of the 
Chechens have moved to the south and to the west and to the 
hills. They are guerrilla fighters, and I think this will go 
on. This is what I said yesterday, when they showed pictures of 
Grozny having been occupied.
    The Russians also have said they are now prepared to look 
at a variety of humanitarian aspects of this. As I understand 
it, a U.N. group went in, but did not get in far enough to 
really see what some of the conditions are. I had asked that 
they let an assessment team go in, and I am waiting for an 
answer from Foreign Minister Ivanov on that, because Mr. Putin 
said for him to look at that.
    I had said that they needed to have a political dialog. We 
have offered, through the OSCE and other ways, to assist. There 
was not a lot of taking on that. I think ultimately they see a 
political dialog, but not at any pace that we are looking at, 
but their own pace.
    I also asked that they allow accredited journalists to go 
in, because the facts on the ground are clearly in dispute. I 
made very clear that the Russian Government bears 
responsibility for Mr. Babitsky, the Radio Liberty reporter.
    So we have a disagreement on Chechnya, there is no doubt 
about that, but I think--as I started to say to the chairman--
there are other parts of our relationship with Russia that we 
need to consider, and I hope we will have a chance to discuss 
    Senator Hagel. Thank you. You mentioned also, I believe, in 
your conversation with Mr. Lehrer last night that you found the 
acting President, President Putin, a little more open-minded 
than you had thought regarding the 1972 ABM treaty. Would you 
care to explain that?
    Secretary Albright. Well, first of all, we had a 3-hour 
discussion where there was a real give-and-take. He showed me 
that he had a stack of note cards that he did not use. I showed 
him mine, and we could have exchanged them. But he took notes. 
He was very organized and careful, and when I raised the arms 
control issues, what I found interesting was that he did not 
deny the fact that there were new threats and that there needed 
to be a way to deal with them.
    He also, I think, understood the importance of what had 
happened in Helsinki and Cologne, and the importance of the 
previous agreements President Yeltsin and President Clinton had 
made in terms of seeing the ABM and START III treaties as a 
package that looks at defense and offense together. This 
approach allows us to look at deep cuts and the importance of 
maintaining a strategic deterrent.
    So it is not definitive. Obviously, the negotiations are 
being carried on at many levels, but I did not find him in a 
total ``nyet'' mode, and I felt there was a way that we could 
work on a common assessment of the new threats. He also felt 
that we have to maintain the fundamental principles of the ABM, 
and that is our view.
    I have stated many times that it is possible to do that and 
still adjust the ABM. It has been amended before.
    Senator Hagel. If I might, Mr. Chairman, just add one 
thing. I am not sure what your point was, then, when you said 
on Lehrer that you found him essentially a little more 
accommodating. I think the term you used was a little more 
open-minded. Where is the open-mindedness?
    Secretary Albright. I think this is my assessment in 
previous conversations I had had. Many of the Russians had 
denied the existence of any new threats and felt that this was 
an American plan to only deal with trying to limit their 
strategic deterrence. He did not, flat out, say there are no 
threats, you are only after us, and so in that regard I found 
him more open-minded.
    But more open-minded than I had been led to believe. I am 
not saying here that this is any kind of an easy proposition. 
It is just that what struck me about him, Senator, is that he 
is willing to talk. He may come out with a decision we do not 
like, but he does not make pronouncements. He is basically 
somebody that you can have a conversation with.
    But I would like to say about him that the jury is 
obviously out. There has been a lot of psychobabble about his 
background, but we basically have to be looking at his actions, 
not his words. We are going into protracted and difficult 
negotiations on these subjects.
    Senator Hagel. Thank you. Mr. Chairman, thank you.
    The Chairman. Senator Dodd.
    Senator Dodd. Thank you very much, Mr. Chairman.
    Welcome, Madam Secretary. Let me at the outset commend you 
for the wonderful job you are doing and your team is doing in 
uncertain times, and let me quickly add how much I appreciate 
the support that you have given to us on this side of the table 
who have made some trips overseas recently, and working with 
the administration, including the most recent trip by Senator 
Hagel and some of our colleagues who went.
    I think that kind of cooperation advances very well the 
cause of our common interests here as we try and pursue the 
best policies for our Nation in this century, and it is healthy 
to see this kind of attitude between the legislative and 
executive branch. We have seen examples of it throughout some 
recent past history, and I hope we will continue to see it even 
after your term of office expires.
    Let me just quickly make a point. I do not want you to 
respond to this, but the confirmation process, something the 
chairman and I have talked about informally, has got to be 
improved. We need to find a far better way in which we can deal 
with the confirmations of individuals who offer themselves up 
to serve our country in one capacity or another, and this is 
going on too long and taking too much time, and we ought to be 
able to figure out a way in which we can do a better job of 
that in the future.
    I have three areas I want to address with you. I will not 
get to all of them in the first round, but I am very interested 
in India and Pakistan. Senator Daschle, myself, Senator Reid 
and Senator Akaka were in Pakistan and India a couple of weeks 
ago. Our colleague, Sam Brownback was there right around the 
same time we were, and so I presume he will have some questions 
in this area that Senator Biden has raised.
    Second, Colombia and the pay package, Venezuela and Ecuador 
and the northern Andean countries is an issue I want to raise 
with you, and also Ireland, so there are three important ones.
    Let me pick up on the Indian and Pakistan issue since 
Senator Biden has raised that one already, and I will come back 
to Colombia later on if others do not bring the subject matter 
    On India and Pakistan, Madam Secretary, there are four 
issues that are of deep concern to us, as I understand them. 
Terrorism, obviously, a major concern. The road to 
democratization after the October coup in which General 
Musharraf took control of the country, the issue of Kashmir, 
which obviously is tremendously troublesome, and fourth the 
issue of the nuclear weapons issue.
    Now, there is also the pending question of the Presidential 
trip to the subcontinent. I for one would like to see the 
President make a stop in Pakistan. I know this is a very 
troublesome question, and there are a lot of reasons, based on 
current circumstances, why he might not. India has been a great 
ally of ours, and a tremendous democracy, and someone we 
basically have a tremendous respect for, and obviously they are 
deeply concerned about certain actions that Pakistan has taken, 
and events in Pakistan.
    I do not think there is much likelihood on resolving 
Kashmir in the next few weeks, nor are we likely to deal with 
the issue of the nuclear weapons issue overnight, but I think 
there can be some statements and some things done on 
democratization and terrorism in the next few weeks which the 
Pakistani Government could take, and I would hope that we would 
use whatever efforts and offices we have to try and promote 
that so that a stop by this President in Pakistan as he visits 
the subcontinent would be possible.
    I would appreciate any comments you may have on that, and 
how I have characterized the four issues, whether you agree 
with those or whether you want to add or subtract from the 
number I have mentioned.
    Secretary Albright. Senator, let me just say about travel 
and CODEL's and contacts, I welcome very much, I hope you do, 
the possibility that we actually talk when you are all out on 
the road, as you and I have done.
    Senator Dodd. As we did.
    Secretary Albright. And I think that it helps a lot in 
terms of what you are seeing and what our reaction to it might 
be. While we do not speak for each other, I think that it does, 
in fact, help a lot when we have that kind of contact. So we 
very much appreciate your taking those kinds of trips. They are 
not easy. I know people sometimes think they are. As somebody 
who travels a lot myself, I know how hard they are, so thank 
you very, very much for that.
    On the issues that you have raised, I think that those are 
the key issues. We have been very concerned about the path to 
democracy. I think that one of the issues all along has been 
how Pakistan has evolved, and how it is in fact really working. 
Pakistan's ability to absorb democratic practices is not a new 
    We obviously were disturbed by the way that General 
Musharraf took over, and have been working to try to get him to 
understand the importance of having a civilian democratic rule, 
and have laid out with him some of the steps that need to be 
    On the issue of terrorism, we expect Pakistan to cooperate 
with us in trying to deal with the problem of terrorism, and 
there has been cooperation at some levels, but not as much as 
we would like.
    Kashmir is obviously the fuse that is always there, and 
what makes the situation so dangerous. It is our hope that they 
can, in fact, begin to talk about it with whatever assistance 
we can give.
    On the issue of the President's trip, first of all I think 
it is very important that the President is going to India. It 
is the world's largest democracy.
    Senator Dodd. It has been a long time, 1977.
    Secretary Albright. It has been a long time. There are a 
number of issues, not only the nonproliferation issue, which is 
obviously very high, but in terms of business and environment 
and a number of ways that we can include India more.
    No decision has been made as to whether the President will 
go to Pakistan as well. We do have these concerns, and we hope 
that Pakistan will address them.
    Senator Dodd. My bell has rung here, but can I interpret 
from your remarks, Madam Secretary, that you would hope that 
some of these issues might be resolved so the President could, 
in fact, make a stop in Pakistan?
    Secretary Albright. Well, we have, in fact, made our 
concerns known to them, but as I have said there has been no 
decision as of yet.
    Senator Dodd. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator. Senator Grams.
    Senator Grams. Thank you very much, Mr. Chairman. Madam 
Secretary, as the chairman noted earlier, we have worked 
closely together during the last year in shaping my 
legislation, which was signed into law to improve the security 
of our diplomatic facilities abroad, and I hope we can work 
together now to tighten security at the State Department 
    I understand the ongoing tension between the foreign policy 
establishment's desire for openness and also the security 
office's need for restrictions, but I think we can all agree 
that the success of Russia's foreign intelligence service in 
placing an electronic eavesdropping device inside a strip of 
molding in the seventh floor conference room, which by the way 
is close to your office, reveals that this administration has 
been dangerously lax in enforcing prudent, common sense 
measures to safeguard our most sensitive diplomatic secrets.
    Now, I am going to be chairing a committee hearing on this 
subject on Thursday, but I also wanted to take this opportunity 
to ask about the State Department's security, because it is an 
issue, I believe, that should be addressed at the highest 
levels, so controlling access is a contentious issue, I 
understand, at the State Department.
    On November 17, 1998 the Department notice stated that, and 
I quote, ``all visitors, with the exception of active U.S. 
Government agency personnel who display proper photo 
identification, shall be escorted at all times.'' That mandate 
was rescinded just 6 days later, and it took 9 months to 
reinstate the policy on August 6, 1999.
    Now, having all visitors escorted seems to be a common 
sense and prudent measure. Why, Madam Secretary, was the order 
    Secretary Albright. First of all, Senator, let me say I 
agree with you completely that security at the State Department 
as well as other agencies is essential, and it is something 
that I have as a very high priority.
    I have asked Assistant Secretary Dave Carpenter, who is a 
professional law enforcement officer and a former member of the 
Secret Service, to undertake a complete review, bottom-up, top-
down, of all of our security arrangements.
    Let me also, just to correct something, while the bug was 
on the seventh floor it was not near my office. The State 
Department is a very large building. It looks like an ``H'' and 
it was on totally the other side.
    The escort policy had originally been changed in 1992. 
There were reviews of it, and I insisted in August 1999 that it 
be reimposed. I do not have a specific answer as to why. There 
were questions about the numbers of people that were necessary 
to escort people around. It is a resource problem, and it is a 
question as to how buckled down or tied down everybody is in 
the State Department.
    But I can just assure you that we are taking every action 
now to make the State Department a totally secure place, while 
still allowing us to work. People have to come and visit us. 
That is part of what we do. But I am glad you are holding 
hearings, and we will be as cooperative with you as possible on 
    Senator Grams. Madam Secretary, according to a report by 
the GAO, dozens of foreign citizens were given access to 
sensitive computer systems at the Federal Aviation 
Administration without undergoing any security checks. 
Comparable concerns have arisen regarding DOE's Stockpile 
Stewardship Program.
    Now, I am concerned that similar security lapses could have 
occurred at the State Department as well, so my question would 
be, do all foreign citizens who work at the State Department, 
including all contractors, have to go through some background 
    Secretary Albright. Senator, it is my understanding yes. I 
am as concerned as you are about this and as angered as you 
are, and I am directing now that we review all of these issues. 
This is obviously a concern across the board in the Government. 
With respect to the freedoms allowed to Americans and for 
people who are not originally born in the United States but are 
citizens, such as me. We cannot completely tie ourselves in 
knots. But I am absolutely as shocked, appalled, irritated, 
whatever adjective you want to use, as you are, and that is why 
I have directed this change. I am also looking at structural 
changes within the Department.
    Senator Grams. In that regard, do you have any reports as 
to what nationalities have been given access to computers at 
the State Department?
    Secretary Albright. No, I personally do not.
    [Subsequent to the hearing the following clarifications 
were received from the Department of State:]

    Clarification of Responses Given by Secretary of State Albright

                          U.S. Department of State,
                                            Washington, DC,
                                                 February 15, 2000.
Hon. Jesse Helms, Chairman,
Committee on Foreign Relations,
United States Senate.

    Dear Mr. Chairman: I am writing at Secretary Albright's request to 
clarify two responses given during the Committee's hearing on February 
8. Both were in reply to questions posed by Senator Grams.
    When asked whether ``all foreign citizens who work at the State 
Department, including all contractors, have to go through some 
background checks,'' the Secretary responded in the affirmative. This 
answer is correct when applied to all persons, including foreign 
citizens, who are admitted to the Department with the understanding 
that they will work on classified or sensitive projects or have access 
to classified or sensitive information.
    Contracts which do not require access to classified information or 
equipment can be awarded to uncleared companies. These uncleared 
companies may assign uncleared personnel, to include non-U.S. citizens, 
to these contracts. If the contract performance is at the Department of 
State, however, building passes are required at which time the 
contractor employees undergo a records check.
    In a follow-up question, the Secretary was asked whether she knew 
the nationality of all individuals granted access to computers at the 
State Department. She replied that she did not personally know this 
information. She is, however, aware of one case, currently under 
investigation, involving a subcontractor who used foreign nationals on 
an unclassified project related to computers in the Department. Among 
other things, the investigation is seeking to determine whether all the 
policies referred to above were observed in that case.
    I hope this information is helpful in clarifying and ensuring the 
completeness of the record of the hearing. If you would like further 
information on this matter, Assistant Secretary David Carpenter would 
be pleased to brief you.
                                    Barbara Larkin,
                  Assistant Secretary, Legislative Affairs.

    Senator Grams. One followup quick question. The Booz Allen 
and Hamilton consulting firm recently conducted an audit on the 
State Department's ability to respond to both terrorists and 
counterintelligence threats. Now, it has been reported that one 
of the recommendations made in this report was to elevate the 
role of the Bureau of Diplomatic Security. I would like to ask 
you, do you believe the role of the DS should be elevated, and 
that the DS should report directly to you?
    Secretary Albright. This is exactly the kind of thing I am 
now looking at when I am saying that we are looking at 
structural changes. I have the highest regard for the 
Diplomatic Security Service, and I believe that their numbers 
should be increased, and I believe that they should be able to 
do what is necessary in order to protect our security at the 
State Department as well as abroad.
    I have looked at the recommendations of the report as well 
as a number of other reports that have been given to me. As I 
said, I am looking at structural changes in the Department, but 
in the interim I have, in fact, asked Dave Carpenter, who I 
respect highly, to undertake this review. I take this very 
seriously, Senator.
    Senator Grams. Thank you, Madam Secretary.
    The Chairman. Senator Kerry.
    Senator Kerry. Thank you, Mr. Chairman. Madam Secretary, 
welcome. It is nice to see you here, and thanks for taking time 
to be with us, and thank you also for the terrific job you are 
doing in our behalf.
    I thought that you and the President both made very 
important statements at the World Economic Forum and again 
today. I have just finished reading through your testimony, and 
I think it is a terrific summary of the global responsibilities 
and challenges we face.
    On page 3, I think you make just an enormously important 
statement in two paragraphs which is a challenge to this 
committee and to the Congress, and I am not sure the full 
measure of it is taken into account either in our discussion 
today or in our thinking.
    That is the paragraph where you talk about how we allocate 
less than one-tenth of the portion of our gross national 
product that we did have a century ago to support democracy and 
growth overseas, how during the past decade alone our 
investment relative to the size of our economy has declined by 
more than one-half, and how, throughout this period, we have 
been cutting foreign policy positions, closing diplomatic 
posts, shutting USAID and USIA missions, and you then in your 
next paragraph talk about the consequences this has for us.
    I would just like to share with my colleagues and ask you a 
question. Maybe you would go a little further in talking about 
this. At the World Economic Forum there is a meeting that takes 
place for several days with leaders from various countries 
around the world, maybe 60 leaders, finance ministers, prime 
ministers, Presidents of countries, many of them less-developed 
countries, all of them with the same interest that we have in 
stability and in development.
    To a country, they are currently wrestling with the impact 
of globalization and technology, and to a leader they are 
struggling with the extraordinary divide that exists in the 
world. We are getting richer and richer, and many of them seem 
to be standing still, or even getting poorer.
    The issue of AIDS in Africa is of such enormous 
consequence, it is hard to grapple with it, get a hold of it. I 
know you were asked a question by one woman about 40 million 
children who will be orphans, added to the 100 million already 
existing, and when you consider that many children being raised 
as orphans, the implications for democracy-building, 
institutions, or society are just enormous.
    One of the great fears of developed country leaders and 
less-developed country leaders is what Tom Friedman's talking 
about in his book, ``Backlash,'' and each year in Davos we have 
talked about the potential for backlash.
    Here we are, this great cresting wave of success in our 
country and around the globe in accepting market economies, and 
here we are busily investing and developing these market 
economies to a small degree, but not with the kind of success 
we would like to see in terms of passing it on to larger 
numbers of people, and, indeed, spreading stronger 
institutions: witness what is happening in Russia right now 
where it is actually going the other way, rather than the 
direction we would like to see it go.
    So I ask the question here, how is it that we can be, 
perhaps, within the Congress as complacent as we are, or even 
moving in the wrong direction on foreign affairs spending, and 
would you share with the committee more on the danger that 
exists in our not recognizing the degree to which the world has 
changed, and our larger responsibility now to invest more 
either through technological transfer, through technological 
assistance, through cultural exchanges. If you look at the fact 
that 60 percent of the Government of Taiwan was educated in the 
United States, it tells us something about the values that are 
transmitted by this kind of long-term investment, and yet we 
are moving in the opposite direction.
    I know you are speaking to this in your testimony, but I 
think it bears perhaps greater emphasis, and I would ask you 
simply to talk a little more about the world you see and the 
implications for us as Americans if we allow a backlash to set 
back this incredible acceptance of markets and movement toward 
democracy that we have all wished for and invested in for so 
    Secretary Albright. Thank you. I think that is a very broad 
and open-ended question, but let me just make a few points, 
because I think what you have said is so important.
    There was a time when the United States basically invested 
its foreign affairs resources in efforts to resist communism, 
particularly on base rights. We really focused ourselves on 
fighting the cold war, and I think we did that very well.
    Now, we are dealing with problems that are burgeoning in 
countries that most people at a certain stage did not care 
about, because they were either well on ``our side'' or 
hopelessly on the other. We fought in many ways to try to move 
some countries from being in one camp to the other. That was 
what we did with our foreign aid money. What we now have to 
deal with are issues that are vast because of the complexity of 
    What I think is the most important point, and I think we 
have all been celebrating this fact, is that there are now more 
democracies. At the beginning of the century there were not any 
that were elected by universal suffrage. Now there are about 
120 nations where there are democracies, but democracy I think 
also makes promises.
    The people are promised that they will have a better life. 
What we have seen, and this is true in Latin America, and in a 
lot of the nations of the former Soviet Union and Central and 
Eastern Europe, is that the average people are not getting the 
pay-out for being democratic. So what you see is some of the 
backlash that Tom Friedman has talked about and that we have 
all seen. People wonder where is the democracy dividend.
    So we have been talking a lot about the fact that democracy 
is a process all the time. Where I believe the United States 
needs to increase its help is in terms of making sure that 
these are not just democracies in name, that there are judicial 
systems, and commercial codes in place, that human rights 
policies are carried out, and that these countries can take 
their rightful place within the international system.
    I just came back from a trip to Latin America, where there 
were discussions about the fact that while we have celebrated 
that there are no military dictators in Latin America, there 
really has not been enough change there to provide a 
substantial structure that would allow functioning democracies. 
Therefore they may begin to flirt with authoritarianism or 
    Let me go back to the Putin question, because this is the 
issue. We have rightfully spent a lot of time celebrating the 
end of the cold war, but for the average Russian, not the 
intellectual, not the people who live in cities even, there has 
been very little pay-out. They are disoriented, and what Putin 
is talking about, the buzz-word in Moscow is order. The 
question is whether it is order with a small ``o'' or a big 
``O'' and I think this is what we have to watch. We do not want 
order with a capital ``O.''
    So I think this is a huge question, Senator, but I think we 
need to understand what underlies the countries that are now 
democratic, and not just celebrate their democracy, but 
understand the needs that come with democracy. The United 
States is much better off with countries that are democratic 
and have market systems, and our programs ought to be directed 
toward that.
    The Chairman. Thank you very much. Senator Brownback.
    Senator Brownback. Thank you, Mr. Chairman, and welcome, 
Madam Secretary. It is always a delight to have you here at the 
committee and hear your perspectives and views.
    I have got three areas that I want to address quickly and 
would like for you to respond to. I think I will just put all 
the questions there together and let you sort them out, as the 
time goes pretty fast.
    First, on South Asia, then I want to speak briefly on 
Sudan, then on Iraq. On South Asia, I think we have an enormous 
opportunity really staring us in the face, and all these 
opportunities come with huge challenges as well.
    India, it strikes me, is interested and open to a better 
engagement, broader engagement with the United States, and it 
is in our interests and theirs to have it, so I am excited 
about the President's trip there, your trip, I believe to South 
Asia before the President goes. I hope we are engaging on a 
broad set of issues and not holding the whole region hostage to 
one issue, which I think would be a tragedy for us.
    You have the authority to waive sanctions. I would hope you 
would do that across the board on economic sanctions. 
Particularly, I understand there is still--the administration 
is opposing some international financial institution loans into 
India, and I would hope that those would be waived by the 
administration in our effort to broaden the relationship with 
India that I think is important.
    On Pakistan, which is a very troubling for us as a country, 
with what we see taking place there on several fronts, I would 
hope you would go to Pakistan as well, before the President 
does, and I would join my colleague Chris Dodd in urging that 
the President go to Pakistan as well.
    A different set of issues, but clearly the dealing with 
terrorism and much of that shift of international terrorism now 
moving to the region. Within that region we need to be engaged 
within Pakistan to be able to deal with it, and my fear is that 
if you do not go to Pakistan, if you go to India but not to 
Pakistan, and the President goes to India but not to Pakistan, 
we further move Pakistan away from us, our ability to be able 
to deal with them, and we actually strengthen the very hand we 
seek to weaken, and that of the really fundamentalist within 
    This is a very troubling region of the world to me. I think 
I am quoting my colleague, John Ashcroft, and I look at that 
region as being a pool of gas looking for a match. It is just 
very, very volatile right now in that region, and I would urge 
us to be widely involved.
    On the Sudan, I was disappointed that the authority was not 
used to be able to help more in southern Sudan that was granted 
to the administration. I understand from some press reports, as 
recently reported in the Washington Post, that the State 
Department is considering renewing engagement in the Sudan, 
opening an embassy up in Khartoum, lifting some of the 
sanctions in certain circumstances.
    This is still a regime in place that is doing a number of 
things directly contrary to what the United States believes in, 
certainly in democracy, but you can go beyond that to the 
killings, the slavery, the civilian bombings that continue to 
take place, the support of terrorism by the Khartoum 
Government. That seems to me a very odd move to us at this 
point. I hope you can tell me that that is not the case.
    And finally, on Iraq, the President has the authority to 
sign the bill, the Iraq Liberation Act, has drawn down the 
authority, has money, and has not been willing to spend that in 
the opposition movement to Saddam Hussein.
    Now, it is my understanding that less than $1 million of 
the $97 million drawdown that was authorized under the Iraq 
Liberation Act has actually been spent. None of the $10 million 
appropriated last year for the Iraqi opposition appears to have 
been spent, which leads me to conclude that the President has 
just abandoned the idea of moving Saddam Hussein from power. 
Now, I hope you can change my mind on that, but the actions 
seem to speak that way.
    I am throwing a number of issues out, but those are key 
ones on my mind.
    Secretary Albright. Thank you. Let me just add to a couple 
of things on India/Pakistan. I agree with you completely that 
we need to view the area as one that we have to deal with in a 
more proactive way. The sanctions were something, as you know, 
that were automatic on this, and you have been a leader in 
trying to wend our way through this. All of you that have gone 
to the region I think have come back with a lot of information, 
and very useful ideas.
    I see this as a tinder box, and we are working very hard to 
try to diffuse a lot of that. We have made clear, and I will 
not repeat all this because of time, the things we are 
concerned about in Pakistan, and I believe we are moving 
forward. India now has a strong government that is dealing with 
a lot of the issues that have been of concern to us.
    The President is also going to Bangladesh, and I think that 
we need to note that because it is a small but important 
country for the region.
    On Sudan, Senator, let me say first of all again I would 
like to thank you for your attention to Sudan. You have spent a 
lot of time on it. I have, too, and I have been very concerned 
about the civil war there, and the terrible fighting that is 
now in its 17th year. We would like to see a comprehensive 
solution for peace in the Sudan. We are supporting the IGAD 
process and will continue to do so.
    I hate to say this, but you cannot believe everything you 
read in the newspapers. We have appointed a special envoy, 
Harry Johnston, to examine where we are with Sudan. There are 
those who would like us in the governments or other places to 
have diplomatic relations with Sudan. The only thing we are 
doing is looking at the internal things that are going on 
between Bashir and Turabi, what they mean. I have spent enough 
time working on the problem to know there is slavery, a modern 
form of slavery going on in Sudan, and that is something that 
we have to deal with on an ongoing basis.
    The warring parties met for the first time January 15th, 
20th under the new revitalized IGAD structure, and we are 
working very hard to build their capacity for civil society and 
civil governance.
    On the food aid authorization, the President has not yet 
made a decision on this issue. We are assessing the whole 
    Senator Brownback. You are still considering that, then.
    Secretary Albright. Yes.
    On Iraq, let me say this. First of all, we have not changed 
our policy. We are for the containment policy, and we are for a 
regime change, and on the implementation of the Iraq Liberation 
Act, we are committed to supporting regime change and assisting 
the opposition groups both inside and outside Iraq. We have 
worked very hard with the Iraqi opposition and it is making 
some progress. We are discussing providing it first with 
nonlethal material and training support under the ILA drawdown 
as quickly--and I really need to have you hear this--as quickly 
as their capabilities to absorb permit. We will obviously 
remain in close consultation with you.
    Frank Ricciardone is the person I put in charge of this. He 
has devoted an incredible amount of energy to working with the 
group. In 1999, the Iraqi National Congress held its first 
executive meeting since 1994, and its first mass assembly since 
1992. Members of your staff and other Members of Congress 
supported and witnessed these meetings.
    No matter if some Iraqi party stayed away The important 
point is that all Iraqis, inside and out, ranging up to Saddam 
Hussein himself, began talking about the INC agenda. Frankly, 
even after that meeting Saddam started talking about letting 
the Iraqi people have a new constitution, elections, and 
political parties. I received these people when I was in New 
York at the General Assembly and urged others to do so.
    The Defense Department is now working to accelerate the 
training and to deliver material support to the opposition. We 
are working hard to help the INC meet statutory and regulatory 
requirements to make it eligible to receive the first direct 
funding from the Economic Support Funds.
    In sum, I think the Iraqi opposition has come far, though 
it has a long way to go. We will remain in very close touch 
with you. This is not an easy proposition, because, as I said, 
they were divided. We have tried to bring them together, but I 
just have to specifically say to you, we have not changed our 
goal of regime change with Iraq.
    Senator Brownback. Thank you.
    The Chairman. Thank you very much. Senator Feingold.
    Senator Feingold. Thank you, Mr. Chairman.
    Madam Secretary, welcome. I have several questions. I may 
need to go to a second round if the chairman permits a second 
round. Let me just get right into it. The first has to do with 
an issue that many Americans are increasingly concerned about, 
and that is the use of the death penalty in this country.
    I am concerned for many reasons, not the least of which is 
the fact that people who are later proven innocent have sat on 
death row for decades. Other domestic concerns include the 
arbitrary and discriminatory manner in which the death penalty 
is administered, but I am increasingly concerned about the 
death penalty's impact on America's international stature, 
which I have found to be mentioned more and more.
    I have a two-part question with regard to this. It is my 
understanding the EU denies membership to countries that employ 
the death penalty. Can you tell us about how the death penalty 
has arisen in your conversations with European leaders, and 
have you found that the United States' use of the death 
penalty, and particularly this country's willingness to execute 
people for crimes they have committed as juveniles, impacts on 
our credibility when we try to champion international human 
rights in countries like China?
    Secretary Albright. Well, first of all, I am not going to 
comment on my personal views on this subject. Let me say that 
it is true that the EU does have a requirement about the death 
penalty. This was one of the concerns that did come up when 
questions were raised about Turkey's accession to the EU.
    I believe there are those who question America's position 
on this, and it does come up in a number of situations, but 
here I agree with Chairman Helms. I think this is our sovereign 
right. It does create problems, there is no question about 
that, but that is the U.S. position.
    Senator Feingold. Thank you, Madam Secretary.
    Switching to Colombia, I am concerned by continuing reports 
of collaboration between the Colombian armed forces and the 
right wing paramilitary responsible for grave human rights 
abuses in that country and, as you mentioned in your remarks, 
the administration is proposing very significant increases in 
U.S. support for these same armed forces.
    Two questions in this regard. Are you satisfied with the 
Colombian Government's efforts to sever these ties, and how is 
it possible to ensure that U.S. assistance does not find its 
way into the hands of the paramilitary?
    Secretary Albright. First of all, let me say that, as I 
stated in my testimony, I think the threat from Colombia to us 
in terms of drug production is huge. This is one of those 
foreign policy problems that has a huge domestic impact. 
President Pastrana has over the last months undertaken, I 
think, a systematic approach to trying to deal with the 
problems in Colombia. Some of what he has done has to do with 
narcotrafficking and some has to do with the peace process, and 
some has to do with his economy, and some has to do with social 
issues and the social structure in Colombia.
    He developed Plan Colombia, which we are supporting because 
it has balanced approach and is comprehensive in dealing with 
the issues I have discussed.
    The assistance that we are giving is counternarcotics, not 
counterinsurgency, and the issue is how the money will be used. 
The paramilitary is a group that is, as far as I am concerned, 
outside the legal structure, and one of the problems that 
President Pastrana has is how to deal with the paramilitary. 
When I was down there he presented ideas about how they were 
going to sever ties with them and how they were going to make 
sure that the power of the paramilitary is undercut.
    On the issue of human rights and where our money is used, 
the assistance that is going to the military is being used to 
provide protection for the police. The state needs to gain 
control over the south, and the police will be doing that. The 
military is going to be providing an envelope for them to do 
    We have all been concerned about human rights, as has 
President Pastrana. He has put his Vice President in charge of 
this. He has created two new military groupings that are 
composed of people that have been vetted case-by-case for any 
human rights abuses. So we are following the Leahy amendment, 
which prevents us from giving assistance, very closely.
    I do not know whether you had a chance to speak to 
President Pastrana. He speaks very movingly and strongly about 
his dedication to human rights, and that when he is out of 
office he wants to make sure that no one ever criticizes him 
for having been involved or countenanced any human rights 
    Senator Feingold. I had hoped to meet with him, but that 
was on the day of the snow disaster, so I hope to do that in 
the future. What is the administration doing to help African 
countries gain access to drugs to treat HIV/AIDS? As you 
probably know, Senator Feinstein offered an amendment, which 
was accepted, to the African Growth and Opportunity Act that 
essentially says the United States should not fight against 
African laws that are designed to improve access to AIDS drugs 
provided that those laws comply with the agreement on trade-
related aspects of intellectual property rights.
    At this point, we are trying to fight to keep this in the 
bill in conference, and I am wondering what your position is on 
    Secretary Albright. Well, let me point out the scourge of 
AIDS in Africa, where I think the facts idicate more people 
have died of AIDS-related problems than actually in some of the 
fighting. We have now budgeted $244 million in the USAID budget 
for HIV/AIDS, and this is a $54-million increase in fiscal year 
    There has been a question as to intellectual property 
rights and pharmacutical remedies being dealt with in this 
context. We are trying to sort out how to make it possible for 
there to be availability of drugs that can deal with AIDS. At 
the end of last year the President instructed the Department of 
Health and Human Services to develop a cooperative approach 
with USTR on these intellectual property matters that is 
consistent with our goals both for helping these poor countries 
gain access, as well as protection of intellectual property 
    I find this problem very important, and Ambassador 
Holbrooke really took an outstanding step and did something 
unusual in making HIV/AIDS a security issue for the Security 
Council. He thereby pushed the envelope of what is normally 
considered a security issue, which I think HIV/AIDS definitely 
    Senator Feingold. I agree with you, and I hope the 
administration will support our amendment as the African Growth 
and Opportunity Act.
    [A prepared statement by Senator Feingold follows:]

           Prepared Statement of Senator Russell D. Feingold

    I want to welcome Secretary Albright to this hearing this morning.
    The Administration's budget was just delivered yesterday, which 
gives us some idea of the Administration's foreign policy priorities 
for the year ahead, but it is really this kind of interaction, where 
the committee can discuss the international affairs component of the 
budget and the state of U.S. foreign policy in general with the 
Secretary, that is particularly useful and instructive for me.
    First, I would like to commend the Administration and particularly 
Secretary Albright for continuing to push for responsible, thoughtful, 
and sustained engagement in world affairs. As we embark on a new 
century, America's long-term interests are inextricably bound up in the 
course of international events. Our leadership has never been more 
    I am also extremely pleased to see evidence of this 
Administration's commitment to addressing the AIDS pandemic. I recently 
traveled in Africa and saw first-hand just how devastating, and how 
pervasive, this crisis truly is. Likewise, I am heartened to see that 
the Administration will continue to push for debt relief, so that the 
poorest of the poor can cast off at least one set of shackles that lock 
them in destitution. And I recognize and appreciate a genuine attempt 
to direct much-needed attention and resources to the African continent, 
where important U.S. interests are all too often overlooked, and where 
so much potential lies.
    As we discuss U.S. policy priorities, I want to take this 
opportunity to reiterate some broad concerns that I have expressed 
before, both in this committee and on the Senate floor. I do not 
believe that strategies of engagement with any particular regime--China 
is just one example--can meaningfully succeed absent consistent and 
firm dialogue about internationally recognized human rights. It is 
unquestionably true that human rights are not the only issues of 
concern to the U.S., but it is also true that they cannot be treated as 
a second-tier issue.
    The ultimate strength and sustainability of our international 
relationships, and our nation's very credibility, depend upon a 
principled approach to foreign policy. In this regard, there are many 
challenges in the year ahead--particularly with regard to U.S. policy 
toward Colombia, Indonesia, and China. I look forward to learning more 
about the Secretary's views on these matters.

    The Chairman. Thank you. Senator Ashcroft.
    Senator Ashcroft. Madam Secretary, thank you very much for 
coming. Mr. Chairman, thank you for this opportunity. May I 
commend you on your hard work. You are a very industrious 
person, and I am grateful for your effort.
    I want to take some questions in a different direction. A 
little over a week ago, the State Department said that the 
United States would abide by a newly negotiated Biosafety 
Protocol. It is a protocol that is designed to implement the 
convention that the Senate has not ratified, the U.N. 
Convention on Biological Diversity. Quite honestly, this action 
shocked and concerned me greatly, because it is a protocol that 
has the potential to substantially affect agribusiness in this 
country, the largest employing industry in my home State of 
    The protocol covers trade in genetically enhanced 
commodities, which includes almost one-third of all corn grown 
in the United States and more than half of all our soybeans. We 
are seeking to make progress, for instance, to have these 
disease-resistant and insect-resistant agricultural products 
available not only as a result of our own commercial interests, 
but because they hold great promise in feeding the world.
    Round-up ready corn, for example, is pending approval in 
the European Union. We would not want anything to impair that, 
and I fear that if this Biosafety Protocol is to become the 
ultimate standard for trade in these commodities, most corn and 
soybean ships with USA painted on the side will not be getting 
very far off-shore.
    Let me lay out a few facts from the protocol, then I would 
like to ask you a question about what you consider to be the 
impact of the protocol. First, the protocol requires complete 
segregation of biotech and nonbiotech commodities in order for 
U.S. exporters to avoid the regulatory complexities and cost of 
complying with the protocol.
    Second, the protocol would for the first time require that 
a type of labeling will be required for biotech bulk 
commodities, and third, under the protocol countries can use 
the so-called precautionary principle in order to block imports 
of bulk commodities, meaning they can block U.S. farm products 
without sound, scientific evidence that our food would cause 
harm, and finally, countries would be authorized under the 
protocol to use socioeconomic impacts of biotechnology when 
deciding whether to allow imports.
    Now, the EU has been trying to impose these kind of trade-
restrictive measures, the precautionary principle and 
multifunctionality in trading rules for years. We stood up to 
them in Seattle, but apparently not in Montreal, and I would 
like for you to try, if you would--what I would like to focus 
on, what impact will these new rules have on our free trade 
rules in the World Trade Organization, WTO, and if you would 
start with that.
    Secretary Albright. First of all, Senator, let me say that 
I have gotten not technically but personally interested in this 
subject because I have seen it from a European perspective, 
where they are going through two things. I think they clearly 
do not have the kinds of protections in terms of their food 
safety that we do. They do not have an FDA, and they are going 
through problems with mad cow disease and various things. That 
is one reality.
    Senator Ashcroft. That should lead them to discriminate 
against European beef, not American.
    Secretary Albright. Then, I believe, we are having problems 
with them in terms of protectionism from their perspective, and 
various WTO issues. In my dealings with the Europeans I have 
tried to get them to separate out exactly what you said, which 
is, you deal with your domestic food and health safety issues, 
that is your issue, but do not discriminate against the United 
    As I said in my opening remarks I do travel the United 
States, and I actually was in Iowa talking to farmers about the 
problems that this creates for them. I have, in fact, now 
created kind of an informal advisory group of people who talk 
to me about the issues of biotech and how they are affecting 
food production and our relations. I think that it is a huge 
problem, and we have to separate out what is real and what is 
    But to get to the Biosafety Protocol, it does not alter the 
obligations here. The United States, together with other 
leading agricultural exporters, felt it was critical that this 
protocol not alter rights and obligations under other existing 
international agreements, including the WTO, and we were 
successful in insisting that the final text include a savings 
clause and an explicit statement of this understanding.
    Now, one of our primary interests in the negotiation was to 
ensure that restrictions on trade in living modified organisms 
be based on science and realistic assessment of risk 
assessment, and we believe that the protocol does do that.
    However, the protocol does allow countries to make 
regulatory decisions, just as the U.S. does, in the absence of 
scientific certainty, and some have said that this embodies the 
precautionary approach. We believe it is just a reflection of 
the reality that there is always scientific uncertainty, and 
that governments should not be paralyzed by this in making 
    Now, we are, as I said, among the first to understand the 
need to apply precaution in the development and enforcement of 
environmental and health safety laws, and so our people have a 
confidence in our regulatory system.
    Now, we have an additional problem, which is the protocol, 
the way we see it, is a less-than-perfect agreement. Since the 
United States is not a party to the Convention on Biological 
Diversity, we cannot become a party to the biosafety protocol. 
Nonetheless, we engaged in the negotiations to protect vital 
U.S. interest in agricultural trade and biodiversity. We 
believe that the agreement, on balance, will help to protect 
the environment without unnecessarily disrupting world food 
    But this is a huge problem, Senator, I understand, and we 
are limited in how we can deal with it.
    Senator Ashcroft. I see my time is up. This is--I frankly 
have very serious reservations about the fact that the State 
Department has committed us to abide by this agreement, which 
you said does not bind us.
    I have very serious reservations about saying we will abide 
by it when the international law indicates that our practice 
can be used as a way of defining our rights under WTO, and so 
if we abide by something we are not a party to, we might, by 
abiding by it, bind ourselves to it later.
    And your statement that there is a savings clause is a 
statement about one of the paragraphs in the preamble, but 
there are two other paragraphs in the preamble which seem to 
take us out of the savings mode, and the European Union cites 
those clauses to indicate a position which is contrary to the 
position that you indicate, and I have grave reservations about 
    My time has gone, and it is short, but this is a matter of 
deep concern to me, and when these protocols get entered into 
by the executive branch and the U.S. Senate has not ratified 
the underlying agreement, the convention, and you announce that 
we are going to follow these conventions absent ratification by 
the Senate, it is troublesome, and I think it threatens very 
substantially the technical position of the United States and 
our capacity to feed a hungry world, and I am deeply concerned.
    I am glad you are sensitive to this, and I would volunteer 
that if we can ever assist you and this group that you have 
that is helping define your consciousness on these issues, we 
would like to do so.
    Secretary Albright. Let me just say, Senator, that I would 
appreciate if I could send somebody up to discuss with you in 
more detail what happened in Montreal, but also raise an issue 
which I think is a very large issue, is how, as nonparties to 
any one of the agreements that are being made, how you protect 
the nonparty status.
    This is true in issues of international criminal court, 
various other aspects in international law, which put us at--we 
have to engage in order to protect our nonparty status, and it 
is a very difficult issue, and I appreciate having this 
conversation with you, and I will send somebody up to have a 
further discussion.
    Senator Ashcroft. Mr. Chairman, may I ask that an article 
from the Economist of February 5, entitled ``Caution Needed,'' 
which relates to this issue, and also a recent press release, 
be made a part of the record?
    The Chairman. Yes.
    [The article and press release referred to follows:]

                 [From the Economist, February 5, 2000]

                             Caution Needed

    When ministers from more than 130 countries met in Montreal to 
discuss the most controversial issue in international trade--
genetically modified organisms (GMOS)--it had all the makings of a 
Seattle-style debacle. European consumers are in a frenzy over the 
alleged dangers of GMOS, which producers, mostly American, insist are 
safe. America and a few GMO-exporting countries were bitterly opposed 
to demands by the European Union and most developing countries for 
strict safeguards on trade in GMOS. Their disagreement had scuttled a 
previous attempt at a deal a year ago in Cartagena, Colombia. And yet, 
astonishingly, on January 29th a deal was done.
    The new ``Biosafety Protocol''--the first agreement regulating 
trade in GMOS--seeks to respond to widespread fears that GMOS pose 
risks to biodiversity and health. It requires exporters to label 
shipments that ``may contain'' bio-engineered commodities such as maize 
and soyabeans (which account for 90% of global trade in GMOS). And it 
allows countries to block imports of GMOS on a ``precautionary'' basis 
in the absence of sufficient scientific evidence about their safety.
    Optimists hope that the deal will help to defuse transatlantic 
tensions over GMOS, which threaten to test the World Trade Organisation 
to breaking-point. One reason that the Clinton administration agreed to 
compromise is that American consumers are starting to share Europeans' 
concerns about the dangers of GMOS. Another is that it was loth to take 
the blame for wrecking a second big trade summit in two months.
    The big worry is that the Biosafety Protocol opens up a loophole 
for protectionists. European governments, for instance, could use it to 
protect inefficient farmers from American competition on the pretext of 
protecting consumer health. Disputes about health standards that 
restrict trade are currently adjudicated according to WTO rules. These 
stipulate that food-safety standards must be based on scientific 
evidence of a possible health risk.
    Take the battle between the EU and America over growth hormones in 
beef, which are widely used in America but which the EU bans, because 
it claims they may cause cancer. The WTO ruled against the ban (which 
the EU has yet to lift) because the EU had not conducted a risk 
assessment that shows such hormones to be dangerous. For similar 
reasons, the WTO might again side with America if it were to challenge 
an EU ban on GMOS.
    But when there is insufficient scientific evidence, the WTO allows 
governments to take provisional measures ``on the basis of available 
pertinent information.'' So the WTO might accept the EU's right to 
maintain a temporary ban on GMOS until more is known about their 
potential dangers. The EU and many consumer groups want WTO rules to 
recognise this ``precautionary principle'' more explicitly, and without 
setting any time limit. With that in mind, the European Commission 
published its first formal guidelines on how to apply the principle on 
February 2nd.
    The Biosafety Protocol is a step in the EU's direction. It makes it 
easier for countries to ban imports of GMOS, because it shifts the 
burden of proof to exporters, who must show that their products are 
safe. Admittedly, the protocol does not supersede WTO law. And since 
America is not a party to the umbrella agreement of which the protocol 
is part, it could in future claim not to be bound it. But in practice, 
thinks Steve Charnovitz, an expert on environment-related trade law, if 
America ever challenged an EU ban on GMOS, the WTO would have no choice 
but to take account of a multilateral agreement such as the Biosafety 
    This is a messy compromise. It does not resolve the underlying 
issue: how to reconcile governments' differing attitudes towards the 
risks of technological change, without disrupting trade. Some 
governments think that, even though its environmental effects may be 
irreversible, bio-engineering should be allowed unless it is shown to 
be dangerous. Others believe it should be banned unless it is shown to 
be safe.
    Coping with this fundamental difference requires political 
compromise. But the danger is that countries will instead try to settle 
their disputes about GMOS using legal means, at the WTO. This is a 
recipe for disaster. If the WTO struck down an EU ban on GMOS, European 
governments might find it impossible to override consumer fears--
however irrational--for the sake of free trade. If the WTO upheld it, 
that could give a green light for protectionists. Either way, the WTO's 
ability to keep world trade free could be fatally undermined.

                 [For Immediate Release--Feb. 4, 2000]

                   Statement by Senator John Ashcroft

                         UN BIOSAFETY PROTOCOL

    Washington, DC.--U.S. Senator John Ashcroft (MO), a member of the 
Senate Foreign Relations Committee, issued the following statement on 
the UN Biosafety Protocol that resulted from the Montreal talks:
    ``The UN Protocol is bad news for American biotechnology, which 
holds tremendous promise for fighting world hunger, reducing the use of 
pesticides and other chemicals, expanding U.S. exports, and creating 
new jobs in America. This Protocol allows other nations to shut the 
door to American biotechnology without having to show a sound 
scientific reason for doing so. In this and other respects, the 
Protocol threatens serious harm to American exports, biotechnology, and 
agriculture. It never should have been agreed to by the Administration. 
In addition to the Protocol's undermining of science in setting the 
rules for trade, there are other concerns that I will raise with 
Secretary Aibright.
    ``In addition to handing a victory to protectionists in the 
European Community, the Protocol sets a new and troubling standard for 
bulk commodity shipments, by requiring that genetically enhanced 
products be tracked with a new record keeping system, even though there 
is no scientific reason for discriminating against biotech products.
    ``For American farmers who expect to make their own production 
decisions, there is another concern. Farmers in Missouri tell me that 
they want to move away from centralized control over their decisions 
about what to plant, when to plant, and how much to plant. Certainly, 
they will have no interest in a multilateral bureaucracy taking a hand 
in running their farms.''

    The Chairman. Senator Sarbanes.
    Senator Sarbanes. Thank you, Mr. Chairman. First of all, on 
my issue, it is my understanding the executive branch did not 
enter into the protocol, is that correct? I do not think there 
was--I mean, we have not ratified the underlying convention, 
and I do not think we entered into the protocol.
    Secretary Albright. Well, we were there trying to protect 
our nonparty status.
    Senator Sarbanes. That is right, but we are not signatories 
or parties to the protocol, and it seems to me that if we had 
failed to be there to try to protect our interest, we would 
have been even worse off. I mean, we have this problem now with 
these agreements others are entering into that are creating 
these various conventions and international protocols, and if 
we are not part of it, then we have a problem. How do we 
protect our interest, even though we are not a party, and as I 
understood it, that is what we were trying to do at Montreal, 
and to protect the very interest that Senator Ashcroft is 
talking about.
    Secretary Albright. That is correct, Senator. What happened 
is, we are not, as I said, a party to the Biodiversity 
Convention and cannot sign the protocol until we are a party. 
Therefore, it was necessary for us to participate in the 
negotiations to this in something called the Miami Group, a 
coalition of leading agricultural exporters that also included 
Argentina, Australia, Canada, Chile, and Uruguay.
    During these negotiations we achieved our major goals of 
exempting bulk agricultural commodities such as bulk shipments 
of corn and soybeans from potentially trade-restrictive review, 
and ensured the inclusion of a clear statement that this 
agreement is not meant to change the rights and obligations the 
parties have under other existing international agreements such 
as the WTO, as I said earlier.
    So this is where we are. By not being a party to something 
we have to go at it sideways to try to protect our nonparty 
    Senator Sarbanes. Well, I do not think the administration 
should be put in the position of somehow, in some way or 
another, appearing to not have been playing an active role, or 
try to protect American interests, because it is my 
understanding that that is exactly what you were trying to do, 
even though we are not part of this international regime that 
has been established.
    I mean, if we did not show up, they could go ahead and do 
whatever they wanted to do and then apply that against our 
exporters, as I understand it. Now, by going, you were able, I 
think, to alter, along with those other countries to alter the 
nature of the regime, so we have got, as it were, better terms 
than might otherwise have been the case.
    Having said that, I do think this is a very complicated 
issue, and I am pleased to hear that you have set up a special 
group to advise you on it and to follow through on it, because 
the potential is obviously very significant in terms of 
addressing our American interest in this regard.
    I wanted to ask a couple of questions on Africa. It seems 
to me that, with the U.S. being in the chair at the Security 
Council in January, having made that the Month of Africa at the 
Security Council and at the United Nations, and with some of 
the initiatives that have been taken, we have an opportunity to 
really sort of move our whole relationship with the continent 
to a new level.
    I see three issues, perhaps there are more, and I would 
like to name those three and you could add others, and I would 
like to know how you are doing on this. One is the AIDS 
initiative which you have already addressed. I mean, it is an 
absolute killer plague in Africa, and Senator Feingold brought 
that issue up, and I know the administration actually--the 
budget I think has specific provisions addressed to that.
    The second are the peacekeeping efforts at the U.N. I 
understand we are going to boost significantly the peacekeeping 
force in Sierra Leone, and you have sent a notification to the 
Congress on the Congo, and perhaps you might take a moment or 
two to address those issues and their importance and the U.S. 
role. As I understand it, there are no U.S. forces involved in 
either of these peacekeeping missions.
    Secretary Albright. Correct. First of all, let me say that 
the amount of time and effort that the Clinton administration 
has afforded Africa I think has been unprecedented. The 
President has gone there and I have gone there every year as 
Secretary of State. We have believed the continent requires a 
different level of attention, and therefore I was particularly 
pleased that Ambassador Holbrooke followed through on what we 
were doing by having the Month of Africa. I think it made a big 
difference and drew a lot of attention.
    We had actually, in previous U.N. presidencies, focused on 
Africa. We have really worked on this, and I think it needs 
more support. We need the Africa trade act to go through, 
something that we have been working on for quite a long time.
    On the AIDS epidemic, I have already mentioned the 
increased funding. Also, I do thank Senator Feingold, who went 
on a remarkable trip, for everything he has done.
    On peacekeeping, we have been very concerned about how to 
do peacekeeping in Africa, and have looked at the do's and 
don'ts of previous mandates. In setting up the Sierra Leone and 
Congo mandates we have been very cautious in terms of the 
mandate, to size the budget for it.
    We have in fact now increased the size of the Sierra Leone 
UNOMSL mandate, and believe that it needs to be worked harder 
in terms of supporting the cease-fire. It is not a peacemaking 
force. It is there to support the cease-fire.
    On Congo, I think when I was in New York I talked about the 
Congo and the involvement of everybody in it as Africa's world 
war, basically. Congo is surrounded by nine countries. There 
are various ones playing roles by being in Congo in support of 
rebels, or in support of the Kabila Government. Peace in Congo 
is critical for peace in Central and Southern Africa. As you 
point out, there are no U.S. troops, but we are asking for an 
increase in the size to about 5,000. We are reprogramming 
funds, about $42 million for our other areas to go into what is 
now considered phase two in support of the cease-fire. We want 
them to abide by the Lusaka Accords.
    Another part of something we are doing, Senator, is to try 
to focus our attempts on helping democracies a little bit in 
terms of what Senator Kerry was talking about. We cannot be 
everywhere all the time, but I have focused on four democracies 
that are in transition that I think really need to have more of 
our assistance, and Nigeria is one of them.
    It has been my sense that Nigeria under military 
dictatorship was a missing piece in terms of stability in 
Africa. With President Obasinjo we have a huge opportunity to 
help him, so we have increased our assistance. I think we have 
quadrupled it for Nigeria. We will be working very hard there 
to support civil society to have him deal with civilian control 
of the military, judicial systems, and to deal with their 
ethnic problems.
    So we are focused on Africa, and it has many problems, but 
we would like very much to get the Africa Growth and 
Opportunity Act passed.
    Senator Sarbanes. Mr. Chairman, let me just observe the 
administration has included in their budget important debt 
relief initiatives for the African countries, and I very much 
hope that here in the Congress we will be able to act favorably 
on that, because I think that is another very important piece 
of this puzzle.
    Thank you very much.
    The Chairman. Senator Chafee.
    Senator Chafee. Thank you. It is an honor, Mr. Chairman, to 
be named to your committee. I would followup on Senator 
Feingold's questions about our aid package to Colombia. In your 
experience, and your recent visit there, what level and how 
rampant do you think corruption is in Colombia?
    Secretary Albright. Senator, we have obviously been 
concerned about corruption in Colombia--in Africa, too. What I 
find heartening is President Pastrana and his team are also 
very much aware of that, and therefore funds that go in are 
very carefully monitored. So we do not want to have a concern 
about any misuse of the funds we are providing, and President 
Pastrana knows that.
    Whit regard to the problems in Colombia, everything seems 
to be interwoven, the narcotraffickers and corruption and the 
paramilitaries. So by looking at this in a comprehensive way, 
which Plan Colombia does, I think it will help us.
    One point I would like to make about that, while Plan 
Colombia as a whole is $7.5 billion, we have committed 
ourselves to a package of $1.6 billion, $1.2 billion in the 
supplemental and then what we have given previously. But 
Colombia itself has committed $4 billion to this, and the World 
Bank and the IMF also. We are trying to get the Europeans to 
assist, and all of them are going to be looking at ways so 
money does not get diverted and that corruption is also dealt 
    Senator Chafee. How high, in your personal opinion, do you 
think the level of corruption rises?
    Secretary Albright. Excuse me?
    Senator Chafee. How high in Colombia do you think the 
corruption rises?
    Secretary Albright. I can only tell you what I was told 
when I was there--that President Pastrana has gotten rid of a 
lot of people that he has been concerned about with regard to 
human rights issues or on issues of corruption. What was 
different about President Pastrana's election, I think, is that 
he has worked very hard to distance himself from all of that 
and is very much aware of the fact that there is a problem.
    Senator Chafee. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Madam Secretary, we will keep the record open until the 
close of business on Friday so that there can be additional 
questions for the record from Senators who were present or not 
    One item, and then we will recognize the Senator from 
Connecticut. We have in our midst, Madam Secretary and 
Senators, and those who are our guests, a prodigal son of a 
sort. His name is Bertie Bowman. He has served 40 years on 
Capitol Hill, 27 years on the Foreign Relations Committee 
staff, and by George, he had retired and he came back the other 
day. He just could not stay away from us. Bertie, we are glad 
to have you here.
    Now then, Senator Dodd.
    Senator Dodd. Thank you, Mr. Chairman. I thought I was back 
as a freshman Member of the Senate when I saw Bertie here. He 
was here the first day I arrived, so it is nice to see him come 
back again.
    Madam Secretary, thank you again, and let me quickly make a 
couple of points. One is, I am glad Senator Sarbanes raised the 
issue of the world debt, the poorest nations' debt. It did not 
get much attention, but this was raised at the World Economic 
Forum in Davos as well.
    You made excellent remarks there, by the way, Mr. Chairman. 
The Secretary did a terrific job at that international 
conference, as did the President. There was not much attention 
here on what was done by the Congress and the administration, 
and I commend the leadership of the House and the Senate as 
well as the administration.
    What better gift I cannot think of, than to give the 
poorest nations of the world for the new millennium than to say 
to these countries, that debt that you owe, we are going to 
start this new millennium for the poorest nations who would 
never be able to pay back this debt, to give them a fresh 
start, and I commend you for it and hope we will continue with 
that initiative that needs to be made, but it really deserves 
recognition. It did not get as much here as I thought it should 
have. It was a tremendous effort.
    Second, I want to come back to Colombia as well, and I 
appreciate the fact--and I welcome, by the way, my colleague 
from my neighboring State, Lincoln Chafee. We all loved serving 
with his dad and are going to enjoy, I think, service with 
Lincoln as well. Welcome to the committee, Linc. It is a 
pleasure to serve with you.
    But there is this issue--and look, I am going to support 
Plan Colombia. I think it is worth the effort. I have great 
respect for President Pastrana. I think he is a remarkable 
leader. I met with him a few weeks ago. I was in Venezuela and 
Colombia and Ecuador, and I think he is determined to try and 
resolve this issue with the FARC, the large insurgency, Mr. 
Chairman, that has been operating for some 40 years there.
    But I have got to tell you, it is troublesome as well. This 
is a program which is rife with difficulties if it does not 
work right, and I know you appreciate that, Madam Secretary, 
and this is too small to have here, but the map of Colombia 
here, and there are two battalions, Mr. Chairman, we are going 
to be training with part of these funds to try and deal with 
the narcotrafficking issue and the major areas they are going 
to be are in three southern provinces in Colombia, Caqueta 
Province, Putumayo, and Guaviare Province in the south here.
    The problem with that is, to some extent is that the DMZ, 
which is where the insurgency is, is right there, and in fact 
in the Colombian assistance package put out by the Department 
you make reference to this. You say here, helping the Colombian 
Government push into the coca-growing regions of southern 
Colombia which are now dominated by the insurgent guerrillas, 
so the issue for us is, if our target here is to deal with the 
narcotrafficking and stay away from the insurgency, that we do 
not want to get ourselves bogged down in the insurgency in 
Colombia, it is going to be very difficult to kind of keep 
those activities separate. That is the worry we have.
    Now, again, I am going to be supportive of this because I 
do not have an alternative, Mr. Chairman, to suggest to you, 
and I think Colombia has been heroic in its efforts. We are the 
big consuming country. They are now providing more than half, I 
think you pointed out, Madam Secretary, more than half of the 
world's coca production. Maybe as much as 80 percent of it, Mr. 
Chairman, are coming out of Colombia now that Bolivia and Peru 
are being shut down.
    We need to do a better job, obviously, in cutting back 
consumption here, but obviously the source countries need to be 
dealt with, and I do not have a better plan for you than the 
one that is on the table, although I might adjust that formula 
80/20 to a little more on the social side of that equation, 
rather than 80/20 military to social, but nonetheless I think 
it deserves support.
    But I think we have got to watch this very carefully, or we 
could get ourselves really bogged down here. When we get into 
those southern areas here and you run smack into the 
insurgency, I do not know how you take those 30 Blackhawks and 
30 Hueys, train those two battalions and say, you can fire at 
the coca guys but you cannot fire at the insurgents, when in 
fact the insurgents are the ones who are protecting some of the 
    So it is a very difficult issue, and if you want to make 
some additional comments on that I would be willing to hear 
them, but I am worried about it, and I hope that we might 
broaden the frame of reference here to include Venezuela, 
include Ecuador in the plan.
    Mr. Chairman, all of the factories, the production of the 
cocaine actually comes out of Colombia down into Ecuador, and 
there are some problems on the Venezuelan border on the other 
side, so it would be, I think, in our interests to try and 
involve Hugo Chavez, who I think is worth backing. I spent time 
with him. I think he is a good democratic leader. He is 
different than any other leader we have seen recently in the 
region, but I think he is worth spending some time with and 
working with.
    And I was deeply upset that we did not do more with 
President Mahuad, who was the President who let us put that 
forward-looking base to deal with the narcotraffickers in his 
country, supported us on U.N. votes over and over again, and in 
his hour of need we were not there, in my view. I say that with 
all due respect. You know how I feel about it. We talked about 
    We have got a new Vice President in charge now down there, 
President Naboa, who I have talked with in the last couple of 
days, but we have got to look at this more on a regional basis 
than just Colombia, and to watch it very carefully that this 
does not spill over, as Bob White and others have warned in 
some editorial comments that it could.
    So I would be interested to further sort of explanation 
here, Madam Secretary, how you are going to try and keep these 
activities separate.
    Secretary Albright. Well, first of all I think you point 
out a very serious problem. Clearly there is a history of 
previous assistance in other places that have been of concern 
to many of us over the years, but I think that we understand 
the problem.
    You point out the map that I have carried with me 
everywhere. Basically the problem is that the government in 
Bogota does not have control over large portions of its 
country. That is why we are concerned about this pushing into 
the south. Because we are aware of the problems there, we are 
going to try to do everything we can to keep it all separated. 
But it is difficult, you are right. Sometimes it is hard to 
distinguish between a narcotrafficker and a paramilitary and an 
insurgent, so this is difficult.
    One thing I do want to tell you is, while I did not talk 
about this, this is a regional issue. There is also money going 
to Ecuador. We are talking to Chavez. When I was talking to 
Pastrana we spoke about the importance of having it look more 
like a friends of Colombia, that there has to be a real effort 
here to involve the neighboring countries.
    Partially, the fact that this has happened in Colombia is 
due to success that we had in Peru and Bolivia. A lot of the 
growing of cocaine, coca plants had moved over. It is a strange 
thing, but some of this is due to our success. I just want to 
assure you that we are looking at it in the larger picture.
    On balance, I would have rather had more for the ``social 
aspect'' of this, but we have been told by USAID, for instance, 
that they cannot absorb large amounts of this type of 
assistance at the moment. But we are looking at it constantly, 
because I think that as I have gotten immersed in this problem 
it clearly has a number of components to it. Obviously, 
narcotraffickers do not have alternative farming. The economy 
and the whole economic structure of Colombia is a problem.
    On President Mahuad, we did talk to him a lot, and we 
obviously regret what happened, but we are in very close touch 
with the new President, and have done--I know you had other 
ideas here, but we really have tried to be supportive of him. 
We clearly were unable to do that.
    Senator Dodd. I know my time is up, but Mr. Chairman, let 
me ask one other question on this. Again, looking at the map 
with both Colombia and Venezuela, which just sort of--people I 
know know this, but both countries have significant parts of 
their country that border on the Caribbean.
    I know there are different feelings around here about the 
Caribbean Basin Initiative. I wonder if you want to comment on 
this very quickly, but I would like to see us--one of the 
things I thought we might do, I am a strong supporter of the 
Caribbean Basin Initiative. One of the things I thought we 
might do is add Colombia and Venezuela to the CBI countries 
here. They are not presently added, but they have tremendous 
part of their countries on the Caribbean Basin.
    This could be the long-term kind of real economic 
assistance that is an alternative to the present difficulties 
they face in both countries here, less in Venezuela, obviously, 
with the petroleum reserve, but certainly more so in Colombia.
    Do you have any comment on that? I am going to try and work 
this and talk with other Members of Congress and see how they 
feel about it, but does the administration have any deep 
objection if Colombia and Venezuela were to be added?
    Secretary Albright. I would have to look at that. I was in 
Cartagena, which is clearly a Caribbean port, so I think 
basically there is the Caribbean aspect to it. Let us look at 
    The other part of the problem we have to look at is that 
these are countries, especially Colombia, that have huge river 
systems. So we also have to look at various other ways to 
involve all parts of the military in this. We must help them 
with a lot of activities on their rivers and with their coast 
guard. This is a huge project, no question about it.
    I will not repeat what you said, Senator Dodd, but this is 
an American problem. We always talk about the linkage between 
domestic and foreign policy. There is no clearer example than 
this. This is one that I think is explicable to the American 
people, because this is how we are protecting our children.
    Senator Feingold. Mr. Chairman, I will be very brief, but 
let me just say I want to compliment the administration and 
agree with the Secretary's comments about the administration's 
commitment to Africa, as well as the President's commitment, 
your own efforts, and Ambassador Holbrooke's. I think the 
emphasis is being felt in Africa, and making a difference in 
sort of setting the stage for what Senator Sarbanes had 
suggested, and I want to thank you for that.
    Specifically on Congo, I have been impressed with the 
administration's efforts to take this very seriously, and 
pleased that this notification has come through. The approach 
that has been suggested by the Secretary General, as you know, 
is a carefully phased approach. We completed phase one, and now 
we are into this phase two that is the subject of the 
    I wonder if you could just comment on what kind of 
benchmarks we look for before we move to another phase of that. 
I am going to talk to my colleagues about this. What are the 
kinds of things we would be looking for in terms of progress in 
the situation in Congo and the Lusaka agreement, so that I 
could continue to feel good about where we are heading on this?
    Secretary Albright. Well, I think this is all about whether 
they live up to a cease-fire. The next phases would have to do 
with disarmament issues--who would do it, and how that would be 
done. We started talking about that a bit when I was in New 
York with the leaders of the countries. We have to see how they 
are abiding by the cease-fire parts of it, how the rebels are 
dealing with the Kabila and the Kinshasa Government. We must 
also look at the issues that came up in the statements of the 
other Presidents regarding how Uganda and Rwanda are responding 
and the role of Zimbabwe.
    So I cannot give you specific benchmarks. But the real 
issue is, we are not going to move into another phase until we 
feel that it is doable.
    I think for me, and I spend a lot of time on African 
peacekeeping issues, is that we have to make sure that the 
mandates work, that the budgets are correct, that the right 
people are able to do the job. We just had a problem in Sierra 
Leone, where some of the rebels were disarming the 
peacekeepers. They were not doing their job, because the 
numbers were not big enough, or they were not instructed 
    So when we say we do not want to have American forces 
somewhere, we then rely on the forces on the ground in the 
region. We have to do more in terms of helping to train the 
Africans in the African Crisis Response Initiative so that they 
can undertake this.
    But let me say, I think that as we have gone around here on 
all the issues, it makes me just realize what I said 
initially--that the United States has an interest in many 
places. We are concerned about how stability in Africa affects 
us for any number of humanitarian reasons, but also about HIV/
AIDS. I think that is something Americans understand.
    And while it is very easy for somebody in my position to 
come up here and say, it is so complicated, and it is much more 
complicated than it ever was, the truth is that we now care 
about a lot more places than we ever did before because they 
are not frozen in a cold war stance. So we have to learn to 
absorb all these new threats and opportunities as they come up 
in the 21st century.
    Senator Feingold. Thank you very much.
    Senator Dodd. Mr. Chairman, just one additional, and I 
apologize to you, and I am not doing this in the order, but 
obviously Ireland is on everybody's mind as we watch the events 
unfolding here, and I want to just make a quick comment on it.
    I read the editorial comments the other day about what some 
determined as a failure on the part of the administration, of 
people like our colleague Senator Kennedy and others who worked 
on this issue. Silence is somehow condoning certain activities, 
and I know first-hand that the administration has worked 
tirelessly on this issue, cooperating with Prime Minister Blair 
and Prime Minister Hearn as well as members of the--David 
Trimble and obviously other members of the political community, 
Gerry Adams and the like.
    I am wondering again, and I am hopeful that this can be 
resolved over the next several days, but I wondered if maybe 
you wanted to take this opportunity just to express what the 
administration's view is on this issue and what prospects for 
hope you have that matters can be resolved.
    Secretary Albright. Well, first of all, let me say this is 
an issue on which the President has spent a great deal of time 
and personal interest. He has been in touch with the various 
parties all along. Whenever any party, whether it is Gerry 
Adams or Trimble or anybody comes here we spend time with them.
    Senator Dodd. As we do up here, by the way, on all sides.
    Secretary Albright. Then I think the President believes, as 
you do, that the Good Friday agreement needs to be carried out. 
Should it not be carried out it would be so unfortunate, in 
contrast to other places that we deal with. The people voted 
for this power-sharing government and moving this process 
forward. They voted in much bigger numbers than people thought. 
The people want this to happen.
    And we are certainly not silent on the issue. As you have 
said there has been a lot going on, and your former colleague 
and my friend Senator Mitchell has spent an awful lot of time, 
both in terms of quality and quantity, on this. We are hoping 
that the agreement will be carried out, because it is so 
important, and that is what the people there want.
    Senator Dodd. Well, I thank you for that, and it is 
important. The fact that we are not issuing statements or 
making speeches on the floor of the Senate about it does not 
mean there are not people working at this every day, and I 
thank you for it, and I thank you for this morning. You have 
been tremendously patient and done a tremendous job in visiting 
a lot of places all over the globe, and once again we are 
reminded how lucky we are to have you as our Secretary of 
    Secretary Albright. Thank you, and let me say what an honor 
it is for me to be Secretary of State. I am glad I have another 
    The Chairman. Madam Secretary, another impressive 
appearance. We thank you for coming, and I am overdue 30 
minutes in letting you leave, but you brought it on yourself, 
and you did it well.
    Thank you so much, and there being no further business 
before the committee, we stand in recess.
    [Whereupon, at 1 p.m., the committee adjourned.]


             Additional Questions Submitted for the Record

  Responses of Secretary of State Madeleine K. Albright to Additional 
               Questions Submitted by Senator Jesse Helms

                          treaty negotiations
    Question. Please provide a listing of all bilateral and 
multilateral treaties and other international agreements under 
negotiation by the United States. Please list the treaties and 
agreements by the bureaus in the State Department charged with leading 
the negotiation. Indicate whether the agreement will be submitted to 
the Senate for its advice and consent and the projected date of 
completion of negotiation of the agreement. Also, please indicate other 
federal agencies that are participating in the U.S. negotiation of each 
agreement. In addition, please list the meeting schedule for all 
multilateral negotiations.
    Answer. I am unable to provide the information requested in this 
question for several reasons.
    First, the Department of State maintains no comprehensive list of 
treaties and international agreements under negotiation. The Department 
maintains only a record of treaties and international agreements that 
have been signed and/or concluded. Aside from treaties, which are 
transmitted to the Senate for Advice and Consent, the conclusion of 
other international agreements is reported regularly to Congress in 
accordance with the Case-Zablocki Act, 1 U.S.C. 112b (``Case Act'').
    Second, many federal agencies (e.g., USTR, DOD, etc.) have 
independent statutory authority to negotiate international agreements 
without any Department of State participation. The Case Act requires 
only that other federal agencies coordinate with the Department of 
State prior to the conclusion of an international agreement. Until 
conclusion, federal agencies with this authority are free to negotiate 
without coordinating those negotiations with the Department of State.
    Third, in those areas where the Department of State would have a 
lead in negotiations, there are numerous instances where authority has 
been delegated to another federal agency to negotiate and/or conclude 
particular classes of agreements. Under those circumstances, the 
Department is often unaware of the existence of any negotiations prior 
to an agreement's conclusion.
    Accordingly, a Department of State compilation of all treaties and 
international agreements presently being negotiated by the United 
States is simply not possible given the statutory and administrative 
framework that presently applies to the United States' negotiation and 
conclusion of treaties and other international agreements.
                           biosafety protocol
    Question 1. Please provide a detailed analysis of the U.S. 
commitments under the Biosafety Protocol.
    Answer. The United States has no legal commitments under the 
Biosafety Protocol, nor will it when the Protocol enters into force. 
The United States is not a party to the Convention on Biological 
Diversity and, therefore, cannot become a party to the Biosafety 
Protocol. As a non-party, the United States Government is not legally 
obligated to implement the particular requirements of the agreement.
    We expect countries that become a party to the Protocol will amend 
their domestic laws so as to be consistent with the provisions of the 
Protocol. Our agricultural exporters who then trade with these 
countries will have to comply with these domestic import requirements.

    Question 2. Is it accurate that the Administration intends to 
implement the Biosafety Protocol despite the fact that the United 
States is not and will not become a party to the Protocol?
    Answer. The Administration does not intend to implement the 
Biosafety Protocol as the United States is not a party to the agreement 
and it is not in force. We believe, however, that it is in our national 
interest to participate voluntarily in several of the information-
sharing aspects of the Protocol. Our relevant domestic regulatory 
agencies, for example, already provide factual information to the 
public about living modified organisms, including via the Internet, 
pursuant to existing domestic authorities. Sharing our risk assessment 
information will help familiarize other countries with LMOs, and may 
promote international confidence in U.S. exports and reduce the 
likelihood of international criticism of the U.S. and its exporters.

    Question 3. Please explain the legal basis for implementation of 
the Biosafety Protocol without Senate advice and consent to 
    Answer. The Administration does not intend to implement the 
Biosafety Protocol. As a non-party to the Convention on Biological 
Diversity (the parent treaty of the Biosafety Protocol), the U.S. 
Government is not legally obligated to implement the agreement. 
Participating voluntarily in several of the programs envisioned by the 
Protocol, such as the sharing of information that the United States 
already makes public, may prove to be in our national interest. In the 
long term, we believe sharing this information will help ease concerns 
regarding biotechnology, and could facilitate trade in biotechnology 


    Question. Please provide a breakdown of all U.S.-funded projects 
that would qualify as implementation of U.S. commitments under the 
Desertification Convention. Indicate the cost of each project.
    Answer. Attached is a table compiled by USAID which sets forth 
bilateral and regional support in Africa for desertification activities 
in 1996, 1997 and 1998. We are working with USAID to update this 
information for Africa and other regions and would be pleased to 
furnish it as soon as it becomes available. USAID informs us that a 
significant portion of its resources for drought and desertification is 
devoted to Africa. We also are consulting with other federal agencies 
to determine their degree of support, if any for U.S.-funded 
desertification projects overseas.
    As a non-party to the Convention to Combat Desertification, the 
United States has no treaty obligation to commit resources to combat 
land degradation under the terms of that Convention. If the United 
States were to become a party, ongoing development assistance programs 
would fulfill our obligations under the treaty. The Convention to 
Combat Desertification does not require any specific level of funding.
   annex a\1\--usaid's africa bureau bilateral and regional support 
                directly relevant to desertification \2\

      Strategic Objective            Country        FY96    FY97    FY98
1. Sustainable Dryland
  Increased food security.....  Eritrea..........   0.45    0.40    0.18
  Increased availability of     Ethiopia.........   0.13    1.00    1.25
   locally produced food
  Smallholder agriculture and   Kenya............   0.66    0.80    0.80
   natural resource management.
  Economic growth.............  Mali.............   2.72    2.40    3.06
  Rural household increased     Mozambique.......   1.25    0.75    0.61
   income in target areas.
  Improved regulatory           Zambia...........   0.09    1.65    0.65
   environment for
   agricultural production.
  Increased household food      Zimbabwe.........   1.92    1.20    0.87
   security in communal areas.
2. Rehabilitation of Dryland
  Rehabilitation and            Angola...........   0.04    0.01    0.01
3. Drought/Disaster Early
 Warning and Mitigation:
  Famine early warning and      Africa...........   5.34    7.90    7.70
   crisis prevention,
   mitigation and response.
4. Mitigation Using Natural
 Resource Management:
  Protect the natural           Guinea...........     --      --    2.92
  Reduce natural resources      Madagascar.......   1.68    2.19    2.45
   depletion in target areas.
  Increased sustainable use,    Malawi...........   1.54      --    4.70
   conservation and management
   of natural resources.
  Improved benefit from         Namibia..........   0.12    0.10    0.35
   locally managed natural
  Increased crop production     Senegal..........   3.08    3.85    1.40
   via improved natural
   resource management.
  Environmentally sustained     Tanzania.........   2.05    1.75    2.00
   natural resource management.
  Sustainable increases in      S. Africa Region.   0.51    2.50    1.75
   agriculture and natural
  Conservation in critical      Uganda...........   0.74    1.28      --
  Improved policies, programs,  Africa...........   0.40    1.80    2.32
   strategies in sustainable
5. Awareness Raising in
 Dryland National Resource
  Dryland information and       Sahel Region.....   0.65    1.30    1.50
6. Capacity Building and
 National Planning:
  Horn of Africa support        Gr. Horn of Afric   0.19      --    0.35
   program.                      a.
  Regional technical support..  Africa...........     --    0.40    0.70
\1\ Data is included in a USAID booklet entitled, ``USAID Framework for
  Cooperation in Africa in the Implementation of the Convention to
  Combat Desertification.''
\2\ Based on the Control Data from USAID's Africa Bureau, Office of
  Development Planning.
Note: Beyond dryland management, many activities supported by USAID
  support the anti-desertification goals, such as marketing and enabling
  policies and infrastructure, rural economy growth initiatives, etc.
  Activities for which USAID provides funding have met the following
  three criteria.
 Is environment a priority in the USAID Country Strategy? If so,
  has the Mission taken national priorities for combating
  desertification into account in preparing its Strategic Plan?
 Assuming an activity is defined within a given National Action
  Program to Combat Desertification (NAP), how does it relate to the
  country's National Environment Action Plan (NEAP), and is it clearly
  coordinated with the work of other donors?
 Has the responsible agency in-country designed and implemented
  a system of benchmark indicators (as established within the
  Convention), along with monitoring, evaluating, and mitigation plans?
  Has policy reform gone forward to the extent that demonstrable
  progress can be demonstrated toward a policy environment?

                               UN REFORM

    Question. The toughest reform at the United Nations necessitated by 
the Helms-Biden law is a wholesale change in the assessment scale. If 
the American share of dues is cut to the fair level that the 
legislation mandates, other major powers will have to contribute more. 
That will require high-level bilateral diplomacy conducted by you, in 
addition to the efforts by Ambassador Holbrooke at the United Nations. 
In particular, China, a Security Council member with one fifth of the 
world's population, contributes less than 1 percent of the UN budget. 
What are you going to do to address that inequity?
    Answer. The Administration has already initiated a broad diplomatic 
effort to secure support for revisions to the UN's scales of assessment 
that will provide a flatter and more equitable distribution of the UN 
budget among its members and that will meet the Helms-Biden benchmarks. 
We are considering a number of different scenarios to illustrate ways 
in which the resulting reduction in U.S. contributions can be 
redistributed. The UN's Fifth Committee will begin deliberations on 
scale of assessment when it reconvenes in mid-March. Although it is not 
possible to determine with certainty at this time whether China's 
assessment will increase, that is a possible outcome. As the UN 
decision-making process proceeds, culminating at the 55th UN General 
Assembly, the U.S. will strongly advocate revised scales of assessment 
to ensure their adoption by the required two-thirds of the UN members, 
using all the tools at our disposal.

                             PEACE PROCESS

    Question 1. Do you contemplate any possibility that the United 
States will provide assistance, either economic or military to the 
Assad government in Syria? What conditions would Syria have to meet to 
be eligible for assistance? How much do you think a Syria-Israel 
package will cost the United States? Will those costs be borne over 
several years? How much burden sharing can we expect from Europe and 
    Answer. Syria, a state sponsor of terrorism, is precluded from 
receiving U.S. assistance. Assad and his government know what Syria 
needs to do to get off the state sponsor of terrorism list. Until that 
occurs, it is premature to discuss U.S. assistance to Syria.
    However, we all recognize that we have a major opportunity this 
year to help the parties achieve a comprehensive peace in the Middle 
East. As the parties move forward in their negotiations, we will need 
to work closely together--the Administration and Congress--to shape an 
assistance package that will support the parties as they make tough 
    Israel will incur major security costs in future peace agreements. 
The Israelis have begun to outline to us some of their prospective 
needs, which we are reviewing closely. In the context of peace 
agreements, we hope to be responsive to their needs, just as we have 
with every other Middle East peace agreement over the past two decades.
    We are at a preliminary stage. It is too early for specifics on a 
U.S. contribution. We will, of course, also look to the broader 
international community to play a major role in supporting the costs of 
Middle East peace. In Moscow in February, I began a dialogue with my 
colleagues from Europe. Japan, and others on helping to meet these 
    We recognize that Congress needs to be involved at an early stage 
and look forward to consulting closely with you.

    Question 2. Last go-round with Israel and Syria the issue of U.S. 
troops on the Golan Heights was a topic of some interest. Has the issue 
been discussed with the parties? Would this Administration support a 
request to supply U.S. troops to a Golan Heights peacekeeping or 
multinational force?
    Answer. The President has expressed a willingness, in consultation 
with Congress, to consider a U.S. troop contribution to a potential 
monitoring or peacekeeping force on the Golan, in the context of a 
peace agreement between Israel and Syria, should both parties request 
it. The security requirements of any possible peace deal between Israel 
and Syria have not been determined yet, so it would be premature to 
comment on them at this time.


    Question 1. How much of this year's appropriation of $10 million 
for the Iraqi opposition has been obligated or disbursed?
    Answer. We have recently submitted the congressional notification 
for FY 00 funds. None of the $10 million appropriated has been 
obligated or disbursed. The Iraqi National Congress Support Fund has 
submitted a preliminary assessment of projects it would hope to fund 
through the use of FY 00 ESF funds. We look forward to receiving more 
concrete proposals from them and from groups interested in developing 
evidence of Saddam's war crimes and related pursuits in the near 

    Question 2. Why has the Administration failed to pursue additional 
training courses and further drawdown for the Iraqi National Congress 
under the ILA?
    Answer. DOD and State are pursuing an active dialogue with the 
Iraqi National Congress about using the ILA drawdown for both material 
and training needs. DOD is currently developing a range of courses that 
would meet the needs discussed most recently in January meetings in 
London. At the same time, the INC is putting together its own list of 
potential trainees and determining language capabilities and other 
logistical needs. We anticipate that we and the INC will agree on the 
next series of training courses shortly and that more Iraqi students 
can participate in U.S.-led training early this spring.
    The INC itself has told us that it is not currently prepared to 
carry out humanitarian assistance to Iraqis under the ILA. It is taking 
steps to develop the infrastructure necessary for such activity.
    We will continue working closely with the INC, as representative of 
the groups listed separately as eligible to receive drawdown under the 
ILA to further our common goals.


    Question. During the civil war, staffing levels at the U.S. mission 
in Lebanon were understandably low. Is it the Administration's 
intention to increase staffing levels at the U.S. mission in Beirut?
    Answer. The safety of personnel at our overseas posts is one of my 
highest priorities. Staffing levels at embassy Beirut have been kept to 
a minimum because of security concerns. However, we continually re-
evaluate conditions at Beirut and other posts. We will consider 
increasing the staffing level in Lebanon only when I have been assured 
that this can be done safely.

                         PALESTINIAN AUTHORITY

    Question 1. Numerous human rights organizations have complained 
about the Palestinian Authority's reckless disregard for human and 
political rights. Officials of international financial institutions and 
numerous EU governments point to pandemic corruption. Internal remedies 
for these problems are almost non-existent because of Arafat's 
autocratic rule. Are these issues a priority for the Administration, 
and is it the Administration's policy to pressure Arafat to sign the 
Basic Law?
    Answer. We maintain close watch over the human rights situation in 
the West Bank and Gaza. We regularly raise human rights concerns with 
Palestinian officials.
    The Administration released its annual human rights report to the 
Congress on February 25, which detailed our concerns about human rights 
practices in the West Bank and Gaza. In our report, we specifically 
noted that the Basic Law and other laws passed by the Palestinian 
Council, designed to limit executive branch abuses and to delineate 
safeguards for citizens, have not been signed.

    Question 2. In January Palestinian police seized property in 
Jericho belonging to the Russian Orthodox Church Outside of Russia 
(ROCOR), a religious organization incorporated in the United States. 
Apparently the Palestinian Authority intends to turn over the land to 
the Moscow Patriarchate, despite the fact that the ownership documents 
are in the possession of ROCOR. What steps is the Administration taking 
to stop this illegal handover of property?
    Answer. While we have taken no position on the merits of the 
dispute over ownership of the property, we believe that property 
disputes should be resolved in an orderly way through a judicial 
process in accordance with the rule of law, not by decree or by force.
    I have raised this issue with Chairman Arafat personally.
    Officials from the U.S. Consulate General in Jerusalem are 
monitoring the situation closely and maintaining contact with 
Palestinian officials and leaders of the Russian Orthodox Church 
Outside Russia.

                          ASSISTANCE TO KOSOVO

    Question. Please provide to the Committee the U.S. contribution to 
date to: (1) the operation of the United Nations Mission in Kosovo 
(UNMIK), (2) the budget support program directed by UNMIK for local 
officials in Kosovo participating in the administration of the 
province, (3) the United Nations International Police force in Kosovo 
(UNIP), (4) the Kosovo Protection Corps (KPC), and (5) all bilateral 
assistance for reconstruction purposes.
    Please provide the same information for the member states of the 
European Union.
    Answer. [Please see attached charts, one for each element of the 

                                  U.S. and E.U. Assessed Contributions to UNMIK
                                             [As of March 15, 2000]
                                              First Assessment: $125                    Second Assessment: \1\
                                                      million                                $302 million
          Countries            Share 1999  ----------------------------  Share 2000  ---------------------------
                                              Requested       Paid                      Requested       Paid
United States \2\...........        25.00%        $31.25        $31.25        25.00%        $75.52        $35.38
Germany.....................         9.81%         12.26         12.26         9.86%         28.07             0
France......................         7.94%          9.93          9.93         7.93%         22.61             0
United Kingdom..............         6.18%          7.73          7.73         6.17%         17.59         17.59
Italy.......................         5.43%          6.79          6.79         5.44%         15.50             0
Spain.......................         2.59%          3.24          3.24         2.59%          7.38             0
Netherlands.................         1.63%          2.04          2.04         1.63%          4.65             0
Sweden......................         1.08%          1.35          1.35         1.08%          3.08          3.08
Austria.....................         0.94%          1.18          1.18         o.94%          2.68             0
Denmark.....................         0.69%          0.87          0.87         0.69%          1.97          1.97
Finland.....................         0.54%          0.68          0.68         0.54%          1.54          1.54
Portugal....................         0.42%          0.53             0         0.43%          1.23             0
Greece......................         0.35%          0.44          0.44         0.35%          1.00             0
Ireland.....................         0.22%          0.28          0.28         0.22%          0.64          0.64
Luxembourg..................         0.07%          0.09          0.09         0.07%          0.20             0
Others......................        31.71%         39.64         36.24        31.78%        106.71          50.4
    Totals..................          100%        125.00         121.6          100%        290.37         110.6
\1\ Billed mid-January 2000, at $302 million for the US and $285 million for others (to account for tax
\2\ Paid out of CIPA account. United States has been billed by UN 30.4% in CY 1999 and 30.28% in CY 2000
Note: Altogether 15 EU member states represent 37.89% of CY 1999 and 37.94% of CY 2000 assessed contributions.
  Calculations represent unofficial estimates of UN assessments and payments.

                               Donor Contributions and Disbursements to UNMIK \1\
            As of March 28, 2000, including off budget expenses (civil registry, electricity imports)
                                            [In millions of dollars]
                                          Total Pledged to                                      \2\ % of Donor's
                 Donors                        Date           Donor's % of        Disbursed           Pledge
                                                              Total Pledges                         Disbursed
United States...........................           $24.0               13.4%             $24.0            100.0%
EC/EU/NATO..............................           134.7               75.2%             117.5             87.2%
Others (Canada, Japan, World Bank)......            20.5               11.4%              10.7             52.2%
    Totals..............................           179.2              100.0%             152.2             84.9%
\1\ Data for non-U.S. donors provided by the UN.
\2\ Unlike the U.S., the fiscal year for most other donors begins January 1. Therefore, U.S. disbursements vs.
  other disbursements in March are not directly comparable.

                 Donor Contributions and Deployments to International Police Force in Kosovo \1\
                                       [Number of Forces (April 10, 2000)]
                                              \2\ Total
                 Donors                    Pledged to Date    Donor's % of        Deployed        % of Donor's
                                                              Total Pledges                      Pledge Deployed
  United States.........................               550               16%               513               93%
  EU/NATO \3\...........................             1,038               30%               816               79%
  Others................................             1,816               53%             1,428               79%
    Total...............................             3,404              100%             2,757               81%
  United States.........................                 0                0%                 0                0%
  EU/NATO \3\...........................               230               20%                 0                0%
  Others................................               920               80%               149               16%
    Total...............................             1,150              100%               149               13%
  United States.........................               550               12%               513               93%
  EU/NATO \3\...........................             1,268               28%               816               64%
  Others................................             2,736               60%             1,577               58%
    Total...............................             4,554              100%             2,906               64%
\1\ Data for non-U.S. donors is based on data provided by the UN.
\2\ Total authorized strength is 4,718 of which 3,593 CIVPOL and 1,125 Special Police. The total number of
  pledges has risen by 153 since 3/7/00, but the number pledged by the EU and NATO remains unchanged.
\3\ EU/NATO: 15 EU member states + other NATO members Norway, Iceland, Czech, Poland, Hungary, Turkey.

                                         [Deployed as of April 10, 2000]
                                      Regular      Regular      Special      Special
              Country                  Police       Police       Police       Police       Total        Total
                                       Pledge      Deployed      Pledge      Deployed      Pledge      Deployed
  Austria.........................           50           49           --           --           50           49
  Belgium.........................            5            5           --           --            5            5
  Czech...........................            6            6           --           --            6            6
  Denmark.........................           30           27           --           --           30           27
  Finland.........................           20           19           --           --           20           19
  France..........................           78           77           --           --           78           77
  Germany.........................          420          264           --           --          420          264
  Greece..........................           15           --           --           --           15           --
  Hungary.........................           10           10           --           --           10           10
  Iceland.........................            2            2           --           --            2            2
  Italy...........................           82           45           --           --           82           45
  Luxembourg......................           --           --           --           --           --           --
  Netherlands.....................            1            1           --           --            1            1
  Norway..........................           25           15           --           --           25           15
  Poland..........................           10            9          115           --          125            9
  Portugal........................           25           25           --           --           25           25
  Spain...........................           37           34          115           --          152           34
  Sweden..........................           42           44           --           --           42           44
  Turkey..........................          120          124           --           --          120          124
  UK..............................           60           60           --           --           60           60
    Totals........................        1,038          816          230           --        1,268          816
United States.....................          550          513           --           --          550          513
  Argentina.......................           68           38          115           --          183           38
  Bangladesh......................           50           31           --           --           50           31
  Benin...........................            5            5           --           --            5            5
  Bulgaria........................           60           60           --           --           60           60
  Canada..........................          100           90           --           --          100           90
  Dominican Republic..............           30           --           --           --           30           --
  Egypt...........................           71           71           --           --           71           71
  Estonia.........................            5            5           --           --            5            5
  Fiji............................           33           33           --           --           33           33
  The Gambia......................            5           --           --           --            5           --
  Ghana...........................          137          136           --           --          137          136
  India...........................          245           86          230           20          475          106
  Jordan..........................          230          230          230           15          460          245
  Kenya...........................           50           39           --           --           50           39
  Kyrgyzstan......................            2            2           --           --            2            2
  Lithuania.......................            9            9           --           --            9            9
  Malawi..........................           30           --           --           --           30           --
  Malaysia........................           48           47           --           --           48           47
  Mozambique......................            5           --           --           --            5           --
  Nepal...........................           53           53           --           --           53           53
  Niger...........................            5            6           --           --            5            6
  Nigeria.........................           50           48           --           --           50           48
  Pakistan........................          110           88          115          114          225          202
  Philippines.....................           45           23           --           --           45           23
  Romania.........................           70           45           --           --           70           45
  Russia..........................          130          120          115           --          245          120
  Senegal.........................           16           16           --           --           16           16
  Tunisia.........................           10           10           --           --           10           10
  Ukraine.........................           29           30          115           --          144           30
  Zambia..........................           60           55           --           --           60           55
  Zimbabwe........................           55           52           --           --           55           52
    Totals........................        1,816        1,428          920          149        2,736        1,577
      Grand Totals................        3,404        2,757        1,150          149        4,554        2,906

           contributions to the kosovo protection corps (kpc)
United States: $14.1 million
   $5.0 million SEED for KPC salaries, equipment (UNMIK)
   $2.5 million SEED for KPC training (IOM)
   $2.5 million SEED for KPC training (IOM--committed but not 
        yet distributed)
   $4.1 million DOD draw-down (KPC uniforms, equipment)
European Union and Member States: $13.7 million
   $5.0 million (European Community Task Force)
   $2.0 million (U.K.--IOM program)
   $1.0 million (U.K.)
   $4.0 million (France--pledged)
   $1.6 million (Germany--pledged)
   $0.06 million (Germany--in kind)

           EU and Euro-NATO Contributions and Disbursements for Kosovo Reconstruction in 1999 and 2000
                               [As of April 7, 2000--In millions of U.S. dollars]
                                                                             % of
                                              Total                        Donor's                       % of
                  Donors                     Pledged     \1\ Contracted     Pledge     \2\ Payments    Donor's
                                                                          Contracted                 Pledge Paid
EC/EU/NATO \3\...........................       $402.0          $93.0          23.1%         $36.4          9.1%
\1\ Contracted = Implementation of commitments via contracting of services, goods.
\2\ Payments = Implementation of contracts via payments made to either contractors or UNMIK.
\3\ The current available data only includes EU allocations and disbursements. Europeans: 15 EU member states
  and other European NATO members Norway, Iceland, Czech, Poland, Hungary, Turkey. The EU includes part of their
  support to the UNMIK budget ($5 million paid in 1999 and $10 million paid in 2000) within their framework of
  reconstruction assistance contributions.

    EU and Euro-NATO Contributions and Disbursements to Humanitarian
                 Assistance for Kosovo in 1999 and 2000
           [As of April 7, 2000--In millions of U.S. dollars]
                                                                 % of
                                  Total                        Donor's
            Donors               Pledged     \1\ Contracted     Pledge
EC/EU/NATO \2\...............       $428.0         $347.0          81.1%
\1\ Contracted = Implementation of commitments via contracting of
  services, goods.
\2\ The current available data only includes EU allocations and
  disbursements. Europeans: 15 EU member states and other European NATO
  members Norway, Iceland, Czech, Poland, Hungary, Turkey.

  U.S. and E.U. Pledges to Kosovo Stabilization and Revitalization \1\
              [FY 2000, in millions of U.S. dollars (2/28)]
                                     Total Pledged to  Donors % of Total
              Donors                       Date             Pledges
United States.....................             $168.0              13.9%
European Commission ..............              360.0              29.7%
Austria \2\.......................                4.1               0.3%
Belgium \2\.......................                0.3              0.02%
Denmark...........................               36.5               3.0%
Finland...........................               11.1               0.9%
France............................               18.6               1.5%
Germany \2\.......................               36.0               3.0%
Greece............................               21.0               1.7%
Ireland...........................                2.5               0.2%
Italy \2\.........................               10.9               0.9%
Luxembourg........................               17.0               1.4%
Netherlands.......................               52.5               4.3%
Portugal..........................                1.3               0.1%
Spain.............................               13.9               1.1%
Sweden............................               35.2               2.9%
United Kingdom....................               50.6               4.2%
  Others..........................              371.3              30.7%
    Total.........................            1,210.8             100.0%
\1\ Includes assistance for democratioc reform as well as civilian
\2\ Provisional, under allocation process.
Note: European Union (EU + member states) represents $671.5 million
  (55.5% of the pledges).

                             balkan policy
    Question 1. Given the fact that it is widely believed that the 
Administration's insistence on early elections in Bosnia legitimized 
hardliners in that country and made a sustainable peace much more 
difficult to achieve, is the United States supportive of a plan to hold 
elections in Kosovo before moderate leaders have had time to develop? 
Given the fact that the wounds from war are still fresh, would 
elections be appropriate at all this year?
    Answer. There were two options on elections in Bosnia: wait for 
some undetermined period, meaning we would have to exercise direct rule 
which no one contemplated at the time, or use the elections as a 
moderating process. We opted for the latter approach.
    Each successive election in Bosnia has produced greater moderation. 
The election process produced the moderate SLOGA coalition in Republika 
Srpska. It has spawned the growth of moderate parties in the 
    On balance, we believe this was the correct approach, though it has 
meant also enhancing the authority of the High Representative along the 
way in order to make the system function.
    Kosovo differs from Bosnia in important ways. First, under UN 
Security Council Resolution 1244 the United Nations Interim 
Administration Mission in Kosovo (UNMIK) is to form through democratic 
elections provisional, rather than permanent, self-governing 
institutions that would remain subject to UNMIK's oversight and 
authority until such time as Kosovo's future status is determined. 
Second, there are already a number of politically active moderate 
leaders in Kosovo today, allowing for significant choice for voters, 
and creating a range of potential partners for the continuing work of 
the international community. Lastly, the magnitude of ethnic division 
in Kosovo is far smaller than in Bosnia. Serbs and other non-Albanians 
comprise little more than 10 percent of the population. The outcome of 
the election would therefore be more likely to reflect intra-Albanian 
political choices than it would a stark test of ethnic strength. We are 
fully supportive of UNMIK and OSCE's plan to hold municipal elections 
this fall.

    Question 2. What is the status of each of the ten benchmarks set 
forth by the Administration on which progress must be made before U.S. 
troops participating in the Stabilization Force (SFOR) in Bosnia can be 
    Answer. The following is a summary of the report to Congress signed 
by the President on July 23, 1999, addressing each of the ten 
benchmarks set forth in section 7 of P.L. 105-174, the 1998 
Supplemental Appropriations and Recissions Act (known as the Levin 
amendment). We expect a newly updated report will be transmitted to 
Congress soon.

          1. Military Stability.--Aim: Maintain Dayton cease-fire. 
        Despite the Kosovo crisis, Bosnia and Herzegovina (BIH) 
        remained calm. The senior leadership of the Republika Srpska's 
        (RS) Army remained neutral in the Kosovo conflict, and 
        Federation armed forces were not involved in any way. The 
        Office of the High Representative (OHR), OSCE, and SFOR 
        cooperated closely to increase professionalization and 
        education of the entity armed forces (EAFS) and push them 
        towards a common BIH security policy and a state dimension of 
        defense. A Permanent Secretariat for the State-Level Standing 
        Committee on Military Matters was established.
          2. Public Security and Law Enforcement.--Aim: Restructured, 
        democratic police forces in both entities. There are positive 
        signs of reform in public security and law enforcement. The 
        Federation and RS signed agreements with the UN International 
        Police Task Force (IPTF) Committing both governments to 
        restructure police forces in accordance with democratic 
        principles. The Federation Police Academy, with U.S. and IPTF 
        assistance, has graduated two classes. The RS Police Academy 
        opened and began training predominantly minority Bosniak and 
        Croat recruits. Hiring of minority officers lags in all areas, 
        and tensions persist. Public disorder remains a threaty and 
        SFOR's Multinational Specialized Unit (MSU) has been crucial in 
        supporting local police responses.
          3. Judicial Reform.--Aim: An effective reform program. OHR is 
        responsible for reform of the judicial system, assisted by 
        international organizations and NGOs. The UN's Judicial System 
        Assessment Program (JSAP), issued its first comprehensive 
        report in April 1999, covering areas needing reform, including 
        property, employment, and commercial law. The JSAP involved 
        Bosnian legal experts in judicial reform, ensuring that local 
        capacity is developed as critical areas requiring reform are 
          4. Illegal Institutions, Organized Crime, and Corruption.--
        Aim: Dissolution of illegal pre-Dayton institutions. Customs 
        control has improved, and advances in police and law 
        enforcement reform allowed greater emphasis on dealing with 
        corruption and organized crime. Units specializing in organized 
        crime and drugs trained local police and provided technical 
          5. Media Reform.--Aim: A regulated, independent, democratic 
        media. Continued progress was made in democratization and de-
        politicization of the media. One of Bosnia's two public 
        television networks, RTV BIH (in the Federation), was freed 
        from party control, and a process of restructuring began to 
        create a Federation TV network. The reform of the Serb radio 
        television network continued with its further separation from 
        political oversight and renaming to reflect the multi-ethnic 
        character of the RS (radio television of the RS). The IC-funded 
        open broadcast network (OBN), Bosnia's only cross-entity 
        television network, is a reliable countrywide source of 
        objective news and public affairs programming. The Independent 
        Media Commission (IMC) put in place a licensing framework and a 
        code of practice for electronic media. On this basis, the IMC 
        informed EROTEL, a subsidiary of the Croatian state 
        broadcaster, that its old license would be revoked and that its 
        new license would limit braoadcast coverage and content.
          6. Elections and Democratic Government.--Aim: National 
        democratic institutions and prectices. At the state level, the 
        joint Presidency made progress toward functioning as a 
        responsible institution. Until the formal adoption of a Bosnian 
        election law, the OSCE remains in charge of running elections 
        in Bosnia under the Dayton Accords. The next round of municipal 
        elections was postponed from November 1999 to April 2000. SFOR 
        ensures a secure and stable environment in which the 
        parliamentary assemblies at the state and entity levels can 
        function and in which democratic elections can take place.
          7. Economic Development.--Aim: Free-Market Reforms. Bosnia 
        has made progress towards economic reconstruction and recovery, 
        but progress toward a free market economy is slow. Ethnic 
        tensions hinder reform, and the pilitical leadership remains 
        wedded to control over economic activity, which supports ethnic 
        parties financially. These vested interests block privatization 
        and market reform. There is still little private investment, 
        either domestic or foreign. Due to international assistance, 
        annual economic growth has averaged about 40 percent in real 
        terms since 1995, and GDP reached $4.1 billion in 1998, roughly 
        40-percent of its pre-war level. The Kosovo crisis compounded 
        reconstruction difficulties, in particular for the RS, whose 
        major trading partner was the FRY.
          8. Displaced Person and Refugee (DPRE) Returns.--Aim: A 
        Functioning, Phased, Orderly Minority Return Process. Over 
        600,000 DPREs repatriated or returned to their homes since the 
        signing of the Dayton Accords. As of July 1999, 80,000 had 
        returned to areas where their ethnic groups were minorities. 
        About 1.2 million Bosnians remain displaced internally or 
        abroad. Hard-line nationalists seek to block minority returns 
        with bureaucratic maneuvers and, occasionally, violence. 
        However, violance against minority returnees has substantially 
        declined, and implementation of property legislation is 
        improving. The pace of minority returns has slowly improved. 
        Significant spontaneous returns occurred, particularly in areas 
        such as Drvar, where Serb returns have reached significant 
        levels with no repetition of earlier violence. SFOR's 
        contribution to a secure environment is key to the return 
          9. Brcko.--Aim: Implementation of the Brcko Arbitration 
        Tribunal's final award that was issued on March 5, 1999. The 
        award called for the creation of a neutral, multi-ethnic self-
        governing district comprised of the entire pre-war municipality 
        of Brcko. Both entities will be required to delegate their 
        authority over the district to a democratically elected local 
        government. International supervision remains in place. 
        Moderates in the RS, led by Prime Minister Dodik, accepted the 
        award after some initial objections and obstruction from hard-
        line Serb elements. SFOR support remains crucial to deterring 
        violent attempts by hard-liners to disrupt Brcko 
          10. Persons Indicted for War Crimes (PIFWCS).--Aim: 
        Cooperation with the International Criminal Tribunal for the 
        Former Yugoslavia (ICTY) leading to the transfer of PIFWCS to 
        the Hague for trial. As of July 1999, SFOR had assisted in the 
        transfer of 28 indictees to the Hague. Cooperation from the 
        parties varies widely. Bosnian Serb cooperation with the 
        Tribunal has improved since Milorad Dodik became Prime Minister 
        of the RS. The two most senior indictees for war crimes 
        committed in BIH, Radovan Karadzic and Ratko Mladic, have yet 
        to be apprehended.

                         LIFTING THE FLIGHT BAN

    Question. Has the Department of State or any other Administration 
agency analyzed the effect that lifting the flight ban against Serbia 
would have on that country's economic situation? Could lifting the 
flight ban provide any material benefit to Serbia? If so, why did the 
Administration support this move?
    Answer. We have discussed with our European partners the commercial 
implications for Belgrade of Yugoslav Air Transport (JAT) flights to 
Europe, and we have looked into the facts ourselves. It is not at all 
certain that the JAT service will earn a profit from flying to European 
ports, and it is unlikely that the Serbian economy will gain much from 
the EU suspension of the flight ban.
    Prior to the EU flight ban, Belgrade authorities charged a $30 per 
passenger surcharge on all passengers flying EU carriers. Our contacts 
in the EU tell us they will insist on strict reciprocal relations with 
JAT, and will not pay this charge.
    In addition, JAT is currently leasing many of its planes to 
carriers in countries not participating in the U.S. or EU sanctions 
regimes, and JAT is not known to earn profits from its regular flights.
    JAT will earn some added revenue from landing fees charged to EU 
carriers, but the level depends on the frequency and type of flights. 
It is too soon to estimate what these earnings would be.
    Under the proposed EU regulations JAT would be authorized to 
establish one bank account in each member country that can be used to 
make and receive payments related only to flights. JAT would also be 
permitted to obtain necessary fuel and petroleum products at EU 
airports. However, no fuel could be exported to Serbia. EU airlines 
will be permitted to transfer funds to the FRY for payment of goods and 
services, as well as payments of taxes, customs duties and other 
charges. However, all such payments would be subject to Commission 
    We will seek to ensure that JAT cannot profit from these new routes 
by carrying cargoes that would be subject to the EU finacial sanctions.


    Question. How is the NATO Alliance affected by the numerous trade 
disputes the United States has with the European Union?
    Answer. Trade disputes have not been on the agenda of alliance 
discussions. Although eleven members of the EU are also alliance 
members, trade disputes have not detracted from the important security-
related work being conducted at NATO.


    Question. The NATO Alliance and the European Union have agreed the 
EU will only undertake military operations ``where the Alliance as a 
whole is not engaged.'' Is there a common understanding of this phrase 
among NATO members and between the Alliance and the EU? What 
arrangements do you envision between NATO and the EU that will 
structure their relationship so that it lives up to your understanding 
of this phrase?
    Answer. The NATO Washington Summit and the EU Helsinki Summit both 
have affirmed that NATO is the institution of first choice for 
undertaking military operations. The EU will take action in a crisis 
only if NATO chooses not to act. No possibility of duplication or 
overlap exists.
    Institutional NATO-EU links will serve as the basis for 
operationalizing the arrangements whereby the Alliance ``hands off'' 
action to the EU.
    We are pressing for regular and close consultations between EU 
structures and corresponding NATO structures to ensure full 
transparency and coordination.

                            NATO ENLARGEMENT

    Question. Is it the position of the United States Government that 
of those European states that have applied for NATO membership there is 
not one whose admission into the Alliance today would enhance the 
security of the Alliance and its ability to carry out its 
responsibilities? If not, please identify which of the candidates 
currently meet these criteria.

    Answer. Since including the Czech Republic, Hungary, and Poland as 
new NATO members in 1999, neither NATO nor the U.S. has conducted a 
definitive review of whether any of the current aspirants are yet in a 
position to enhance the security of the Alliance and have the ability 
to carry out the responsibilities of membership. At the 1999 Washington 
Summit, NATO Allies agreed to review enlargement again at the next 
summit, which will be held no later than 2002.
    At the Washington summit, NATO offered to assist countries aspiring 
to join the Alliance through a Membership Action Plan (MAP). In this 
context, NATO met with senior members of aspirant governments earlier 
this year to examine progress made through the MAP and provide feedback 
and assistance.
    President Clinton and NATO leaders made clear in Washington that 
the door to NATO membership remains open to all aspirants, based on 
NATO's determination that a country is ``willing and able'' to assume 
the obligations of NATO membership and would contribute to the 
political and strategic interests of the Alliance.
    At the May 2000 North Atlantic Council Ministerial in Florence, 
NATO reaffirmed this commitment. NATO reiterated its expectation that 
further invitations would be extended in coming years to nations 
willing and able to assume the responsibilities and obligations of 
membership. Nine countries--Albania, Bulgaria, Estonia, Latvia, 
Lithuania, Macedonia, Romania, Slovakia, and Slovenia--have thus far 
expressed a desire to assume those responsibilities.


    Question. Russia suspended its participation in the NATO-Russia 
Permanent Joint Council to protest Operation ALLIED FORCE. Is the 
United States or the Alliance encouraging Russia to re-engage in the 
PJC? If so, does this effort involve any offers by the Alliance or the 
United States to alter the PJC's agenda from its original construction? 
Is the Russian government making any such proposals as a condition for 
their return to the PJC?
    Answer. NATO kept the door open for Russia to re-engage with the 
Alliance, and we fully supported this position. We welcomed Russia's 
return to the PJC after the end of the Kosovo air campaign and urged 
Russia to re-engage on issues other than Kosovo and KFOR alone. It is 
in NATO and Russia's interest to resume the broader dialogue envisaged 
in the Founding Act, as NATO-Russia cooperation can contribute 
fundamentally to European security.
    NATO neither set nor agreed to any conditions in resuming broader 
dialogue. The consultative nature of the PJC will remain unchanged. We 
have urged Russia to make full use of this mechanism.
    NATO Secretary General Robertson's visit to Moscow on February 16 
was an excellent step at the right time. He had constructive 
discussions with Russian Acting President Putin, FM Ivanov and MOD 
Sergeyev. This visit confirmed Russia's decision to re-engage broadly 
with NATO.
    I note that cooperation between Russian and NATO SFOR and KFOR 
forces on the ground is excellent and that this cooperation also rests 
on a consultative basis.
           ``holocaust reparations''--german allocation plan
    Question. The German government has agreed to compensation for Nazi 
slave and forced labor of 10 billion DM and negotiations are ongoing as 
to how these funds will be dispensed. Why is the Administration 
supportive of the German concept of allocation--77% for direct payments 
and 23% for all other payments--rather than the allocation favored by 
the countries in Central and Eastern Europe that represent the 
victims--90% for direct payments and 10% for all other payments?
    Answer. I am pleased to report that in late March all the parties 
participating in the negotiations, including the victims groups, agreed 
to an allocation plan. All agreed that the lion's share of the funds, 
at least 8.1 billion of the 10 billion DM in the German foundation, 
should go to labor and other personal injury cases. The 8.1 billion is 
expected to be augmented by interest earnings and from other sources. 
The next step in this process is approval of German legislation that 
will establish the foundation, anticipated by July. This timetable 
could lead to operation of the German foundation by the end of the 

                            NORTHERN IRELAND

    Question 1. What has the Administration done to pressure the Irish 
Republican Army and its political wing, Sinn Fein, to begin IRA 
decommissioning? Why should the United States government continue to 
allow representatives of Sinn Fein to travel and raise funds in the 
United States when Sinn Fein has failed to meet its obligations on 
decommissioning under the Good Friday Accord?
    Answer. The Administration continues to urge the parties involved 
in the peace process to implement all aspects of the Good Friday 
Accord, including decommissioning.
    Neither we nor the British or Irish governments are questioning the 
sincerity of the Sinn Fein leadership's efforts to implement the Good 
Friday Accord and establish lasting peace in Northern Ireland.

    Question 2. Has Marion Price, a former IRA member who was convicted 
of planting four bombs in London which killed one person and wounded 
nearly 200, applied for a visa to the United States at any time during 
the past two years? If so, was the visa issued? Has Marion Price 
traveled to the United States at any time during the past two years?
    Answer. Marion Price applied for a visa to the United States in 
late December. Due to her previous convictions, she is ineligible for a 
visa and requires a waiver to receive one. An inter-agency group 
including representatives from the Departments of State and Justice 
considered Ms. Price's most recent waiver request. This request was 
    Marion Price has not traveled to the United States at any time 
during the past two years.
       international criminal tribunal for the former yugoslavia
    Question 1. Should the United States continue to support 
financially the International Criminal Tribunal for the former 
Yugoslavia (ICTY) in light of its investigation into the conduct of 
NATO actions during the war in Kosovo?
    Answer. ICTY Prosecutor Carla Del Ponte herself has said previously 
that ``NATO is not under investigation'' and ``There is no formal 
inquiry into the actions of NATO during the conflict in Kosovo.'' 
Moreover, NATO fully incorporated the laws of armed conflict in 
training, targeting and operational decisions in Kosovo. NATO undertook 
extraordinary efforts to minimize collateral damage.
    The United States continues to support the ICTY through a variety 
of means, including financial, diplomatic, logistical and other support 
for its investigations and trials. We expect this support to continue 
in the future.

    Question 2. Are you concerned at the speed with which the Office of 
the Chief Prosecutor initiated this investigation, particularly in 
light of the fact that it took them nearly eight years to indict 
Slobodan Milosevic--the instigator of all of the bloodshed and violence 
in the former Yugoslavia?
    Answer. As noted in the previous answer, the Prosecutor has told us 
NATO is not under investigation and there is no formal inquiry of NATO 
now underway.
    The United States fully supports the ICTY's investigations and 
indictment of Slobodan Milosevic for crimes against humanity and war 
crimes in Kosovo, and is supporting the ICTY's efforts to investigate 
other crimes in Croatia, Bosnia and Kosovo for which he and his 
associates may be held individually and criminally responsible.


    Question 1. Last September, bombs went off in four apartment 
complexes in Moscow and other cities. Russian authorities have 
attributed these bombings to Chechen terrorists and used these 
accusations to justify the invasion of Chechnya. Do you believe that 
the Russian government is justified when it accuses Chechen groups as 
responsible for the bombings? If so, would you please forward to the 
Committee any evidence that you have that links these bombings to 
Chechen entities?
    Answer. We condemned the deadly apartment bombings in the harshest 
terms. Acts of terror, in all their forms, have no place in a 
democratic society.
    The investigation into these bombings is ongoing. We offered our 
assistance to Russian law enforcement immediately following these 
    We understand that Russian authorities have linked the bombings to 
Chechnya. Chechen authorities, including President Maskhadov, deny this 
    We have not seen evidence that ties the bombings to Chechnya.

    Question 2. Were the decisions of the United States Government to 
suspend IMF loans and EXIM Bank programs to Russia linked to Russia's 
invasion and use of force in Chechnya? If a move is made to end the 
suspension of the IMF's loans to Russia, will the United States block 
it on the grounds that Russian military spending exceeds the loan's 
provisions concerning the Russian national budget?
    Answer. The IMF decided to withhold further disbursements under the 
program Russia agreed to in 1999 because Russia had not met all the 
conditions of that program. We will consider supporting future 
disbursements under that program only if Russia fulfills the 
conditions--including spending targets--it agreed to with the IMF.
    Where Russia has met the conditions of its agreements with the 
international financial institutions, disbursements have been made, as 
occurred with a $100 million tranche of the World Bank's coal loan in 
    I invoked the Chafee Amendment to delay Ex-Im Bank transactions 
with one specific Russian company so that important questions about 
that company's conduct could be fully examined. At least one other Ex-
Im transaction has gone forward since I invoked the Chafee Amendment in 

    Question 3. The European Union recently decided to suspend and 
redirect its assistance programs to Russia to underscore its concern 
about Russia's invasion of Chechnya. What is the Administration's 
position on this move by the European Union?
    Answer. We understand the concerns about Russia's conduct of its 
campaign in Chechnya which led to the announcement of certain measures 
by the Europeans in January. The United States shares those concerns.
    Two-thirds of our bilateral assistance to Russia is aimed at 
reducing the threat of proliferation of weapons of mass destruction.
    The remainder of our bilateral assistance consists largely of 
humanitarian assistance for vulnerable groups and programs focused on 
promoting grassroots economic and democratic reform outside Moscow. 
These efforts include support for NGO's, Internet access, independent 
media, regional initiatives, exchange programs, and small business 
development. Cutting this aid would run counter to U.S. interests in 
Russia's successful transition to a democratic society and a market-
oriented economy that is integrated into global political and economic 

    Question 4. Can Russia win its war against Chechnya without seeking 
to subordinate Georgia in order to further isolate the Chechen 
resistance? If Russia were to take actions that threatened the 
sovereignty, security, and independence of Georgia, what would be the 
reaction of the Administration?
    Answer. The shift of Russian military operations in Chechnya 
southward into the Caucasus mountains gives new urgency to U.S. 
concerns about the potential for spillover of the conflict into Georgia 
and the South Caucasus.
    The U.S. strongly supports Georgian sovereignty and territorial 
integrity and has dedicated significant diplomatic energies and 
assistance to this end.
    We strongly supported the December 15, 1999, OSCE Permanent Council 
decision to expand the Georgia OSCE mission's mandate to include border 
monitoring in the northern region.
    We have made it clear to the Russian government--at the highest 
levels--that Russia cannot cross the border without serious 
consequences to our bilateral relationship and to Russia's standing in 
the world.
    Acting President Putin stated in a December 11, 1999, press 
interview that ``Russia will never cross the border of a sovereign 
state.'' We have reminded Russia of this statement on numerous 
    We are pleased by recent improved cooperation at the working-level 
between Russian and Georgian border guards.

    Question 5. What has the Administration done to promote a just 
peace in Chechnya aside from rhetorically emphasizing the need for 
    Answer. Our firm and continuing dialogue with the Russian 
Government is producing some results. Russia agreed at the March 3 
Lisbon Ministerial to allow an OSCE assessment visit to the region in 
preparation for the reestablishment of the OSCE Assistance Group in the 
region. This is a direct result of concerted pressure by the U.S. and 
our allies.
    Acting President Putin has also acknowledged his readiness to 
engage in a political dialogue with Chechen leaders and address the 
economic and social issues at the root of this conflict.
    We have also made clear our redline that this conflict must not 
threaten the security of Russia's neighbors. Putin's public restatement 
of his policy of respect for the sovereignty and territorial integrity 
of Russia's neighbors came, in part, in response to our expressions of 

    Question 6. How does a war against Chechnya affect the prospects of 
Russia's evolution into a democracy?
    Answer. Overall, Russia has made considerable progress over the 
last decade as an emerging democracy. This is a long term process.
    The conduct of the State Duma elections in December and the 
upcoming presidential elections indicate that democracy is taking root 
in Russia.
    However, the war in Chechnya has had a negative effect on Russian 
democracy in certain areas, such as freedom of the press, treatment of 
ethnic minorities, and protection of displaced persons. Government 
policies in these areas raise questions about Russia's commitment to 
improving the protection of individual rights and freedoms.
    It is important that the Russian government continue to abide by 
the constitution and ensure all citizens their rights and 

    Question 7. The Administration has repeatedly stated that Russia 
will pay the price of international isolation if it does not cease its 
indiscriminate military operations against Chechnya. How has President 
Putin's use of indiscriminate force in Chechnya directly resulted in 
any dilution of the political engagement and economic benefits it 
receives from the West?
    Answer. Russia is paying the price for its actions in Chechnya 
through its growing isolation from the international community. Russia 
will have difficulty advancing its own agenda when Chechnya dominates 
its dialogue with the world.
    That said, our policy of engagement with Russia has not changed. It 
is important that we stay engaged in Russia. We have a broad range of 
shared interests with Russia and will continue to pursue them.
    Because we continue to engage Russia, we and the international 
community have had some influence in Chechnya and the region, 
especially with regard to the provision of humanitarian assistance.

    Question 8. In light of the known atrocities committed in Chechnya, 
should there be an investigation of war crimes committed by the 
combatants in this tragic conflict?
    Answer. Widespread reports of Russian and some rebel actions in 
Chechnya raise fundamental questions under international humanitarian 
law that necessitate immediate Russian investigation and access to 
Chechnya by international observers.
    A thorough investigation would, of course, be necessary to gather 
sufficient evidence to prosecute any individual for specific criminal 
    Because of the seriousness of these allegations, we are urging the 
Russian government to investigate in an open and transparent way and, 
where warranted, prosecute those responsible for violations.

    Question 9. During your recent visit to Moscow, you proposed that 
Russia allow an international commission to visit Chechnya and 
determine the needs of the peoples displaced by this war. Are you 
considering any proposal in which the United States would provide 
humanitarian assistance and reconstruction assistance to the displaced 
peoples of Chechnya?
    Answer. We have so far provided $12 million worth of assistance as 
financial support in response to appeals from the ICRC and UNHCR, and 
we have provided some food commodities to the World Food Program for 
Chechen refugees. We are not considering help with reconstruction.

    Question 10. You have called upon the Russian government to ``get 
involved in a political dialogue'' with the Chechen resistance. Yet, 
when a senior representative of the Chechen resistance, Ilyas Akhmadov, 
visited Washington in January, you and other senior State Department 
officials, including the Assistant Secretary of State for Human Rights, 
refused to meet with him. How can the Kremlin be expected to take your 
call for a political dialogue seriously when our own government refuses 
to meet with members of the Chechen leadership?
    Answer. The U.S. supports the territorial integrity of the Russian 
Federation, which does not recognize independent Chechnya. Mr. Akhmadov 
represented himself as the ``Foreign Minister of the Chechen 
Republic.'' It would be inappropriate for us to meet with him at senior 
    Working-level officials--who are our leading experts on Chechnya 
and are involved in the policy-making process--met with Mr. Akhmadov 
while he was in Washington. I assure you that Akhmadov's views were 
conveyed to the senior policy level.
    We remain convinced that Russia's military policy does not address 
the deep-rooted economic and social problems which lie at the root of 
unrest in the North Caucasus region. We have consistently called on the 
Russian government to enter a substantive dialogue with legitimate 
leaders in the region to seek a long-term political resolution to this 

    Question 11. You have called upon the Russian government to ``get 
involved in a political dialogue'' with the Chechen resistance. How do 
you envision the structure of such a political dialogue? Who should 
represent the Chechen resistance? Should outside parties such as the 
OSCE and neighboring states such as Georgia and Azerbaijan be a part of 
this dialogue?
    Answer. We have consistently made clear to the Russian government 
that we believe their military policy in the North Caucasus does not 
address the social and economic problems which lie at the root of 
unrest in the region. We continue to urge the Russian government to 
take meaningful steps toward a political solution. Substantive dialogue 
with responsible Chechens is critical.
    We have encouraged the Russians to facilitate a return of the OSCE 
Assistance Group to the North Caucasus region. The Assistance Group's 
broad mandate tasks it with engaging parties in substantive political 
    We have encouraged Russia to work closely with its neighbors in the 
South Caucasus; the OSCE has been a useful forum for some of this 
discussion. The Russians agreed in the Istanbul Summit Declaration that 
the OSCE ``would contribute'' to achieving a political solution.
    We strongly supported the December 15, 1999 OSCE Permanent Council 
Decision to expand the Georgia OSCE Mission's mandate to include border 
monitoring on the Georgian side of the Russian-Georgian border with 

                        RUSSIA AND PROLIFERATION

    Question. The Director of Central Intelligence recently sent to 
Congress a report on the proliferation of technologies relating to the 
weapons of mass destruction (WMD) and advanced conventional munitions. 
The report concludes that the Russian government's ``commitment, 
willingness, and ability to curb proliferation-related transfers remain 
uncertain.'' Recognizing that this CIA repot addresses the first six 
months of 1999, how do you assess the Russian government's commitment 
to restrain these dangerous transfers of missile and WMD technology 
under the leadership of Prime Minister and Acting President Vladimir 
Putin? What in your view should the United States do to further 
encourage or pressure the Government of Russia to curb the 
proliferation of such technologies and materials?
    Answer. Russia has undertaken a wide range of international 
commitments to control the export of equipment and technology for use 
in weapons of mass destruction (WMD), missiles for WMD delivery, and 
advanced conventional weapons. Moreover, the Government of Russia has 
consistently stated that its policy is to oppose proliferation. The 
U.S. continues to press the Russian Government at all levels to fully 
meet its commitments and abide by its stated policy, and to work with 
the Russian Government to assist it in doing so.
    Nevertheless, the U.S. remains concerned that Iran and other 
proliferators are able to obtain items for their WMD/missile programs 
from Russian entities. In response, the U.S. will continue both to 
press the Russian Government to improve its controls over sensitive 
technology and to assist Russia in doing so. Moreover, the U.S. will 
continue to enlist the help of our allies in this effort, as well as 
provide alternatives to proliferation activity for key Russian 
institutes and scientists. Finally, as warranted, the U.S. will 
continue to impose penalties against Russian entities for engaging in 
proliferation activity, as we have already done with ten Russian 
entities involved with Iran's missile and nuclear programs.


    Question. China's recent purchase of two $800 million missile 
destroyers underscores the growing military ties between Beijing and 
Moscow. What are the implications of this deepening Sino-Russian 
military relationship for America's security interests? Has the United 
States expressed to the Russian government opposition to these other 
sales of military equipment?
    Answer. We are well aware of Russia's arms sales to China and have 
been monitoring closely the development and modernization of China's 
military and its potential affect on U.S. security. While China's 
purchase of two guided missile destroyers will clearly improve its 
naval capabilities, the Department of Defense has indicated that it 
does not pose a significant military threat to the U.S. military 
posture in Asia and that it will not fundamentally alter the regional 
balance of power.
    The United States maintains an active dialogue with Russia on the 
issue of arms sales, reflecting our concern about proliferation and 
regional stability. We will continue to monitor closely Russian arms 
sales to China and will raise them with the Russian government in a 
manner consistent with our overall nonproliferation and security 

                              NORTH KOREA

    Question 1. Have we committed to, or are we considering, removing 
North Korea from the terrorist list? If so, how can this be justified 
in light of recent CIA testimony that North Korea is now the world's 
largest weapons proliferator and that North Korea's missile development 
program continues, despite last year's flight-testing pledge?
    Answer. We have made no commitment to the DPRK to remove it from 
the list of state sponsors of terrorism.
    We have conducted several rounds of bilateral talks on this issue, 
the most recent in New York in March.
    In those talks we again raised with the DPRK our concerns regarding 
terrorism and described to the DPRK in detail what steps it must take 
to be removed from the list.
    The objective of the talks was to ensure that the DPRK addresses 
our concerns-removal of the DPRK from the list is not the priority 
rather, our goal is to get the DPRK out of the terrorism business.
    We will not remove the DPRK from the terrorism list until it takes 
actions necessary to meet our concerns.
    The issue of the DPRK's missile program is of serious concern to us 
and the international community and is itself a subject of bilateral 
discussions aimed at stopping the DPRK's missile evelopment and export 
    We expect to continue bilateral missile talks to achieve the 
important goals laid out by Dr. Perry in his report.
    We have already obtained a suspension of the DPRK's flight testing 
of long-range missiles while high-level talks to improve our bilateral 
relations are underway. We are seeking to clarify and extend the 
suspension in our ongoing high-level talks.

    Question 2. It has come to my attention recently that seven North 
Korean UNHCR recognized refugees, including a 13-year-old boy, made 
their way from North Korea to Russia, across Chinese territory. Despite 
pleas from the UNHCR and South Korea, Russian authorities deported the 
seven back to China, which then regrettably had the refugees sent back 
to North Korea. What is the status of the seven refugees? What steps 
has the Administration taken to halt such repatriations? What does the 
future hold for other North Koreans seeking to escape persecution?
    Answer. Estimates of the number North Koreans in northeastern China 
vary widely. Most of them are migrants who intend to stay temporarily 
and then return voluntarily to North Korea.
    The PRC office of the U.N. High Commissioner for Refugees--the 
recognized lead international agency for such issues--and various NGO's 
have been able to assist some needy North Koreans in China. We have 
been told that these organizations are generally satisfied with their 
freedom of important UNHCR activities in China which aid these 
    Regarding the seven refugees who were returned to the DPRK from 
China in January, we are working closely with the office of the UNHCR, 
which has raised this issue with the PRC, to ensure that the needs of 
the asylum seekers are met. We support the position of the High 
Commissioner on refoulement, which opposes the forcible return of 
persons to a place where they face persecution.
    It is not possible for the administration to ascertain directly the 
status of these individuals because we have no embassy or official 
presence in North Korea. We take this case very seriously and expect 
all members of the international community to abide by the guiding 
principles of the U.N. Charter and the Universal Declaration of Human 
    We have also kept in close touch with the ROK government, which of 
course has a strong interest in this case and in the welfare of the 
North Korean people.


    Question. If the United States does not place an ambassador in 
Rangoon, why does the United States continue to allow the Burmese 
junta's ambassador to stay in Washington?
    Answer. In support of our policy objectives--democracy, improved 
human rights, and more effective counternarcotics efforts--we maintain 
diplomatic relations with the Government of Burma. This allows us to 
staff an embassy in Rangoon in pursuit of those objectives. Our 
unilateral decision to downgrade our chief of mission status from 
Ambassador to Charge is a result of the regime's failure to implement 
the results of the 1990 elections, won by the democratic opposition. 
This symbolic downgrading does not, however, impede the efforts of our 
Embassy to effect change in Burma.
    If we required the Burmese to downgrade the status of their chief 
representative, any retaliatory action aimed at our Embassy in Rangoon 
could impinge upon the ability of our diplomats to do their jobs, 
which, in turn, would interfere with our ability to support the 
democratic opposition, including Aung San Suu Kyi.

                          PRC SUNBURN MISSILE

    Question. What capabilities does Taiwan have to track, lock on to 
and shoot down the PRC's recently acquired Sunburn anti-ship missile?
    Answer. The U.S. has supplied a number of weapons systems designed 
to provide Taiwan navy ships a limited capability against Sunburn 
missiles. Perry-class and Knox-class frigates are equipped with the 
PHALANX Close-In Weapons System (CIWS), which is designed to intercept 
surface skimming, low-flying anti-ship missiles. Additionally, F-16 
aircraft, equipped with the air-launched Harpoon antiship missile, can 
be used to attack PRC ships before a Sunburn could be launched (the 
preferred tactic of the U.S. Navy.) However, the Sunburn's terminal 
flight maneuvers make it an extremely difficult target for any U.S. 
weapons system, including Aegis, to track and shoot down.


    Question 1. Has the Chinese government been demarched for the 
threatening statements made by DCM Liu Xiaoming on February 3rd, when 
he implied that China would initiate military action against Taiwan if 
Congress passed the Taiwan Security Enhancement Act?
    Answer. Yes. Assistant Secretary of State for East Asian and 
Pacific Affairs, Stanley Roth, called Chinese Ambassador Li Zhaoxing 
personally, shortly after Mr. Liu's remarks were made public. Assistant 
Secretary Roth also called the Senate Foreign Relations Committee, to 
inform them of the substance of the demarche.
    In his call to the Chinese Embassy, Assistant Secretary Roth told 
Ambassador Li that Mr. Liu's remarks were inappropriate, needlessly 
provocative, and contrary to China's stated policy of seeking 
``peaceful reunification'' with Taiwan.

    Question 2. Has the State Department or the White House taken any 
steps to induce the government of Taiwan to make negative statements 
about the Taiwan Security Enhancement Act?
    Answer. No, we have not taken any steps to induce the Taiwan 
authorities to make negative statements about the Taiwan Security 
Enhancement Act (TSEA).
    The administration's reasons for opposing the legislation are well 
known. We believe it would seriously diminish Taiwan's security and 
undermine the important U.S. objective of stability in Asia.
    We remain firmly committed to fulfilling our commitments under the 
Taiwan Relations Act, including the security and arms transfer 


    Question. I understand that the Refugee Resettlement Unit at the 
U.S. Consulate in Saigon has begun processing ``Priority One'' cases. 
How many cases have been received and processed thus far? Of those 
cases, how many refugees have been admitted to the United States?
    Answer:. The Refugee Resettlement Section (RRS) in Ho Chi Minh City 
has not yet begun to process ``Priority One'' (P1) cases. Since 
November the program in Vietnam has been in transition with the close 
out of Orderly Departure Program (ODP) operations in Bangkok and the 
expansion of RRS operations in Ho Chi Minh City. This month the RRS 
initiated interviews for the small number of residual ODP cases. 
Concerning the P1 program, we are currently in the process of 
implementing procedures for the new program and expect that the program 
should be in place by early April. Later this month we intend to 
contact your staff and the staff of other interested Members of 
Congress to offer a briefing on the process.

                               COSTA RICA

    Question. The Committee continues to receive regular requests for 
assistance from U.S. (and other) citizens with squatter-related 
property and security issues in Costa Rica. How many of these cases is 
the USG aware or what is being done to assist these U.S. citizens? What 
more could be done?
    Answer. The United States Embassy in San Jose, Costa Rica, does not 
maintain an historic roster of squatter and security cases. We are 
aware that many of the cases that arose in Pavones, Costa Rica, late in 
the previous Costa Rican administration, have been resolved. At the 
present time, the Embassy is actively tracking one squatter case and 
one security case.
    The police in Costa Rica have recognized the issue and have 
increased their presence in Pavones, as well as increased police 
presence for the active security case upon the request of the U.S. 
citizen involved and the Embassy.
    The Government of Costa Rica recognizes the importance of public 
security to further development. The Penal Code and the court system 
were significantly amended in January of 1998, making them similar to 
the penal code and court system of the United States. We are working 
with the Government of Costa Rica to strengthen the professionalism of 
the police force and Costa Rican law mandates that one-quarter of the 
Public Security force be kept on with each new administration.
    The Department of State has no greater purpose than the protection 
of the security of Americans living and traveling abroad. The Bureau of 
Consular Affairs as well as our Embassy in San Jose stand ready to 
assist American citizens in any way they can, including but not limited 
to liaison with the police, provision of information regarding the 
Costa Rican legal system and legal remedies, and advocacy with the 
government in egregious cases.

                          COUNTER-DRUG FUNDING

    Question. What is the Department of State doing to resolve 
overflight issues in South America so that counter-drug funds and the 
FOL investment in Manta can be most effectively used?
    Answer. Overall, we are extremely pleased with the level of 
cooperation and support that South American and Caribbean governments 
have provided for our aerial interdiction efforts in the Western 
Hemisphere. In 1999 we sealed a ten-year agreement with the Government 
of Ecuador permitting the U.S. to operate regional counter-narcotic 
detection and monitoring missions from an Ecuadorian air force base in 
the city of Manta. We also reached an interim agreement with the 
Netherlands Antilles to permit similar missions throughout the Eastern 
Caribbean region, with negotiations currently underway to extend 
operations into the next decade.
    Regarding the issue of overflights by U.S. counterdrug aircraft, 
all countries involved in regional counter-drug operations recognize 
that sovereignty concerns must be respected and addressed. In 
particular, we are engaged actively in discussions with the Government 
of Venezuela to reach a mutually agreeable resolution of the issue that 
respects the sovereignty concerns of the Venezuelan Government.


    Question. In your view, to what degree has Jean Bertrand Aristide 
(both in office and out) frustrated U.S. efforts to bring democracy, 
economic reform, and rule of law to Haiti since he was returned by U.S. 
    Answer. In September 1994, the UN sanctioned, U.S.-led 
Multinational Force restored elected government to Haiti, which for 
three years had been under the brutal dictatorship of the de facto 
military regime. Then- President Jean Bertrand Aristide, who had been 
elected in 1990 in elections widely regarded as free and fair, returned 
from exile in 1994 to assume his duties in Port-au-Prince. President 
Aristide subsequently dismantled the Haitian army and oversaw the 
establishment of a professional civilian police force. Although he had 
been in exile for much of his term, President Aristide stepped down 
from power when President Rene Preval assumed office in January 1996. 
This was the first peaceful transition from one elected president to 
another in Haitian history.
    Former President Aristide continues to be an important political 
figure in Haiti, as head of the Famni Lavalas (FL), the country's 
largest political party. In December 1999 at the FL party conference, 
he denounced violence in the lead up to the upcoming legislative, 
local, and regional elections and called on his party to respect 
political pluralism. Some 9,000 FL candidates have registered to 
compete in the elections at all levels, and the FL was the first to 
sign the code of ethics committing the parties to non-violence during 
the electoral process. We are concerned by a recent rise in elections-
related violence, including the killings of a prominent journalist and 
an opposition party activist, and the burning down by agitators of the 
headquarters of an opposition political party. Some of the violence has 
been perpetrated by self-professed supporters of former President 
Aristide, although the FL leadership has publicly condemned the 
violence. We called on the Government of Haiti to restore a climate of 
security and ensure that the perpetrators of violence are identified 
and brought to justice. Additionally, we believe the leaders of all 
Haitian political parties, including former President Aristide, have an 
obligation to use all means possible to dissuade their followers from 
engaging in violence or other actions that could call into question the 
integrity of the electoral process.


    Question. Has the USG received information that suggests, 
indicates, or otherwise links Aristide or individuals associated with 
him with disruptions in election-related activities, including the 
registration process? Are you prepared to use your authority to pull 
the visas of individuals involved in these activities?
    Answer. Some four million Haitians registered to participate in 
upcoming legislative, regional, and local elections, and we are 
continuing to urge the Haitian government to ensure these elections are 
held rapidly in an atmosphere of nonviolence. While in some areas the 
registration process unfolded in a peaceful manner, several areas 
experienced localized disturbances or violence, primarily related to 
the selection of electoral personnel at a local level. Also, some 
protests directed against the Provisional Electoral Council (CEP) 
occurred because of the CEP's failure to ensure adequate registration 
supplies in some locations and the timely opening of some registration 
sites. We are concerned, however, by an increase in the demonstrations 
and violent acts carried out by supporters from range of political 
sectors--including the pro-Aristide Famni Lavalas (FL) movement--in the 
early weeks of April, 2000. The FL party has publicly denounced the 
violence and called for an atmosphere of calm.
    Special Haiti Coordinator Donald Steinberg, in a press statement in 
Haiti in December, stated ``the U.S. Government has the right to deny 
entry into the United States by individuals who violently disrupt 
political rallies; attack election registration sites; or attack and 
intimidate the Haitian National Police, electoral officials, voters, or 
candidates.'' We are prepared to use this authority as appropriate to 
promote U.S. interests in ensuring the continued consolidation of 
Haitian democracy.
    A significant international observer presence is absolutely 
critical to deter potential fraud and violence during the upcoming 
elections. A hold by the Senate Foreign Relations Committee on $1.3 
million in U.S. funding for OAS elections observers has greatly 
jeopardized the ability of the international community to provide 
adequate observation for this critical vote.


    Question. We know from testimony by State Department officials that 
members of President Aristide's security forces were implicated in 
political assassinations committed by hit squads run out of the 
national palace. The leadership of these forces included longstanding 
Aristide confidants, Dany Toussaint, Medard Joseph, and Fourel 
Celestin, individuals Ambassador Swing has testified were chosen 
because of their personal loyalty to Aristide. Do these individuals 
maintain an association with Jean Bertrand Aristide? Does the 
Department of State share the Committee's concern that the same 
individuals who led the security forces during the period of the 
assassinations will be returned to the National Palace along with Jean 
Bertrand Aristide if he is re-elected?
    Answer. We have made consistently clear to President Preval, as we 
did to former President Aristide, our concern that individuals placed 
in key government positions, particularly those related to security, 
demonstrate a high level of integrity and respect for the law. We have 
also made clear that continued U.S. assistance for developing the 
Haitian National Police (HNP) would be jeopardized if individuals 
believed to have been involved in human rights abuses or illegal 
activity were placed in positions of responsibility over the HNP.
    Dany Toussaint, Medard Joseph, and Fourel Celestin are presently 
candidates in the impending senate elections under the Famni Lavalas 
(FL) banner. They continue to associate with former President Aristide.

                     HAITI: ``POLITICAL'' KILLINGS

    Question. With regard to political assassinations in Haiti since 
President Aristide was returned, State Department officials have 
briefed Committee Staff that ``no one believes that anyone will be 
prosecuted for these crimes'' and that maintaining an investigative 
advisor to the SIU is really about having some sort of ``deterrent or 
prophylactic'' effect on potential murders. Why has the State 
Department concluded that no one will ever be brought to justice in 
these cases? Why is it apparently no longer the State Department's 
objective to see that the murderers are brought to justice for these 
    Answer. The Department of State and Embassy continue to urge the 
Government of Haiti to ensure progress on investigations of politically 
linked killings that took place before and after the 1994 restoration 
of elected government. The continued poor state of the Haitian 
judiciary remains a major impediment to the resolution of these cases. 
We are encouraged by recent movement towards a trial for the 1993 
killing of innocent citizens by security forces near the town of 
Raboteau. We are also encouraged by swift moves by the Haitian National 
Police (HNP) to arrest and detain its own members responsible for the 
killing of 11 individual in the Port-au-Prince borough of Carrefour-
Feuilles. We hope these positive developments will increase confidence 
within the HNP Special Investigative Unit (SIU) and judiciary and lead 
to results in the investigations of other outstanding cases.

                        HAITI: ATTACKS ON POLICE

    Question. Recent months have seen attacks on individuals associated 
with the police and on the institution of the police itself, with some 
evidence that Jean Bertrand Aristide or partisans are the source of 
these assaults. Does the Department of State share the Committee's 
concern that an effort is underway to politicize the Haitian National 
    Answer. In the period leading up through October 1999, a series of 
violent incidents targeted at the Haitian National Police (HNP) 
leadership--including the killing of a senior police advisor--raised 
deep concerns of attempts by some sectors to politicize the five year-
old force. The security situation since that time has been relatively 
calm, and HNP actions on the ground have indicated a general respect 
for political pluralism and support of the democratic process. The HNP 
has provided a level of protection at key political rallies, developed 
a security plan for elections, and improved coordination with the 
Provisional Electoral Council and a range of political parties. HNP 
Director General Denize has told us publicly that politically-related 
pressure on him and others in the police leadership has greatly 
    We continue to make clear to Haitian leaders the importance of a 
professional and apolitical police force to the development of Haitian 
democracy, and we continue to watch closely new appointments of key 
security officials. The biggest challenge is that the HNP remains an 
extremely small force, with fewer than 5,500 members for a country of 
roughly seven million people. The U.S. continues to provide bilateral 
and multilateral assistance to develop the HNP. We are working closely 
with other donors and the UN in building up the new International 
Civilian Mission for Support in Haiti (MICAH) which began operating 
March 16 with the mandate of providing technical assistance to the 
police, judiciary, and human rights sector. We would reevaluate current 
U.S. assistance levels if it appeared at some point that Haitian 
leaders had abandoned their commitment to the HNP's political 

                       HAITI: ARISTIDE FOUNDATION

    Question. What has been done to determine the degree to which the 
Aristide Foundation for Democracy is involved in destabilizing 
campaigns against economic and fiscal reform, against U.S. 
organizations like IRI, and against the institution of the Haitian 
National Police? What has been concluded?
    Answer. We have received no credible information and have no reason 
to believe that the Aristide Foundation for Democracy has been involved 
in destabilizing campaigns against economic or fiscal reform, against 
U.S. organizations, or against the Haitian National Police.


    Question. Has the GOH re-signed the bilateral Repatriation 
Agreement with the United States? Has the U.S. requested that they do 
so? When? What was the response? Has the text of such an agreement been 
drafted and presented to the GOH?
    Answer. All migrant interdictions at sea and subsequent 
repatriations are handled in accordance with Executive Order 12807. The 
Order signed by President Bush on May 24, 1992 provides authority for 
the United States Coast Guard to interdict undocumented aliens on the 
high seas and to arrange for their repatriation to the country from 
which they came or another country.
    In a letter dated March 14, 1994, then-President Aristide gave 
notice to President Clinton of Haiti's intention to terminate the 1981 
Repatriation Agreement. Pursuant to the Agreement's terms, the 
termination became effective six months following that notification--on 
September 14, 1994. The letter claimed that Executive Order 12807 
violated the terms of the Agreement by requiring the summary return of 
all Haitians interdicted at sea without consideration of their 
eligibility for refugee status.
    Notwithstanding the termination of the Repatriation Agreement, the 
United States has continued to interdict Haitians on the high seas and 
to repatriate them as appropriate under Executive Order 12807 with the 
cooperation of the Government of Haiti under the same procedures as 
under the Repatriation Agreement. Since the termination of the 
Agreement the Coast Guard has repatriated more than 5000 Haitian 
migrants. We do not, at this time, and the Coast Guard concurs, see a 
need to seek to negotiate a new agreement with the Haitians.


    Question. Has the United States requested Panamanian officials 
since the inauguration of President Moscoso to consider an arrangement 
affording U.S. law enforcement or military officials access to former 
U.S. bases or port facilities in Panama for the purposes of mutually 
beneficial missions, including counterdrug operations? If not, please 
provide a detailed explanation.
    Answer. No, the United States has not made such a request to the 
Government of President Moscoso. The failure of negotiations for a 
Multilateral Counter-narcotics Center (MCC) and the subsequent public 
statements by leaders from across the political spectrum in Panama 
demonstrate a lack of credible political support for an agreement to 
reestablish a U.S. military or law enforcement presence there.
    Even if there were greater Panamanian receptivity to such an offer, 
U.S. facilities in Panama have already been dismantled and transferred 
to the Government of Panama in accordance with the 1977 Panama Canal 
Treaty and most are being converted to other uses. Therefore any such a 
presence would require that facilities be re-established there. Re-
establishment would only be viable if such facilities were to offer a 
complete range of activities. However, the present political climate in 
Panama will not support the establishment of a significant U.S. 
military or law enforcement presence.
    While the Department of State has not requested from the current 
Panamanian Government an arrangement to provide U.S. military or law 
enforcement officials access to former U.S. bases or port facilities in 
Panama, it is acutely aware of the needs for Panamanian security and to 
continue efforts to interdict shipments of illicit narcotics headed for 
the United States.
    Accordingly, the U.S. Departments of State and Defense have begun a 
series of high-level bilateral security and law enforcement 
consultations with the Panamanian Government, aimed at creating a new 
Panamanian security strategy and at seeking areas where the United 
States and Panama can cooperate to strengthen Panamanian security and 
counterdrug capabilities. The first round of these consultations was 
held in Washington in November, 1999, and another round is planned for 
Panama in May, 2000. Additionally, following the cessation on May 1, 
1999, of counterdrug air operations at Howard AFB, and in order to 
continue uninterrupted source and transit zone counterdrug operations, 
the Departments of State and Defense have established Forward Operating 
Locations (FOLs) at existing airports in Manta, Ecuador and Aruba/
Netherlands Antilles (Curacao). These FOLs will eventually be capable 
of supporting continuous aerial operations 24 hours a day, 7 days a 
week. A long-term FOL agreement has already been reached with the 
government of Ecuador and we expect to sign a long-term agreement with 
the Netherlands very soon to replace the interim FOL agreement now in 
effect. We also plan to establish a third FOL site at an appropriate 
location as conditions warrant and as funding permits. Once 
infrastructure improvements are accomplished at the FOLs, U.S. 
counterdrug assets previously based in Panama will operate from these 
alternative locations continuously.
    Until FOLs become fully operational, the Department of Defense will 
rely on a combination of interim sites in Puerto Rico and the 
continental U.S., as well as the FOL sites mentioned above, from which 
to run its counterdrug missions. An initial, but minimal degradation in 
our baseline counterdrug aerial interdiction coverage will gradually 
improve as FOLs become fully operational. With the addition of a third 
FOL, the Department of Defense is confident that counterdrug detection 
and monitoring coverage will exceed Howard AFB capabilities at a cost 
well below what would have been needed to maintain that multipurpose 
military facility. We believe that with a concerted U.S. effort over 
the near term, we can maintain adequate support to the National Drug 
Control Strategy as we re-establish our regional counterdrug support 
infrastructure. With the conclusion of long-term agreements with FOL 
host nations, we hope to receive the authority and budget to carry out 
necessary overseas military construction/upgrades that will allow us to 
maintain the continuous commitment of U.S. air assets and personnel in 
the counterdrug effort. The Secretary of Defense has given his full 
commitment to bringing the FOLs to full operational status. Other U.S. 
agencies involved in counterdrug activities have likewise given full 
support to the FOL plan. We therefore have every reason to believe the 
FOL concept is the most promising and cost-effective alternative to 
counterdrug operations previously conducted at Howard AFB.


    Question. On September 28, 1999, Mr. John Keane told staff of the 
Foreign Relations Committee that on or about June 7, 1999, Mr. Keane, 
upon instructions of then Deputy Assistant Secretary of State John 
Hamilton, called U.S. Ambassador to Panama Simon Ferro to instruct him 
not to go forward with the Embassy's plan to revoke the visa of a 
Panamanian official. Mr. Keane further confirmed that on June 9, 1999, 
the Embassy did revoke that visa. Ms. Susan Jacobs, Deputy Assistant 
Secretary for Legislative Affairs, attended that briefing. On November 
2, 1999, and January 2000, the SFRC staff sent two (2) separate 
memoranda to DAS Jacobs requesting her assistance in obtaining 
affidavits to substantiate these alleged events. To date, these 
affidavits have not been produced. Could you explain the unwillingness 
of Mr. Keane, Ambassador Ferro, and/or Ambassador Hamilton to cooperate 
with this request of the Committee? Please append to your reply to this 
question the requested affidavits, to wit:

   Of Mr. Keane substantiating the date and content of that 
        telephone call, including any phone logs or cables documenting 
        that phone call.
   Of Ambassador Hamilton substantiating that he instructed Mr. 
        Keane to make that phone call and what actions he took upon 
        finding that Ambassador Ferro did not follow the instructions 
        provided by the Bureau.
   Of Ambassador Ferro substantiating his recollection of that 
        phone call and explaining why he did not follow the 
        instructions allegedly conveyed in that phone call.

    Answer. The above referenced call from Mr. Keane to Ambassador 
Ferro took place on the afternoon of June 7, 1999, at the request of 
Ambassador Hamilton, who instructed Mr. Keane to ask Ambassador Ferro 
if he had consulted with the Department or other Washington agencies 
prior to his meeting with Panamanian President Perez Balladares during 
which the revocation of the Panamanian official's visa was discussed. 
The focus was on consultations about the subject matter with Washington 
prior to discussions with Panamanian officials. In addition, Mr. Keane 
asked Ambassador Ferro not to go forward with the revocation of the 
Panamanian official's visa, if it had not already been done, until he 
received instructions from the Department. However, the Embassy made 
its finding of inadmissibility against the Panamanian official and 
entered the name into the computer lookout system on June 7, 1999. The 
Panamanian official was advised of this inadmissibility via 
correspondence dated the same day.
    As stated in Department correspondence to the Senate Foreign 
Relations Committee Chief of Staff, Mr. Stephen Biegun, dated January 
11, 2000, the requested affidavits are not and have not been provided 
because the Department regards the normal channels of oral and/or 
written communication with the Congress to be the appropriate means of 
providing and exchanging information. We do not believe that affidavits 
from Department officers are necessary in order for the Department to 
provide credible and reliable information to the Congress.
    The Department of State is and has been fully prepared to cooperate 
with the Committee concerning this matter and to make Department 
officers available to the Committee in any reasonable manner in order 
to be responsive.


    Question. I have written you regarding the Department's decision to 
grant a visa to Cuban intelligence officer Fernando Garcia Bielsa, 
however, the Department's reply failed to address my concerns. U.S. 
federal agencies have documented the direct role that Cuban officials 
have played in supporting terrorist attacks by Puerto Rican 
``nationalist'' groups on U.S. soil. Cuban spies are on trial in U.S. 
federal court at this very moment, their illegal activities abetted by 
Cuban ``diplomats'' at the UN. Has the Department been informed by any 
U.S. agency that Fernando Garcia Bielsa has met any time, including in 
the last three years, with associates of the Puerto Rican terrorist 
groups FALN or Macheteros? If so, why has the Department chosen to 
disregard contact between this Cuban intelligence officer and members 
of associates of terrorist groups in granting that intelligence officer 
a visa to work in the United States?
    Answer. We did not disregard the information the FBI provided us 
concerning Garcia Bielsa. The FBI did share certain information with 
the Department. The FBI withdrew its initial objection to Garcia 
Bielsa's posting to the Cuban Interests Section in Washington; the visa 
was issued with the FBI's concurrence.


    Question. Please explain in detail why the Department has failed to 
expel from the United States two Cuban officers who the FBI informed 
the Department played a role in the spy ring that was discovered in 
September 1998.
    Answer. Those diplomats at the Cuban Mission to the United Nations 
in New York who the FBI was able to identify as having direct links to 
the captured spies either departed voluntarily from the United States 
before we could expel them or were expelled by the State Department. No 
one whom the FBI could document as having direct contacts to these 
spies is in the United States.


    Question. Will you assure me personally that the Department will 
not allow the posting in U.S. territory of any Cuban diplomat or Cuban 
intelligence officer who is known to have had direct contact with 
associates of the Puerto Rican terrorist groups FALN or Macheteros? If 
not, please explain your decision to disregard this threat.
    Answer. All applications for diplomatic visas are reviewed to 
determine whether the applicant is ineligible under the terrorist and 
other security provisions of the Immigration and Nationality Act, and 
visas are only issued after any ineligibility issues are resolved.


    Question. In 1996, sec. 102(e) of P.L. 104-114 stated the sense of 
the Congress that, ``The President should instruct the Secretary of 
State and the Attorney General to enforce fully existing regulations to 
deny visas to Cuban nationals considered by the Secretary of State to 
be officers or employees of the Cuban government or of the Communist 
Party of Cuba, consistent with executive Proclamation 5377 of October 
4, 1985, pursuant to section 212(f) of the Immigration and Nationality 
Act of 1952, as amended. In recent months, Cuban government officials 
at the Vice Ministerial level have been granted visas to enter the 
United States. When questioned by Committee staff Department officials 
blamed these decisions on a new procedure intended to increase the 
issuing of visas in Havana. Please explain in detail the new procedures 
for granting nonimmigrant visas to Cubans from our Interests Section 
Havana. Has the President rescinded Proclamation 5377 of October 4, 
1985? Please provide a detailed explanation of the procedure for 
granting visas to senior Cuban government officials.
    Answer. The President has not rescinded Proclamation 5377 of 
October 4, 1985. However, the application of the Proclamation was 
modified to carry out President Clinton's January 5, 1999, announcement 
expanding people-to-people contact between the United States and Cuba, 
particularly in the educational, cultural, scientific, athletic, 
professional and religious areas.
    New procedures effective May 17, 1999, generally provide for the 
more expeditious processing of the visa applications of persons 
resident in Cuba and subject to the Proclamation. Six categories of 
employees or officers of the Government of Cuba or the Communist party 
of Cuba are exempt from the new procedures, however:

    1. The President and Vice President, a minister or vice minister of 
the Government of Cuba;
    2. The President and Vice President of the National Assembly of 
    3. A politburo member, central committee department head or 
provincial first secretary of the communist party of Cuba;
    4. A senior military, intelligence, or police official;
    5. A Cuban Government or communist party officer or employee 
determined by the U.S. Interests Section to be a person of potential 
foreign policy concern to the United States; and
    6. A Cuban government or communist party officer or employee whose 
application is opposed by an interested USG agency within ten days of 
the submission of the case to Washington.

    These new procedures implemented the President's policy to promote 
people-to-people contact while still restricting Cuban officials who 
might pose a threat to national security or be a foreign policy 
concern. While senior government officials, including vice-ministers, 
are subject to INA 212(f) sanctions imposed against Cuban Government 
officials, 212(f) sanctions are not used to deny visas when visa 
issuance is in the national interest and/or required by our 
international commitments.

                     CUBA: TDY OF OFFICIALS TO U.S.

    Question. How many Cuban officials have been admitted to 
``temporary duty'' (TDY) in the United States in the last two years? 
How many U.S. officials have been granted TDY visas to enter Cuba in 
the same period? What procedure exists for ensuring that Cuban 
officials entering the U.S. on TDY visas are not intelligence officers 
before granting them TDY visas? What procedure exists for informing the 
FBI of the entrance into the U.S. of Cuban officials on TDY visas? What 
purpose is served for allowing Cuban officials to enter the U.S. on TDY 
visas? What procedure exists for ensuring the timely departure of Cuban 
TDY visitors from U.S. territory? How many Cuban officials on TDY visas 
have stayed beyond their departure date? What is the penalty for Cuban 
officials overstaying their departure date?
    Answer. In the last two years (March 2, 1998-March 2, 2000), 
approximately 140 visas have been granted to Cuban officials for 
temporary duty assignments in the United States at the Cuban Interests 
Section. In addition, some 380 visas have been granted to Cuban 
officials for temporary assignment to the UN Mission in New York for 
temporary assignments. We estimate that at least 150 U.S. officials 
have traveled to the U.S. Interests Section in Havana for temporary 
assignments. (We do not have precise date because of a computer 
malfunction that damaged our database.) Decisions to issue visas to 
Cuban officials are made in accordance with applicable laws, 
reciprocity, and the needs of the U.S. Interests Section. In general, 
requests for visas for Cuban officials are evaluated to determine 
whether the proposed representative is subject to any grounds of 
inadmissibility and if so, whether a waiver of inadmissibility is 
legally available. The issuance of bilateral diplomatic visas (A-1 and 
A-2 visas) is also subject to acceptance by the Secretary of State.
    All visa applications are reviewed by appropriate law enforcement 
agencies as provided for by law prior to issuance or denial.
    Temporary duty officials from Cuba and the United States are issued 
visas for the purpose of performing work internal to the mission. The 
agreement establishing the two Interests Sections provided for 
personnel ceilings. The Cuban Interests Section is permitted 25 
permanent officials and 10 long-term duty persons. The U.S. Interests 
Section in Havana has a total of 26 permanent positions, 5 long-term 
duty positions and an additional 20 permanent positions for the 
consular section to implement the Migration Accords. Long-term 
temporary support officers are permitted a total of a one-year stay in 
the host country. Short-term temporary support officers may stay in the 
host country for nine months.
    Last year two individuals had overstayed their visas in the United 
States and were asked to leave the country promptly. The Department of 
State has implemented procedures in coordination with the Federal 
Bureau of Investigation to monitor Cuban Government compliance with the 
staffing and length of stay limits noted above.

                       CUBA: FUGITIVES OF JUSTICE

    Question. The Department of State has provided the Committee a list 
of several dozen fugitives of justice granted sanctuary by the Cuban 
government. Please document the date and circumstances when the 
Department last asked the Cuban government to surrender any of these 
fugitives to justice in the United States?
    Answer. The Department of State raises this issue periodically with 
the Cuban government. However, We have not recently sent a formal 
diplomatic note on this issue.
    Past Cuban responses and recent journalistic reports offer no 
encouragement that the Castro government will treat as serious any 
request to extradite fugitives from justice.
    Nonetheless, we will continue to insist that the Cuban government 
extradite individuals indicted for crimes in the United States.

                              UNCHR PLANS

    Question. What specific steps is the Department of State taking to 
ensure the passage of a resolution on human rights in Cuba at the 
upcoming meeting of the UN Commission on Human Rights in Geneva?
    Answer. The U.S. has agreed to co-sponsor the resolution on Cuba 
that the Czech Republic and Poland introduced at the UN Commission on 
Human Rights on April 11, 2000. We stand ready to help the Czechs and 
Poles in their valiant efforts to keep the world focused on the 
deplorable state of human rights in Cuba.


    Question. Did any official in the Department of State (including 
any in the U.S. Interests Section in Havana) or, to your knowledge any 
other U.S. official, suggest to any Cuban official a quid pro quo by 
which Cuba would receive fugitives from St. Martinville, Louisiana, in 
exchange for the repatriation of refugee Elian Gonzales?
    Answer. No. The Cubans did not suggest a quid pro quo nor did we 
offer one. There is no connection between these two cases.


    Question. What is the status of the inquiry into the Sol Melia case 
under Title IV of the Libertad Act? When will the Department make 
available to the Committee the documents requested regarding this case?
    Answer. On July 1, 1999, we contacted Sol Melia by letter and 
telephone to advise the company of the potential application of Title 
IV to certain of its activities in Cuba. This case continues to be of 
the utmost concern to the Department. We are working on this matter 
assiduously and have been in regular contact with all parties involved. 
Because this case is still under review by the Department, we are not 
in a position to release documents or publicly discuss the status of 
the investigation.


    Question. What U.S. official is responsible for making final 
determinations under Title IV of the Libertad Act? Please provide the 
Committee with the document by which Acting Assistant Secretary Peter 
Romero recused himself from such decisions.
    Answer. The statute places this responsibility with the Secretary. 
On May 1, 1996, the Secretary's authority under this provision was 
delegated to the Assistant Secretary for Western Hemisphere Affairs. 
However, the Secretary, the Deputy Secretary, and the Under Secretary 
for Political Affairs may exercise any function delegated by this 
delegation. Since July, 1999, Acting Assistant Secretary Peter Romero 
recused himself from Title IV matters to avoid the appearance of 
conflict, given his pending confirmation before this committee. There 
was, however, no document to bring this about.


    Question. Please describe the policy under which Acting Assistant 
Secretary Peter Romero has repeatedly refused appearing before the 
Foreign Relations Committee while making himself available on a number 
of occasions to other Congressional committees.
    Answer. Acting Assistant Secretary Romero was nominated by the 
White House to be the Assistant Secretary for Western Hemisphere 
Affairs on September 10, 1998. To date the Senate Foreign Relations 
Committee (SFRC) has declined to invite Ambassador Romero for a 
confirmation hearing, at which he would be able to address issues of 
interest and concern to the Chairman and Members of the Committee.
    It is the practice of the Department of State not to offer for 
testimony before the SFRC those senior-level officials who are awaiting 
confirmation hearings by the same Committee.
    As of this writing, Ambassador Romero has executed the duties of 
the office of Assistant Secretary in an acting capacity for almost 18 
months. In the course of those duties and in an effort to better inform 
Congressional members in their legislative and oversight capacities, 
Ambassador Romero has appeared before Congressional committees to offer 
testimony on key events and USG activities in the Western Hemisphere. 
The Department would welcome and encourages the SFRC to extend to 
Ambassador Romero an invitation to participate in a confirmation 

                           ASSISTANCE TO CUBA

    Question. The Department has recently decided to post at the U.S. 
Interests Section in Havana a U.S. Coast Guard officer to share 
information with Cuban authorities on suspicious flights over Cuban 
territory, notwithstanding the fact that Cuba does not meet the 
requirements of 22 U.S.C. sec. 2291-4(a) (2) that, inter alia, ``the 
country has appropriate procedures in place to protect against innocent 
loss of life in the air and on the ground in connection with 
interdiction.'' Please provide the Committee a copy of the legal 
opinion on that decision. What Department officials took part in making 
that decision? Has each of these Department officials been informed of 
their potential liability under held criminally liable under 18 U.S.C. 
sec. 32(b) (2) and 18 U.S.C. sec. 2(a)? If not, why not? Who made the 
final decision to post this Coast Guard officer to share information 
with Cuban officials? Does not due diligence require that officials of 
the Department of State, before facilitating the exchange of 
information on suspicious flights over Cuban territory, first clarify 
with Cuban officials their government's policy with respect to the 
destruction of suspicious aircraft in its territory? Please explain the 
date and circumstance under which that clarification was sought or the 
decision not to seek such clarification.
    Answer. I can confirm that the U.S. Coast Guard has recently 
assigned one of its officers to work at the U.S. Interests Section in 
Havana on maritime issues and Coast Guard activities such as narcotics 
interdiction, safety at sea, search and rescue, and repatriations. The 
assignment was made with the approval of the State Department and in 
consultation with other U.S. Government agencies.
    In a letter to Chairman Helms dated December 17, 1999, Office of 
National Drug Control Policy Director McCaffrey addressed on behalf of 
the Administration the question of whether Cuba has a policy of 
shooting down civil aircraft suspected of involvement in drug 
trafficking, for which U.S. provided information would be relevant. As 
indicated in that letter, Cuban officials have never used U.S. provided 
aircraft position information to shoot down civil aircraft, and we have 
no indications that Cuban officials intend to use future position 
information to shoot down aircraft suspected of narcotics trafficking.
    We continue to monitor carefully our counterdrug information 
sharing programs with Cuba. Should we see any evidence of a Cuban 
policy or intent to shoot down civil aircraft suspected of narcotics 
trafficking, we will certainly take appropriate action under U.S. law.
    The discussion and information provided in Director McCaffrey's 
letter to Chairman Helms continues to represent the Administration's 
position on this subject.

                 CUBA: SECTION 109 OF THE LIBERTAD ACT

    Question. Do you believe that it was proper for Counselor to the 
Department Wendy Sherman to question former Cuban Affairs Coordinator 
Michael Rannenberger as to why so many ``Cuban-American groups'' had 
received support under Section 109 of the Libertad Act? What steps will 
you take to ensure that these alleged comments do not result in, as 
stated, in USAID regulations, ``any U.S. citizen or legal resident 
(being) . . . excluded from participation in, (being) . . . denied the 
benefits of, or (being) . . . otherwise excluded from discrimination on 
the basis of race, color, national origin, age, handicap, or sex?
    Answer. As part of her responsibilities as Counselor, Ambassador 
Sherman has generally reviewed the implementation of the program grants 
funded under Section 109 of the Libertad Act. I know Ambassador Sherman 
would characterize such alleged comments as inappropriate, unwarranted, 
and wrong and, therefore she would not and, in fact, did not make such 
comments. Ambassador Sherman and all my colleagues in the Department of 
State support the strict implementation of the program in conformity 
with USAID regulations.

                         SCHOOL OF THE AMERICAS

    Question. As the person who speaks for the Executive Branch on 
foreign policy matters, would you please explain the contribution made 
by the U.S. Army School of the Americas (USARSA) to U.S. interests in 
Latin America? How would you rebut the claims of USARSA critics that 
the school has trained persons responsible for human rights violations 
or coups? Do you personally believe the school should remain open?
    Answer. The U.S. Army's School of the Americas can play an 
important role in developing civil-military relations, consolidating 
democracy, promoting regional stability, and pressing for the highest 
standards in respect for human rights.
    Much of the controversy about the School stems from human rights 
abuses committed by some of its past graduates. Clearly, there have 
been abuses, which we condemn.
    But the School's curriculum has been revised to strengthen and 
accentuate training and instruction on civilian control of the 
military, the promotion of democracy, and respect for human rights, so 
that these abuses have less likelihood of occurring in the future.
    The School also encourages regional stability and cooperation 
through training in peacekeeping, demining, counterdrug operations, 
medical assistance, leadership development and military justice.
    These goals are in our national interest, and we should support the 
efforts of the School of the Americas to help achieve them.

                            COLOMBIA SUPPORT

    Question 1. The Administration has unveiled a plan of extraordinary 
support for Colombia. Despite our support for Colombia in the last 
several years--approaching a-half-a-billion dollars--U.S. estimates of 
cocaine and heroin production have more than doubled in that period. 
How will the $1.3 billion aid plan produce a marked decline in the 
production of cocaine and heroin from Colombia?
    Answer. While total production in Colombia has increased at an 
explosive rate (with a 20 percent increase last year alone), those 
increases have, as a general rule, occurred outside of the areas of our 
focused efforts. That is why this package is so important. It will 
allow for the expansion of counternarcotics eradication operations into 
areas that are beyond the reach of current efforts without sacrificing 
performance in current areas of operations. In addition to expanding 
current eradication efforts to new areas, the supplemental will improve 
Colombia's interdiction capabilities, allowing Colombia to overlay the 
coca fields with aerial and riverine interdiction of the movement of 
coca and precursor chemicals, and give new impetus to alternative 
development and other social programs to cement the eradication gains.
    Expectations are positive for the programs supported by the 
package, in part, because they are based on the lessons learned in our 
counternarcotics cooperation with the governments of Peru and Bolivia. 
Since 1995, despite the explosive growth in Colombian coca cultivation, 
regional cultivation has declined because of the successes in those two 
countries. Over that time period, Peru has reduced its coca crop by 66 
percent and Bolivia by 55 percent. Colombia hopes to match that 

    Question 2. What specific activities are Colombian guerrillas 
engaging in that make them complicit with the illegal drug trade? If 
they are, making a fortune trafficking drugs, why would anyone think 
they are committed to the peace process?
    Answer. Guerrilla and paramilitary leaders have publicly admitted 
to taxing the narcotics trade. Additionally, there is evidence that 
they are more actively involved: providing protection for crops, 
encouraging cultivation, etc. We would be happy to arrange a classified 
briefing to discuss details of this.
    A key objective of counternarcotics efforts in Colombia is to break 
the financial nexus between the guerrilla and paramilitary groups and 
the narcotics trade. Narco-dollars are the single biggest source of 
funds for these groups. The Government of Colombia believes that 
disruption of this income will deal a severe blow to the groups and 
encourage their participation in the peace process.

    Question 3. Why does the supplemental request for Colombia not 
include increased aid for Bolivia, Peru, Ecuador or Panama to which the 
illegal cocaine trade will spill as we help Colombia crack down on 
illegal activities in its territory? What additional programs or 
funding could be responsibly used in those neighboring states (above 
already what is programmed in the Administration's 2001 request)?
    Answer. That is an oft-stated misconception. In reality, there is 
$70 million dollars in the proposal specifically designated for those 
very countries. These funds are in addition to the regular FY 2000 and 
FY 2001 requests and will enhance interdiction in those countries to 
prevent spillover while simultaneously expanding development and social 
services to provide licit alternatives to the narcotics trade.


    Question 1. Do the decisions of President Fujimori to seek a third 
term and his maneuvers to fire constitutional court judges and 
electoral tribunal members and harass media opposed to his third term 
hurt or harm the institutionalization of democracy in Peru? Why has our 
Embassy in Peru failed to speak out clearly on these issues of human 
rights and democracy in Peru? Please provide examples of Ambassador 
Hamilton's statements on these subjects.
    Answer. We have repeatedly expressed our concern over the 
longstanding problem of weak democratic institutions in Peru. We have 
told the Government of Peru publicly and privately that an independent 
and transparent judiciary and freedom of speech are essential elements 
to any democratic government, and we have pointed out actions which 
threaten to undermine these fundamental rights. Our Country Report on 
Human Rights Practices concludes that the government's record on 
protection of political and civil rights was poor over the last year, 
and thoroughly documents the problems we believe must be corrected.
    Ambassador Hamilton has spoken out on these issues from his arrival 
in Lima last September. On the presentation of his credentials 
September 6, his remarks (quoted extensively in the press) stated that 
``foremost among the challenges'' in our bilateral relations is ``the 
deepening of Peru's democratic process . . . to find effective ways of 
encouraging the promotion of competitive and transparent electoral 
processes, respect for human rights, a vigorous free press and 
effective, independent legislative and judicial branches.'' When the 
U.S. House and Senate passed separate resolutions on democratic 
freedoms in Peru in October 1999 (HR 57 and SR 209), Ambassador 
Hamilton went to the Peruvian Congress, where he told the press that 
these were ``the considered opinions of friendly institutions'' and 
urged all Peruvians to study them carefully, emphasizing their 
bipartisan nature. In a nationwide radio interview January 8, the 
Ambassador highlighted our concern that the Peruvian elections be fair 
to all participants. Echoing recommendations from the pre-election 
observation mission from the National Democratic Institute and Carter 
Center, the Ambassador in a February 23 interview in ``Caretas'' 
magazine highlighted the problems of opposition access to the media and 
use of state resources for partisan ends. At a speech before the 
American Chamber of Commerce in Peru on February 24, the Ambassador 
reported that ``our bilateral relations have not yet reached their full 
potential'' because GOP restrictions on democracy and human rights 
``limit what could otherwise be a robust and healthy relationship.'' He 
urged the GOP to ``take concrete and rapid measures'' to implement the 
NDI/Carter Center recommendations in the days remaining before the 
April 9 elections.

    Question 2. Under what specific terms did the U.S. decide to 
provide funding to the OAS for an electoral observation mission in 
Peru? What steps will the Department take to ensure that the OAS 
electoral mission complies with these commitments? Will the Department 
insist that the OAS mission document the anti-democratic maneuvers by 
which President Fujimori is seeking a third term?
    Answer. We authorized $275,000 in support of an OAS electoral 
observation mission, which was invited by the Government of Peru to 
monitor the April 9 elections. The mission has fully complied with all 
the conditions of our funding. The team, led by former Foreign Minister 
Eduardo Stein of Guatemala, established a presence in Peru in March, 
well in advance of the April 9 elections. Under Stein's leadership, the 
Mission coordinated with independent domestic and international 
observers of the pre-election phase to build on and reinforce the work 
done by those groups. Stein issued numerous reports in advance of the 
elections, highlighting the deficiencies identified by other observers 
in the pre-election phase and recommending measures to improve the 
technical as well as substantive aspects of the electoral process.
    On election day, the OAS fielded a team of 90 observers throughout 
the country to monitor the vote and conduct a ``quick count'' sample of 
returns. Stein has led other observers in expressing concern over the 
discrepancies between official government results and the independent 
quick counts, and spoken out sharply on irregularities in the balloting 
and tabulation process. While reserving final judgment until complete, 
official results are available, Stein has warned that a first round 
victory for President Fujimori would not be an acceptable result, as it 
would contradict the independent findings.

                      VENEZUELA--FLOOD ASSISTANCE

    Question. In light of President Chavez' rejection of U.S. military 
personnel on Venezuelan territory, why do U.S. helicopters and 
personnel remain in Venezuela today? Does the Executive branch plan to 
expend any additional sums from the DOD ``drawdown'' in Venezuela in 
light of that government's rejection of U.S. military personnel? Please 
explain in detail.
    Answer. The Government of Venezuela welcomed USG flood relief 
assistance, including a sizable deployment of military personnel to 
help with search and rescue, airlift of relief supplies and other 
emergency tasks. Shortly thereafter, the Venezuelan Minister of Defense 
requested U.S. and Brazilian military engineering assistance for 
roadclearing. On January 13, the GOV indicated that Venezuelan 
engineers had achieved better than expected progress in opening the 
roads and notified us they no longer believe the deployment is needed. 
The USG accordingly canceled the projected deployment (Brazil cancelled 
its project as well). The very late decision by Venezuela that it no 
longer needed the assistance surprised us, but we respect it.
    Although an initial press report on Venezuelan President Chavez's 
press statements indicated a rejection of foreign military personnel on 
Venezuelan territory, Chavez and members of his government quickly 
clarified they were referring only to the road clearing projects 
planned by the USG and Brazil. They believed the situation had changed 
and that the Venezuelan military and private sector could handle the 
task. President Chavez and the Foreign Minister expressed again their 
great appreciation for the USG's contribution to the assistance effort, 
which has included assistance in the search and rescue efforts, airlift 
support, water purification units, hazardous material management 
technical assistance and a variety of relief supplies.
    On February 6-8, three USG military planes transported donated 
Swedish equipment and personnel to help control and suppress any future 
fire from the chemical spill at La Guaira port. The decision to proceed 
with this assistance was made after it was determined that no 
commercial or other donor sources of transport was available for this 
urgently needed equipment.
    The DOD operation was phased down as planned, and ended in mid-
March with an estimated total cost of $9.3 million.


    Question. Did the events of January in Ecuador effect a coup, in 
light of the fact that the democratically elected president was toppled 
from power and did not resign voluntarily? What decisions have been 
made regarding Ecuador's continued eligibility for U.S. foreign Aid? 
Why did the U.S. fail to invoke the ``Resolution 1080'' mechanism at 
the OAS in light of events in Ecuador?
    Answer. On January 22, 2000, Vice President Gustavo Noboa succeeded 
President Jamil Mahuad in a series of events which were strongly 
influenced by the Ecuadorian armed forces but which did not constitute 
a ``military coup'' in the sense of a planned and sustained military 
seizure of power. While a number of military officers took actions that 
were intended to achieve an extra-constitutional change of government, 
at no time did the military assume control of the government. 
Furthermore, constitutional government was reconfirmed by the Vice 
President's assumption of the presidential mantel when President Mahuad 
publicly proclaimed his inability to exercise his presidential duties. 
Accordingly, the U.S. Government did not suspend assistance to Ecuador 
and Ecuador remains eligible for assistance.
    The United States did not invoke the ``Resolution 1080'' mechanism 
at the January 21 emergency meeting of the OAS Permanent Council 
because President Mahuad was still in office at that time. Though the 
demonstrators and their ``junta'' were receiving extensive publicity 
and some declarations of support, they had no control of the 
government. The OAS passed a strong resolution condemning actions 
against President Mahuad and his government and instructed the 
Secretary General to report on the situation. This OAS declaration 
helped preserve constitutional rule by warning plotters that an 
illegitimate government in Ecuador would be unacceptable to the 
hemisphere. The U.S. and other OAS members were preparing to take 
action under ``Resolution 1080'' if the situation warranted.


    Question 1. Within your Department, what is the status of AFSA's 
    Answer. AFSA's request is currently being reviewed by the 

    Question 2. Do you believe you have legal authority to grant each 
of AFSA's 13 separate proposals? If not, which proposals are beyond 
your authority?
    Answer. We do not believe that we have the legal authority to grant 
each of AFSA's 13 separate proposals. We are not aware of any current 
authority that would permit us to accept the following proposals: 
access to post medical facilities; access to government contract 
airfares; and the employment preferences granted to American family 

    Question 3. Do you intend to act on AFSA's request unilaterally? If 
so, what do you intend to do?
    Answer. The Department does not intend to act unilaterally to 
implement changes that are beyond its statutory authority. The 
remainder of AFSA's requests are under review.

    Question 4. Within your Department, what is the status of the 
organization of Gays and Lesbians in Foreign Affairs Agencies (GLIFAA)? 
Does the organization receive any public funds from your Department or 
from other governmental organizations? Besides the meeting of January 
22, 1999 with Director General Gnehm, have you or any other official of 
the Department met with GLIFAA to discuss its agenda? In the meetings 
with GLIFAA, what has the Department agreed to do? Have any of GLIFAA's 
proposals been rejected?
    Answer. GLIFAA has no official or formal relationship with the 
Department and receives no public funds from the Department or other 
government agencies. It is a recognized organization for purposes of 
use of public space and Department bulletin boards. The Department has 
generally granted requests for meetings to specialized employee groups 
such as GLIFAA, HECFAA (Hispanic Employees Council of the Foreign 
Affairs Agencies) and BIG (Blacks in Government). At such meetings 
participants share their views on issues of interest to the group. 
(AFSA is the exclusive representative of covered Foreign Service 
employees and as such is the organization with which the Department 
negotiates conditions of employment).
    I have not met with GLIFAA. Other officials of the Department have 
met with GLIFAA. All of these meetings have been informational in 
nature. The Department has not formally accepted or rejected any of 
GLIFAA's proposals.

    Question 5. Within your Department, what is the status of GLIFAA's 
    Answer. GLIFAA's request is not under formal consideration from the 
Department. The requests submitted by AFSA are being considered since 
AFSA is the official bargaining unit for Foreign Service employees in 
the Department of State. The Department's willingness to meet with AFSA 
on their proposals is in the context of our normal labor-management 
relationship with them.

    Question 6. Do you believe you have legal authority to grant each 
of GLIFAA's separate proposals? If not, which proposals are beyond your 
    Answer. Since we have no official bargaining relationship with 
GLIFAA, we are not formally considering any of their proposals.

    Question 7. Do you intend to act on GLIFAA's request unilaterally? 
If so, what do you intend to do?
    Answer. Since we have no official bargaining relationship with 
GLIFAA, we are not formally considering any of their proposals.

    Question 8. In June 1999, Moscow requested the Department's 
guidance with respect to an employee and the employee's partner (Moscow 
014507). In its response (State 177246 11), the Department said:

          Currently, no published Department of State guidance exists 
        regarding support for unmarried partners of the same or 
        opposite sex. While we understand the difficulties the current 
        situation presents to unmarried partners residing at our 
        overseas missions, the Department has not authorized official 
        action on behalf of partners who do not have a legally 
        recognized relationship with a U.S. Foreign Service employee. . 
        . .

    Does this statement still represent the policy of the Department of 
State? If so, does the Department plan to make any change in that 
policy? If the quote stated is not Department policy, please provide 
the Committee with a copy of the Department's current policy and tell 
us when the new policy took effect and under what circumstances.
    Answer. This statement still represents the policy of the 
Department of State. Any future change to this policy would be 
consistent with our statutory and regulatory authority.

    Question 9. AFSA stated that, ``The Board was concerned with what 
appeared to be [as stated in State 177246] a change in the previous 
practice of allowing chiefs of mission flexibility in dealing with this 
issue and of advancing `family friendly' policies in general'' (State 
211732-2). Do you agree with AFSA that the policy stated in State 
177246 was new? If so, please explain the change; if not, please 
summarize the history, of the policy.
    Answer. We do not agree with AFSA that the policy outlined in State 
177246 is new. Chiefs of Mission have always been given wide latitude 
(while adhering to all legal and regulatory constraints) to establish 
personnel practices at their missions, in response to circumstances in 
each country.

    Question 10. If you believe the policy stated in State 177246 was, 
indeed, new (see above), do you believe that the change was mandated by 
the Defense of Marriage Act, I U.S.C. Sec. 7 (Supp. 111 1997)? (The 
pertinent part of the Defense of Marriage Act was quoted in paragraph 2 
of State 177246:

          In determining the meaning of any Act of Congress or of any 
        ruling, regulation, or interpretation of the various 
        administrative bureaus and agencies of the United States, the 
        word ``marriage'' means only a legal union between one man and 
        one woman as husband and wife, and the word ``spouse'' refers 
        only to a person of the opposite sex who is a husband or a 

    Answer. We do not agree with AFSA that the policy outlined in State 
177246 is new.

    Question 11. In summarizing the effect of the Defense of Marriage 
Act, State 177246 paragraph 2 said, ``The Defense of Marriage Act of 
1996 generally constrains the Department from interpreting the word 
`marriage' or `spouse' to include same-sex partners.'' What does the 
Department mean by the term ``generally constrains''? Under what 
circumstances might the Department be freed from the express and 
unambiguous terms of the Defense of Marriage Act? Is it the position of 
the Department of State that the Defense of Marriage Act ``generally 
constrains'' a redefinition of ``marriage'' and ``spouse'' or that the 
Act flatly excludes such redefinitions?
    Answer. The term ``generally constrains'' in paragraph 2 of State 
177246 means that the Department is currently constrained by the 
Defense of Marriage Act from interpreting ``marriage'' or ``spouse'' to 
include same-sex partners. The Department would be freed from the terms 
of the Defense of Marriage Act only if the Act were altered or amended 
by Congress. It is the position of the Department that the Defense of 
Marriage Act flatly excludes any definition of ``marriage'' and 

    Question 12. In its memorandum of September 23, 1999, GLIFAA 
``propose[d] that the Department, in coordination with the civilian 
agencies with employees covered by the Foreign Affairs Manual, expand 
the definition of Eligible Family Member (EFM) to include the partners 
of gay and lesbian employees'' (page 1). By what authority do you 
believe you have the ability to redefine the term ``family'' or 
``Eligible Family Member''? Section 311 of the Foreign Service Act, 22 
U.S.C. Sec. 395 1 (1994), provides a hiring preference for family 
members of government employees assigned abroad. Do you believe you 
have lawful authority to define ``family members'' for purposes of 
section 311 to include persons who are related neither by blood, nor 
marriage, nor adoption? Do you have authority to extend the hiring 
preference for ``family members'' to persons who are dear friends or 
sexual partners of the government employee?
    Answer. In light of Department regulations and the Defense of 
Marriage Act, the Department is not intending to extend hiring 
preferences. With respect to Section 311 of the Foreign Service Act, 
pursuant to the Department's regulations and the Defense of Marriage 
Act, the Department only has the legal authority to extend hiring 
preferences to persons who are either a U.S. citizen spouse or 

    Question 13. Article 37.1 of the Vienna Convention on Diplomatic 
Relations (entered into force with respect to the United States on Dec. 
13, 1972) says, ``The members of the family of a diplomatic agent 
forming part of his household shall . . . enjoy the privileges and 
immunities specified in Articles 29 to 36.'' In turn, the provisions of 
Article 37 have found their way into the United States Code, e.g., 22 
U.S.C. Sec. 254a(2) & Sec. 4304a(c)(2) (1994). What are the 
international diplomatic implications of redefining ``family''?
    Answer. Sending States generally defer to the discretion of the 
Receiving State in defining ``members of the family forming part of the 
household'' for the purposes of granting family member status, and 
attendant privileges and immunities, under the Vienna Convention on 
Diplomatic Relations.

    Question 14. GLIFAA's memorandum of September 23, 1999 says the 

          President Clinton's Executive Order 13087 of May 1998 
        mandates non-discrimination on the basis of sexual orientation 
        in Federal agencies. This provision has been incorporated into 
        the Foreign Affairs Manual as 3 FAM 1511. Statements by 
        Secretary Christopher (1994) and Secretary Albright (1997) 
        similarly prohibit discrimination on the basis of sexual 
        orientation in the Department. Nonetheless, the Department 
        continues to deny the partners of gay and lesbian employees the 
        benefits, privileges and immunities accorded to the spouse of 
        heterosexual employees.

    Does the Department believe that marriage (together with its 
accompanying benefits) constitutes invidious discrimination? Does the 
Department believe that Executive Order 13087 requires the Federal 
Government to eliminate all preferences for, or benefits to, married 
persons? Does the Department believe that E.O. 13087 requires a 
redefinition of ``family''? As noted above, 22 U.S.C. Sec. 3951 (1994) 
provides a hiring preference for ``family members of government 
employees assigned abroad.'' Is this preference ``discrimination on the 
basis of sexual orientation'' which is unlawful under E.O. 13087?
    Does the Department believe that marriage (together with its 
accompanying benefits) constitutes invidious discrimination? No
    Does the Department believe that Executive Order 13087 requires the 
Federal Government to eliminate all preferences for, or benefits to, 
married persons? No
    Does the Department believe that E.O. 13087 requires a redefinition 
of ``family''? No
    As noted above, 22 U.S.C. Sec. 3951 (1994) provides a hiring 
preference for ``family members of government employees assigned 
abroad.'' Is this preference ``discrimination on the basis of sexual 
orientation'' which is unlawful under E.O. 13087? No

    Question 15. AFSA says that its proposals can be implemented ``at 
little or no budgetary cost'' (State 211732-19). What is the 
Department's estimate of the cost of implementing AFSA's proposals?
    Answer. The Department is not contemplating incurring any budgetary 
costs relating to AFSA's requests.

    Question 16. It has been said that AFSA's proposals will make a 
difference only at overseas posts. This cannot be true inasmuch as the 
proposals themselves speak of ``appropriate training opportunities at 
the National Foreign Affairs Training Center'' in Virginia. If adopted, 
what effect would AFSA's proposals have within the United States?
    Answer. Consistent with current law, regulations and practice, the 
Department is not extending training opportunities at the National 
Foreign Affairs Training Center.

    Question 17. What is the Department's estimate of the cost of 
implementing all of GLIFAA's proposals?
    Answer. The Department is not considering the GLIFAA proposals, and 
therefore no estimate of costs has been made.

    Question 18. Under GLIFAA's proposal, benefits would be available 
to same-sex partners when the employee and his/her partner executed an 
affidavit ``testifying they are of legal age, are not blood relatives, 
are not married to anyone else, are mentally competent, share a 
domicile and agree to notify the Department if they terminate their 
relationship'' (Memorandum of Sept. 23, 1999, pp. 4-5, 
``Eligibility''). Under AFSA's proposal, benefits would be available 
``only in cases where the employee has certified that he/she and his & 
her domestic partner have been each others sole domestic partner for at 
least six months and intend to remain so indefinitely, are at least 18 
years of age, unmarried, and mentally competent to consent to contract, 
and are jointly responsible for each other's common welfare and 
financial obligations'' (State 211732-15). GLIFAA's definition says 
nothing about ``sexual orientation.'' Would the Department accept 
GLIFAA's definition or AFSA's definition or is there another definition 
that the Department prefers? Does the Department of State have any 
expertise in defining a relationship which is not marriage but which 
involves two persons sharing living quarters who want to be treated in 
some aspects as if they were married?
    Answer. The Department of State has no expertise in defining a 
relationship which is not a marriage, but which involves two persons 
sharing living quarters, who want to be treated in some aspects as if 
they were married. The Department has not accepted either the GLIFAA or 
the AFSA definitions for purposes of establishing a partner's, 
eligibility for the privileges accorded to legal spouses of our 
employees. There is no other definition the Department prefers.

    Question. Effective security for our diplomatic missions and 
personnel abroad is essential. Did any personnel security issues 
develop for State Department officers as a result of the arrest of Mir 
Aimal Kansi in June 1997? If so, how were they resolved? Do any issues 
remain unresolved? What lessons in the Kansi arrest might apply now in 
the search for Osama bin Ladin?
    Answer. I take personnel security issues for all State Department 
officers very seriously. Effective security for all or missions and 
people is one of our highest priorities. We took the appropriate 
security measures deemed necessary to address the general security 
issues surrounding the case of Mir Aimal Kansi in June 1997.
    Not all issues from this case have been resolved. Because the 
details of this case pertain to intelligence matters and could still 
affect the security of official U.S. personnel, additional information 
should be provided by the agencies directly involved in a classified 
    The success of the Kansi rendition was due to intensive and 
effective coordination by U.S. government agencies, and concerted 
diplomatic efforts to gain cooperation against terrorism. These are 
among the key elements in our approach the we hope will bring Usama bin 
Ladin to justice.


    Question 1. I am concerned that the standards for setting controls 
on commodities are established at a high and unreachable level. Section 
201, for instance, restricts end user and end use controls to only 
those commodities which ``could materially contribute'' to WMD. Do you 
agree with this standard (e.g., only those dual use commodities that 
are considered a ``material'' risk should be controlled)? How would 
such a standard affect technologies and know-how?
    Answer. The Administration has been working with Senate staff on a 
number of proposed amendments to the text of S. 1712, as it was 
reported out of the Senate Banking Committee. Some of these amendments 
would affect the standards for imposing sanctions. The Administration 
has supported deletion of ``materially'' in section 201(c) and will 
continue to work with Senate staff on this and other issues.

    Question 2. Section 212 creates exemptions from export control 
unless the President decides that the lack of controls ``would prove 
detrimental to the national security'' and there is a ``high 
probability'' that the U.S. can achieve multilateral controls on the 
item. It appears to me that ``would'' requires a specificity of 
information indicating definite knowledge that a commodity will be 
misused. Do you agree that the appropriate standard should be whether a 
commodity, if uncontrolled, could harm national security to the 
agreement of other nations to control the commodity? Does this approach 
make sense in light of how some foreign nations refuse to constrain 
WMD-related exports to Libya, Iraq, and Iran, or the controversy over 
proposed exports to Saddam Hussein under the oil for food program?
    Answer. The Administration still has concerns about this provision 
(Sec. 212). We have seen proposed amendments addressing some of our 
concerns. We will continue to work with Congress to ensure that the 
bill provides adequate protections and set-asides to address our 
national security concerns.

    Question 3. Section 213, relating to foreign availability, again 
sets its criteria at a very high level. Moreover, even if a commodity 
is not exempted by 213, it still can be rapidly decontrolled pursuant 
to a non-stop 6 month review period. What are your views on this 
    Answer. The Administration has had questions about the mass market 
exemption (Sec. 213) similar to those we have had with the foreign 
availability exemption (Sec. 212). The mass market set-aside is less 
onerous than the foreign availability set-aside, but still could be 
improved. We have been evaluating proposed amendments to this section 
that would address our remaining concerns.

    Question 4. Section 301 would seem to impose unreasonable standards 
for policy controls. It is not enough that a commodity might pose a 
threat to the U.S. It must pose a serious threat. And the foreign 
policy controls proposed must be 100 percent guaranteed to be 
effective, or they cannot be implemented. 303 is likewise configured. 
Do you, Madame Secretary, accept these guidelines for the conduct of 
U.S. foreign policy, or do you continue to believe--as you have often 
said--that the ``perfect should not become the enemy of the good''? If 
so, how would you restructure Section 301?
    Answer. The Administration believes that, in general, the foreign 
policy controls in this bill provide sufficiently broad authority to 
successfully implement our export control policies. The bill sets a 
standard that the controls are ``likely to achieve'' the relevant 
foreign policy objectives, which is acceptable. The standard of a 
``serious'' threat only applies to contract sanctity. The 
Administration's main objection to Title III is the exception for 
components as stated in section 301(c). This concern has been 
transmitted to Senate staff, and we have seen amendments addressing the 
issue. We will continue to work with Senate staff on the issue.

    Question 5. Many sections of the bill seek to put commercial 
interests at the same level, or an even higher level (in the case of 
proposed review boards), as national security. Section 202, for 
example, requires that ``national security'' be balanced against 
``economic costs.'' We all agree that commercial interests are 
important, and that the strength of the U.S. economy is a core national 
security concern. But do you agree with S. 1712's effort to put 
commercial interests on the same footing as the nation's security 
    Answer. The Administration agrees that commercial concerns must be 
balanced with national security. However, national security can not be 
compromised in the name of economic gain. We have worked with Senate 
staff to ensure that no provision of this bill will force any President 
or Administration to make decisions that jeopardize our national 

    Question 6. Numerous sections of the bill provide authority to the 
Secretary of Commerce with no offsetting authority to those agencies 
that are responsible for safeguarding national security. Section 211 is 
a good example. The determinations regarding ``foreign availability'' 
and ``mass market status''--two categories designed to create loopholes 
in the control lists for commodities--fail to mention specific agencies 
beyond DOD only provide for ``consultation'' (e.g., Commerce can ignore 
the views of other Departments). Do you agree that the State Department 
should be involved, and that concurrence be required?
    Answer. The State Department has an essential role to play in the 
national security, foreign policy, and foreign commerce matters 
addressed in this legislation. We in the Administration believe that 
questions of consultation within the Executive Branch are best left to 
the President's discretion and direction. However, if legislation 
specifies roles for individual agencies in particular matters, it is 
important that State's key role not be overlooked.

    Question 7. S. 1712 explicitly does not include, as a reason for 
controlling an item, the fact that the U.S. has numerous multilateral 
commitments (such as the Australia Group and the MTCR) and bilateral 
commitments that require export controls. Section 212, for example, 
does not take this into account. Do you agree that the bill should be 
amended to add these international commitments as a legitimate basis 
for controlling an item? Do you also agree that the bill should take 
into account the fact that sometimes the U.S. must ``go it alone'' to 
make a point, to achieve an objective, or to bring other nations along?
    Answer. This remains a matter of concern for the Administration. We 
have discussed with Senate staff our multilateral nonproliferation and 
export control commitments in reference to sections 212 and 213. We 
have been evaluating proposed amendments to these sections that would 
address our concerns. We agree that it is essential to protect the 
vitality of the multilateral export control regimes. It is also 
important that the Administration be able to set unilateral export 
control policies in some instances to achieve important national 
security and foreign policy objectives. This bill provides authority to 
impose controls where necessary to achieve our objectives.

    Question 8. Numerous other Departments and agencies have provided 
comments and specific amendments to S. 1712 via their oversight 
committees. The Foreign Relations Committee, however, has not heard any 
formal views from the Department of State. Nor has it received any 
suggestions or amendments to improve the bill or resolve matters of 
concern, despite numerous entreaties by Committee staff. Madame 
Secretary, would you please direct the Department to prepare formal, 
views and suggestions for the Committee's use?
    Answer. We appreciate the opportunity to address your questions on 
S. 1712. This bill would form the basis of our commercial export 
control system and be a crucial component of our continued efforts to 
safeguard national security. The Administration has been working 
closely with staff from the Senate Banking Committee to address the 
concerns of all affected agencies. In response, the Committee has made 
important changes. However, some important concerns remain unresolved. 
The State Department will continue to discuss with you our views 
concerning this important legislation.


    Question. What role did the Department of State play in the 
recently concluded MOU with the United Kingdom concerning defense 
cooperation principles?
    Answer. The Department of Defense initiated the dialogue with the 
British MOU, which led to the recent signing of the Declaration of 
Principles. The Department of State played no role in the exchanges, 
which resulted in the conclusion of this non-binding mutual statement 
of aspirations. It imposes no legal obligations on either government, 
although it commits to entering binding agreements in the near future. 
It provides DOD's vision for trans-Atlantic defense industry 
cooperation, and as such, contains some basis for future reflection.
    The Declaration recognizes however that it does not affect the 
prerogatives of other agencies, particularly State, which has 
jurisdiction over certain matters addressed therein.
    In this regard, the Departments of State and Defense are actively 
engaged in developing enhanced trade initiatives to benefit NATO 
countries and certain other allies. The Department of State remains 
committed to preserving a strong and comprehensive defense trade 
controls system that supports the foreign policy and national security 
interests of the United States. We seek to establish an Administration 
position on commercial defense industry trade that will facilitate 
transnational cooperation, in accordance with U.S. law and regulation, 
while preserving the strength of our current controls.

    Question. What has been the Department's role in the discussions 
with other countries (Australia, Netherlands, France, and Germany) 
referred to by DOD spokesmen in their February 8, 2000 press briefing?
    Answer. The Department of State has not been party to the 
discussions referred to by the DOD spokesman on February 8, 2000. We 
are working within the interagency arena to ensure that a U.S. 
Government position on defense industry cooperation, which encompasses 
trade controls and security procedures, is established before 
consultations with foreign governments are initiated.

    Question. With respect to the so-called ``Canadian exemption,'' 
Section 38 of the Arms Export Control Act was crafted at a time when it 
was not the case (or not understood) that terrorist organizations or 
front companies might utilize license-free exemptions to acquire 
restricted commodities. Under these circumstances blanket exemptions--
even for Canada--may be seen as dangerous loopholes in U.S. 
nonproliferation efforts. One would hardly wish to see nations such as 
Russia, or even Israel or Turkey, engage in parallel behavior with 
their neighbors. How is U.S. policy on exemptions under Section 38 
evolving? Are you prepared to allow, Madame Secretary, the exemption 
under Section 38 to be expanded to encompass license-free trade to 
nations such as Australia? If so, given that friendly countries, and 
even NATO allies, have been caught transferring U.S. weaponry to rogue 
regimes, what would the arms control and nonproliferation consequences 
be from such a decision? How would U.S. efforts to strengthen the 
export control policies of other nations be affected?
    Answer. The Department of State has subjected the Canada ITAR 
exemption to extensive scrutiny because of, among other things, 
enforcement and diversion concerns. As you know, due to those concerns, 
the Department amended the exemption in April 1999, making it much more 
restrictive and subject to further review.
    Since April, the Department has been engaged in a constructive 
dialogue with Canada concerning the appropriate scope of the exemption, 
and possible changes to Canada's export controls. We expect to conclude 
negotiations with the Canadians in due, course, at which time I believe 
we will have developed an exemption that serves both the unique needs 
of our only contiguous NATO ally, with whom our defense industries 
enjoy a unmatched degree of integration, and our commitment to foreign 
policy and non-proliferation objectives.

    Question. Will you assure the Committee that the Department not 
liberalize the International Traffic in Arms Regulations (ITAR) during 
the Presidential election campaign or before the current Administration 
leaves office?
    Answer. The Department of State remains committed to preserving a 
strong and comprehensive defense trade controls system that supports 
the foreign policy and national security interests of the United 
States. In accordance with State's primary legal and policy authorities 
and responsibilities for all defense military assistance, as well as 
the President's Conventional Arms Transfer Policy, we will facilitate 
transnational defense cooperation in support of our national security 
and foreign policy objectives.
    As is our normal practice, we would plan to consult with the 
relevant committees prior to any ITAR changes.

                            TRIPS AGREEMENT

    Question. As a strong advocate for intellectual property protection 
worldwide, you are aware that the World Trade Organization Agreement on 
Trade Aspects of Intellectual Property entered into force for major 
developing countries in January 1, 2000. The TRIPS Agreement serves as 
an important standard for ensuring that countries recognize and provide 
full protection for intellectual property rights for innovation from 
pharmaceuticals to software to music to books.
    It is my understanding that several countries, including Argentina, 
Brazil and India have failed to meet their TRIPS Agreement deadline.
    In light of this fact and given the importance of TRIPS 
implementation to American companies, do you support use of the WTO 
dispute settlement process against countries that have failed to meet 
their TRIPS obligations?
    What steps would the State Department consider to complement 
enforcement of TRIPS obligations through the WTO dispute settlement 
process to ensure that TRIPS Agreement will be implemented in these 
    Answer. Of course we support the rapid implementation by developing 
countries of their responsibilities under the TRIPS Agreement. We will 
encourage them by any and all appropriate and effective means.
    In some cases this will clearly mean that we will consider action 
in the WTO under the Dispute Settlement Understanding (DSU), as we have 
already done in past intellectual property disputes (e.g. our action 
against India regarding implementation of their ``mailbox'' 
    It is crucial that TRIPS implementation proceed smoothly. We are 
meeting our own commitments, and in case of outright refusal by other 
governments to honor their commitments we will not hesitate to use the 
DSU to enforce compliance.
    At the same time, we must recognize that agreements such as TRIPS 
are complex. Some countries have genuine difficulty implementing them 
despite making sincere efforts to do so. In such cases, our preferred 
approach is to work through the problems with them on a constructive 
and pragmatic basis. That is the best way to ensure that we address the 
fundamental concerns countries have and preserve the integrity and the 
balance of rights and obligations all of us have taken up.

    Question. Several private relief organizations and some individual 
constituents have recently contacted my office to express their 
concerns about the current humanitarian situation in Iraq. The United 
Nations ``oil for food'' program, they suggest, does not provide the 
Iraqi population, particularly the most vulnerable including children, 
with sufficient food and medicine. Death and starvation are the result. 
I recognize the continuing need to maintain international sanctions on 
Iraq until it has fully complied with all relevant United Nations 
resolution. However, two questions come to mind.
    First, are you aware of the alleged shortcomings of the ``oil for 
food'' program and do you see any possibility to ensure the timely 
delivery of humanitarian goods to the Iraq people?
    Answer. The humanitarian impact of oil-for-food has been dramatic 
and measurable. Conditions are improving all the time.

   Last year, oil revenues reached $11 billion. This year, 
        they're projected at $20 billion.
   The UN reports that average per capita caloric intake has 
        increased from around 1,275 to over 2,000 calories per day.
   Food imports are now just about at pre-war levels.

    Nonetheless, we are always looking at ways to improve the program 
to better meet the needs of the Iraqi people. UNSCR 1284, adopted in 
December, permits Iraq to export as much oil as required to meet 
humanitarian needs, and calls for a number of procedural reforms which 
should streamline the program.
    The resolution also calls on Iraq to ensure timely and equitable 
distribution of goods and to address the needs of Iraq's most 
vulnerable populations--including children and the elderly.

    Question. Second, how do you evaluate proposals to put the United 
Nations in charge of the distribution of food and medicine in southern 
Iraq, similar to the situation in the Kurdish areas in the North?
    Answer. The oil-for-food program would certainly be more effective 
if the UN could administer it in the south and center as it does in the 
    Last year a UNICEF study found that child mortality in the north 
was lower than in the early 1980's, long before sanctions were imposed. 
In contrast, child mortality in the remainder of the country--where the 
UN must manage oil-for-food through the Iraqi government--is now more 
than double the level, recorded in the early 80's.
    However, the UN could not take such a step without the concurrence 
of the Iraqi Government. Therefore, we will continue to try to find 
ways to improve the program despite the regime's obstruction.

    Question. Could you tell the committee the current status of the 
initiative identified with Christine Gosden, the British geneticist who 
has fought to gain funding, a U.S. commitment and access to the town of 
Halabja, Iraq to conduct research and dispense medical advice and 
treatment to victims and the environment stemming from the chemical 
attack by Saddam during the Iran-Iraq war? Can you provide me with the 
level of funding provided, the terms of the agreement, other country 
participation, and other relevant information on this important 
    Answer. The Washington Kurdish Institute, the organization with 
which Dr. Gosden has implemented the project has established the 
Halabja Post-Graduate Medical Institute (HMI). The U.S. provided a 
grant of $235,000 to conduct a medical survey of the population in 
northern Iraq exposed to chemical and biological weapons attacks. The 
survey will establish a base line of the long-term effects of these 
agents on the population and environment. The grant also provided funds 
for an international advocacy campaign to publicize the human rights 
abuses by the regime and to generate additional support for the 
treatment and research project.
    WKI and Dr. Gosden have successfully completed the first phase of 
the project. Four HMI centers were established in Halabja, 
Suleymaniyah/Kirkuk, Dohuk and Erbil. Ten percent of the population of 
northern Iraq has been surveyed. With funds provided for advocacy work, 
the grantee has been able to garner financial and other support from 
several other countries, including the Swiss, British and Italian 
governments; WKI is currently in consultations with the Kuwaiti 
government. Additionally, they have received significant contributions 
from non-governmental organizations based in northern Iraq.
    We are pleased with the results of the initial grant and are 
working with WKI now to provide additional funding for the next phase 
of this project.

    Question. Madam Secretary, corn and soybean farmers in my state are 
in the process of making final planting decisions for the Spring's 
planting. What assurances can you give corn and soybean growers in my 
state that the U.S. Government is going to successfully resolve the 
biotech trade dispute with the EU prior to this Fall's harvest?
    Answer. The U.S. Government can give no assurances that the market 
access problem with the EU will be resolved this year. We have had a 
number, of discussions with the EU over the past year to try to resolve 
this problem. President Clinton and EC President Prodi discussed the 
problems when Prodi visited Washington on October 27, 1999. The issue 
was also discussed at the December 19 U.S.-EU Summit, and will be on 
the agenda again for the next U.S.-EU Summit.
    Following these discussions, a high-level group, led by Under 
Secretary Larson on the U.S. side, was formed to intensify our efforts 
to find solutions. The State Department has made extensive outreach 
efforts to U.S. farmers, and other interested parties, on biotech 
issues. We will continue to work diligently to resolve the market 
access problems with the EU and help disseminate information on biotech 

    Question. As you know, the EU has not approved any agriculture 
biotech products since the Spring of 1998. This has led to U.S. corn 
farmers losing $200 million for each of the last two years due to the 
EU's unwillingness to address approvals of new agriculture biotech 
products. More recently, the EU has threatened to limit imports of 
other U.S. corn-based products, such as corn gluten feed, which totals 
$800 million a year, because they may contain GMO varieties unapproved 
in Europe. Given the significance of this issue for U.S. agriculture, 
does the Administration have a short-term game plan to resolve this 
    Answer. Agricultural use of biotechnology is extremely politicized 
in Europe. Consumer and environmental groups have effectively joined 
together to raise public concerns about food safety and environmental 
aspects of the technology. The EU also brings into the debate vague 
socioeconomic issues associated with agricultural production.
    Some Member states have indicated that they are waiting for a 
revised environmental regulatory system to be put into place in 2001 
before granting new approvals. The current approval system is therefore 
not sanctioning. The new regime could include a requirement for each 
biotech trait to be tracked through the commercial stream, ``from farm 
to fork,'' which would be extremely onerous.
    Given this highly-politicized environment, our short-term ``game 
plan'' consists of finding areas of mutual agreement with EU officials 
in order to allay consumer anti-biotech fears. We will look for 
opportunities to leverage in already approved varieties. Last November, 
pursuant to an agreement between President Clinton and European 
Commission President Prodi, we initiated a High-Level Dialogue with 
members of the European Commission to attempt to break the market 
access impasse. This Dialogue includes senior-level government-to-
government discussions, as well as the establishment of a consultative 
forum, composed of eminent scientists, industry leaders, and members of 
civil society to address the major public concerns. Our differences are 
sufficiently deep that even with these mechanisms progress is likely to 
be slow.

    Question. Who in the Administration is taking the lead on 
developing and implementing the plan to resolve this critically 
important trade issue with the EU?
    Answer. The State Department has taken the lead to coordinate the 
High-Level Dialogue on a bilateral basis with the EU. Additionally, the 
U.S. Trade Representative's Office has the lead to engage the EU in the 
Transatlantic Economic Partnership (TEP) Biotechnology Working Group, 
established in 1998 to develop common data elements in our respective 
application process for new biotech seeds. USDA has the lead on our on-
going multilateral work in the area of food safety, at the Codex 
Alimentarius Committees on General Principles and Food Labeling, and at 
the OECD.
    The State Department has also taken the lead on coordinating an 
aggressive public diplomacy campaign, which we believe is the key to 
debunking the misinformation that has circulated. We are undertaking 
outreach to foreign press and interest groups, and have our Embassies 
doing yeoman's work to help raise awareness on this issue around the 
world. We are using websites and interactive video-conferencing to 
deliver our message is that we seek a balanced approach to fair market 
access while addressing consumer and environmental concerns. Embassy 
Hague sponsored a conference with top scientists and industry leaders, 
and our International Visitors programs have brought skeptical but key 
European constituencies to the U.S. to learn more about biotechnology.
    We are encouraging an awareness of the current and potential 
benefits of this promising technology, stressing that we seek to ensure 
that the concrete benefits of biotechnology agriculture are shared 
worldwide. We believe many consumers are not aware of these benefits. 
European consumers have been enjoying domestic beer, cheeses and dairy 
products produced through biotech processes for some time. Three of the 
five biotech seed companies in the world are European, and have 
developed new strains of corn, rapeseed, potatoes, and sugar beets. The 
EU has created a $14 billion venture capital fund for new biotech R&D.
    Consumers are also largely unaware of the environmental benefits of 
biotechnology. In addition to the new plant varieties that are 
resistant to pests and to disease, reducing the amounts of chemicals 
needed, some farmers are reporting increased yields and a reduction in 
the need to farm new or marginal land which is too environmentally 
fragile to cultivate. Cotton crops enhanced by biotech production 
processes reportedly reduce the need for chemical fertilizers by one-
third. We hope to meet the challenges of food security by requiring 
less land and water and far fewer chemicals to achieve increased food 
supplies for the growing global population.
    Additionally, biotech plants are being developed to replace 
petroleum as a source of plastics. Only further research will reveal 
the many positive applications of biotechnology to agriculture, 
industry, and medicine. And there are already enhanced health-related 
benefits for consumers from ``nutriceuticals.'' Through biotechnology, 
vitamin A can be added to rice to combat blindness created by a vitamin 
A deficiency, which afflicts millions of children in Asia. A malaria 
vaccine embedded in bananas is also being tested, which could reduce 
time and cost of refrigerating and distributing life-saving medicines.


  Responses of Secretary of State Madeleine K. Albright to Additional 
              Questions Submitted by Senator Richard Lugar

                         export license report
    Question. Part of the study involved providing data on the time it 
took in 1999 to process the major categories of license, staffed and 
not staffed to other agencies. While I recognize the amendment 
suggested six months as a reasonable time frame to look at all the 
issues, I would appreciate an effort to provide a printout of that 
statistical data, which I understand is readily available. This will 
help me and other members put the concerns expressed by our 
constituents and other interested parties into some perspective. Would 
it therefore be possible to have such a printout in the next several 
    Answer. Unfortunately, we do not maintain the complete data that 
you seek in a readily available format, but I believe the chart below 
will be of some assistance while we work to produce the report required 
by legislation and help address some of your constituents' concerns 
about license processing times.

                                       Not Staffed          Staffed
    At Present Staff Level \1\         Interagency        Interagency
FY 1996...........................  18 days            74 days
FY 1997...........................  14 days            69 days
FY 1998...........................  21 days            \2\ 86 days
FY 1999...........................  24 days            98 days
        Projected with Full Use of $2 Million for Additional FTE
(By mid 2000, 9-12 month phase)...  10-12 days         60-65 days
\1\ Start to finish in calendar days (i.e., date received to date
\2\ Incorporates increase in review period at DOD from 41 to 54 days (FY
  1997 vs. FY 1998).
On average, approximately 25-30 percent of the annual volume of 45,000
  munitions authorization requests are staffed inter-agency, chiefly to
  the Defense Department (DTRA, formerly DTSA). The average times
  reflected include all Congressional notifications and other
  significant cases (e.g., those where missile technology assurances are
  required from the recipient government).
Seventy to 75 percent are decided by DTC without referral to other
  agencies or other State offices.
In FY 1999, the average processing times for license applications not
  staffed to other agencies was 24 calendar days and 98 calendar days
  for cases staffed to other agencies.
14,686 cases were staffed in FY 1999 out of 45,000 received (13,382 were
  staffed to DOD).

    Given Congressional and industry interest in the handling of 
communications satellite (comsat) cases since the transfer of 
jurisdiction to State from Commerce, it may be interesting to note that 
State licensing from March 15, 1999 through the end of February 2000 
included 902 interagency staffed cases that took an average of slightly 
more than 80 calendar days to process. The average time out with DOD 
was 36 days and with State, including the time to obtain MTCR 
assurances, 44 days. There were 296 non-interagency staffed cases, the 
average processing time for which was 25 days. Fourteen comsat 
notifications were made to Congress.
    With the change of comsat jurisdiction, State's annual licensing 
workload may increase by 1500-2000 cases.
    In my January 1999 report to the Congress concerning implementation 
of the National Defense Authorization Act for FY 1999, State and 
Defense established a goal of ``90 working days'' for acting on 
satellite-related munitions export requests, exclusive of cases raising 
substantial policy issues or major sales requiring notification to 
Congress, and assuming the availability of additional financial and 
personnel resources. The above data suggests that the ``90 working 
day'' goals has been generally met or exceeded, even in those cases 
requiring notification to Congress.

                            SANCTIONS REFORM

    Question. I am confident the Congress will consider some form of 
sanctions reform this year. It has never been clear where the 
Administration stands on sanctions reform, whether it is the 
comprehensive reform proposals in S. 757 which I and others have 
championed or the more limited sanctions reform proposals involving 
food, agriculture, and medicine. Could you clarify the administration's 
view on sanctions policy and sanctions reform? Is the Administration 
prepared to sit down and negotiate the language in the sanctions reform 
    Answer. The Administration is committed to a rational, consistent 
and effective sanctions policy that is carefully targeted, truly 
advances our foreign and security policy goals, and avoids damaging 
other interests. Moreover, we must take account of the burdens 
sanctions impose on U.S. business and financial interests and their 
costs in terms of jobs and exports.
    We have carefully studied the proposals submitted last year by 
Senators Lugar, Ashcroft, Hagel and others and have worked with 
Chairman Helms on this issue. We share the desire to improve the way we 
develop and use sanctions, and to make them better serve the national 
interest. We support some aspects of each of these initiatives.
    Sanctions reform should include procedures to analyze the impact of 
sanctions in a systematic way, including potential costs and benefits 
as well as to improve discipline on their use by both Congress and the 
Executive Branch. As part of our need for Presidential flexibility, we 
also support a national interest waiver as a key element of any reform 
    We share the goal of exempting some agricultural products as well 
as medicine from sanctions. Indeed, the Administration last year 
exempted agricultural products and commodities, medicine, and medical 
products from sanctions for humanitarian reasons.
    The State Department welcomes the opportunity to work with 
Congress, which shares these overall objectives and concerns, to try to 
craft comprehensive legislation on which we can all agree.


    Question. Last year, I proposed legislation, the Russian-Ukrainian 
Business Management Education Act, which was enacted in the State 
Department authorization bill and the omnibus spending bill, but no 
funding earmark was provided for implementation. The initiative 
provides authority to train Russians and Ukrainians in fundamental 
business skills and to do the training in the two countries. This would 
be done in collaboration with the private sector here and in the two 
countries. I understand that the administration believes this program 
and the objectives it seeks to accomplish are a high priority.
    Can you tell us how much funding the Administration is allocating 
to this initiative through the Freedom Support Act in order to achieve 
the objectives of this legislation? Is there an Administration game 
plan for this program? What can I expect on this program?
    Answer. The Russian-Ukrainian Business Management Education Act 
underscores one of our shared priorities in the region--increasing 
understanding among young people in Russia and Ukraine of important 
economic and business concepts and enhancing their ability to apply 
these concepts in a practical way. In FY-00, we expect to exceed our 
FY-99 level of support by funding over, $15 million worth of programs 
directed at strengthening business, accounting and other management 
skills in Russia. We anticipate spending over $18 million in Ukraine.
    In Ukraine, the Next Generation Initiative launched this year 
reaches out to young Ukrainians by doubling some of our most successful 
exchange programs and expanding educational opportunities for 
undergraduate and graduate students to study in Ukraine. It includes 
additional support for university partnerships, distance learning, and 
the Economics Education Research Consortium at the Kiev-Mohyla Academy, 
which trains the best and brightest in Ukraine in graduate-level 
economics. We have redirected funds from other programs to support this 
    In Russia, the Department will support internship programs for 
Russian entrepreneurs, university linkages and specialized English 
training in support of the Presidential Management Training Initiative. 
The Library of Congress Russian Leadership Program will bring over 1400 
young leaders from the regions. USAID is reaching out to Russia's 
regions with numerous training programs, intervening early with new 
curricula in the high schools through Junior Achievement, and building 
a core of specialists in International Accounting Standards.
    With increased funding in FY-01 we could do still more.


  Responses of Secretary of State Madaleine K. Albright to Additional 
           Questions Submitted by Senator Russell D. Feingold


    Question. Overall, I am pleased by the Administration's efforts to 
support the new democracy in Nigeria. But despite the many encouraging 
signals sent by the Obasanjo Government, some of the government's 
actions in the Niger Delta and elsewhere echo some of the unfortunate 
choices of the past. In our efforts to be encouraging, does the U.S. 
risk sending a signal that ``anything goes'' with this new government?
    Answer. We are providing strong support to the Obasanjo Government, 
but we are also very concerned about the numerous outbreaks of communal 
violence that have caused hundreds, if not thousands, of deaths since 
this government was inaugurated. We are very troubled by the use of the 
military to restore order in such trouble spots as Odi in the Niger 
Delta; our Country Reports on Human Rights describes the destruction of 
this town by troops sent in to restore order. We have made clear that 
brutality and violations of human rights are not acceptable, and we 
have strongly urged all Nigerians to respect each other and to resolve 
differences peacefully.
    By no means are we sending a signal to this government that 
``anything goes,'' and we have underscored our concerns publicly and 
privately to Nigerian Government officials. We believe that the 
Government of Nigeria, the general population, and even the military 
understand that brutality and repression should not be tolerated. 
Unfortunately, previous military rule decimated political, economic, 
and social institutions in Nigeria, and the police and the judicial 
system were among the institutions most adversely affected.
    Years of authoritarian rule repressed expression of political views 
and legitimate grievances. Now that Nigerians have the freedom to 
express themselves, unresolved social, religious, and economic 
conflicts have started to surface and cause very serious outbreaks of 
violence. Poorly trained and equipped police are often incapable of 
restoring order once violence starts, and the state governments have 
had to ask the Government of Nigeria to bring in the military to deal 
with criminality or to restore order. The long-term solution requires 
rehabilitation of Nigeria's political, economic, and social 
institutions, particularly the police and judicial system. We are 
supporting this effort with more than $2 million in assistance this 
year to help train judges, and police and law enforcement officials. 
Finally, and most importantly, sustained investment and economic growth 
are needed to create opportunities for all Nigerians to prosper and to 
work together for the common good of their country.


    Question 1. As the power struggle between the military and the 
newly elected government continues in Indonesia, it seems to me that it 
is critically important that the U.S. offer strong support for the 
forces of reform. I can see that the Administration intends to do that. 
But I also believe that it is equally important to send strong signals 
about what the international community will not tolerate. How does the 
Administration plan to keep the pressure on the elements of the 
Indonesian military who are challenging President Wahid's authority and 
continuing to fail in their duties to protect civilians?
    Answer. We are optimistic about the progress of Wahid's efforts to 
reform the military and establish civilian control. In the earliest 
stage, it may have been accurate to speak of a ``power struggle'' 
between the Wahid government and elements of the military. However, 
subsequent developments indicate that Wahid's power is unlikely to be 
challenged by the military in the short or medium term. As you know, 
Wahid successfully removed General Wiranto from his cabinet position in 
January. Wahid has since embarked on an ambitious reshuffling of his 
military leadership, replacing Wiranto supporters and opponents of 
reform with his own allies and supporters of military reform. The U.S. 
welcomed these steps in the context of our strong support for military 
    It is important to note that President Wahid possesses the 
legitimacy of having been democratically elected and enjoys the clear 
support of the Indonesian people. Most members of the Indonesian 
military recognize this and support President Wahid. The potential 
challenge lies in a relative minority of disaffected military officers 
rather than the military institution as a whole. The United States has 
been very clear about the consequences to Indonesia's international 
reputation, political stability, investment climate and economic 
recovery of any attempt by elements of the military to seize power.
    Any Administration plan to resume military-to-military relations 
with Indonesia would be a step-by-step effort undertaken after careful 
coordination with President Wahid to ensure that it unequivocally 
reinforces Wahid's reform agenda.

    Question 2. Please elaborate on the Administration's proposals for 
East Timor. In light of the devastating scorched-earth campaign waged 
by militias, with the backing of elements of the Indonesia military, 
the needs in East Timor are extraordinarily great. What are the key 
priorities that the U.S. intends to address, and what is the absorptive 
capacity of East Timor today?
    Answer. After the devastation in East Timor in 1999, and given the 
challenges inherent in transforming a poor, small territory to into a 
democratic, economically active, independent nation in a few years, the 
needs of the East Timorese people are indeed extraordinarily great. The 
UN (UNTAET) and World Bank--with strong support from the U.S. and many 
other donors--are leading the international effort of reconstruction, 
capacity-building, and development in East Timor.
    The U.S. contribution is substantial and covers a wide range of 
needs. Our first priority has been the humanitarian needs of refugees 
and internally displaced persons. The U.S. spent some $20.5 million in 
1999 on relevant humanitarian assistance. In 2000, we expect to spend 
an additional $49.0 million in multilateral and bilateral humanitarian 
assistance, including some for East Timorese refugees still in camps in 
West Timor. This humanitarian assistance would come primarily from the 
State Department's Department of Population, Refugees, and Migration 
(PRM) and USAID's Office of Foreign Disaster Assistance.
    In FY 2000, we are also supporting the multilateral effort in East 
Timor with contributions to the UNTAET Trust Fund ($4 million) and to 
the World Bank Reconstruction Trust Fund ($500,000). The UNTAET Trust 
Fund is vital to ensuring that basic public services are fully restored 
in East Timor and that East Timorese develop the skills to provide them 
on a continuous basis. Most of the UNTAET Trust Fund (and thus most of 
our contribution) will be used to benefit East Timorese immediately and 
directly by paying salaries for public workers, most of them teachers 
or health care workers. Some of the fund will go to critical projects 
that support democracy and governance. The World Bank, working through 
its Trust Fund, is the main coordinating body for the multilateral 
effort to rebuild East Timor into a self-sustaining economy over the 
long-term. We are enthusiastic about the World Bank's coordinating role 
and programs, but most U.S. assistance to support similar objectives in 
East Timor will be provided on a bilateral basis.
    Specifically, the U.S. will spend about $20 million in FY 2000 to 
expand existing USAID and USAID Office of Transition Initiatives (OTI) 
bilateral projects in East Timor. We expect that USAID's $8.1 million 
project to assist coffee farmers will have a particularly rapid and 
positive impact on the East Timorese economy (a priority need that all 
agree upon) as coffee is East Timor's most viable export product. Our 
goal is to provide income-generating employment for 220,000 East 
Timorese. USAID and OTI will also assist in providing quick employment 
in community projects to East Timorese. Quick employment opportunities 
will help stabilize urban and village populations by increasing the 
purchasing power of the, population, stimulating economic activity, and 
reducing unrest. The U.S. objective in most OTI projects (about $10 
million in programs and $1.4 million more in administrative support) 
will be to encourage the growth and development of local civil society 
and other institutions that will be critical to democratic governance 
in East Timor.
    Other U.S. programs will address East Timor's urgent need for 
assistance on forensics and human rights training. East Timorese 
responsible for documenting past human rights abuses on the ground in 
East Timor (both UNTAET officials and NGO workers) lack the specialized 
training needed to conduct such investigations, have little access to 
forensic expertise, and possess little to none of the specialized 
equipment. We expect to spend about $1.4 million in FY 2000 to address 
these skill and equipment gaps and to assist East Timorese to monitor 
current human rights abuses (for example, by establishing a position of 
human rights ombudsperson) and to prevent future abuses.
    In addition, we expect to expend about $1 million for judicial 
training, justice sector institution building and promotion of the rule 
of law in East Timor, another priority need. These funds will support 
the training of judges, prosecutors, and public defenders; the revision 
of the legal code, and overall planning for the development of an 
independent East Timorese judiciary.
    Internal security is another immediate priority in East Timor. The 
U.S. will increase its civilian police (CIVPOL) contingent in support 
of UNTAET and, consistent with what is permissible under U.S. law, help 
to establish a local police force capability and critical judicial 
functions. These last activities will require expenditure of about $8.5 
million in PKO funds in FY 2000.
    The U.S. also has a small, non-combat U.S. military presence 
(USGET) in East Timor to coordinate a program of U.S. military medical, 
humanitarian and civil engineering assistance to the East Timorese 
people to be provided by appropriate units deployed from ships 
temporarily stationed off shore. This U.S. military presence and 
assistance is not part of the UNTAET peacekeeping operation. A good 
estimate on the monetary worth of this in-kind military assistance is 
not yet available.
    The East Timorese are talented, resourceful people but nobody 
doubts that they and the international community face a daunting 
challenge to bring into existence an economically active, independent 
East Timor after 2-3 years of transition under UN auspices. UNTAET, the 
World Bank, and major donors, including the U.S., have from the 
beginning given great consideration to the real problem of absorptive 
capacity in East Timor, and have sought to address it in the design of 
their assistance programs. A donor coordination mechanism has been 
established that will help donors to balance regularly the needs for 
urgent assistance against the constraints of absorptive capacity.



                      WEDNESDAY, FEBRUARY 9, 2000

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:34 a.m. in 
room SD-419, Dirksen Senate Office Building, Hon. Jesse Helms 
(chairman of the committee) presiding.
    Present: Senators Helms, Biden, and Kerry.
    The Chairman. The committee will come to order. Yesterday 
this committee, the Committee on Foreign Relations, heard from 
the distinguished Secretary of State, Hon. Madeleine Albright. 
She testified regarding the Clinton administration's foreign 
policy priorities for the year 2000. The committee engaged in a 
good debate of issues with Secretary Albright, and she fielded 
questions very well. She is very competent.
    Now, today we are going to continue to explore the same 
subject in this session. We are so fortunate to have with us 
today a panel of particularly distinguished Americans and 
experts in foreign policy. Today's panel consists of a long-
time friend, Hon. R. James Woolsey, a partner in Shea & 
Gardner, and a former Director of the Central Intelligence 
    We have Hon. Robert B. Zoellick, a former Under Secretary 
of State, and Hon. William J. Perry, the Berberian professor 
and senior fellow at the Institute for International Studies at 
Stanford University.
    Now, these gentlemen, I will say to the young people here, 
are distinguished Americans, and Secretary Perry was Secretary 
of Defense when he was in the Government. Now, I am going to 
pause and give us a chance to be joined by the ranking member 
and other Senators.
    I will make the comment for the record, in defense of 
members who cannot make it, that every committee is meeting 
this morning and every Senator belongs to two or three 
committees. I belong to three myself, so sometimes they have to 
make a call on which one they are going to, because all of us 
are meeting at the same time. We will stand at ease until a few 
more minutes have elapsed.
    The Chairman. I am going to proceed. The record will be 
available to all Senators, and we will make it available to the 
public as well.
    Gentlemen, I hope that you will provide oral statements so 
that we can engage with you in an exchange regarding foreign 
policy issues that will be confronting the United States in the 
coming year, and let me thank you again for your willingness to 
appear here this morning. I know that you have 10,000 things to 
do, and as a rule I would be calling on Senator Biden, the 
ranking Democrat on the committee.
    Senator Biden. You call and I answer, Mr. Chairman.
    The Chairman. Great. I will present to the witnesses and to 
the general public Hon. Joseph Biden of Delaware.
    Senator Biden. Mr. Chairman, in the interest of hearing 
what our panel has to say--I know they are all busy men--I will 
ask unanimous consent that my statement be placed in the record 
as if read.
    The Chairman. Without objection.
    Senator Biden. Thank you.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Senator Joseph R. Biden, Jr.

    Mr. Chairman, I commend you for convening this hearing to hear the 
views of a distinguished panel of witnesses about American foreign 
policy priorities.
    To state the obvious, this is an election year. This is a time when 
the American people should debate the great issues of the day.
    As we begin the new century, we face many serious foreign policy 
questions--even if they have not, so far, become major issues in the 
    Among the many questions we face are these:

   How do we help Russia consolidate democratic rule after 
        centuries of misrule from czar through commissar?
   How do we best reduce the large nuclear arsenals still 
        possessed by Russia and the United States?
   How do we manage the emergence of a great power in China?
   How do we counter the proliferation of weapons of mass 
        destruction and the means to deliver them?
   How do we counter the threat of international terrorism and 
        international organized crime, including narcotics smuggling?
   How do we address other transnational threats of 
        environmental pollution, deadly disease and refugee and 
        migration flows?
   How do we best advance human rights and expand the community 
        of democratic nations?
   How do we continue our economic success at home, and help 
        advance economic opportunity and stability abroad?

    These are just a few of the questions that the United States will 
continue to confront in the coming decades.
    To help us answer these and other questions, the Committee has been 
fortunate to obtain the advice, if only for a couple of hours, of a 
distinguished panel of witnesses.
    We have managed to invite not only a group of great stature, but a 
group that is evenly balanced--quite a feat given that there are three 
    Bill Perry was President Clinton's second Secretary of Defense, who 
managed the Pentagon with great distinction.
    Robert Zoellick was an Under Secretary of State and Counselor to 
Secretary of State Baker in the Bush administration.
    And Jim Woolsey has served under both Democratic and Republican 
Presidents--including as President Clinton's Director of Central 
Intelligence, and as negotiator of the Conventional Forces in Europe 
Treaty under President Bush.
    I join the Chairman in expressing my appreciation to our witnesses, 
who, though they have left government service, continue to give their 
time and energy to the public good.
    I am especially grateful that Secretary Perry accepted my 
invitation to leave sunny California to come to snow-covered Washington 
in the month of February.
    Gentleman, welcome.

    The Chairman. All right. Let's see, left to right. You are 
on, sir.

                     STATE, WASHINGTON, DC

    Mr. Zoellick. I thank you very much, Mr. Chairman, Senator 
Biden. It is a pleasure to be with you both today, and since I 
suspect that the committee is most interested in having time 
for an exchange, I will keep my opening remarks very brief.
    I would like to thank the committee on both sides of the 
aisle for taking the time to review America's foreign policy 
strategy. Today, the vitality of the United States private 
economy is unmatched. America's military power is preeminent, 
and the appeal of American ideas around the world is 
unparalleled, but good times do not last forever. Therefore, 
the United States should be using this special period to our 
advantage for the future.
    We should be building public support at home, and laying 
the foundation abroad for a strategy that will shape the world 
so as to protect and promote American interests and values for 
the next 50 years. We need to find a modern American 
internationalism for a very different era.
    This morning, I will list six priorities for this new 
strategy. First, America is most effective when it can extend 
its influence by leading coalitions. Therefore, the United 
States needs to overhaul its ties with its primary partners and 
allies so as to adjust to changed circumstances and meet new 
    We should not take our relationships with these traditional 
partners for granted. These are the countries to which the 
United States is most likely to turn for help, whatever the 
problem. If we are not careful, a pattern of competition and 
conflict could lead to acrimony and even alienation, but if we 
lead wisely, with a good sense of America's key objectives as 
well as the points that are subject to compromise, the United 
States should be able to get its allies and other partners to 
bear a fair share of responsibilities.
    Our partnerships start at home, in the neighborhood of our 
hemisphere. If North America is strong, the United States will 
be free to pursue its aims around the world. But if our 
continent, the Caribbean, and South America are troubled 
because of economic, political, narcotics, environmental, or 
immigration problems, the United States will be preoccupied at 
home and handicapped abroad.
    America's allies across the Atlantic and the Pacific are at 
the core of America's vital interests. They secure the U.S. 
position in the Eastern and Western regions of Eurasia, the 
world's largest land area, which has the people and resources 
to either shape or shake the world, and these allies can 
enhance America's ability to deal with the great uncertainties 
of China's and Russia's future.
    America's NATO and Pacific allies should also be stronger 
partners in dealing with dangerous states and new security 
threats, including terrorists with terrible weapons, and the 
market democracies of the European Union and East Asia must 
help contribute to an international economic environment 
hospitable to dynamism, creativity, and the energy of the 
private sector.
    Second, the United States faces the challenge of the three 
other large powers of Eurasia, a China that has been rising, a 
Russia that has been weakening, and an India that has been 
reassessing its outlook and place in the world.
    These are the big ones. If we handle these relationships 
wisely, America may be able to establish a sound basis for a 
peaceful and prosperous future. If we mishandle them, the 
benign assumptions of today could be quickly replaced by the 
dangerous realities of tomorrow.
    Today, China and Russia are certainly not strategic 
partners, or even friends, but they need not become enemies. 
The United States should seek to draw these states into the 
economic, political, and security arrangements that America and 
its allies have sponsored, yet the United States needs to be 
prepared to shield against these powers if peaceful integration 
is not possible.
    Third, North America, the European Union, and Japan need to 
reach out to the next group of potential partners. In varying 
degrees, countries in Central and Eastern Europe, Latin America 
and East Asia have been turning to private markets, building 
middle classes, and developing representative democracies that 
respect individual liberties, but these countries have faced 
enormous stresses.
    We need to buttress their home-grown efforts to embrace 
competitive markets and representative Government through 
closer economic integration, security ties, and support for 
democracy, and if we succeed, these democracies should be able 
to help America address the next generation of challenges.
    Fourth, the United States must counter those dangerous 
recidivist states that threaten America's closest friends, such 
as Israel, or America's vital interests, such as maintaining 
access to the energy resources of the Persian Gulf. In 
particular, the United States will need to be able to develop 
theater and national missile defenses to intercept missiles 
that might target U.S. conventional forces overseas or paralyze 
America if it intervenes to resist their threats.
    Fifth, in this information age, the United States needs to 
be able to promote open economic architecture that will enable 
the private sector to unleash productivity, innovation, and a 
free flow of ideas. Communities or private groups, whether 
organized for business or social events, can achieve results 
far beyond the reach of governments and international 
    Given America's strong and diverse private sector, the 
United States can gain from the widening influence of American 
citizens, businesses, associations, and ultimately our ideas. 
The United States should link itself to the private agents of 
change around the world through new networks of free trade, 
information, and investment.
    At the same time that we secure the benefits of dynamic 
intervention, however, the United States needs to be able to 
deal with the inevitable stresses of capitalism on a global 
scale. To have support at home for a successful foreign policy 
abroad, the United States must help its citizens to adjust to 
and benefit from new possibilities, including through superior 
education, portable benefit plans, low taxes that reward work 
and risk-taking, and secure savings and pensions.
    Sixth, the United States needs to transform its defense 
capabilities to ensure America's military remains unmatched 
well into the future. To do so, the United States should align 
its military power with the strengths of America's society. 
America's skilled people, its advanced technology, and 
Americans' proficiency at integrating interactive, fast-paced 
systems into potent networks.
    I would like to close with a final point about how the 
United States pursues these strategic goals. In recent years, 
the conduct of America's foreign policy has prompted too many 
countries, even France, to pull back from or even resent the 
United States. Too often, they have perceived U.S. actions as 
combining the arrogance of might with inconsistency and 
    That is an unnerving combination. America's power is 
obvious to the world, but we can extend that reach and 
influence further, and we can do it for much longer, if the 
United States speaks softly while acting with clear purpose and 
    Which brings us back to the topic of strategy. If the 
United States asserts that it is committed to do everything, 
its commitment to everything will be suspect. To have a clear 
purpose, to have a sense of what is most important, to be able 
to weigh what ends warrant which means, to have the 
capabilities to integrate policies across issues in time, to do 
these things, the U.S. Government needs a strategic vision for 
the future, and this strategy can be the cornerstone of a 
modern American internationalism.
    Thank you, and I would be pleased to try to answer any of 
your questions.
    [The prepared statement of Mr. Zoellick follows:]

             Prepared Statement of Hon. Robert B. Zoellick

    Chairman Helms, Senator Biden, Members of the Committee:
    It is a pleasure to be with you today. Since I suspect the 
Committee is most interested in having time for an exchange, my opening 
remarks will be brief. I also have submitted, for your record, an 
article that I recently published in Foreign Affairs that covers 
today's topic in greater detail.
    I would like to thank the Committee, on both sides of the aisle, 
for taking the time to review America's foreign policy strategy. Today, 
the vitality of the U.S. private economy is unmatched. America's 
military power is preeminent. And the appeal of American ideas around 
the world is unparalleled.
    But good times do not last forever.
    Therefore, the United States should be using this special period to 
our advantage for the future: We should be building public support at 
home, and laying the foundation abroad, for a strategy that will shape 
the world so as to protect and promote American interests and values 
for the next 50 years. We need to define a modern American 
internationalism for a very different era.
    This morning I will list six priorities for this new strategy.
    First, America is most effective when it can extend its influence 
by leading coalitions. Therefore, the United States needs to overhaul 
its ties with its primary partners and allies, so as to adjust to 
changed circumstances and to meet new challenges.
    We should not take our relationships with these traditional 
partners for granted. These are the countries to which the United 
States is most likely to turn for help, whatever the problem. If we are 
not careful, however, a pattern of competition and conflict could lead 
to acrimony and even alienation. If we lead wisely--with a good sense 
of America's key objectives, as well as of the points that are subject 
to compromise--the United States should be able to get its allies and 
other partners to bear a fair share of responsibilities.
    Our partnerships start at home, in the neighborhood of our 
hemisphere. If North America is strong, the United States will be free 
to pursue its aims around the world; if our continent, the Caribbean, 
and South America are troubled because of economic, political, 
narcotics, environmental, or immigration problems, the United States 
will be preoccupied at home and handicapped abroad.
    America's allies across the Atlantic and Pacific are at the core of 
America's vital interests: They secure the U.S. position in the eastern 
and western regions of Eurasia, the world's largest land area, which 
has the people and resources to shape or shake the world. These allies 
can enhance America's ability to deal with the great uncertainties of 
China's and Russia's futures.
    Over time, America's NATO and Pacific allies should also be 
stronger partners in dealing with dangerous states and new security 
threats, including terrorists with terrible weapons. And the market 
democracies of the European Union and East Asia must help contribute to 
an international economic environment hospitable to the dynamism, 
creativity, and energy of the private sector.
    Second, the United States faces the challenges of the three other 
large powers of Eurasia: A China that has been rising, a Russia that 
has been weakening, and an India that has been reassessing its outlook 
and place in the world. These are ``the big ones.'' If we handle these 
relationships wisely, America may be able to establish a sound basis 
for a peaceful and prosperous future; if we mishandle them, the benign 
assumptions of today could be quickly replaced by the dangerous 
realities of tomorrow. Today, China and Russia are certainly not 
strategic partners, nor even friends, but they also need not become 
enemies. The United States should seek to draw these states into the 
economic, political, and security arrangements that America and its 
allies have sponsored. Yet the United States needs to be prepared to 
shield against these powers if peaceful integration is not possible.
    Third, North America, the European Union, and Japan need to reach 
out to the next group of potential partners. In varying degrees, 
countries in Central and Eastern Europe, Latin America, and East Asia 
have been turning to private markets, building middle classes, and 
developing representative democracies that respect individual 
liberties. But these countries have also faced enormous stresses. We 
need to buttress their homegrown efforts to embrace competitive markets 
and representative government through closer economic integration, 
security ties, and support for democracy. If we succeed, these 
democracies should be able to help America address the next generation 
of challenges.
    Fourth, the United States must counter those dangerous, recidivist 
states that threaten America's closest friends, such as Israel, or 
America's vital interests, such as maintaining access to the energy 
resources of the Persian Gulf. In particular, the United States will 
need to develop theater and national missile defenses to intercept 
missiles (perhaps carrying weapons of mass destruction) that might 
target U.S. conventional forces overseas or paralyze America if it 
intervenes to resist their threats.
    Fifth, in this information age, the United States needs to promote 
an open economic architecture that will enable the private sector to 
unleash productivity, innovation, and a free flow of ideas. Communities 
of private groups, whether organized for business or social ends, can 
achieve results far beyond the reach of governments and international 
bureaucracies. Given America's strong and diverse private sector, the 
United States can gain from the widening influence of American 
citizens, businesses, associations, and ideas. The United States should 
link itself to the private agents of change around the world through 
new networks of free trade, information, and investment.
    At the same time that we secure the benefits of dynamic 
integration, however, the United States needs to be able to deal with 
the inevitable stresses of capitalism on a global scale. To have 
support at home for a successful foreign policy, the United States must 
help its citizens to adjust to and benefit from new possibilities, 
including through superior education, portable benefit plans, low taxes 
that reward work and risk-taking, and secure savings and pensions.
    Sixth, the United States needs to transform its defense 
capabilities to ensure that America's military remains unmatched well 
into the future. To do so, the United States should align its military 
power with the strengths of American society: America's skilled people, 
its advanced technology, and Americans' proficiency at integrating 
interactive, fast-paced systems into potent networks.
    I would like to close with a final point about how the United 
States should pursue these strategic goals. In recent years, the 
conduct of America's foreign policy has prompted too many countries, 
even friends, to pull back from, or even resent, the United States. Too 
often, they have perceived U.S. actions as combining the arrogance of 
might with inconsistency and unreliability. That is an unnerving 
combination. America's power is obvious to the world. But we can extend 
the reach of that influence much farther and for much longer if the 
United States speaks softly, while acting with clear purpose and 
    Which brings us back to the topic of strategy: If the United States 
asserts that it is committed to do everything, its commitment to 
everything will be suspect. To have a clear purpose, to have a sense of 
what is most important, to be able to weigh what ends warrant which 
means, to have the capability to integrate policies across issues and 
time, the U.S. Government needs a strategic vision for the future. This 
strategy can be the cornerstone of a modern American internationalism.
    Thank you and I would be pleased to try to answer any questions.


    [From Foreign Affairs, Volume 79, No. 1, January/February 2000]

                             Campaign 2000

                      A Republican Foreign Policy

                        (By Robert B. Zoellick)

                            an era of change
    At the opening of the twentieth century the United States began a 
quest similar to today's. The rise of American power, revolutions in 
technology, and great clashes abroad set the stage for a historic 
transformation. Theodore Roosevelt and Woodrow Wilson dominated the 
age, as they debated and labored to promote their visions of America's 
role in a new international system. In 2000, the world is again in an 
era of rapid change, reminiscent of a century ago. The vitality of 
America's private economy, the preeminence of its military power, and 
the appeal of the country's ideas are unparalleled. But as former 
British Prime Minister Margaret Thatcher cautioned her colleagues, we 
must ``expect the unexpected.'' A primary task for the next president 
of the United States is to build public support for a strategy that 
will shape the world so as to protect and promote American interests 
and values for the next 50 years.
    At the end of the Cold War, President George Bush built on Ronald 
Reagan's legacy by beginning to adapt American foreign policy to the 
challenges of changed circumstances. Recognizing the importance of 
economic ties, his administration negotiated the North American Free 
Trade Agreement (NAFTA), supported a free-trade agreement with Chile as 
a step toward free trade throughout the western hemisphere, and 
promoted the Asia-Pacific Economic Cooperation (APEC) group to bind 
U.S. economic interests across the Pacific. The United States then 
employed these regional initiatives to bring the global trade talks of 
the Uruguay Round to the edge of conclusion. Those initiatives have 
created the most powerful movement toward free trade in history.
    The United States also took advantage of its preeminent position to 
push hard for peace in a number of vital areas. In the Middle East, the 
United States used its standing after the Cold War and the Gulf War to 
break old deadlocks at the Madrid Conference and to push the Arab-
Israeli peace process to a totally new plane. The Bush administration 
sought to reshape the strategic landscape across Europe and Russia by 
uniting Germany within NATO in 1990, defining a new strategic concept 
for NATO in 1991, opening the alliance to former enemies in 1990 and 
1991, and negotiating landmark conventional and nuclear arms reduction 
agreements to underpin the new security framework. U.S. ties with 
Russia reached an impressive level of effectiveness, as demonstrated by 
their cooperation in the Gulf War. U.S. links with China were also 
slowly improving after the Tiananmen Square tragedy, as the Bush 
administration handled sharp differences in a way that still enabled it 
to foster positive change. By the end of its term, the administration 
had created a climate of cooperation among the world's major powers.

                       CLINTON'S FLAWED APPROACH

    President Bill Clinton's intelligence and his ability to synthesize 
policy and politics at home held out the prospect that he could build 
on Bush's initial efforts to redefine America's position in the world. 
Unfortunately, the Clinton administration never adopted a guiding 
strategy or even demonstrated a sustained commitment to foreign policy. 
As a result, Clinton has failed to define a new internationalism for 
the United States, thus letting historic opportunities slip away.
    Clinton's foreign policies have been stymied by five flaws. The 
first, an unwillingness to remain committed to his own priorities, has 
been demonstrated by his drift on international trade. Clinton started 
with an encouraging emphasis on trade, perhaps because he inherited a 
signed NAFTA deal and a partial Uruguay Round agreement that he could 
not abandon easily. But after 1994, the Clinton administration changed 
its course: it made pledges for free trade, but the reality of its 
policies did not match the rhetoric. Instead, the United States 
demanded managed-trade quotas with Japan--precisely the wrong remedy 
for a country needing deregulation--until it was compelled to retreat. 
Fearful of alienating protectionist political constituencies, Clinton 
was unwilling to build on NAFTA or even to defend it. After deferring 
to the new economic isolationists, Clinton seemed surprised in 1997 
when he could muster only about 40 out of 200 members of his own party 
in the House of Representatives to support his forlorn search for the 
authority necessary to negotiate additional trade agreements.
    These mistakes have had lasting consequences. In the early 1990s, 
countries throughout Latin America were competing to negotiate free-
trade agreements with the United States. Recognizing the strategic 
value of NAFTA, they wanted to connect their economies, societies, 
security, and even political systems to America. Today, no one in Latin 
America or elsewhere expects the current administration to follow 
through on its statements. Latin Americans proceeded with their own 
customs union, which has been negotiating new trade ventures with the 
European Union (EU) and Japan. When East Asian economies faced their 
greatest financial shock in generations--creating possibilities for 
structural reforms but also a need to fight protectionism with mutual 
liberalization--U.S. trade negotiators stood on the sidelines. Without 
the initiative and leadership of the United States, all participants 
involved in launching the global trade talks in Seattle last November 
approached the meeting defensively. So the new trade round was stymied 
by stalemate. Washington has the power to shape global economic 
relations for the next 50 years, but it has marginalized itself in this 
crucial area.
    The White House's second flaw has been to erode its credibility by 
offering words that are not backed by actions; this has taken a special 
toll with U.S. allies. It is ironic that an administration that came 
into office proclaiming ``assertive multilateralism'' has dissipated 
America's energies as a coalition leader. The Gulf War coalition is in 
tatters, not surprisingly, after years of strong language about the 
dangers of Saddam Hussein's machinations, followed by only tepid and 
reflexive actions. Despite the American military's overwhelming 
superiority in Kosovo, at the end of the bombing its European allies 
concluded that they needed to create their own alternative to U.S. 
political and security leadership. After China harshly criticized Japan 
for agreeing to new defense guidelines with the United States, Clinton 
could not find one minute during his nine-day trip to China to stand by 
his struggling Japanese ally. The administration managed to boot out a 
U.N. secretary-general, but it has never developed a sustained, 
consistent strategy toward the organization that would serve U.S. ends. 
(Only a few years earlier, America had proved that a more constructive 
approach to the U.N. was possible when it built the Gulf War coalition 
and organized the repeal of the ``Zionism is racism'' resolution.)
    The Clinton administration's third flaw is its inability to frame 
strategies supported by operations, which has particularly damaged its 
dealings with China and Russia. Neither one is the ``strategic 
partner'' that Clinton proclaimed. In fact, the distrust created by the 
administration has made it hard for the United States to cooperate with 
either country on long-term mutual interests. Sadly, the Clinton legacy 
with both China and Russia--the two great powers whose future paths 
remain uncertain and potentially unstable--is one of tense and 
suspicious relations that have been getting worse.
    In the case of China, at first the administration linked human 
rights to normal trading relations, but it later backed down--a clear 
sign of weakness. Clinton then mistakenly promised the Chinese that the 
United States would not grant a travel visa to the president of 
democratic Taiwan, Lee Teng-hui; his subsequent reversal of that 
decision generated distrust and counterreactions that have increased 
dangers between Beijing and Taipei. During Clinton's high-profile trip 
to China in 1998, he neglected to explain serious security differences, 
ultimately misleading China and failing to prepare the American public 
for China's missile buildup, its nuclear espionage, and its crack-downs 
on democracy. Next, Clinton prodded Chinese Prime Minister Zhu Rhongji 
to offer the United States concessions in exchange for Chinese 
membership in the World Trade Organization (WTO) but then inexplicably 
spurned Zhu's proposal during a high-profile visit, thereby weakening 
China's reform efforts. The agreement with China on the WTO in November 
1999, although welcome, only underscores that Clinton could have cut a 
deal earlier that was as good or better--avoiding a crisis that left 
unnecessary scars.
    Clinton's Russia policy has discredited free-market economics, 
squandered money from the International Monetary Fund (IMF), and 
generated widespread anti-Americanism. His ``Monroeski doctrine'' and 
his comparison of the battle in Chechnya to the U.S. Civil War have 
encouraged both a view of state power that conflicts with a modern, 
democratic Russia and a revival of Russian imperialistic attitudes. The 
administration's indifference to Yeltsin's shelling of the Russian 
legislature, among other autocratic measures, revealed a blind spot in 
the importance of Russia's rule of law and democratic process. Clinton 
has never seemed to grasp the costs of embracing an elected czar, one 
who oversaw a privatization drive that turned into massive theft and 
who now presides over pervasive corruption. Not surprisingly, this 
system has failed to improve the livelihood of average Russians, 
setting the stage for future trouble.
    A fourth flaw has been Clinton's uncertainty on when and how to use 
American power--frequently hesitating, then overcommitting, and 
regularly failing to match means with ends. This weakness has shadowed 
his initiatives to resolve humanitarian and ethnic strife with military 
intervention. His ``nation-building'' failure in Somalia was costly in 
terms of lives, the reputation of the United States, and America's 
confidence that it can deal effectively with such problems. The U.S. 
invasion of Haiti and its multi-billion-dollar effort to bring 
``democracy'' turned out to be an unhappy reminder that supposedly good 
intentions cannot save a flawed policy. The United States continued to 
be drawn into miniwars in the Balkans without clarifying its goals or 
being honest about the ongoing commitment of human and material 
resources these U.N. ``colonies'' would require. The history of false 
starts and missteps was captured well by Clinton's own new ``doctrine'' 
on intervention in such conflicts: his words were at first stunning in 
their reach but were then quickly reinterpreted, leaving the world to 
conclude that America is confused, cynical, or both.
    Finally, many of Clinton's ventures have the disquieting feature of 
being driven significantly by political polls and calculations; this 
perception has made it exceedingly hard for him to call credibly for 
bipartisan foreign policies. As Clinton's ad hoc foreign policies have 
frayed, the administration has lashed out at its critics, calling them 
isolationists. In fact, Clinton's inability to develop a foreign policy 
disciplined by sustained priorities, reliability, strategy, 
selectivity, and frankness has squandered opportunities. The 
president's mistakes have made it harder for him to complete work in 
areas--such as the Middle East and Northern Ireland--where he has 
invested considerable effort in bringing parties together for peace 
processes. The Clinton foreign policy style has also taken its toll 
abroad. The administration has caused too many countries to be weary, 
and even resentful, of the United States. The power of the United 
States is obvious to the world, but Clinton has failed to use that 
power wisely or diplomatically. His rhetoric has contained much hubris 
but little credibility. America is more influential if it speaks 
softly, but with firm conviction. If it asserts that it is committed to 
do everything, its commitments to everything are suspect.

                         REPUBLICAN PRINCIPLES

    Five principles distinguish a modern Republican foreign policy. 
First, it is premised on a respect for power, being neither ashamed to 
pursue America's national interests nor too quick to use the country's 
might. By matching America's power to its interests, such a policy can 
achieve its objectives and build credibility both at home and abroad. 
U.S. policy should respect the histories, perspectives, and concerns of 
other nations, but it should not be paralyzed by intellectual penchants 
for moral relativism. All States do not play equally important roles. 
Given America's responsibilities in the world, it must retain its 
freedom to act against serious dangers.
    Second, a modern Republican foreign policy emphasizes building and 
sustaining coalitions and alliances. Effective coalition leadership 
requires clear-eyed judgments about priorities, an appreciation of 
others' interests, constant consultations among partners, and a 
willingness to compromise on some points but to remain focused on core 
objectives. Allies and coalition partners should bear their fair share 
of the responsibilities; if they do, their views will be represented 
and respected. Similarly, to have an effective U.N., the key nations 
that compose it must recognize that their actions--not their speeches 
and posturing in an international forum--will determine whether 
problems can be solved.
    Third, Republicans judge international agreements and institutions 
as means to achieve ends, not as forms of political therapy. Agreements 
and institutions can facilitate bargaining, recognize common interests, 
and resolve differences cooperatively. But international law, unlike 
domestic law, merely codifies an already agreed-upon cooperation. Even 
among democracies, international law not backed by enforcement 
mechanisms will need negotiations in order to work, and international 
law not backed by power cannot cope with dangerous people and states. 
Every issue need not be dealt with multilaterally.
    Fourth, a modern Republican foreign policy must embrace the 
revolutionary changes in the information and communications, 
technology, commerce, and finance sectors that will shape the 
environment for global politics and security. Because of these changes, 
people's aspirations--to exercise their free will and transform their 
lives--are rising in all corners of the globe. Communities of private 
groups, whether organized for business or social ends, will achieve 
results far beyond the reach of governments and international 
bureaucracies. The United States can leverage this dynamism to open 
minds and markets. America's foreign policy must promote these global 
trends. It must take practical steps to move the world toward greater 
freedoms and human rights. It should link itself to the agents of 
change around the world through new networks of free trade, 
information, and investment.
    Finally, a modern Republican foreign policy recognizes that there 
is still evil in the world--people who hate America and the ideas for 
which it stands. Today. we face enemies who are hard at work to develop 
nuclear, biological, and chemical weapons, along with the missiles to 
deliver them. The United States must remain vigilant and have the 
strength to defeat its enemies. People driven by enmity or by a need to 
dominate will not respond to reason or goodwill. They will manipulate 
civilized rules for uncivilized ends.

                          POWER AND ECONOMICS

    A modern Republican foreign policy should apply these principles 
within a long-term strategy to promote peace, security, and liberty. 
America must capture the dynamism of the era and transform its new 
elements into the economic and security foundations for a future 
system. The United States and its partners need to link the world's 
continental regions within a global economic system that secures the 
benefits of integration while coping with the inevitable stresses of 
capitalism. Looking at the twentieth century, it is clear that peace is 
not ensured through closer economic ties alone; so the United States 
must navigate changing great-power relations, strengthen its alliances, 
and maintain unquestioned military superiority over dangerous regimes.
    In the information age, America should promote an open architecture 
in order to capitalize on its greatest assets: a vibrant, innovative 
economy and a society that continually reinvents itself: American 
concepts of corporate governance, shareholder value, benchmarking, and 
the ``value chain'' are now discussed in executive offices around the 
globe. By incorporating advances in information and communications 
technologies into business processes, U.S. corporations have triggered 
gains in productivity similar to those achieved when companies learned 
how to reengineer their businesses using electrical power 100 years 
ago. The surge in e-commerce, already a $500 billion activity, is 
transforming business models again. Governments everywhere are turning 
to privatization and deregulation to help their countries keep pace. 
The American entrepreneur commands an awe that matches the respect 
accorded the American military.
    The American private sector is a powerful, attractive magnet. But 
the U.S. government has not used this energetic force to transform 
others in ways that enable America to build on its successes. Instead, 
growth and market imbalances have led to the largest trade deficits in 
American history. Although U.S. markets are generally open to the 
world, too many others remain closed to the United States. Countries 
should embrace changes that will tap the vitality and genius of people 
around the world, improve their livelihood and health, and open doors 
to freedom. Government efforts to turn back the clock, even if well-
meaning, will end up hurting people. Instead, governments and societies 
should help people adjust to and benefit from new possibilities. 
Therefore, a successful U.S. foreign policy must also be based on 
superior education at home, low taxes that reward work and risk-taking, 
and secure savings and pensions for retirees.
    The United States needs a strategic economic-negotiating agenda 
that combines regional agreements with the development of global rules 
for an open economy. To link up with Latin America and the Asia-Pacific 
region, the United States should propose free-trade agreements, with 
either individual countries or regional groups. If India continues its 
reforms, the United States should offer it a new economic partnership 
beginning with those Indian sectors that are open to the world or can 
offer large public gains through deregulation. As a new generation of 
leaders gains authority in the Middle East, possible peace agreements 
can be buttressed by drawing these societies into information-age 
economics and integrating their economies into world markets. African 
countries seeking to abandon the old, failed state controls need the 
incentive of open U.S. and world markets for their emerging 
enterprises, as well as financial backing for serious reforms. The EU 
and the United States should follow the lead of their increasingly 
integrated businesses by opening even more sectors to cross-investment 
and greater competition, with the aim of achieving transatlantic free 
    These agendas should be ambitious--ranging from farm products to e-
commerce. Tariffs should be cut further. The United States should 
support innovative business ventures to streamline common standards. It 
should promote the deregulation and opening of vast new global markets 
for services--in areas such as energy, airlines, finance, and 
entertainment. The United States should apply successful regional 
precedents in economic and trade liberalization to other regions or to 
global negotiations through the WTO. By operating at the center of this 
changing network, the United States-the one economy with a truly global 
reach--should promote openness among regions.
    If some regions are too slow to open their markets, the United 
States should move on to others. America should spur a competitive 
dynamic for openness and transparency. Competition can work wonders: 
when the United States pursued NAFTA and APEC, the EU finally felt the 
pressure to complete the global Uruguay Round trade negotiations. If 
others hold back in the new WTO round, the United States should repeat 
this strategy of regionalism with a global goal in order to break the 
    This modern Republican design recognizes the benefits of regional 
integration and seeks to harness it for global purposes; regional 
integration can help countries deal more effectively with transnational 
problems, such as the environment or narcotics trafficking. The 
practice of joint action within regions, especially by private-sector 
groups, can be expanded to deal with common political and even security 
issues. The history of U.S. foreign policy is full of examples of 
private parties--from missionaries to engineers--who forwarded 
America's belief in the future by helping others face the challenges of 
the day. The very nature of the ``new economy''--with its rapidly 
adapting technologies, fast-paced change, and innovative spirit--will 
elevate the role of private parties; they will often surpass the 
government in their ability to resolve inevitable disputes. These 
parties are not zero-sum thinkers. The U.S. government should create a 
climate in which citizens can serve both the private and the public 
good. Prosperity with a purpose is an idea that reaches far beyond U.S. 
    If America links its economy to those of key regions, it can also 
promote its geopolitical agenda. Deeper integration with Latin America, 
Europe, and East Asia will support U.S. security commitments as 
citizens of these regions recognize their common interests. At best, 
economic interdependence will be a new glue that draws partners close 
together. More modestly, creating common rules for open economies will 
connect private sectors and help manage a combination of cooperation 
and competition.
    This blueprint expands on America's political and economic 
principles. It promotes open markets and open societies, the free flow 
of information and ideas, and the development of the private sector--
all of which contribute to the growth of economies, middle classes, and 
liberties. If China, Russia, India, and others want to keep up, they 
will have to open up. This plan offers a positive program around which 
internationalists of both parties can rally to counter protectionists 
and isolationists. It also challenges America to sustain its openness, 
a feature that attracts great thinkers and doers from all over the 
world. It creates a dynamism that gives its diverse society cohesion 
and a shared purpose; and it safeguards liberty and freedom.
    The public international financial institutions--especially the IMF 
and the World Bank--also need to be overhauled to match the demands of 
the information age and the globalization of financial markets. 
Considering how private-sector financial firms have changed in recent 
years, it is understandable that the Bretton Woods institutions of 1944 
require major reengineering. First, the operations of the IMF and the 
World Bank must be more transparent, on-line, and real-time. They 
should fight corruption, which can drain both money and confidence. But 
they should not, out of technocratic hubris, usurp the proper roles of 
either creditor or debtor governments or of the private financial 
sector. A dependency on international bureaucracies for solutions to 
tough problems will dissuade national governments from taking 
responsibility for their countries' futures and will ultimately erode 
the legitimacy of both governments and international financial 
    The IMF still has a role to play in buffering national financial 
markets against shocks that threaten global stability, until self-help 
rebalances the capital movements. But the IMF must exercise this role 
in a fashion that does not add to long-term financial instability by 
encouraging risks for which investors are not willing to pay. 
Furthermore, since today's global economy (different from what it was 
50 years ago) rests on private capital flows, the IMF must ``bail-in'' 
creditors, not bail them out. Private creditors must play a financial 
role in restructuring ``national bankruptcies,'' just as when they have 
loaned money to companies in trouble; creditors can reschedule loans, 
take discounts, and extend more money during workouts. The World Bank 
should concentrate on helping people adjust to change. In poor 
countries, this agenda may involve improving basic health and 
subsistence needs while creating economic opportunities. In other low-
income countries, the World Bank can assist in developing markets that 
will enable people to benefit from self-help.

                    ALLIES, ENEMIES, AND IN-BETWEENS

    In pursuing a reinvigorated foreign policy, the United States first 
needs to overhaul ties with its partners and allies: its North American 
neighbors and its two primary partners abroad, Europe and Japan. 
Mexico, Canada, and the United States share an interest in building on 
their common democracy and prosperity by addressing problems that 
require greater regional cooperation--such as narcotics, the 
environment, and illegal immigration. To operate effectively overseas, 
the United States must ensure that it has a strong neighborhood at 
home. Transatlantic and transpacific alliances can go a long way toward 
ensuring security in the eastern and western parts of Eurasia, where in 
the past dangerous powers have threatened the United States. These 
partnerships can enhance America's ability to address the uncertain 
futures of China and Russia. The EU and Japan are also important 
colleagues in ensuring an international economy hospitable to growth, 
dynamism, and the creative spirit.
    The United States should not be complacent about its allies' roles. 
Europeans say they want to shoulder a greater defense responsibility--
and they should--especially when it comes to policing their own 
continent. But a wide gap still separates Europe's defense oratory and 
its actual spending on the necessary capabilities. The United States 
should encourage its NATO allies to face this reality and to recognize 
the mutual benefit in having European defense forces operating in close 
concert with the U.S. military through coalitions. Ultimately, an 
effective European defense arm will require serious participation by 
British, French, and German troops.
    Japan should evolve gradually toward assuming more responsibility 
for East Asian security, in concert with America and its allies. Only 
the United States can help Japan's neighbors accept this historic 
adjustment, which is the key to transforming Japan's domestic opinion. 
As a start, Japan, the United States, Korea, and Australia should form 
closer defense ties. Over time, Japan's forces should be more closely 
integrated to support the U.S. military in Asia. These steps will 
strengthen the posture of the Pacific democracies toward North Korea, 
demonstrate to China that it should seek security cooperation (and not 
competition) with the Asia-Pacific democracies, and channel any 
increased Japanese capabilities into a reassuring framework.
    Second, the United States and its partners face three great 
challenges in Eurasia: China, Russia, and India. China has been rising, 
Russia has been weakening, and India has been reassessing its outlook. 
These are the ``big ones,'' and more mistakes with them could cost 
America dearly in the future. The United States must be realistic, not 
romantic, about the prospects for China and Russia. These states should 
be integrated into the economic, security, and political arrangements 
that America and its allies have sponsored, although we must be 
prepared to shield against these countries if integration is not 
possible. These countries are ``works in progress;'' they are not yet 
friends and are certainly not partners, but they need not be enemies. 
The United States and its allies should explain to both China and 
Russia the steps that can build on shared interests and lessen 
differences. Ultimately, America will evaluate its own ability to 
cooperate--and the world will assess America's willingness to do so--
based on concrete actions, not photo opportunities.
    India, the worlds largest democracy and before long its most 
populous nation, will play an increasingly important role in Asia. To 
grow and prosper, it will need to adjust to the global economy. To 
contribute to its prosperity and regional security, India will need to 
lower the risk of conflict with its neighbors. And to have influence 
with India, America must stop ignoring it. A more open India, 
possessing a broader understanding of its place in the world, could 
become a valuable partner of the United States in coping with Eurasia's 
uncertainties. In addition to proposing trade and investment 
liberalization, the United States should open a regular; high-level 
security dialogue with India on Eurasia and the challenges to 
    Third, North America, the EU, and Japan need to reach out to the 
next group of potential partners. In varying degrees, moving at 
different paces, countries in central and eastern Europe, Latin 
America, and East Asia have been opening private markets, building 
middle classes, and developing representative democracies that respect 
individual liberties. But these countries have been subject to enormous 
stresses. With Latin America in particular, the United States has 
resumed its old, bad habit of overlooking its neighbors until problems 
compel it to pay attention. Resistance is slowing the momentum for 
democracy and free markets that Latin America kicked off a decade ago. 
More debt defaults, rising populism, frustrations with the lack of 
tangible results from economic reforms, and narcotics traffickers 
seeking to control governments all threaten to eclipse the movement 
toward what should be a historic and strategic achievement: a fully 
democratic and prosperous western hemisphere.
    Fourth, the United States must counter those dangerous states that 
threaten its closest friends, such as Israel, or its vital interests, 
such as maintaining access to oil in the Persian Gulf. In dealing with 
the likes of Iraq and North Korea, the United States needs to offer 
consistent long-term directions to guide coalitions that will deter and 
even replace their brutal regimes. Concessions to blackmail and 
threats, even if they serve as temporary expedients, will exacerbate 
these problems. The United States must retain the initiative so that 
its opponents are so worried about what America is planning that they 
cannot plot attacks or new forms of blackmail. Theater and national 
missile defenses will let the United States counter missiles carrying 
weapons of mass destruction from those countries that might target U.S. 
conventional forces or paralyze the United States if it intervenes 
against their threats. Time is on America's side--not that of these 
decaying dictatorships--if the United States has the confidence and 
determination to stand up to, and if necessary defeat, its enemies.

                             MILITARY MIGHT

    America's leadership in the next century requires a strong 
military, wisely used. The Clinton administration has too often relied 
on the U.S. military to bail out speculative diplomatic ventures that 
turned sour. Concurrently, America's military has been cut back some 40 
percent. At some point, doing more with less just becomes doing less 
with less. Given the current demands on the U.S. military the Pentagon 
has made the troublesome choice of trying to fund present needs at the 
expense of future capabilities. This spending improvisation is divorced 
from the administration's own plans. As the military equipment bought 
in the early 1980s ages, the armed services are spending more and more 
funds just to keep old planes, ships, and tanks operating. The 
administration's undersecretary of defense called this quandary a 
``death spiral.'' The chair of the joint chiefs of staff called it a 
``nosedive.'' These are strong words. The failure to prepare for the 
future will become sharply apparent during the next decade, when the 
wheels start to come off the weapons purchased some 25 years ago. As 
one Marine general said, ``If parents are uncomfortable sending their 
sons and daughters to college in 25-year-old cars, what will they think 
about sending them into harm's way in 25-year-old helicopters?''
    The challenge for the next president is not just to spend more on 
defense but to spend wisely. In transforming its defense strategy for 
the future, the United States should seek to align the military's 
strength with the nation's strengths: America's people and technology. 
U.S. companies that have not incorporated the revolutionary advances in 
information and communications technologies have been swept away by 
their competition with surprising rapidity. The Pentagon cannot afford 
to run a similar risk. The United States must invest in a combination 
of sophisticated sensors, information technology, real-time 
communications, and precision-guided weapons that will enable the 
individual services to fight together seamlessly in joint operations. 
Future networked forces should be smaller, quicker, easier to deploy, 
more dispersed, and able to destroy targets with fewer sorties and 
greater ``standoff'' capabilities. They must be able to act together 
when executing discrete missions--such as suppressing air defenses, 
achieving complete air dominance, and destroying small, mobile 
targets--that will be vital in the new security environment. They will 
need ``more teeth and less tail.'' At the end of the day, gutsy 
soldiers in muddy boots will still have to hold ground, but they need 
to be the fastest to get to decisive points, with the most precise 
firepower to support them.
    This transformation will take time. In many respects, technology is 
the easy part. The challenge is to integrate technology into new 
operational concepts, doctrines, and organizational structures--and 
then to practice them. (In June 1940, the French army had more and 
better tanks than the German army, but the panzer leaders knew how to 
use blitzkrieg operations to overwhelm France within weeks.) The 
experience of the private sector points the way toward a smart, 
modernized defense for the future. Like private business executives 
facing new challenges, the next generation of military officers needs 
clear goals to guide change--and strong support in making the country's 
forces achieve these goals. Only the president can establish these 
goals and provide the needed leadership.
    The Pentagon can also learn from the private sector about cutting 
costs. Although the cost of civilian information-technology systems has 
fallen tremendously, the price of analogous military systems has not. 
Like other professional organizations, the Defense Department must 
focus on its core missions and outsource supporting activities. In 
leading this transformation, the next president must also challenge 
America's allies to keep up. In critical areas, U.S. allies in Europe 
and the Pacific can share significant burdens and make major 
contributions. In order to fight together, their forces must be 
interoperable. And allies should assume greater roles in peacekeeping 
operations, supported by unique U.S. capabilities and backed by the 
hammer of its robust force.

                            THE RIGHT TRACK

    As Americans enter a new century, the history of the last one may 
inspire a sense of both caution and opportunity. The United States in 
1900 seemed to have unbounded potential. But the first half of the 
twentieth century involved frightful costs. And although America 
achieved great accomplishments over the past 50 years, these came at a 
high price of lives, money, and national attention. Now a new 
generation must chart a course for America amid revolutionary changes 
in technologies, economies, societies, and weaponry. It is a mistake 
for the United States simply to react to events. America needs a 
strategy that blends traditional truths with the opportunities of a 
networked marketplace and a modernized army. It must be realistic about 
human nature and conflicting interests while being optimistic about the 
world's potential. America must deploy its power wisely, selectively, 
and consistently to mold an international system that will enhance its 
influence in future events. Drawing on this influence, modern 
Republicans believe they can work with like-minded Democrats so that 
America can advance both its interests and its ideals. America's 
potential is extraordinary, and so is the world's. It is time to get on 
the right track.

    The Chairman. Thank you, sir. Before we proceed to Mr. 
Woolsey, Joe, I would note that we have a great many young 
people here this morning. I am encouraged by that, because they 
have the most to gain or lose based on what we do here in the 
Congress of the United States. If you cannot for any reason 
hear back there, sort of gently wave your hand. Be sure, 
gentlemen, to have your mike close to you, because they are the 
ones among us that I especially want to hear what you are 
    So I say to the young people that this gentleman is the 
former head of the Central Intelligence Agency of the United 
States of America. Mr. Woolsey, you may begin.


    Mr. Woolsey. Thank you, Mr. Chairman, Senator Biden. It is 
an honor to be asked to testify today. I will summarize this 
5\1/2\ page statement in about 10 minutes, if I might.
    Our first priority, in my view, is to take steps in foreign 
relations that would maximize our ability to defend the 
American homeland. This is a relatively new concern for the 
United States in recent decades, because for many years during 
the cold war the Soviets were the only power really relevant to 
this. Our relationship with them was complex. It involved our 
needing to couple our military forces to those of NATO and to 
deter clearly any conventional Soviet attack in Western Europe.
    This led, through a set of reasonings and political 
realities in the early seventies, to the ABM treaty of 1972. 
China was not particularly relevant on this issue during the 
cold war, because it was essentially our tacit partner in 
containing the Soviets. It has a very elementary ballistic 
missile capability for much of this period.
    Hostile rogue states were not particularly relevant, 
because states such as North Korea did not have the capability 
to threaten us here at home, and terrorism, the other threat, I 
think, to the American homeland, was not really an issue 
because it had not impinged on the United States within this 
country in a major way, and certainly not in the form of 
terrorists looking to possess weapons of mass destruction.
    All of these assumptions are now gone with the wind. We 
will no longer need to concern ourselves with a Russian 
conventional attack in Western Europe for many years. Russia's 
strategic rocket forces are not the stable and elite force that 
once thoroughly and clearly controlled Russian nuclear weapons.
    China is no tacit partner of ours vis-a-vis anyone. Indeed, 
it implicitly threatens us with its rapidly improving nuclear 
arsenal, principally in order to try to discourage us from 
fulfilling our pledge to ensure peace in the Taiwan Strait. And 
not only North Korea, but right behind it Iran and Iraq, will 
threaten us within relatively few years with the possible 
deployment of ICBM's capable of reaching the U.S. International 
terrorists have us very much within their sights, and they can 
be sure to make a serious effort to acquire weapons of mass 
    The shifts in all these strategic tectonic plates in my 
view call on us to give the very highest priority to homeland 
defense. Some in Europe would contend that we would be more 
likely to help defend them if we are ourselves vulnerable. This 
argument has been advanced in various circles in Europe by the 
same people for years in attacking a number of American 
strategic modernization programs. It grows no less ridiculous 
with repetition.
    Arms control has some utility in this overall picture I 
think, Mr. Chairman, but I do not believe we should let the 
arms control tail wag the strategic dog. I would be pleased to 
answer questions about the Comprehensive Test Ban Treaty. On 
the choice that was faced here in the Senate, up or down on 
that particular treaty, I believe the Senate acted 
    My own preference would have been for a reservation to be 
attached to the treaty, forcing its renegotiation to move 
toward a low yield test treaty. But that was not the course 
which events took.
    With respect to the ABM treaty, I believe we should take 
whatever steps are needed, hopefully bilaterally with the 
Russians, but unilaterally if we must, to permit us to defend 
ourselves against rogue states and China particularly. 
Kibitzing parties on this treaty who are not parties to the ABM 
treaty, such as China and France, deserve exactly the degree of 
attention due kibitzers.
    To put it bluntly, we owe Chinese ballistic missiles a free 
ride across the Pacific to exactly the same degree that we owed 
it to the Japanese in the 1930's not to build Carl Vinson's 
two-ocean Navy and thus to permit Japanese aircraft carriers 
free passage across the Pacific. Or as it might be put in the 
current argot: Not.
    We must insist, I believe in the strongest possible terms, 
that other nations join us in the struggle against 
international terrorists.
    With respect to Russia and China, Russia is a troubled 
democracy. We hope it will become less troubled and still 
remain a democracy. Its economy in major sectors somewhat 
resembles the Chicago wholesale liquor market of the 1920's: 
competition based not on price and quality, but on skill in 
assassinating competitors.
    China is still a Communist dictatorship, albeit one with a 
partially modernized economy and, I would add, some interesting 
political developments such as elections in villages. It seems, 
unfortunately, to have chosen the tactic of threatening Taiwan 
in order to rally the Chinese people behind nationalism as 
China's economic change leads to social unrest.
    I believe that with both Russia and China we should be 
cordial, we should be calm, we should be firm. We should be 
willing, for example, with China to trade, and to see it and 
Taiwan admitted to the WTO, and still not hesitate to criticize 
it vigorously for its violations of human rights.
    We should be able to help Russia sequester its nuclear 
warheads and fissionable material under the Nunn-Lugar program, 
and take other cooperative steps with Russia, but still make it 
clear that we have no intention to permit it to hinder our 
ability to protect ourselves from the likes of North Korean and 
Iranian ICBM's.
    The rogue states, principally North Korea, Iran, and Iraq, 
bear us and our allies and friends particularly ill will. All 
of them are aided to one degree or another by one another, by 
other proliferators, and by organizations in or by the 
governments of--sometimes it is hard to tell the difference--
Russia and China in their efforts to acquire ballistic missiles 
and weapons of mass destruction.
    In the case of North Korea and Iraq, I believe our tactic 
is simply to do what we can to weaken their ruling regimes and 
keep our powder dry.
    With respect to Iran, the situation is more complex. 
Although the hard-line clerics retain control of the 
instruments of state power, and they use such instruments 
especially to support terrorism abroad, they have lost the 
support of the vast majority of the people of Iran. I believe 
that Iran's social and political structure holds the promise 
that if we play our cards right we may in time help encourage 
that country to move in a constructive direction. With Iran, I 
think we should bide our time.
    Free trade, Mr. Chairman, I believe is our friend as we 
seek to maintain our own remarkable economic performance and to 
see prosperity spread around the globe. As a general matter, in 
my view I think we ought to work to reduce trade barriers 
through the WTO and otherwise.
    There is one area which I will not go into substantially, 
but I want to mention, where I believe vigorous U.S. Government 
action is needed to create an alternative to a major product, a 
major commodity. Today, as oil prices rise, we see the 
increasing leverage of oil exporting nations. The vast majority 
of the world's proven reserves are in the Persian Gulf and 
adjacent areas, a region in which most ruling regimes are 
either pathological predators or vulnerable autocrats.
    The world's transportation systems run on petroleum-based 
fuels and substitution in a crisis is virtually impossible. I 
believe it would be most wise for us to take steps to move 
toward bio-based fuels as a substitute for petroleum-based 
ones, and to take other steps to reduce the need to rely on oil 
imports from the Mideast. Senator Lugar, a member of this 
committee, and I co-authored an article a year ago in Foreign 
Affairs on this subject titled ``The New Petroleum.''
    I want to stress, however, that what I am suggesting is not 
to move toward the use of grain-derived products such as 
today's corn-based ethanol. Rather, it is to undertake the 
research, development, and initial steps of commercialization 
in order to produce ethanol and other useful products out of 
agricultural and other wastes. Added funds for this purpose are 
in the President's budget, and Senator Lugar has proposed 
legislation on this important subject as well.
    I believe that only the use of waste products, and of crops 
such as prairie grass, for feedstocks will lower the cost of 
alternative fuels to the point that they can compete with fuels 
derived from Mideast oil.
    We need, Mr. Chairman, to maintain our ability to intervene 
abroad, I believe to be able to fight two near-simultaneous 
regional wars, and that level of military capability will give 
us the wherewithal to use force in lesser contingencies as 
well. I think force should be our last resort, but there are 
some important criteria to look at, such as whether major 
economic interests are involved and whether military logistics 
permit us to operate successfully.
    I think it should be a very rare occurrence for us to 
intervene in a country's internal struggles, but stopping 
genocide seems to me to present a plausible exception to that 
    Generally, I think it is important that we limit the use of 
American forces to cases where our opponent has what Clausewitz 
called ``a center of gravity,'' that is, a military capability 
that, if we defeat it, will mean victory. We should not send 
U.S. forces to hang out in bad neighborhoods looking for 
something useful to do. Our involvement in the Gulf war met 
this criterion. Destroying Saddam's command and control and 
defeating the Republican Guard meant military victory. Our 
involvement in Somalia did not. There was no center of gravity 
to defeat.
    But it is far from the case that the most important and 
effective tools we have to influence events always involve 
force, or threatened force. Both Lech Walesa and Vaclav Havel 
have said that the most important thing the United States did 
during the cold war was to operate Radio Free Europe.
    Joseph Nye of Harvard, a friend of all three of us, has 
given the name ``soft power'' to our influence abroad that is 
derived from our media, our culture, our economy and the like. 
Sometimes these influences can be very important, and they are 
especially important when they augment and magnify the message 
that our way, the path of political and economic freedom, holds 
the best promise to improve the lot of the world's people.
    I want to make only one final comment, Mr. Chairman. Given 
the importance of the message that this Nation stands for human 
freedom, it is especially dismaying when we see our own 
Government undermining it. Within the last month, the press has 
had a few reports about a step the administration is taking in 
negotiations in Vienna that can only be described as 
    This issue was first brought to public attention by William 
Bennett and Charles Colson in a piece in the Wall Street 
Journal on January 10 of this year. In the negotiations on the 
U.N. Convention on Transnational Organized Crime, the 
administration is proposing to define sexual exploitation as 
being limited to ``forced prostitution'' rather than simply 
    This would have the effect of creating a huge loophole for 
the enforcement of international restrictions against the 
trafficking in and the victimization of women. Most traffickers 
claim that those they have forced into prostitution have made 
this choice voluntarily. It is virtually never true.
    Most nations of the world, and particularly poor nations, 
which tend to be the homelands of the women who are coerced 
into prostitution and then transported to wealthier countries, 
oppose this administration effort to give a free pass to 
traffickers. The motivation of those in the administration who 
are instructing our diplomats to join in these negotiations 
together with The Netherlands and a few other wealthy countries 
where prostitution is legal, in order to make life easier for 
predators who export poor women--and to do so against the 
wishes of the governments of the world's poor nations which are 
trying to stop this exploitation--is absolutely beyond 
    I know that you, Mr. Chairman, have written to the 
administration on this matter, as have 32 Members of the House 
of Representatives. It is an issue in which religious groups 
have spoken out in dismay and anger, and they have met as their 
colleagues in this cause, speaking virtually the same language, 
such individuals as Jessica Neuwirth, Patricia Ireland, Eleanor 
Smeal, Gloria Steinem and other prominent feminists.
    Whatever anyone thinks should be our highest foreign policy 
priorities, surely removing the international barriers to 
coercing poor women into prostitution should be nowhere among 
them. What in the world does the administration think it is 
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Woolsey follows:]

              Prepared Statement of Hon. R. James Woolsey

    Mr. Chairman and Members of the Committee, it is an honor to be 
asked to testify before you on this important subject. I will seek to 
summarize briefly what I believe our top foreign policy priorities 
should be.

                            HOMELAND DEFENSE

    Our first priority, in my view, should be to take those steps in 
foreign relations that maximize our ability to defend our homeland.
    This is a relatively new concern for the United States, at least in 
recent decades, because of the fact that the Soviets' ability to 
destroy us was subsumed for many years in the question of many other 
aspects of our relationship with them during the Cold War. NATO, for 
example, was paramount for us. Thus we bargained away our ability to 
build ballistic missile defenses against the Soviet threat in no small 
measure to enhance our ability to have a clearly credible offensive 
deterrent (thus our desire to ensure low levels of such Soviet 
defenses); this guaranteed offensive capability, many of us believed at 
the time, made us better able to deter a conventional attack by the 
Soviets on Western Europe. Low levels of Soviet defenses had the added 
advantage of ensuring that our British and French allies also had a 
strategic deterrent against the Soviets.
    China was, for many years, not at all central to our thinking about 
the need for strategic defenses because, beginning in the early 
seventies, it was functionally our tacit partner in containing the 
Soviets. Hostile rogue states such as North Korea did not have the 
capability to threaten us here at home. Nor was terrorism, then, 
thought to be able to reach our shores from abroad in a major way--
certainly not in the form of terrorists' potential use of weapons of 
mass destruction.
    All these assumptions are now gone with the wind. We no longer need 
concern ourselves with a Russian conventional attack on Western Europe, 
and this will probably be true for many years. The once-solid command 
and control of Russia's nuclear arsenal by elite and well-trained 
Strategic Rocket Forces troops is no more. China is no tacit partner of 
ours vis-a-vis anyone, but rather China threatens us with its rapidly-
improving nuclear arsenal principally in order to try to discourage us 
from fulfilling our pledge to ensure peace in the Taiwan Straits. Not 
only North Korea, but right behind it Iran and Iraq, will threaten us 
within a very few years with the possible deployment of ICBM's capable 
of reaching the U.S. And international terrorists have us very much 
within their sights; they can be sure to make a serious effort to 
acquire weapons of mass destruction.
    The shifts in all these strategic techtonic plates, in my view, 
call upon us to give the very highest priority to homeland defense 
against both ballistic missiles and terrorists, and to take the very 
important steps in foreign policy needed to implement such strategic 
steps. With respect to ballistic missile defense, some in Europe 
contend that we will be more likely to help defend them if we are 
ourselves vulnerable. This argument has been advanced by many of the 
same people for years to attack a number of our strategic modernization 
programs. It grows no less ridiculous with repetition.
    Arms control has its utility I believe, in some circumstances, in 
limiting certain threats--but we should not let the arms control tail 
wag the strategic dog. This happened in the 1920's and it is not a 
history we should repeat. I believe that it was far preferable for the 
Senate to defeat the recent Comprehensive Test Ban Treaty than to 
approve it, although a reservation amending the treaty substantially 
and forcing its renegotiation--e.g. to permit low-yield testing--would 
have been my preference.
    With respect to the ABM Treaty we should take whatever steps are 
needed--bilaterally with the Russians if possible, unilaterally if we 
must--to permit us to defend ourselves. Kibitzing parties, such as 
China and France, deserve exactly the degree of attention due 
kibitzers. To put it bluntly, we owe Chinese ballistic missiles a free 
ride across the Pacific to exactly the same degree that we owed it to 
the Japanese in the 1930's not to build Carl Vinson's two-ocean navy 
and thus to permit Japanese aircraft carriers free passage across the 
Pacific. Or as it would be put in the current argot: Not.
    We must insist in the strongest possible terms that other nations 
join us in the struggle against international terrorism: if that means 
adopting policies that anger our allies who like to trade with Iran, or 
if it means pressing hard for tough action by states such as Pakistan 
that are close to states harboring terrorists, so be it.

                            RUSSIA AND CHINA

    Russia is a troubled democracy, which may or may not remain such, 
with an economy in which major sectors resemble the Chicago wholesale 
liquor market of the 1920's: competition based not on price and 
quality, but on skill in assassinating competitors. China is still a 
communist dictatorship, albeit one with a partially modernized economy; 
it seems to have chosen the tactic of threatening Taiwan in order to 
rally the Chinese people behind nationalism as China's economic change 
leads to social unrest. With both Russia and China we should be 
cordial, calm, and firm. We should be able to trade with China (and see 
it and Taiwan admitted to the WTO), e.g., and still criticize it 
vigorously for its violations of human rights. We should be able to 
help Russia sequester its nuclear warheads and fissionable material 
under the Nunn-Lugar program, and still make it clear that we have no 
intention to permit it to hinder our ability to protect ourselves from 
rogue state ICBM's.

                              ROGUE STATES

    North Korea, Iran, and Iraq bear us and our allies and friends 
particularly ill will, and show no signs of being limited by any of the 
normal conventions of international behavior except as they are 
deterred by military power. All are working hard on ballistic missiles 
and weapons of mass destruction. All are aided to some degree by one 
another, or other proliferators, and by organizations in, or the 
governments of (it's sometimes hard to tell the difference), Russia and 
    In the cases of North Korea and Iraq, the objective seems first and 
foremost to intimidate their neighbors and to deter us from again 
intervening to protect South Korea, Kuwait, and other nations near 
Iraq. Iran is a more complex case: although the hard-line clerics 
retain control of the instruments of state power--and use such 
instruments especially to support terrorism abroad--they have lost the 
support of much of the people of Iran. And the people have some limited 
ability to make their wishes known, through elections and otherwise. 
Dealing with Iran requires firmness and we should be wary of moving too 
eagerly toward resumed relations. But Iran's social and political 
structure holds the promise that, if we play our cards right, we may in 
time help encourage that country to move in a constructive direction. 
With Iran we may bide our time and look for an opportunity. With North 
Korea and Iraq we should do all that we can to weaken their ruling 
regimes, and keep our powder dry.


    Free trade is our friend as we seek to maintain our own remarkable 
economic performance and see prosperity spread to the rest of the 
globe. As a general matter, in my view, we should systematically work 
to reduce trade barriers, through the WTO and otherwise. But there is 
one area of the economy where I believe vigorous U.S. government action 
is needed to create an alternative to a major commodity.
    Today as oil prices rise we see the increasing leverage of oil-
exporting nations. The vast majority of the world's proven reserves are 
in the Persian Gulf and adjacent areas, such as the Caspian Basin--a 
region in which most ruling regimes are either pathological predators 
or vulnerable autocrats. The world's transportation systems run on 
petroleum-based fuels, and rapid substitution of other fuels during a 
crisis growing out of this unstable region is today impossible.
    I believe that we have an obligation--for reasons of security, and 
to promote other goals such as improving the environment and improving 
our trade balance and rural development--to move toward bio-based fuels 
as a substitute for petroleum-based ones and to take other steps to 
reduce the need to rely on oil imports from the Mid-East. I will not 
dwell on this point since Senator Richard Lugar and I co-authored an 
article a year ago in Foreign Affairs on the subject: ``The New 
Petroleum.'' I will simply note that what is at issue is not to move 
toward the use of grain-derived products, such as today's corn-based 
ethanol, but rather to undertake the research, development, and initial 
steps of commercialization that are needed to produce ethanol and other 
useful products out of agricultural and other wastes. Added funds for 
this purpose are in the President's budget. Only the use of waste 
products and of crops such as prairie grass (switch grass) for 
feedstocks will lower the cost of alternative fuels to the point that 
they can compete with fuels derived from Mid-East oil. Senator Lugar 
has proposed legislation on this important subject.

                      INTERVENTION: HARD AND SOFT

    We need to maintain the military capability to project power abroad 
and to fight two major regional wars near-simultaneously. Sliding back 
from this objective will only encourage, e.g., Saddam to attack his 
neighbors if we were to become involved in defending South Korea 
against a North Korean attack. This level of forces will give us the 
wherewithal to use force in lesser contingencies as well. When should 
we do so?
    Certainly force should normally be our last resort, and indeed we 
will need to use it less if our reputation for success is solid. 
Ordinarily such use should be undertaken with our allies, such as the 
nations of NATO, in defense of allies themselves or to defend weak 
nations against aggression by powerful neighbors. Important economic 
interests will often be central to these decisions, as was the case in 
1990 when, after seizing Kuwait, Saddam was about 100 miles away from 
controlling over half the world's proven oil reserves. (As someone put 
it at the time, our analysis would doubtless have been different if 
Saddam had threatened to control over half the world's reserves of 
    Military logistics will always be an important factor: is the 
proposed intervention in a place that we can readily reach with 
effective force? Is it near major air bases that we can use, or near 
the sea so that our Navy and Marine Corps can readily be brought to 
    It should be a very rare occurrence for us to intervene in a 
country's internal struggles, but stopping genocide seems to me to 
present a plausible exception in some circumstances to this general 
    We should generally limit the use of American forces to cases where 
our opponent has what Clausewitz called a ``center of gravity,'' e.g. a 
military capability that, if defeated, will mean victory. We should not 
send U.S. forces to hang out in bad neighborhoods looking for something 
useful to do. Our involvement in the Gulf War in 1990-91 met this test: 
destroying Saddam's command and control and defeating the Republican 
Guard meant victory. Our involvement in Somalia in 1992-94 did not: 
there was no center of gravity.
    But it is far from the case that the most important and effective 
tools that we have to influence events abroad always involve force. 
Lech Walesa and Vaclav Havel have said that the most important thing 
the United States did during the Cold War was to operate Radio Free 
Europe (for much of its existence, I would note, a CIA covert action). 
The Dean of the Kennedy School at Harvard, Joseph Nye, has given the 
name ``soft power'' to our influence abroad that derives from our 
media, our culture, our economy, and the like. Sometimes these 
influences may be steered or directed by government action, as in the 
case of Radio Free Europe, but often not. Given our position as the 
world's only superpower these influences can be powerful, and they can 
be especially so when they augment and magnify the message that our 
way--the path of political and economic freedom--holds the best promise 
to improve the lives of the world's people.

                              A FINAL NOTE

    Given the importance of the message that this nation stands for 
human freedom, it is especially dismaying when we see our own 
government undermining it. Within the last month, Mr. Chairman, the 
press has had a few reports about a step the Administration is taking 
in negotiations in Vienna that can only be described as despicable.
    This issue was first brought to public attention, I believe, in a 
column in the Wall Street Journal on January 10 of this year by William 
J. Bennett and Charles Colson: ``The Clintons Shrug at Sex 
Trafficking.'' In the negotiations on the U.N. Convention on 
Transnational Organized Crime the Administration is indeed proposing to 
define ``sexual exploitation'' as being limited to ``forced 
prostitution'' rather than simply ``prostitution.'' This would have the 
effect of creating a huge loophole in the enforcement of international 
restrictions against the trafficking in, and victimization of, women. 
Most traffickers claim that those whom they have forced into 
prostitution have made this choice ``voluntarily,'' but in fact 
coercion of many types is the norm, not the exception.
    Most nations of the world--particularly poorer nations, which tend 
to be the homelands of the women who are coerced into prostitution and 
transported to wealthier countries--oppose this Administration effort 
to give a free pass to traffickers. The motivation of those in the 
Administration who are instructing our diplomats to join in these 
negotiations, together with the Netherlands and a few other wealthy 
nations where prostitution is legal, in order to make life easier for 
predators who exploit poor women--and to do so against the wishes of 
the governments of the world's poor nations which are trying to stop 
this exploitation--is absolutely beyond comprehension.
    I know that you, Mr. Chairman, have written to the Administration 
on this matter, as have 32 Members of the House of Representatives. 
This is an issue in which, also, religious groups have spoken out in 
dismay and anger--in almost exactly the same language as Jessica 
Neuwirth, Patricia Ireland, Eleanor Smeal, Gloria Steinem, and other 
prominent feminists. Whatever anyone thinks should be our highest 
foreign policy priorities, surely removing the international barriers 
to coercing poor women into prostitution should be nowhere among them. 
What in the world does the Administration think it is doing?
    Thank you for inviting me to appear today, Mr. Chairman.

    The Chairman. Thank you, Mr. Woolsey.
    Mr. Secretary.


    Dr. Perry. Thank you, Mr. Chairman.
    We are, of course, beginning a new century, and somehow we 
all survived the dread Y2K bug. And as we define the foreign 
policy challenges of the 21st century, I think one thing is 
absolutely clear: We do not want to repeat the tragedies of the 
20th century.
    Indeed, the 20th century saw four major tragedies: the 
Great Depression, which was worldwide in scope and 
unprecedented in depth and duration; the rise of fascism and 
communism, which resulted in atrocities typified by the gulags 
and by the concentration camps; two world wars of an 
unprecedented ferocity, resulting in more than 70 million 
fatalities; and finally, a cold war, characterized by a balance 
of terror in which both the United States and the Soviet Union 
held the other country hostage with thousands of nuclear 
weapons. As tragic as the world wars were, if deterrence had 
failed, the cold war would have resulted in the supreme 
tragedy, namely, the extinction of civilization.
    Now we begin the new century on a positive note but still 
with profound challenges, and I want to speak about some of 
those challenges.
    The first challenge is economic. Instead of a Great 
Depression, we are in the midst of an economic boom. Some hold 
that this is only a bubble which will soon burst. I do not 
agree. Indeed, the stock market may go up and the stock market 
may go down, but underlying this boom are two fundamental 
developments. First has been the introduction of free market 
economies and free markets on a widespread basis in the world. 
And the second has been the information technology revolution, 
which is deeper and more profound than the industrial 
revolution of the last century.
    I live and work in Silicon Valley in the midst of this 
revolution, and I know it is characterized by remarkable new 
tools, created by the marriage of the computer with 
communication networks. These allow vastly greater productivity 
in the work place, the home, and in schools. I believe the 
economic boom in the United States is driven by these 
productivity increases as they begin to take hold in the work 
    The good news is that this has a long way to go. We are 
only seeing today the tip of the iceberg as to what 
productivity benefits will come from these two technologies. 
The further good news is that America is the undisputed leader 
of this revolution and the principal beneficiary of it.
    The bad news is that the benefits are not shared much by 
the rest of the world, and therefore there is a wider gap 
between the haves and have-nots being created, with attendant 
sociological and political problems. The challenge to us is to 
find ways of bringing some of the benefits from market economy 
and the information technology to the whole world.
    The second challenge is political. As the century ended, 
democracy was on the rise everywhere, especially in Eastern 
Europe and in Latin America. This is a remarkable development 
and the most hopeful note on which to begin the new century.
    But these new democracies are fragile. No one should 
underestimate how fragile they are, and nowhere are they more 
fragile than in Russia today. Russia is undergoing a profound 
transformation in political, economic, and social. The 
remarkable thing is it has not resulted in chaos and bloodshed 
already, but we should understand just how difficult this 
transformation is they are going through.
    A major holdout in this democratic revolution is China. We 
can hope, however, that as a market economy and free trade 
becomes established in China, it will create an environment 
which will allow a flowering of democratic principles in that 
    Our policy should be to encourage and support democracy 
around the world because I believe that democracy around the 
world will benefit not only our country, but also promote 
stability throughout the world.
    The third challenge is in the military field. As we begin 
the 21st century, the good news is that there is no real 
likelihood of another global war. The bad news is that major 
regional conflicts are all too likely, and the really bad news 
is that these regional wars could become much more destructive 
than in the past as regional powers increasingly gain weapons 
of mass destruction.
    The United States needs three lines of defense against that 
    The first is diplomatic, to create the conditions that make 
war less likely, and you well know that this committee and 
Secretary Albright work every day on that problem.
    A second, to be done in parallel with that, is to do 
everything we can to prevent the proliferation of weapons of 
mass destruction because regional powers become emboldened to 
start a war if they possess the weapons of mass destruction 
and, if they do start one, are able to create catastrophic 
damage. That is why I am working with the President and with 
the Congress trying to minimize the risk that North Korea will 
gain a nuclear and missile arsenal.
    The third line of defense is maintaining strong military 
forces. We have today, as has already been said at this 
hearing, the strongest, most capable military force in the 
world. The challenge is to maintain that force so that if 
deterrence fails, our forces will be able to win the resulting 
war quickly, decisively, and with minimal casualties.
    The fourth challenge and what I believe is the primary 
challenge of our national security policy today is avoiding the 
reemergence of another cold war. Indeed, this was the subject 
of a book which I wrote last year called ``Preventive 
Defense,'' trying to put some focus on this question of 
preventing the reemergence of a cold war.
    As Russia struggles with its economic, its political, and 
sociological problems and as we decide how to assist Russia in 
the struggle, we should remember what is at stake because if in 
Russia's democracy fails, they could easily revert to a 
military dictatorship or, alternatively, they could descend 
into anarchial chaos. A military dictator, were there to become 
one, would have about 20,000 nuclear weapons at his disposal. 
In the event of anarchy, the country would be divided up among 
warlords and presumably the nuclear weapons would be divided 
among the warlords. Any new cold war that resulted from that 
development could be much more dangerous than the last one.
    I do not pretend to have all the answers on how to deal 
with the difficult and complex problems in Russia today, but I 
do know how high the stakes are and I believe that we should 
not wash our hands of the problems of Russia. I believe we 
should not give Russia the back of our hand, and I believe we 
should make a best effort to work with their government to try 
to effect the most cooperative structure we can to help them 
through this transformation through which they are going.
    Finally, I would contend that if we and China mismanage our 
affairs, there is the potential that we could blunder into a 
cold war with China. That would be a catastrophe for both 
countries. Indeed, the leaders of both countries realize that, 
and therefore I do not believe that this will happen. But there 
are forces driving the two countries in that direction.
    The flash point, of course, is Taiwan. I am personally 
sensitive to this issue since I was the Secretary of Defense at 
the time we sent two carrier battle groups to Taiwan during the 
1996 crisis. Those were sent not to create a crisis, but to 
defuse a crisis, and they were successful in doing that. I will 
remind you that it is now 4 years later. And another election 
in Taiwan is coming up next month, and the same conditions 
which led to that last crisis, it seems to me, are confronting 
us today.
    Again, I do not pretend to have all the answers on how we 
should deal with our problems with China, but I do fear that if 
we mismanage those problems, that we will end up with an arms 
race, first of all, between Taiwan and China, second between 
the United States and China, and then third between the United 
States and China and Russia. Such an arms race, if it gets 
started and if it cannot be moderated, could be the first step 
in the new cold war.
    I would summarize my comments, Mr. Chairman, by saying we 
are starting the 21st century on a positive note. Our economy, 
the strength of our military, the state of the world in many 
respects. The challenge is to keep it that way and not let the 
21st century degenerate into the tragedies which we faced in 
the 20th century.
    I thank you, Mr. Chairman.
    The Chairman. Thank you, sir.
    We have been joined by the distinguished Senator from 
Massachusetts, Senator Kerry. I mentioned earlier, John, that 
when I got to my office a while ago from another meeting, the 
corridor was full of young people waiting to get into this 
hearing. It occurred to me that they are perhaps the most 
vitally interested in what this country is going to be like in 
terms of our national defense and other matters, of course.
    I have even asked them to raise their hands if they cannot 
hear the witnesses, and two or three of them have and we have 
moved the mike a little closer.
    Let me say to you, the young people, that this lady here is 
taking down every syllable of every word that these gentlemen 
are saying, and it will be printed. If you think you might make 
an A in foreign affairs or some other class when you get back 
to college or to high school, or wherever you are, and you need 
a verbatim copy of the testimony this morning, drop me a note, 
or Senator Kerry, or Senator Biden, and we will send one to 
you. OK?
    Now then, why do we not take about 7 minutes apiece.
    Senator Biden. Fair enough.
    The Chairman. Jim, Mr. Woolsey, you mentioned the growing 
terrorist threat. Now, we were all greatly relieved with the 
stellar work done by the intelligence community and the Customs 
Service in apprehending a terrorist trying to enter the United 
States from Canada. That incident underscores how great a 
threat to the United States citizens terrorism truly is.
    Now, how do you assess this administration's battle against 
terrorism? And what do you think of the proposals being made 
informally to remove Syria and North Korea from the list 
designated as ``state sponsors of terrorism''?
    Mr. Woolsey. I think that in terms of the response in the 
intelligence community and the law enforcement community, as 
you suggested, Mr. Chairman, there has been a lot of effort and 
it has gone well. The CIA has had a special effort focused, for 
example, on Osama Bin Laden and his organization, which is 
called mainly in the Mideast by its initials MK for Office of 
Services, which is the organization he ran in Afghanistan 
during the war against the Soviets. He and that rather loose 
organization are a huge part of the international terrorism 
problem. The other major portion I think is the Nation of Iran 
and its sponsorship of Hezbollah and other terrorist groups, 
many of them focused very heavily on Israel.
    I think the intelligence work and the intelligence law 
enforcement cooperation has been good and continues to improve. 
We should note that the terrorist trying to cross the Canadian 
border was caught by a regular customs inspector doing her job, 
just straightforwardly, just as Timothy McVeigh was caught by 
an Oklahoma highway patrolman just doing his job. So, down 
there in the ranks of the people who work for the Federal and 
State Governments, what is really important is that people at 
that level perform the way those two did and many do.
    I think that having a single list for terrorist states is 
probably a mistake because North Korea, just to take one 
example, used to sponsor terrorism in some substantial measure. 
It has kidnapped people in Hong Kong and elsewhere. It has 
kidnapped Japanese citizens. It was responsible for terrible 
terrorist incidents against South Korea and the South Korean 
Government in the past. It is today, more or less, a retirement 
home for some aging terrorists.
    Syria is a far more active terrorist state because it 
provides sort of the entrepot. It provides the circumstances 
and the possibility for Hezbollah and other operations to take 
place on its soil, operating principally against Israel.
    I think what we need is a list of states that have 
something to do with terrorism that is rather heavily 
footnoted, sort of like an SEC-required report, for which you 
have to read the footnotes to figure it out. North Korea would 
go appropriately on, I think, any big list of states that have 
something to do with terrorism, but unlike Iran or a handful of 
other states that are quite actively involved, that is more or 
less a past sin of North Korea's and not the principal present 
problem that it presents to us. The present problem is the one 
Dr. Perry is working on.
    Syria I think under no circumstances should be regarded as 
off a list of terrorist-sponsoring states as long as Hezbollah 
and the Palestinian Islamic Jihad and the others operate from 
its soil against Israel the way they do.
    The Chairman. Mr. Zoellick, Mr. Perry, do you have a 
comment on this?
    Mr. Zoellick. No. I basically agree with what Director 
Woolsey said.
    The Chairman. Mr. Secretary.
    Dr. Perry. I agree with the assessment that terrorism is 
going to be a major problem in the coming decades. I believe 
dealing with it is going to require improved intelligence and, 
in particular, a coordination among intelligence agencies not 
used to cooperating, the CIA, the DIA, and the FBI, for 
example. So, there are institutional barriers set up which make 
that cooperation difficult. I saw that functioning in real time 
when we tried to conduct an anti-terrorist operation during the 
Atlanta Olympics. It was very difficult getting that 
coordination. This may even require some legislative change.
    Also, we need to have improved consequence action, that is, 
the action we take to respond to a terrorist event that we have 
not been successful in preventing, and the capability for doing 
that today resides primarily with the military, but the 
military has no law enforcement responsibilities. So, it has 
required bringing together the capabilities of the military 
with the law enforcement responsibilities of the Federal, 
State, and local police authorities.
    The Chairman. Good point.
    Dr. Perry. And in that respect, the posse comitatus law is 
an issue that I think needs to be reexamined. I am in favor of 
the principle of the posse comitatus law, but I think it is 
going to be a problem when we try to develop effective 
responses to terrorism. If we make any law changes, we ought to 
do it in calmness and deliberation rather than in hysterical 
response to an event after it has occurred.
    The Chairman. I tell you I have 1 minute remaining. I am 
going to pick that up next time.
    Senator Biden.
    Senator Biden. Thank you very much.
    I thank all three of you for being here. As the chairman 
would know, if you were willing and we were able, I would sit 
here with you over the next 8 hours and ask you questions. 
There are so many things I want to ask you about.
    I might note, Dr. Perry, that we had a major piece of 
legislation I introduced that you worked with me on back in 
those days to deal with posse comitatus, and it was attacked 
very hard from those who felt that it was a violation of the 
Constitution, the unholy alliance between the far left and the 
far right. Mr. Woolsey's friends on the right were absolutely 
opposed to it, and I found it kind of fascinating how we dealt 
with that issue. It was very difficult. And on the left as 
well, I might add.
    Jim, you have obviously been hanging out with Bill Bennett. 
You are getting his flair these days.
    Mr. Woolsey. No, I really have not. I just read his 
    Senator Biden. But you are getting the cadence down and the 
whole works. You know what I mean?
    The whole thing on prostitution and all the rest. That is 
good stuff. But at any rate, let me get to that later. I want 
to talk to that because it is serious but I think you got some 
of it wrong. But I am not here to debate. I am here to ask some 
serious questions.
    We all talk about a strategic doctrine. We all talk about 
having an informed foreign policy that has broad outlines that 
everyone understands, and I think understandably the last two 
Presidents have not had one because the world has changed so 
rapidly. All the smart guys that you and I know, all the 
talking heads, all the politicians who think they know about 
foreign policy, all the experts, the more standing they have, 
the more reluctant they have been to lay out a clear vision of 
what they thought. Because the world was moving so rapidly, 
they were not so sure.
    Unfortunately, when you ran the agency, Jim, it turned out 
to be dead wrong on major, major issues in terms of its 
predictions. Not your fault because I do not think we fully 
funded it enough. I do not think you had enough resources to 
make judgments.
    So, we are in a period of transition here that really 
presents great opportunities, to paraphrase Dr. Perry, but also 
great dangers.
    I would like to focus on one in my first round here in the 
5 minutes or so I have left, and that is that I for one find 
the notion of a national missile defense system appealing. But 
then I find as I examine it, it is somewhat confusing.
    For example, would it make a difference to any of you if, 
in the abandonment of the ABM treaty, to be able to deal 
effectively with the North Korean threat, Iranian threat, or 
Iraqi threat, the three we are most concerned about in terms of 
rogue states, that the result of that would be--and I do not 
know if it would be. But would it make any difference if that 
would force Japan to become a nuclear power? Would that alter 
your calculation as to whether or not--and the relative risk--
is it a safer world for our grandchildren if Japan is a nuclear 
power and China goes from 18 to 800 or 1,800 ICBM's because 
they figure, you know, the game is up? Would that make a 
difference? Is that something I should be asking the agency, 
Jim, as I make this decision?
    What is your assessment of Chinese intentions now with 
regard to their nuclear capability? And how, if any way, would 
it be altered if we do deploy, having had to deploy, without an 
amendment agreed to by the Russians, meaning we abandon ABM? 
Should I be asking the agency and others who I have great 
respect for what impact that would have then on Japan?
    I am willing to bet you my job--and I have been even more 
successful at mine than you at yours in terms of getting one 
back every time. And that is, I am willing to bet it, that if 
that happens in China, either because we abandon or because we 
do not abandon the treaty, it is only a matter of time before 
Japan becomes a nuclear power. I think there is an 
inevitability to it. I can see no logic that would dictate 
anything else.
    I see no logic that would dictate anything else other than 
India's proliferation that is, it would go to deployment in a 
significant way if China, with or without abandonment of the 
ABM, fundamentally alters its strategic forces.
    In turn, that means Pakistan will have moved to deployment.
    Now, is it a better world for us, in terms of our overall 
security, if they are the options? I am not saying they will 
be, but should we be asking those questions before we make a 
unilateral decision, if we may have to? And the President is 
prepared to, as I understand it. I am less sanguine about it 
than he is. But should we be asking those questions? Do they 
    Mr. Woolsey. They certainly matter, Senator Biden. I think 
they are excellent questions.
    I think the CIA and the U.S. intelligence community's 
cachet is stealing secrets, and where there are no secrets to 
steal, where it is a matter of judgment, understanding the 
culture of, say, a friendly government such as Japan, you might 
get as good or better a judgment from--although there are some 
real experts on Japan out at the CIA--people in the State 
Department or some parts of the academic world.
    I will give you my tentative response--I think it is an 
excellent question--which is that we should try to do this 
bilaterally with the Russians, but I believe the most important 
thing is that whatever we propose be militarily effective. And 
I think that a land-based system with limited numbers oriented 
toward North Korea is not likely to be particularly effective. 
It is much harder to hit a bullet with a bullet, shooting from 
the earth, than to do this in some other ways.
    Now, there is a big dispute in the scientific community. It 
has gone on for many years about these issues. I have always 
been, for at least the last number of years, somewhat drawn to 
the approach called ``Brilliant Pebbles'' which the Bush 
administration was interested in rather more than directed 
energy weapons in space and rather more than land-based 
systems, the reason being that any ballistic missile is slow 
and hot and easy to see when it is in boost phase. For an ICBM, 
that might be until it goes up about 300 miles and is down 
range 500 or 600 miles. It is much easier to deal with it then. 
There has been work--Dr. Perry can talk about this better than 
I--for some of the low earth orbit telecommunication satellite 
companies, Iridium and others, that have made progress on some 
of the types of satellite technology that would be relevant to 
a program like ``Brilliant Pebbles.''
    Senator Biden. Jim, let me cut you off there because my 
time is up.
    Mr. Zoellick and I were at a conference where everyone at 
this conference--you have attended it before--the Wehrkunde 
Conference in Germany with all our European friends, where we 
were all trying to tell them, do not worry, this will not 
affect anything. We are only talking about a limited defense. 
And they talk about, no, that is not true. The people really 
pushing this, the Woolseys of the world, if they knew they 
could only have a limited defense and that would be locked in 
in an ABM amendment, they would not be for it. They would not 
be for it. You would not be for it.
    But let us be honest with people. The major proponents of a 
national missile defense system, if given the option of a 
permanent amendment to ABM that limited only to two sites, 
land-based, with the capacity only to intercept a handful of 
missiles from rogue states, and that was the permanent thing we 
were locking in, you would not be for that, would you?
    Mr. Woolsey. No.
    Senator Biden. Right. And no one else would that I had 
before here, the so-called experts who supported the system.
    So, I think it is time for a little truth in advertising 
here. This idea that this is merely just a desire to have a 
limited nuclear defense to deal with the rogue states is a way 
to attract all those kids out there and say, look, do not 
worry. We are not upsetting the balance here in a major way.
    Now, it may be the way to go, but I think we should argue 
this out honestly here.
    Mr. Woolsey. Senator Biden, let me just two sentences.
    Senator Biden. Yes.
    Mr. Woolsey. There have been a number of proposals from 
Greg Canavan at Los Alamos and others that earth-orbiting 
systems, such as ``Brilliant Pebbles,'' but put in orbits 
below, say, 41, 42 degrees such that they would only be able to 
intercept launches from rogue states or China and not from 
Russia. It is conceivable scientifically and technically I 
think to have an agreement which is early effective----
    Senator Biden. Oh, no, it is conceivable, but that is not 
what you want. You said you got to protect against China.
    Mr. Woolsey. Well, 41, 42 degrees would protect against 
    Senator Biden. I am off my time.
    The Chairman. Let him finish.
    Senator Biden. I am off my time. I will come back to that 
    The Chairman. Go ahead and finish. Please finish your 
    Mr. Woolsey. Systems in that kind of orbit would protect 
against the rogue states and China but not against Russia. This 
might be a very difficult negotiation with the Russians, but I 
think one could conceive of striking a new type of agreement 
with them in which--at least as long as Russia is a democracy--
we would be willing to have an agreement whereby we were not 
deploying vis-a-vis them, but we were deploying a space-based 
effective system against China and the rogue states. I think 
that is a feasible approach.
    The Chairman. Thank you very much.
    Senator Kerry.
    Senator Kerry. Thank you, Mr. Chairman.
    Gentlemen, thank you for being here and sharing some 
thoughts with us. Like Joe, I would love to stay and ask a lot 
of questions, but in fact, I have to go to a meeting on the 
very topic that Joe was just talking about momentarily with the 
    But let me ask you a quick question, if I may. There are 
two things. One, I want to ask you about the direction we are 
going in in the East China Sea, the Taiwan Strait with the 
Sunburn missile capacity that comes with this destroyer 
capacity being delivered to China from Russia within this week 
or so. While obviously we can find and destroy that level of 
destroyer very quickly, it begins, coupled with their submarine 
purchases, to shift the stakes in that relationship. I would 
like any of you to comment on that.
    But the first question I want to ask and pursue is Iraq. 
Saddam Hussein has been characterized in the most harsh terms 
by almost everybody in the U.S. Congress and the 
administration, this one and the prior administration, and the 
threat of his development of weapons of mass destruction was 
sufficient for us--it was part. It was not the entire--
obviously, the liberation of Kuwait and so forth were critical.
    But we saw fit at the end of that war to have a clear 
mandate by the United Nations with respect to his ability to 
develop weapons of mass destruction, and we saw fit to 
prosecute an air war in an effort to enforce that, as well as 
imposing a sanctions regime on Iraq.
    But we are not doing very well at it obviously. The 
Chinese, the Russians, the French particularly have complicated 
our efforts to enforce U.N. Security Council Resolutions and 
find a strong UNSCOM-type of monitoring agency. I do not need 
to review all of it because you are very familiar with it.
    But now we have the New York Times reporting that Iraq has 
rebuilt the military and industrial sites that were bombed in 
1998, and that Saddam is probably rebuilding his WMD capacity. 
And everybody is quiet. Nothing is going on. So, this 
demonization and mobilization that took place at one point 
seems to be running for cover today because of people's lack of 
a sense of how to get something done with regard to Iraq.
    Would you, Mr. Secretary Perry, begin the process of 
weighing for us where we really are there? Do you see some 
options other than those that are being employed? Are we stuck? 
Should we be more worried? What is the reality in terms of our 
policy with respect to that now?
    Dr. Perry. We should be worried, for openers.
    If I could relive history, I would have kept the Gulf war 
going for a few more days until Saddam Hussein was overthrown. 
But that opportunity was missed.
    Now we are stuck with a much harder problem. We are dealing 
with a sovereign nation. Saddam Hussein is the ruler. We are 
trying to prevent the development of weapons of mass 
destruction through the agency of U.N. inspections, and we have 
wavering support among key members of the U.N. conducting those 
inspections in a tough and meaningful way. So, I see this as 
being a very difficult and probably eventually unsatisfactory 
way of containing the weapons of mass destruction.
    The alternatives are not attractive. The alternative of 
trying to overthrow Saddam Hussein has been expressed several 
times, has been attempted several times, has yielded no great 
success. And I am not at all sure that is likely to lead to 
    So, other than what we are doing, which is frustrating in 
the extreme, the only clear alternative is to go back to where 
we were at the end of the Gulf war. I think there is no stomach 
in this country for doing that. I would not recommend doing 
that. So, we are just going to have to struggle through the 
situation the way it is. What we are doing now is frustrating 
and difficult. I do not see a credible approach, a politically 
feasible approach that is better than that. I invited anybody 
to suggest a better approach that we could take that could 
really be executed.
    Senator Kerry. Do you agree, Mr. Woolsey? Are we stuck 
essentially, which is what the Secretary says?
    Mr. Woolsey. We are probably stuck in the short run. I 
think that support for the Iraqi opposition conceivably could 
bear some fruit, but it would be a matter of probably years. 
Had we started vigorously with this back in 1991 and supported 
the Shi'a at the end of the war when they rebelled in the south 
and had we not been on-again/off-again Finnegans with our 
support for the Kurds and the others in the north back during 
the mid-1990's, I think we would be a lot further toward a 
weakened Saddam regime today.
    But one has to start somewhere and sometime, and I think 
Congress' efforts to move toward a more vigorous support for 
the Iraqi opposition are wise. It is just that I think we have 
to have patience that it is going to take some time for them to 
have some effect.
    Senator Kerry. Mr. Zoellick.
    Dr. Perry. Senator Kerry, could I add briefly to that?
    Senator Kerry. Yes.
    Dr. Perry. I agree with what Mr. Woolsey has said. We 
should continue to try those efforts, try harder. I am just 
saying we should not hold our breath for any results quickly 
from that.
    Second, I believe we should continue the efforts we are 
doing militarily which are harassing the Iraqis. I do think 
that should slow down.
    Senator Kerry. Would you take that harassment to the higher 
level if we had intelligence regarding specific sites of 
development to be preemptive?
    Dr. Perry. Yes.
    Senator Kerry. You would?
    Dr. Perry. Yes, but I would require specific intelligence 
to do that. The goal is slowing down the nuclear development. 
There is nothing we have underway now that guarantees that it 
is going to be stopped.
    Senator Kerry. Well now, they currently are refusing to 
comply with Resolution 1284, notwithstanding the way in which 
the French and the others seem to be indicating that if they 
did comply, that the sanctions would be very quickly lifted. 
So, we are better off, in a sense, as long as they remain in 
noncompliance, are we not, because at least you keep the 
sanctions in place?
    Dr. Perry. That is a close call. I am not sure of----
    Senator Kerry. Secretary Zoellick, you have not had a 
chance to answer yet.
    Mr. Zoellick. Yes. You asked if there is a different 
option. I think there is another option. I do not think it will 
be an easy option. I regret to say I suspect we may be pushed 
to it over the next couple years because what I think has 
happened over a course of time is that Saddam Hussein kept 
making challenges, moving troops to the south, assassination 
attempt on President Bush, playing games with the inspectors. 
And each time he came away a little better, and that has not 
gone unobserved by everybody in the region. This is one reason 
why the Saudis, for example, are making their own terms with 
the Iranians because they are now assuming that the dynamic is 
that at the end of the day he will be left there standing. That 
is why I think the coalition has badly frayed.
    Now, what this comes down to is at some point do we decide 
we want to reverse that momentum, so that if he makes a move, 
which he will again, that we push two steps back as opposed to 
just meet his forces at each point along the line.
    With a leader like Saddam Hussein, the reason I think we 
may be driven to this is that we have seen that he is willing 
to use weapons of mass destruction against his own people, 
against enemies. We have seen that he is motivated by revenge. 
In a sense, as Jim was saying, as we look at terrorists, he is 
in a different category than North Korea in my view.
    So, I think what the United States needs to start to 
consider is that at some point when he moves again, whether we 
want to take a step that would, for example, remove his 
authority and control in the south of Iraq. We have partly done 
this in the north of Iraq, and we could probably do more of it 
in the north of Iraq so that the momentum is shifted. The 
momentum becomes he moves one step, he gets two steps back, and 
that we create a true basis for an opposition.
    I support Jim's idea of an opposition, but I think we have 
to be realistic. I do not think that opposition is going to be 
effective against Saddam Hussein's regime under the current 
    So, if we are really worried about this guy, if we really 
see him developing the weapons of mass destruction, if we do 
not have inspection sites, then we have to ask ourselves, are 
we willing to take some actions which would require more 
military action but still might be limited to a degree because 
there are points in the south and the north with rather limited 
troops and air power, we could exercise that control, moving 
toward the dynamic that ultimately his authority in Baghdad has 
been linked to his ability to slowly regain his power. And if 
he starts to lose that, then what effect will it have on the 
thugs around him? And frankly, what effect will it have on the 
French and Russians and others that are now assuming that, if 
they play along, some day they will be the ones that sell the 
oil? That dynamic has not worked in our direction.
    So, I do not mean, by saying this, to suggest this is easy, 
but I think this is the choice, frankly, Senator, we are going 
to face in the next year or two. I do not think we are going to 
face it this year for obvious reasons.
    Senator Kerry. Thank you, Mr. Chairman.
    The Chairman. Thank you, sir.
    Before we go further, I will say again to the young people 
that the give and take in debate and questioning does not 
indicate that there are any hard feelings. As a matter of fact, 
I expect that every Senator in the Senate will agree that Jim 
Woolsey was one of the best CIA directors we ever had.
    Senator Biden. I will agree, Mr. Chairman.
    The Chairman. I feel that way. And if anybody was getting 
it wrong--I believe that was the expression you used--it was 
because they were not listening.
    But anyway, Mr. Zoellick, I wanted to ask you a question. 
We all know about NATO and the U.S. security pact with Korea 
and Japan. Now, how would you assess the current state of U.S. 
alliances in Asia and in Europe? Specifically, is leadership 
from the United States as influential and respected within our 
alliances as it was during the beginning of the last decade? 
And if not, why? And are our allies still committed in 
resources and in policies to defending our mutual interests? I 
put those together so you could address the whole picture.
    Mr. Zoellick. Well, it is interesting, Mr. Chairman. You 
and Senator Biden both started a question the same way, which 
is focusing on allies. I think that is a key question because 
part of the point of my statement was at a time of flux, we 
cannot take these relationships for granted.
    Senator Biden asked some questions about how the Japan 
relationship might change. I personally believe, Senator, that 
the absence of a missile defense is more likely to create the 
phenomenon in Japan that you are worried about than the 
presence of one. And then to play it back into our own 
politics, if we have a theater missile defense for Japan that, 
in effect, is a national missile defense for Japan, you 
gentlemen can tell me better than I could how likely we can 
sell our American public that we are defending Japan but not 
the United States from missiles. So, these points connect.
    And this is a difficult challenge for the United States 
because working with allies is often a terrible pain. You do 
not get to do everything the way we want it. My own view is 
that the United States can extend its influence much further 
when it works with allies. But the key to that, Mr. Chairman, 
is having a strong sense of your objectives, so you know the 
most important things so you can compromise on the secondary 
    I have to say that I think, to a degree at times in recent 
years, we have been somewhat ad hoc and reactive, and so we 
have not had a sense of that strategic objective. We just 
talked about the Gulf war coalition. That is one example of a 
form of alliance that is not in very good shape today.
    Senator Biden mentioned being in Europe. I personally think 
that some of the reaction we are getting from the Europeans on 
national missile defense is that we did not really lay the 
groundwork in explaining what we think about this and why we 
think about it. You could even see at this meeting that some of 
them, when they get the idea that the United States is going to 
go ahead with this one way or the other--there are differences 
about timing, when, and others--they are going to adapt to 
that. But frankly, part of alliance relations is preparing for 
    It goes again to a core issue that Senator Biden raised. 
The Europeans have come away with the idea that missile defense 
is to create a fortress America, to delink. I see it as exactly 
the opposite. I think that if the United States is going to 
continue to project power abroad, we need to make sure that 
those theater forces are protected, and frankly, the United 
States is not vulnerable from a North Korea and Iraq or Iran 
that might take us on. That is the nature of alliance relations 
that I think has suffered.
    One more example just from Asia, since Secretary Perry is 
here, he did, I think, an excellent job in starting to overhaul 
our U.S./Japan alliance relationships after the threat with 
North Korea and we became aware of the risks that, if there was 
a conflict, the Japanese might stand on the side and the 
American public would not be very pleased.
    In the aftermath of that, not surprisingly, the Chinese 
came down on the Japanese like a ton of bricks, and the 
Japanese--bless their hearts--stood up to the Chinese.
    When President Clinton went to China for 9 days, that topic 
did not come up, and I think that was a mistake because I think 
that if you have got an ally, you agree on something, it was 
incumbent on the United States to defend what we worked out 
with our ally from a security position. And that would be the 
answer to Senator Kerry as well. What we know is the Chinese 
have a different view of security in the region than we do. It 
does not mean we have to be enemies, but we better defend our 
friends if we agree with something.
    So, these become small accoutrements. At the end of the 
day, the United States is a powerful country. People are not 
going to abandon us. But there are a lot of issues where, if we 
do not handle these relationships properly, we are going to 
make our job a lot tougher dealing with uncertainties.
    The Chairman. You could not see them, but your colleagues 
were nodding.
    Now, you know about the high level delegation from North 
Korea that was to come to Washington in a couple of months. I 
believe that was supposed to happen in October of last year, 
Mr. Secretary. Why do you think it took so long, after we 
agreed to lift sanctions on North Korea, for the North Koreans 
to commit to sending a high level delegation to the United 
    Dr. Perry. Mr. Chairman, they never gave us a date until 
the last meeting in Berlin when they indicated that we would 
have one more preparatory meeting late in February and that the 
high level meeting would be about a month after that. That is 
the first time they ever specified a date.
    Why did it take so long, though, is your question.
    The Chairman. Yes, sir.
    Dr. Perry. I can only give you my estimate of that. My 
estimate is that there is a struggle going on within the North 
Korean Government between those who see the benefit of 
normalizing diplomatic and economic relations with the United 
States--and the benefits would be quite real--and those who see 
the hazards to doing that. The hazard is basically opening up 
North Korea to Western visitors, to diplomats, to business 
people. And this is a country that is totally isolated and its 
people are separated from the rest of the world. I believe many 
people in the regime fear that this opening up could undermine 
the regime. So, as a consequence, I believe there is a struggle 
going on within the North Korean Government, weighing the 
advantages of opening up versus the disadvantages.
    The Chairman. Plus the fact that they have bad domestic 
problems, like feeding their people, as you well know.
    Mr. Woolsey, a lot of folks in this town are trying to play 
politics with the CTBT vote. There are commercials being run 
back home and all the rest of it. You know, they are doing this 
in spite of the fact that they might undermine the nuclear Non-
Proliferation Treaty and the ability of the IAEA to inspect 
rogue countries.
    Now, I have made repeated requests of the administration 
respectfully for submission of the enhanced safeguards 
protocol. I want that to come to the Senate, but the 
administration does not want the Senate to endorse a nuclear 
Non-Proliferation Treaty at this time--even if it would 
strengthen the IAEA's ability to inspect dangerous countries.
    Now, my question is, how do you assess the value of the NPT 
and the IAEA, and do you think that the administration or 
anybody should be playing politics with efforts to sustain and 
strengthen those efforts?
    Mr. Woolsey. Mr. Chairman, the NPT and the International 
Atomic Energy Agency's operations under it, without the 
enhanced protocol, have some utility, but it is relatively 
limited. Saddam, after all, complied with Mr. Blix's and the 
IAEA's inspections and ran several nuclear weapons programs. 
And it is not because the IAEA inspectors were a bunch of 
Inspector Clouseaus. It was because they really did not have 
the authority, I think, to investigate fully what they needed 
    The protocol, as I understand it, permits challenge 
inspections that cannot be turned down, and that is a big step 
in the right direction. It would help a lot. It was 
negotiated--I forget, but it has been a couple of years ago. I 
do not know what the reason is that it has not been submitted, 
but it seems to me if one is serious about having the IAEA be 
effective, you have got to have the protocol that permits 
inspections of the sort that could not be undertaken in Iraq 
back in the late 1980's and at the beginning of the 1990's.
    The Chairman. Good. Thank you very much.
    Mr. Biden.
    Senator Biden. Thank you, Mr. Chairman.
    Dr. Perry--and I would like all of you to answer this in 
any order. You all know a man I think we all respect as well, a 
heck of a scientist, Richard Garwin. Garwin had an idea for a 
missile defense system that was limited, that was easier to do 
and more reliable, but would require some real negotiation, and 
that is to have a land-based boost-phase defense operation, 
which is even more reliable than ``Brilliant Pebbles,'' more 
accurate, able to be done cheaper. But what it requires is you 
have to have this missile defense system--I know you all know 
this, but for the record--near the site of the rogue state. So, 
in the case of North Korea, we would end up having to have that 
site in Russia, preposterously in China, or in Japan, or in 
South Korea.
    But it seemed to me to be a proposal that--one of my 
liabilities is--I am sure none of you share it--I have been 
doing this for so long that as one of my former colleagues 
said, dealing with the question of nuclear defense and nuclear 
offense is like reading Aquinas' Summa Theologica and the 
debate about how many angels can fit on the head of a pin. I 
mean, we have our nuclear theologians, and I am afraid I may be 
becoming one of lesser stature, but nonetheless becoming one.
    But it seemed a couple years ago this idea was one from a 
purely scientific standpoint and for dealing with the immediacy 
of the threat an appealing notion. I am going to ask you just 
to respond to what I have to say. It seemed as though to me 
from my perspective that it was abandoned a little bit in the 
same way that that famous phrase of G.K. Chesterton about 
Christianity. He said it is not that Christianity has been 
tried and found wanting; it has been found difficult and left 
untried. I think that we basically found this difficult and 
left untried. But I could be wrong about that.
    So, my question is this. If you are able and if you would 
like to, if you could respond to the efficacy of a boost-phase 
defense system operated near rogue state sites, and two, the 
politics, the international politics of that. What are the 
constraints assuming it is efficacious? What are the 
    Why are we not talking about this anymore and talking about 
a considerably more expensive system and a system also that, as 
Director Woolsey says, you know, a bullet hitting a bullet--we 
may be able to do it, but still, that is pretty tough stuff. 
And with a little bit of--not luck. With the good graces of our 
neighbors, we may succeed in the next test, which is within the 
next, I guess, 2 months.
    But can you talk to me about Garwin's notion of boost phase 
and proximity?
    Dr. Perry. I have thought a lot, Senator Biden, about how 
to deal with North Korea's long-range missile threat, and I 
will summarize my judgment on that.
    First of all, the first alternative and, by all odds, the 
best alternative is to try to influence them not to deploy the 
damn missiles.
    Senator Biden. Agreed.
    Dr. Perry. That is what we should be focused on first of 
all, and that is what we are trying to do.
    Senator Biden. And we are and you are.
    Dr. Perry. If we are unsuccessful in that, then in my 
judgment the preferred defense would be to go after the missile 
during the boost phase. I would do that not from land, 
certainly not from Russia, but I would do it from sea. An Aegis 
missile based off the coast of North Korea would have a very 
easy shot, during its boost phase when it is the easiest target 
and before it could release any penetration aids or decoys.
    The third alternative, which is not competitive, if you're 
only defending against North Korea, would be a ground-based 
system in the United States going against the reentry vehicle 
which is a harder way of doing it by quite a bit.
    But let me say clearly that I believe that while there has 
been much technical debate over the NMD system, whether it can 
be done or whether it cannot be done, my own judgment is it can 
be done. It is going to cost more and take longer than most 
people believe today. But I do have complete confidence that 
this is technically feasible and that we will be able to do it. 
But even rather unsophisticated decoys and penetration aids 
makes the job more difficult. That is the advantage of getting 
at the missile during the boost phase; it is far better because 
it avoids the decoys and penetration aids.
    Senator Biden. Right, if you continue.
    Having run the Defense Department, why was this Aegis 
option basically--that is what I will call it for the sake of 
discussion here--apparently dismissed? It seemed to me to be so 
logical. So, from a scientific and an immediacy standpoint, it 
seems to me that would be discouraging for them to produce. If 
they knew that all this effort was going to go for naught 
because we demonstrate that we are capable of doing that and 
you have Aegises sitting in international waters off the coast, 
I just do not understand why was it rejected? Why was it not 
    Dr. Perry. I do not believe it has been dismissed, Senator 
Biden. We are moving full steam ahead to develop a theater 
missile defense system on the Aegis, which itself would be 
quite suitable for doing this job. And it is in about parallel 
development with the national missile defense system.
    I would point out, of course, though that that would defend 
against a Korean attack.
    Senator Biden. Right.
    Dr. Perry. But you have to have the right kind of geography 
for a system like that to be effective.
    Senator Biden. I got it.
    Mr. Woolsey. There are two points, Senator Biden. Without 
an amendment to the ABM treaty, a Aegis boost-phase defense 
against a North Korean ICBM would violate the treaty.
    Senator Biden. I understand that.
    Mr. Woolsey. So, you would have to amend the treaty.
    The second thing is that North Korea is really the only one 
of the three rogue states that is geographically situated in 
such a way that this surface-based, boost-phase intercept might 
be reasonable. Iran and Iraq I think probably are not unless 
one has boost-phase intercept based in Russia again. So, that 
is what has driven some of us, not any great affection for 
space, but that is what has driven some of us to this notion of 
boost-phase intercept with kinetic energy interceptors from 
space in these inclined orbits that I talked about earlier.
    Senator Biden. I guess what I am trying to say is--my time 
is up.
    The Chairman. Go ahead.
    Senator Biden. The people whose views I respect the most, 
including yours--and I mean that sincerely--seem to come down 
in one of two areas. We have to develop a theater nuclear 
defense anyway, unrelated to the rogue states in my view. I 
think in terms of our projection of conventional capability, I 
do not want our forces out in the circumstance where we have 
them through our significant lift capacity moved 8,000 miles or 
12,000 miles from the shore and the proliferation of nuclear 
capability in a theater range not be able to be at least 
arguably dealt with. So, I would assume that no one is 
suggesting if we get a national missile defense land-based 
system, that we are not going to continue to work on a theater 
    So, it seems to me that the people who I speak to most 
often--and it is across the lines, Jim, I promise you. I have 
tried my best. I even asked Richard Perle and Wolfowitz to come 
and see me. OK? So, you know how open-minded I am.
    But all kidding aside. I really am trying to figure this 
    It seems to me, Doctor, that the people who seem to know 
the most about the best strategic posture either end up where 
Jim does on ``Brilliant Pebbles'' in a low or a high altitude 
in outer space or they are talking about boost phase.
    It seems, though, what we have settled on in the Congress, 
not speaking of you all, is we have settled on the present 
approach as being required to, if it works basically--if the 
next test works, with good reason--I am not being critical of 
people who disagree with me on this--there will be a hue and 
cry here to immediately commit to that system, the system that 
just missed and the one that hopefully will hit next time and 
we will have two successful tests. There will be a political 
stampede to employ that, which is an incredibly costly system. 
It seems to be all of the experts' third choice, not first 
choice. And that is what confuses me about this.
    I truly believe that--because I guess if you are here long 
enough, you begin to think you know some things, which is a 
dangerous thing. I have spent a lot of time doing what you guys 
do, writing articles about what should be the broad outlines of 
American foreign policy, what our strategic doctrine should be. 
I have thought a lot about it. I have inquired of all of you, 
and I end up at the same place, which is the combination--you 
started off, Jim. You said the combination of a defensive 
capability and an offensive capability. You said ABM and 
defense, but so everybody understands a defensive and an 
offensive capability that is agreed to internationally is 
ideally the best matrix for us to work within. I am with you on 
    I just am expressing my frustration and will stop, Mr. 
Chairman. I have been a politician too long. I have held public 
office for 30 years. The Senator and I came the same time. I 
was a local official before this. We are going on 28 years. I 
think the only thing I know as well as anybody but probably the 
chairman is I can smell the politics. I do not mean partisan 
politics. I do not mean partisan. I can smell the politics of 
this place where the horses are about to smell the water, man, 
and there is a stampede. It is like we are not thinking it 
through. We, not you. We. So, that is the source of my 
confusion here.
    Mr. Zoellick. Mr. Chairman, with your indulgence, could I 
just make a brief comment on this?
    The Chairman. Certainly.
    Senator Biden. I would love to hear what you have to say.
    Mr. Zoellick. I think again, Senator, your opening 
inclination in your first question is the right way to try to 
look at this which is let us go back to some of the strategic 
basics. Before we get into technology, let us ask ourselves 
    People may disagree with Henry Kissinger about a lot, but 
there is an interesting piece in today's paper I would suggest 
you look at because it talks about his view of the history of 
the ABM and the logic. Point one is it was driven by what some 
people might have an illogic of mutually assured destruction. 
It even seems more illogical if you do not just have two 
    So, the starting point is do you really believe in this era 
we need to defend against missiles and we are willing to devote 
the resources to do that. Because if you do, my view is the con 
game here is that eventually you are going to end up having a 
system that is partly sea-based, you are going to have a system 
that is partly air-based with lasers, and you are going to have 
a land-based because the best way to assure protection is 
multiple tiers. On top of that, you are going to have space 
sensors, if you believe this is an important aspect to develop 
because, just as you were doing, you go through each of these 
options. There is a little flaw here, a little flaw there. And 
the technological capabilities I believe will be there for 
these systems, but you have to ask yourself do you believe 
these are important for projecting power, protecting your 
homeland, basic strategic decisions.
    Now, this leaves one other question, which we all ponder, 
which is, OK, well, we talk about making amendments to the ABM 
treaty and how can you talk about making amendments to the ABM 
treaty, if you are talking about the type of system development 
that I am talking about.
    To me this is why we need to think through these things 
with a new strategic logic. I think we should go to the 
Russians and say, look, the ABM model was designed for a 
different era. We are in an era now where we are concerned 
about these missiles. Frankly, you in Russia should be too. And 
we would be willing to work with you on these, but here is the 
problem we face. We do not know if the information we give you 
ends up in Tehran. But then that is a modern problem that we 
can be focusing on about how to stop that as opposed to 
discussing theory of things that were 30 years ago.
    So, I am reinforcing perhaps the nonpolitical instincts 
here, which is to go back to the strategic purpose, and that is 
what we as a country have to decide.
    Senator Biden. No. If I may, Mr. Chairman. I agree with 
you, and I know for a fact that is the nature of the discussion 
that is happening right now. That is exactly what Talbott and 
others are saying right now, what you just said.
    I guess if I can say it this way, Mr. Chairman, it will be 
a very homely analogy. It is clear that if I am a 14-year-old 
kid left at home and I live in an apartment where there is a 
guard downstairs--you have to get through the guard to get up 
to the apartment--and my parents are not going to be home, that 
is not the safest place for me to be and it is not the best 
place for me to be, and it is better for me to be at 
grandmother's house. But if I have to walk through a rough 
neighborhood to get to grandmother's house, I may get mugged 
and really hurt much more badly. So, the problem I have here is 
how do you get to grandmother's house.
    I think you are right about eventually where we have got to 
get. The problem is if in the meantime what we do is we end up 
not as a desire, but as a consequence of our actions, with the 
significant proliferation of many more nuclear weapons 
worldwide, then we have upped the ante in ways that we have to 
rely upon the certainty that the people possessing them will 
believe that the defense is of such consequence that they will 
not have any utility. That is an even harder game for 
politicians--I know how politicians think--for politicians to 
calculate than the consequence of I know if I react, I am 
obliterated. So, there are equally difficult concepts here.
    So, I am just figuring out how to get to grandmother's 
house, and I think it is a really rough neighborhood you got to 
go through to get there.
    The Chairman. Well, the solution to that is to get grandma 
to move into the same apartment.
    Senator Biden. I think you are exactly right, Mr. Chairman.
    The Chairman. We have kept you for 2 hours, but this is 
probably one of the top 10 hearings since I have been chairman 
in terms of importance. I want you to know, all three of you, 
that I appreciate your patience and your willingness to come 
here this morning.
    Now, I am going to get away from the weaponry because I 
have got friends on both sides, and I try to satisfy my 
friends, you know. It was a lot easier to be a statesman back 
when Benjamin Franklin was alive than it is today, because they 
did not have all these complications.
    But seriously--and I am going to direct this to you, Mr. 
Zoellick. I want to talk about treaty negotiations. Do you have 
the impression sometimes that our Nation, our Government, is 
isolating itself in more and more multilateral treaty 
    What I am trying to say is that we end up agreeing to the 
least bad treaty and then labeling the result as a big victory 
compared to the treaty that could have been negotiated. Now, 
that bothers me.
    Now, this bizarre measurement of success was used by this 
administration with the Biosafety Protocol, with which you are 
familiar, on trade in genetically modified product, which was 
concluded I believe last month in Montreal, as well as the 
Kyoto Protocol on Climate Change, the International Criminal 
Court, the Ottawa Convention on Land Mines, et cetera, et 
cetera, et cetera.
    My question is what negotiating posture can the United 
States take to ensure its interests are not eroded in these 
large multilateral negotiations? And a second part of the 
question is, should the United States continue to participate 
in every forum that initiates an international legal process? 
If you will take that, that will be my end for the day.
    Mr. Zoellick. Well, I am in the worst position of this 
because I served in the State Department.
    The Chairman. That is the reason I asked you.
    Mr. Zoellick. My colleagues to the left--you know, the 
State Department is always easy on this stuff, compared to the 
tough guys at CIA and Defense.
    Mr. Chairman, we started this conversation, the two of you, 
with the importance of allies and working with partners. I 
still believe that is the preferable route for the United 
States and it is an important way to do it, as we have talked 
about on national missile defense. It takes a lot of homework. 
It takes a sense that people will trust your word. It takes a 
sense that you have your objectives clearly stated so you know 
where you can compromise. And that is the preferable route.
    But I also believe, to be effective as a leader in 
negotiations or in war coalitions, you have to be willing to 
demonstrate that you will act alone if necessary. I worked with 
President Bush and Secretary Baker at the time of the Gulf war 
coalition. It was an amazing example of using the U.N. 
effectively for a war-fighting coalition. But I believe we 
never would have been successful if the United States had not 
made clear that, one way or another, we were going to reverse 
this aggression. So, it was the combination of the multilateral 
action but also the individual will.
    You mentioned a couple of cases, and I will just refer to 
one that troubles me deeply and it goes to this question of the 
United States putting a marker down. I am deeply troubled with 
what this Yugoslav human rights court is doing in terms of the 
investigation of NATO forces. I think this is the worst case of 
moral equivalency. I believe that there are plenty of thugs and 
human rights violators that need to be hunted down without 
doing phoney investigations of U.S. forces.
    And my real concern here is that this is the type of real-
life example that the discussion about the International 
Criminal Court brings to light. You gentlemen would know this 
better than I do, but my concern is if the families of American 
soldiers feel that they are not only going to put their lives 
on the line in terms of peacekeeping or peace enforcement 
missions, which they may question in the first place, and then 
on top of that, they are going to have lawyers second guessing 
what NATO forces do, I suspect the willingness to engage in 
these forces is going to be less and less.
    So, this frankly is one where if I were in the 
administration today, I would be making crystal clear that we 
do not accept this process, and if people want to go forward 
with it, then the lawyers can pick up the guns and our guys can 
come home because I think this is a bad way to approach an 
issue where the United States has demonstrated leadership 
abroad dealing with human rights atrocities. So, sometimes you 
do have to make clear your view, and that is one I would make 
it clear on.
    The Chairman. Very well. Do you have any comment?
    Mr. Woolsey. Only, Mr. Chairman, once when fighting in 
Spain, the Duke of Wellington said that he was not sure whether 
his forces frightened the enemy, but he said, ``by God, sir, 
they frighten me.''
    And I think if we had a force of lawyers, as Mr. Zoellick 
hypothesized, that would definitely be the consequence.
    The Chairman. Mr. Secretary.
    Dr. Perry. I am also in favor of drafting all the lawyers.
    Senator Biden. Mr. Chairman, may I make one point?
    The Chairman. Sure.
    Senator Biden. I know Mr. Zoellick knows this. The 
prosecutor who unfortunately said that has walked away from her 
own statement. Nobody--nobody--nobody in the alliance said that 
was any part of the war crimes tribunal. She has stepped back 
from it. She has said that is not what we are going to do. She 
did say it, and within 48 hours she backed away from it more 
rapidly because people like me and a lot of other people deeply 
involved in the issue immediately said, wrong, that is not in 
it. That is not part of the deal. So, that is not the official 
    Mr. Zoellick. Well, with respect, Senator, as I understand 
it--and mine comes from the New York Times. You have better 
sources. She has not dropped this, and I think that she ought 
to make clear that this is off and it will not be done again. 
You would be the first to know that----
    Senator Biden. I absolutely, positively agree with you. My 
understanding is that it is off, but whatever it takes to make 
sure that is done, I assure you I for one will weigh in on that 
    I too want to thank you all very, very much.
    I want to recommend one thing for the students who are 
    And I want to thank you. You have all come a distance, but 
particularly Dr. Perry came from California for this hearing 
and I understand it is basically the only reason you are here. 
I cannot tell you how much we appreciate your making the effort 
to be here.
    Further, I reveal my prejudice. I think your book on 
preventive defense is one of the finest expositions that I have 
read, and I have tried to read every damn important book that 
has been written in the last 15 years on strategic doctrine and 
on our defense posture. And I would recommend it. It is called 
``Preventive Defense'' and it is written by Secretary Perry and 
Ashton Carter for those of you who are students. Whether you 
agree with the position or not, it will give you the most 
articulate case, I think, for the case for prevention that I 
have ever read, and I think you do it extremely well.
    Dr. Perry. Thank you, Senator Biden. I hope that is in the 
    Mr. Zoellick. It needs to be in a book blurb is what it 
    The Chairman. In capital letters.
    I imagine that requests for printed transcripts of this 
hearing are going to be greater than we have had in a long 
time. Therefore, on behalf of the Senators who had obligations 
on other committees and who were not here, I am going to keep 
the record open for a couple of days so that they can submit 
questions in writing. I know this is a burden, but I hope you 
will favor us with your responses.
    Thank you again and I thank the people who have been here 
as visitors.
    The Chairman. There being no further business to come 
before the committee, we stand in recess.
    [Whereupon, at 12:13 p.m., the committee was adjourned.]
    [Responses to additional questions for the record follow:]

                  Additional Questions for the Record

Responses of Hon. R. James Woolsey to Additional Questions Submitted by 
                          Senator Jesse Helms

    Question. I have supported a policy of trying to replace aggressive 
regimes which sponsor terrorism, proliferate the most deadly weapons, 
repress their people, and have designs on repressing their neighbors' 
people. Iraq, Serbia, and North Korea are all examples of states where 
the best policy, in my mind, would be for the United States to aid 
opposition forces and broadcast uncensored news--to help change the 
regime, as the heart of the problem.
   How would you assess the performance of the Clinton 
        Administration in pursuing this simple idea?

    Answer. With respect to Iraq, I believe the Administration's policy 
has been almost uniformly feckless and flaccid. With respect to Serbia, 
I believe that there was a long delay in challenging the Milosevic 
regime with respect to its activities in Bosnia, and an unwise 
limitation on the use of force once the decision was made to challenge 
it in Kosovo. With respect to North Korea, I believe the opportunities 
for regime change are quite limited. But in all three cases, I would 
strongly support aid to opposition groups, where possible, and in any 
case the broadcasting of uncensored news.

    Question. Where the Clinton Administration has said it supports a 
regime-change policy--as in Iraq and Serbia--is it following through?

    Answer. With respect to Iraq the Administration's actions have been 
particularly weak in terms of supporting a change of regime. It seems 
to be principally interested in postponing any outbreak of conflict, or 
even tension, with Saddam until after January 20 of next year. It has 
not followed through even fmancially with what the law requires. With 
respect to Serbia, the Administration did at least take military action 
in Bosnia, although after several unproductive years of trying to make 
the UN dual-key system of control work. It took action after a time in 
Kosovo (a much more difficult case, politically, because Kosovo had 
been recognized as a part of Serbia), but by declaring that ground 
forces would not be used and by limiting air action to high-altitude 
bombing it unnecessarily prolonged the use of force.

    Question. Has it followed through when urged on by Congress, as in 
the case of the Iraq Liberation Act?

    Answer. No. The Administration's implementation of the Iraq 
Liberation Act has been reluctant, formalistic, and minuscule.

    Question. Another foreign policy tool for dealing with rogue states 
is economic sanctions, the application of which a number of legislators 
seek to ``reform.''
   How important a tool are sanctions for either facilitating 
        regime change, urging a regime to alter behavior threatening 
        our interests and principles, or highlighting the importance 
        the United States places on a problem such as terrorism, arms 
        proliferation, and political repression?

    Answer. As a general proposition I believe that the United States 
over-uses the tool of economic sanctions. They are rarely effective 
unless they are multilateral and thoroughly enforced, and often they 
are employed against regimes which care little or not at all about 
economic deprivation of the people they rule. Having said that, 
however, I believe we should persist with the economic sanctions in 
effect against Iraq. A very fine piece by Patrick Clawson in the 
Washington Post on Sunday, February 27 (``The Numbers Don't Lie. Saddam 
Does'') sets out the reasons for maintaining these sanctions quite 

    Question. Do you agree that we ought to take care not to too 
narrowly constrain the ability of the Executive Branch and Congress to 
implement sanctions against rogue states, and specifically countries on 
the State Department list of sponsors of terrorism?

    Answer. Yes. If the government makes a decision to implement 
sanctions, we should do everything we can to make them effective. I 
believe, however, that the State Department list needs to be made more 
precise in its description of state sponsors of terrorism. Some states 
that are on it (e.g., North Korea and Cuba) have ruling regimes that 
are terrible in their deprivation of human rights and in other ways--
such as, in North Korea's case, proliferation of weapons of mass 
destruction and ballistic missiles--but now have very limited roles in 
terrorism. The principal state sponsor of international terrorism is 
Iran, and there the recent election of a majority of reformers to the 
Majlis suggests the possibility (not yet the reality) of some 
substantial changes in government policy; this should be considered in 
any assessment of the desirability of sanctions.



                      THURSDAY, FEBRUARY 10, 2000

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:35 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Jesse Helms 
(chairman of the committee) presiding.
    Present: Senators Helms, Chafee, Sarbanes, Feingold, and 
    The Chairman. Good morning. We welcome all of the visitors 
here this morning.
    Lincoln--Senator Chafee, I would say that I am very pleased 
at the interest in foreign affairs on behalf of the young 
    And I always tell everybody if you cannot hear, raise your 
hand, and we will crank it up a little bit.
    And we work for you here, and now--see this gentleman with 
the plug in his ear and with the pen in his hand and all that 
stuff, he is taking down the verbatim comment in this committee 
this morning. And it will be printed verbatim, except that we 
usually exclude stuff like right now.
    But if you find yourself interested in some of the 
information, as you very well may, drop me a line and we will 
get you a printed copy.
    I have been advised that Senator Biden, who like all 
Senators, we all have committee meetings galore--I think 
sometimes they--there is some sort of computer down in the 
bowels of the Capitol that cranks out stuff about 11:30 every 
night that says, ``How can I schedule Helms at three places at 
one time tomorrow.''
    So I just pick and choose. And I always choose Foreign 
Relations, because this--this is sort of my committee.
    All right. We welcome this morning a distinguished 
American, the honorable Brady Anderson, who is Administrator of 
the U.S. Agency for International Development.
    Now, USAID is the foreign aid establishment. And sometimes 
into the history--its history, it has run amuck at the 
displeasure of the American people.
    Here is a man who is getting all that straightened out. Mr. 
Anderson was confirmed for this position on July 30 of last 
year, after serving as an ambassador.
    Prior to that time, Mr. Anderson and his wife answered an 
even higher calling. They were missionaries in Africa.
    And Mr. Ambassador, you bring an unique perspective to 
USAID and we look forward to hearing your frank assessment of 
the operations of that Agency.
    And, of course, the management changes from time to time, 
and so do the challenges that you run up against.
    We especially look forward to hearing your view of the 
President's fiscal year 2001 foreign aid budget priorities, as 
well as the plans for the Agency you have for the rest of the 
    Now, then it may come up during the hearing, so I will 
mention it right now that Senator Biden and I are engaging in 
discussions regarding legislation we hope to consider very 
    Now, we have kept the committee members informed about the 
general outline of what we will attempt to do.
    And I intend to provide committee members the details of 
that proposal as early as possible, maybe next week.
    The Technical Assistance, Trade Promotion and Anti-
corruption Act is not--let me emphasize--is not a foreign aid 
bill, per se, but I fully expect it to contain a number of 
provisions of interest to you and to USAID. And you and I have 
talked about that.
    Our staff have discussed it, of course. And we are working 
with you on various proposals, because we plan to give you the 
tools to manage USAID more effectively and efficiently.
    I have, therefore, every confidence that the committee can 
and will produce a bipartisan bill with the administration's 
support that will promote U.S. interest abroad and be fair to 
the taxpayers and citizens of the United States.
    Senator Sarbanes, do you have any comments, opening 
    Senator Sarbanes. Well, Mr. Chairman, I just want to join 
you in welcoming Brady Anderson before the committee.
    I think this is his first hearing as Administrator since we 
confirmed him on July 30 of last year, and, of course, he has 
had quite a full plate at USAID.
    USAID has been the principle Government agency involved in 
assisting countries with sustainable development, with disaster 
relief, and recovery, with poverty reduction and with the 
strengthening of democracy.
    And I particularly want to note that the USAID-run 
immunization programs have saved millions of lives all around 
the world. They have developed some very cost-effective 
solutions, the water re-hydration therapy, for example.
    And a lot of the focus is now being paid to the AIDS 
problem in various parts of the world. And they have initiated 
and developed some prevention programs, which have been very 
effective in some of the developing countries, so we are very 
pleased he is here. And I join you in looking forward to 
hearing from him.
    I might observe that we are going to be having a vote in a 
little while, and I am not sure I will be able to get back 
after that vote, but I certainly welcome the Administrator.
    The Chairman. Well, we appreciate your coming for this.
    Senator Chafee, I will say to the young people is--how long 
have you been in the Senate?
    Senator Chafee. Three months.
    The Chairman. His distinguished father served many, many 
years most effectively as an United States Senator, and he 
passed away last year, and the Governor of his State appointed 
his son, Lincoln Chafee.
    And John Chafee was my seat mate. And I am proud that 
Lincoln Chafee is my seat mate on the Senate floor.
    Do you have any comments, Senator?
    Senator Chafee. No, thank you, Mr. Chairman.
    The Chairman. You may proceed, sir.


    Mr. Anderson. Thank you, Mr. Chairman.
    Mr. Chairman and members of the committee, I am pleased to 
be here today in my capacity as Administrator of the United 
States Agency for International Development to present the 
President's fiscal year 2001 budget for foreign assistance 
programs, and to set out for you the priorities of this Agency.
    I would like to make a brief presentation and request that 
my formal remarks be included in the record.
    In testimony before this committee earlier this week, the 
Secretary of State did an exceptional job of laying out the 
President's foreign policy goals and challenges in very 
realistic and eloquent terms.
    The President's fiscal year 2001 budget request for 
international assistance programs identifies the tools and the 
resources we require to pursue these foreign policy goals and 
to meet these challenges.
    Since my confirmation, I have visited the Balkans, the 
Middle East, Turkey, and the Central American countries of 
Guatemala, El Salvador and Honduras.
    Today, I would like to share with you some of my 
observations from these visits.
    We are in a tough business. We cannot overestimate the 
difficulty of the challenges the people of these countries 
    While recognizing that there has been progress, one is 
confronted with the stark reminder of how far these people have 
to go to achieve free and prosperous societies.
    Oftentimes, that progress is two steps forward and one step 
    I was moved by the people in these countries who look to 
us, not so much for our financial resources, but for 
inspiration as they struggle for individual freedom and 
    They respect America and they admire our values. They do 
so, in my judgment, because in large measure, Americans are 
defined by our belief in the dignity and the worth of the 
individual. That is what strikes a responsive chord with people 
    I think USAID's programs today reflect this fundamental 
value, the worth of the individual.
    That is why I would like to emphasize that USAID is not 
about international charity, or transferring money to 
    Granted, financial resources are important. However, our 
most important contribution is the transfer of knowledge, of 
ideas and of information.
    We engaged so many elements of our own society in these 
efforts. Farmers, businessmen, judges, lawyers, universities, I 
might add in North Carolina, cooperatives, credit unions, State 
and local governments, and religious and secular organizations.
    I believe that is why people around the world want us to 
help them find solutions themselves to their own problems, such 
as by building institutions that foster and protect individual 
    This represents a tremendous faith in our values, something 
for which all Americans can and should be proud.
    But what we do is not just for the benefit of others. We do 
it because we want a safe, secure and stable world for 
ourselves, for our children and for our grandchildren.
    No one wants to live in a world of failed states, massive 
hunger, diseases that know no boundaries or terrorism and 
instability, which endanger our security and our prosperity as 
a people.
    As the President stated during his State of the Union 
address, ``We cannot build our future without helping others to 
build theirs.'' I certainly concur.
    I also believe that we can make a difference in responding 
to this challenge, because of who and what we are, a Nation 
based on the principle that all men and women are created equal 
and endowed with certain inalienable rights.
    From the very beginning of my tenure as Administrator, I 
emphasized that one of my priorities was to improve the 
coordination between USAID and the Department of State to 
ensure that our assistance programs reflect and support our 
foreign policy goals. I know this has been a concern of this 
    The President's budget reflects the results of this 
enhanced and extensive collaboration at every level in the 
State/USAID relationship.
    Beginning with our Embassies and USAID missions in the 
field to our regional and central bureaus in Washington, and to 
the final review conducted by the Secretary of State and me, 
our closer alliance is working very well.
    In programmatic terms, our assistance reinforces the 
following foreign policy goals: promoting democracy and open 
markets, addressing global problems such as the spread of 
infectious diseases like polio, HIV-AIDS and TB, and mitigating 
and preventing, where possible, conflict and man-made and 
natural disasters.
    However, for the U.S. Government to meet these foreign 
policy challenges requires efficient management of all our 
    Another priority outlined during my confirmation hearings 
was the need to address the management problems that have 
bedeviled this Agency for some time.
    One of the most critical of those concerns is the 
implementation of a core financial system that meets Federal 
financial standards.
    USAID has now purchased a commercial, off-the-shelf core 
accounting system that we are in the process of installing.
    Additionally, I have requested a work plan to deal with the 
serious procurement problems facing the Agency. And we are in 
the process of finalizing that plan. I am committed to moving 
quickly in remedying this problem.
    While I am not satisfied that we have addressed all the 
management problems that face the Agency, we will continue to 
press hard to make real progress toward efficient and effective 
    Mr. Chairman and members of the committee, I have also 
emphasized that another very critical goal of mine is to 
improve the relationship between USAID and the U.S. Congress.
    In that spirit, I welcome the chairman and the committee's 
desire to pass an authorization bill this year.
    I hope that in the spirit of cooperation, we can reach a 
consensus on such a bill. And I look forward to working closely 
with you in this endeavor.
    Once again, I want to thank you for your kind 
consideration. And I am ready to take your questions.
    [Mr. Anderson's prepared statement follows:]

              Prepared Statement of Hon. J. Brady Anderson

    Mr. Chairman and Members of the Committee, I am pleased to be here 
today in my capacity as Administrator of USAID to present the 
President's budget for foreign assistance programs and to set out the 
priorities of the Agency.
    I appreciate this opportunity to be heard on behalf of USAID, an 
agency that does so much to help people around the world, and directly 
serves our foreign policy goals. Your warm welcome this morning reminds 
me of last July, when I met with you for the first time at my 
confirmation hearing. I am once again gratified by your gracious 
reception. I look forward to working with you throughout the coming 
year in this same spirit of cooperation and mutual respect.
    As you know, I've been at USAID for nearly seven months. That's not 
very long in a job as complex as this, and there is still so much that 
I'm learning. But overall this has been a very rewarding experience. I 
have been to Kosovo, the Middle East and Central America and personally 
observed USAID at work. I am impressed by the work done by USAID and by 
the dedication of our staff. I am honored to serve as USAID 
Administrator. And I would like to share with you some of my initial 
observations as Administrator, some of the accomplishments that have 
most impressed me, and some of my priorities for the remaining year of 
this Administration.
    As you know, my own experience comes from the people in the 
villages of East Africa--Kenya and Tanzania--where I witnessed first-
hand how political instability and violence can hold nations hostage 
and rob individuals of their potential. But I also have seen, both in 
East Africa and on my recent trips, how U.S. development assistance has 
brought hope and new opportunities to communities--through improved 
education, health care, and sanitation, and by providing training and 
assistance to open up both markets and political regimes. Every time I 
am thanked for the work that USAID is doing--whether by a simple 
villager or a head of state--it makes me proud of our country and what 
we stand for.
    I know that there are some important things we need to work on in 
the coming year, in particular to make sure Americans know what USAID 
does and why it is important. I want to make sure people understand 
that foreign assistance is not global charity or international welfare; 
it is about making a secure environment for U.S. business and citizens 
abroad. It is an investment in our future.
    Put most simply, through United States development assistance 
programs we apply our knowledge to help improve the lives of hundreds 
of millions of people around the world, and in the process we improve 
our own security and prosperity. This knowledge is drawn from a wide 
variety of sources--U.S. universities, non-governmental organizations 
and the private sector, as well as from USAID's own professional staff. 
Our programs are not simply directed at governments. We work with 
citizens and citizen groups throughout the world to help them improve 
their own lives and expand the livelihood of their communities. It is 
important that we give the American people confidence that the 
resources they provide are being well spent, and I welcome your help in 
doing this.
    Americans also need to know that foreign assistance isn't just 
about the well being of people overseas. It is about our own security 
as well. It's been said that stable democracies don't go to war, and to 
me, that's a pretty good reason to try to strengthen democratic 
institutions in the countries where we work. Moreover, there are harsh 
reminders that diseases like tuberculosis, HIV/AIDS and polio don't 
respect national borders. If we want to protect our citizens, we need 
to be concerned about the capacity to control these diseases in the 
countries where they are now taking the heaviest toll. Not only does 
foreign assistance contribute to our health security it contributes to 
our economic security as well. History has shown us that countries with 
open market economies make strong trading partners for America. U.S. 
exports of goods to the developing world in 1998 alone totaled more 
than $295 billion. The developing world is our fastest growing trading 
partner. In fact 80 percent of the world's consumers live in developing 
countries. It is evident to me that we have an important stake in how 
these economies and societies develop.
    Americans deserve to know that their money is working and being 
used effectively and has been for a long time. Since 1961, when USAID 
was created, worldwide literacy has risen by almost 50%, life 
expectancy has risen by a decade, smallpox has been eliminated and the 
percentage of people living in absolute poverty has been cut almost in 
half. We didn't do it alone. But it wouldn't have happened without us.
    Mr. Chairman, foreign assistance--both development and 
humanitarian--is an essential American foreign policy tool to help deal 
with the fundamental causes of instability and other problems within 
societies. I believe that the economic health and prosperity of the 
United States depends on the development of free markets and the 
establishment of democratic institutions abroad because it brings 
benefits home to America. U.S. foreign assistance strengthens our 
ability to promote peace, to combat the spread of illegal drugs, to 
fight terrorism, and combat nuclear proliferation. Poverty, hunger, 
illiteracy and disease suffocate hope and create the circumstances for 
upheaval and instability. USAID programs help people transform how they 
live so that they can become more productive participants in the global 
marketplace. And, in return, foreign assistance helps secure our own 
safety and economic health.

                         USAID PROGRAM OVERVIEW

    As you know, the U.S. foreign assistance request has a large number 
of distinct components--Development Assistance, Child Survival and 
Diseases, the Development Fund for Africa, credit programs, 
International Disaster Assistance, Operating Expenses and P.L. 480 Food 
for Peace. We also work closely with the Department of State in 
programming and managing the Support for East European Democracy 
Account, the Freedom Support Act programs, and Economic Support Funds. 
The complexity of our program can sometimes be overwhelming, and as we 
focus on particular accounts or particular countries, we must not lose 
sight of the bigger picture. As I see it, the United States, through 
USAID, is addressing a range of problems that are or can become global 
in scope and that can and do affect our own quality of life and the 
security of this country. Before moving to the details of the FY2001 
request, let me give you some examples of how USAID serves U.S. foreign 
policy priorities.
    In Egypt, as in much of the Middle East, our focus is on regional 
stability and the peace process. While there are other important 
components to our activities in Egypt, the key U.S. strategy is to 
provide programs that stimulate economic growth and create jobs in 
order to benefit the whole of Egyptian society. USAID has been in 
partnership with Egypt since the Camp David Peace Accords were signed 
over 20 years ago.
    In Nigeria, a country which is just emerging from 15 devastating 
years of a corrupt military dictatorship, USAID is focused on efforts 
to bolster the urgent needs of the new and struggling democracy under 
the leadership of President Obasabjo. We are engaged in economic 
reform, health and education programs, infrastructure policy and 
activities to promote the successful transition to democratic 
governance. It is very important to the U.S. and to all of Africa that 
Nigeria succeeds.
    And in El Salvador, where I recently visited, USAID is helping the 
new democratically elected leadership pursue policies that are needed 
to ensure that its citizens share equitably in the reforms. Our 
programs concentrate on consolidating and sustaining the gains that 
have been made. A peaceful transition to democracy in Central America 
will create more opportunities for American investment, which will 
benefit both the United States and Central America.
    In other areas important to our national security interests, we are 
working hard to make similar progress. In Indonesia we are providing 
assistance to help them emerge from the political and economic chaos of 
the last three years. In Russia, our programs continue to target 
selected democratic and economic reforms. And in Colombia we are 
working with President Pastrana to eliminate the production of 
narcotics and to foster a secure and responsive governmental structure. 
We are making progress, but the challenge ahead of us is great.
    Turning now to the major elements of our program, I know that this 
Committee is certainly aware of the global environmental challenges we 
face--degradation and depletion of natural resources, rapid 
urbanization, the substantial environmental and health problems often 
associated with energy inefficiency, and the economic and ecological 
challenges of global climate change. USAID will participate in two 
inter-agency Presidential initiatives: Greening the Globe, to protect 
forests and biological diversity around the world, and International 
Clean Energy, to accelerate globally the development and deployment of 
clean energy technologies. Environmental challenges pose real threats 
to America's economic and political interests, and our request 
addresses conservation of natural resources, pollution prevention, and 
cleaner energy worldwide.
    Examples of USAID's environmental work in the past year include 
improvements in the management of coastal resources in Mexico, 
Indonesia, Tanzania and Kenya; the institution of awareness campaigns 
on water conservation in Central America and the Middle East; and 
promotion of cleaner manufacturing processes in Bolivia, Ecuador and 
Egypt. Our children will inherit a cleaner and healthier world as a 
result of the environmental investments we are making today.
    As this Committee certainly appreciates, open markets and economic 
growth are important to the United States, and we are working to 
promote these goals worldwide. Now, everyone knows that economic growth 
brings benefits to all groups in society, including the poor, the 
disadvantaged and the marginalized. But whether countries can achieve 
broad-based growth and reduced poverty depends on the development of a 
policy environment that promotes efficiency and economic opportunity 
for all members of society, as well as institutions that are soundly 
organized and managed. A level playing field requires good government. 
More than anything else, our programs help countries to become full 
participants in the global economy. This is at the heart of USAID's 
development assistance effort.
    For example, microenterprise is an important part of USAID's 
overall poverty-reduction strategy, and we expect to continue to fund 
these efforts from all accounts. In 1998 USAID microenterprise programs 
served a record 3.5 million clients worldwide, and 83 percent were 
poverty loans. The average loan size in Africa was $170, and women 
constituted 84% of all microfinance clients. These programs helped 
millions of the poorest households in the world to help themselves.
    USAID's worldwide agriculture programs are another important 
element of our overall program. With the world's population at 6 
billion and growing at a rate of 73 million a year, mainly in the 
developing world, we all need to be concerned about how countries will 
ensure adequate food supplies, generate rural incomes and employment, 
and service the growing urban areas without decimating the environment.
    USAID collaborates with the U.S. university community as well as 
private industry to develop and promote technological improvements that 
will improve agricultural productivity--productivity that benefits 
farmers everywhere, including in the U.S. It has been estimated that 
improved productivity from USAID-sponsored work on improved wheat and 
rice varieties has resulted in an additional $14.7 billion for our 
farmers between 1970-1993. We expect to maintain programs worldwide to 
improve agriculture in FY 2001.
    USAID's health and family planning programs have long demonstrated 
that health improvements are essential for a better quality of life for 
individuals. It has also become increasingly clear that reducing 
illness, death rates and population pressures lowers the risk of 
humanitarian crises in countries where population growth is the 
highest. There is little disagreement that by protecting human health 
in developing and transitional countries we also directly benefit 
public health in the United States as we are a mobile society that 
travels throughout the world coming into contact with unhealthy 
conditions and diseases not seen here at home. Unhealthy conditions and 
inadequate health systems elsewhere in the world increase the incidence 
of disease and threat of epidemics.
    I am happy to report that significant gains have been made in 
protecting human health and stabilizing population growth. Through 
USAID's programs, millions of children's lives have been saved and 
fertility rates have continued to decline in all regions. The latest 
data available on fertility reduction and mortality rates for children 
under 5 shows that there continues to be steady progress. In Romania, 
where USAID has provided family planning assistance, we have dramatic 
new evidence that in the past six years the use of modern methods of 
contraception has doubled while abortion rates have declined by one 
third. As a global leader and the largest bilateral donors in this 
sector, the United States can claim considerable credit for these 
achievements. However, we recognize we still have much to do to meet 
the needs of the estimated 150 million married women who want to space 
or limit births but still don't have access to modern methods of 
    In order to make further progress in health and to safeguard the 
health gains achieved during the past few decades, we need to address 
changing disease patterns and shifting population demographics. The 
biggest challenges are the HIV/AIDS pandemic, stagnating rates of 
immunizations, and the rising incidence of anti-microbial resistant 
strains of malaria, tuberculosis and other infectious diseases.
    Progress with child survival appears to be ahead of targets in all 
regions except Africa, which is lagging behind expectations primarily 
because of the HIV/AIDS epidemic and political instability, which 
disrupts health care services. Many couples still do not have the means 
to choose the number and spacing of their children. In January 2000, at 
an historic UN Security Council session, Vice President Gore announced 
an increase of $150 million to fund the fight against HIV/AIDS and 
other infectious diseases internationally. For FY2001, we are seeking 
over $1 billion for these population, health and nutrition programs 
worldwide. President Clinton is actively supporting the Global Alliance 
for Vaccines and Immunization (GAVI) recently announced in Davos, 
Switzerland. In FY 2000 USAID started an important $10 million 
initiative to ``Boost Immunization'' in countries where vaccination 
rates are lagging.
    As we end a most violent and conflicted century, we recognize that 
developing a community of democratic nations is a goal we must continue 
to pursue. As we have seen in Indonesia, structural flaws in the 
economy can be hidden when not accompanied by progress in democracy, 
and the economy can fall apart. In the past decade alone, we witnessed 
some of the most important events of our age including the collapse of 
communism and the end of the Cold War. In many places, opportunity for 
freedom has been accompanied by internal conflict. As these countries 
have moved ahead with the transition to market economies and democratic 
governance, we recognize that our best hope to prevent a recurrence of 
conflict is through the strengthening of these nascent democratic 
states. USAID has been at the forefront of efforts to support progress 
toward the establishment of democratic societies around the world.
    Mr. Chairman, as you know, there has been an unparalleled movement 
toward more open and transparent political systems around the globe. 
Today, more people live in freedom than ever before in human history. 
However, political change is rarely linear and we have learned that the 
democratic gains are often fragile and can be reversed. We must 
continue to support the efforts of determined men and women around the 
world who are working to build political systems that are 
representative, accountable and transparent. USAID funds rule of law 
programs to help curb the abuse of power and authority within 
societies. We support political processes, including elections that 
allow citizens to choose their representatives and hold them 
accountable. We have assisted the growth of organizations for citizen 
participation (civil society), which have emerged as a major democratic 
force in many countries around the world.
    Finally, we are helping societies to build national and local 
government institutions that are responsive to citizen needs and are 
accountable and transparent, such as rules for the banking sector, 
capital markets and appropriate regulatory bodies. This year, we have 
put a special emphasis on addressing the corrosive effects of 
corruption, and are working to encourage the transparency and 
accountability so needed in government, no matter where it is in the 
world. As a result of USAID's technical assistance and institutional 
support to the Supreme Audit Institutions in Benin, they have started 
to audit electoral campaign expenses and develop a manual for 
transparent financial and procurement operations.
    Mr. Chairman, I take very seriously my responsibilities as the 
President's Special Coordinator for International Disaster Response. We 
live in a dangerous and uncertain world. Last year humanitarian crises 
affected an estimated 418 million people: natural disasters accounted 
for some 315 million, while complex emergencies affected an additional 
103 million. The number of people receiving USAID assistance rose from 
40.6 million in 1997 to 140.8 million in 1998. USAID responded to 87 
declared disasters in 1998, of which 65 were natural disasters, up from 
27 the previous year. Several of the major emergencies were associated 
with weather anomalies related to the El Nino phenomenon.
    When Hurricane Georges swept across the Dominican Republic, there 
were critical shortages of food, water and shelter. Malaria, cholera, 
dengue fever, conjunctivitis and respiratory infections were serious 
health problems. Hurricanes Mitch and Georges affected over 12 million 
people, caused more than $10 billion in damage, and drove down the 
annual GDP growth rates of Honduras and Nicaragua by several percentage 
points each. Americans were profoundly affected by this tragedy. We all 
can remember pictures of people and homes being washed away and 
communities being smothered by mud. The loss of life was staggering. 
Americans wanted to help.
    As part of our response to these crises and others, in 1998, USAID 
provided over 920,000 metric tons of food to some 22 countries, and 
provided more than 200,000 metric tons to the World Food Program's 
Protracted Relief Operations in 12 countries. This latter contribution 
represents 41% of total tonnage of food provided to the WFP by all 
donors. While the United States does not often get credit for it, we 
can be proud of being the largest food aid donor in the world and that 
these programs provide a direct benefit to our farmers at home. The 
recovery and reconstruction of these countries is not only a 
humanitarian issue, it directly affects the economy of the United 
    In addition to responding to immediate disaster recovery needs, 
USAID has also been called on to support longer-term rehabilitation and 
recovery for countries in transition, especially those emerging from 
complex emergencies, frequently caused by civil strife, manifested by 
armed conflict, death, displaced populations, hunger, injury, torture 
and massive human rights abuses. Helping societies and governments 
shift from emergency relief to the reestablishment of political and 
social stability is an important component of what we do. This includes 
demobilization of ex-combatants and removal of land mines to enhance 
local security. We help strengthen local governance and institutions in 
order to promote reconciliation and help the reintegration of ex-
combatants into society.
    There are many other aspects of U.S. development assistance that 
assume greater significance when viewed globally. For instance, USAID 
has played an important role in improving education around the world, 
especially for girls. I am personally convinced that teaching girls and 
young women how to read and write may be our most important 
contribution toward moving the development of countries forward.
    As I have noted earlier, USAID has helped countries establish the 
policies necessary to encourage private investment and trade, including 
accession to the World Trade Organization, which opens more markets to 
American business.
    USAID has worked tirelessly to identify and address human rights 
abuses ranging from torture to trafficking in women and children. For 
example, in Nepal, USAID is funding microcredit, health, and education 
activities in rural communities that are specifically targeted at 
preventing the trafficking of thousands of vulnerable young women and 
    Through all of these programs we are improving the lives of 
countless millions, promoting the values that Americans most cherish, 
and making the world a safer and more prosperous place for all of us.
    Before I turn to the specifics of our budget request, let me touch 
on a few other important areas of concern to you, and to me. When I 
assumed leadership of the Agency, I pledged to you that I would focus 
my attention and best efforts on a number of issues that were of 
concern to this committee, including the management of USAID and our 
relationship with the Department of State. While we still have a way to 
go, I am here to report on the important progress that has been made. 
USAID mission critical systems were made Y2K compliant and to date 
because of our efforts, no USAID program activities have suffered Y2K 
    I was made acutely aware of the problems we have had with our 
financial and other information systems that made it extremely 
difficult for us to provide consistent, timely and complete 
information. Though it has been time consuming and costly, it is a 
priority for me to increase our management efficiency and to make 
demonstrable progress this year in fixing these systems.
    We are in the process of developing a five-year information 
management strategic plan, which will guide all agency information 
technology investments over this period. We have awarded the contract 
to install a new core accounting system, which will be completed in 
Washington by the end of this year and completed overseas by the end of 
2002. Additionally, we have trained almost 500 staff and partners in 
more than 45 countries to plan, report and manage for results. And 
finally, we are now better able to collect comprehensive information 
regarding the award of contracts and grants overseas. By the end of the 
calendar year we expect to have the entire 3 year backlog of data 
entered into the database and available to meet the federal requirement 
for reporting.
    I must admit that I was disappointed that USAID did not receive the 
requested authority to implement a Working Capital Fund. The absence of 
this fund is making it much more difficult for USAID to continue to be 
a source of high quality, lower cost services to other agencies in the 
field. I look forward to working with the Committee to address any 
congressional concerns so that we can add this important tool for 
resource management in the field.
    This Committee has a special interest in USAID's relationship with 
the State Department, and I am pleased to report that the relationship 
has never been closer. For example, this year was the first time the 
Secretary of State undertook a formal review of USAID's budget. We 
worked closely with the State Department to determine funding levels, 
and to manage all foreign assistance so that it supports foreign policy 
goals. We are working closely with the State Department to ensure that 
our overseas security and facility costs are being adequately 
addressed. Two working groups have been established to address issues 
of concern to the Secretary and me. And based on agreement between 
State and USAID, several operations have been consolidated, including 
retirement processing, travel contract, information technology main 
frame collection, training, and storage of household effects. 
Additionally, eight press staff were transferred to the State 
Department last April. Overall, the closer alliance between our two 
organizations is working very well.

                              THE REQUEST

    The Administration request for FY2001 is for a total of $2.141 
billion for Sustainable Development Assistance programs in three 
accounts: the Development Assistance Account, at $949 million, the 
Child Survival and Diseases Fund, at $659 million and the Development 
Fund for Africa Account, at $533 million.

                      DEVELOPMENT ASSISTANCE (DA)

    The requested $949 million for Development Assistance is an 
increase of $212 million over the amount provided in FY2000 for 
programs outside of Africa. This account supports programs that promote 
open and democratic systems, economic growth and agricultural 
development, education and training, and environmental management in 
some of the poorest countries in the world.


    The request for Child Survival and Diseases Fund programs for 
FY2001 is $659 million. This is $44 million more than last year. These 
funds will be used for Child Survival, HIV/AIDS, infectious diseases 
and other health programs, and for basic education, particularly for 
girls. The level for HIV/AIDS has been increased by $54 million in 
support of the President's new LIFE Initiative (Leadership and 
Investment in Fighting Epidemics).
    We have seen some striking successes in the child survival 
programs. Infant mortality rates have dropped, polio is on the verge of 
being eradicated, and deaths from measles have been cut in half. Last 
year, USAID launched the Global Alliance for Vitamin A, a partnership 
with UNICEF and other major donors, including U.S. food and 
pharmaceutical companies. Through this program we are using food 
fortification to accelerate the elimination of vitamin A deficiency, 
which causes blindness, and other serious problems.
    In FY2000 USAID launched a $10 million initiative to ``Boost 
Immunization'' in countries where vaccination rates are lagging. 
Recently, President Clinton proposed a U.S. Government contribution of 
$50 million in FY2001 to the new Global Alliance for Vaccines and 
Immunization (GAVI).


    The Administration places a high priority on broad-based economic 
growth in Africa, which is an extremely diverse and complex 
environment. The DFA request for Africa this year is $533 million, in 
addition to another $304 million for Africa planned from the Child 
Survival and Diseases Fund.
    U.S. foreign policy and development assistance for Africa is 
focused on efforts to reduce poverty and to accelerate Africa's 
integration into the global economy by meeting and overcoming the 
problems that threaten development. This includes strengthening 
economic growth and education and training in order to expand 
opportunities, which helps to prevent conflict and outbreaks of 
violence. It means addressing environmental degradation, building 
classroom-based education reform, providing humanitarian assistance, 
supporting Nigeria's difficult democratic transition, which is a 
priority for this Administration, and perhaps of greatest importance, 
by continuing to address the HIV/AIDS crisis.
    USAID programs are making a positive difference in African economic 
and democratic institutions. Despite the encouraging signs of progress, 
however, development in Africa is not assured. Even while democracy and 
good governance programs are helping to shift control of the economy 
and political power to the hands of the people, the HIV/AIDS pandemic 
and the destructiveness of both old and new conflicts continue to have 
a severe impact on progress. For development to proceed in Africa, we 
must help Africa meet these threats head on, and stop their deadly 
effect on African society.
    In Africa, the impact of HIV/AIDS is staggering. This year, for the 
first time, the majority of new HIV infections will affect women. It is 
a crisis that threatens to undermine Africa's progress because whole 
generations are being lost to this deadly disease. Societies are being 
crippled as mothers, fathers, children, teachers, doctors, and other 
core workers, all are being lost to AIDS. The statistics are 
overwhelming. As of December 1998, nearly 23 million adults and 
children were estimated to be living with HIV/AIDS in sub-Saharan 
Africa. UN figures indicate that eastern and southern Africa account 
for more than 50 percent of the world's HIV-positive population. There 
are 11 million AIDS orphans in Africa today, and the number is rising. 
Additionally, in the area of health, mortality rates for children under 
five are increasing and immunization levels are declining. USAID is 
taking a lead role in addressing the many aspects of these problems 
from prevention to impact mitigation.


    The core request for the Latin America and Caribbean region for 
FY2001 is $539 million. Of this $264 million is for Development 
Assistance, $86 million for Child Survival and Diseases Fund, and 
$133.6 million for the Economic Support Fund, and $55.5 million is for 
the International Narcotics Control. This FY 2001 request is the 
minimum needed to continue USAID's solid record of achievement in the 
region, and to mitigate the problems inflicted by Hurricane Mitch.
    Program priorities for Development Assistance and Child Survival 
and Diseases Fund for this region include: $41 million to strengthen 
democratic institutions, and promote broad citizen participation; $62 
million to expand economic growth, reduce poverty and improve income 
equality; $144 million in programs involving population growth, improve 
maternal and child health, and slow the spread of HIV/AIDS and other 
infectious diseases; $73 million to maintain biological diversity and 
sound environmental practices; and $29 million to improve the quality 
of education.
    Mr. Chairman, I just returned from Latin America, where I visited 
USAID programs in Guatemala, Honduras and El Salvador. As you know, 
these countries suffered the destructive ravages of Hurricane Mitch, 
which caused more than $10 billion in damages in Central America, and 
severely threatened the progress these countries had made in the past 
    I know that there are concerns about the pace of implementation of 
the reconstruction. I was concerned as well with reports that little of 
the supplemental funding has been expended. Let me put this in 
perspective. Immediately following the Hurricane, our Missions on the 
ground put all available resources to work, including funds from our 
Office of Foreign Disaster Assistance (OFDA), food aid, and funds 
reprogrammed from ongoing activities. After visiting our projects, it 
is clear to me that our people in the field began working immediately 
following the Hurricane and have not slowed down. They are now using 
the supplemental funds as fast and as responsibly as possible to help 
build back these countries. Virtually all the funds have been notified 
to the Congress and obligated to the countries.
    It is important to remember that after Hurricane Mitch we saw no 
uncontrolled outbreaks of epidemics in Central America. Today, because 
of our efforts, people have been moved into shelters, schools have 
reopened, and throughout the region, microenterprise institutions have 
been re-capitalized. Borrowers have continued to repay their loans and 
economic enterprise has continued, even though their national economies 
suffered enormously.
    As we continue to design reconstruction programs, USAID is doing 
everything possible to ensure an extra layer of accountability. We have 
included concurrent auditing, and hired independent accounting firms to 
assist the work of host country Controllers General, who play a role 
similar to our General Accounting Office. We have worked with other 
donors to create additional monitoring mechanisms that will review 
procurements, audit the financial side and inspect work completed under 
the reconstruction program. We believe that all these steps are 
necessary to give the American taxpayer, as well as the citizens of 
these countries a greater feeling of confidence that these funds are 
being spent wisely. We continue to view this undertaking as a two-year 
mission and believe that we can achieve the bulk of the relief and 
reconstruction results promised to Congress by the end of 2001.
    Turning to another part of the region, as you know over the last 
three years in Peru and Bolivia, USAID has instituted a program of 
interdiction and alternative development to reduce the number of 
hectares in coca cultivation. The results have been significant with 
increased public commitment to voluntarily reduce coca cultivation, 
participation at community and local government levels, and a 
substantial increase in the growth of the legitimate economy. Building 
on the success of this approach, the Administration is initiating 
comprehensive support in FY2000 for President Pastrana's ``Plan 
Colombia.'' As an integral component of the USG support, USAID will 
help Colombia provide people with viable alternatives to illicit drug 
production and strengthen the country's democracy by assisting the 
people displaced by violence and improving human rights and rule of 

                         ASIA AND THE NEAR EAST

    The Administration is requesting $2.4 billion for Asia and the Near 
East programs for FY2001. Of this amount, $271.4 million is for 
Development Assistance, and $97.6 million is for the Child Survival and 
Diseases Fund, and $2 billion is for the Economic Support Fund. In 
FY2001, the United States has an unprecedented opportunity to 
significantly affect the transitions occurring in Asia and the Middle 
East, both in the recovery from the Asian economic crisis and in the 
crucial task of helping the Middle East make the promise of peace, 
opportunity and security a reality. Unfortunately, the region continues 
to be plagued by critical problems such as high unemployment and water 
scarcity that if not managed carefully, could lead to conflict. Our 
national security interests compel us to remain actively engaged in 
this region.
    The last two years have been landmarks in the region's slow 
progression toward regional peace and cooperation. Implementation of 
the Wye River Accords has been a top priority for this Administration. 
USAID has been providing development assistance which is improving the 
quality of life and economic opportunity for the Palestinian and 
Jordanian people.
    In Asia, the region is still suffering from the aftershock of the 
economic crisis. While there are positive signs of economic recovery, 
the underlying economic infrastructure in Indonesia, the Philippines 
and Thailand remain weak and in need of reform and restructuring. To 
address this problem, USAID is helping to improve economic 
transparency, reduce ``crony capitalism,'' and create a better 
environment for investment in the region.
    As the economic crisis spread to Indonesia, we saw the fall of the 
Suharto regime, initiating what we hope will be a continued transition 
to democratic stability. However, economic recovery has been delayed 
due to social and political instability. The most tragic example of 
such instability was seen last year in East Timor where the previous 
regime consistently violated international standards on human rights.
    USAID invested over $33 million to help increase the transparency 
and fairness of Indonesia's first free and fair elections in over a 
generation. We provided technical assistance to establish a framework 
for those elections including voter education, conflict resolution and 
election day monitoring.
    USAID's Asia and Near East priorities for the FY2001 funding 
request include support for Indonesia's transition to democracy, 
facilitating economic reforms especially in the countries hardest hit 
by the Asian financial crisis, and supporting a comprehensive peace in 
the Middle East. USAID will also encourage regional economic 
integration by promoting cooperation and trade in clean energy 
production and technology among South Asian countries.
    We are also working hard to support a comprehensive peace in the 
Middle East, by supporting the critical preconditions for peace. U.S. 
assistance to the Middle East has contributed to regional stability and 
has helped build the foundation for economic prosperity and increased 
adherence to democratic principles. Our programs in Egypt and in Jordan 
concentrate on promoting broad-based economic development and also 
include support for democratic institutions.
    In the West Bank-Gaza, the U.S. has focused efforts on 
strengthening the Palestinian Council, and assisting local non-
governmental organizations working to improve living conditions for 
Palestinians. USAID has provided more than 14,000 small businesses with 
essential start-up microenterprise loans, created an industrial light-
manufacturing center that will employ 20,000 and increased the 
availability of safe drinking water.
    As you know, water is one of the key issues in the Palestinian/
Israeli peace negotiations. In my recent visit to the Middle East, I 
took part in the dedication of the Bethlehem-Hebron water supply 
system. This is a $72 million USAID effort that includes the drilling 
of four wells, the installation of 31 kilometers of transmission lines, 
the construction of reservoirs and the completion of pumping stations. 
This will double the quantity of water for Bethlehem-Hebron and bring 
the water usage for 500,00 people close to the minimum household water 
supply set by the World Health Organization.


    This has been a challenging year marked by hurricanes, earthquakes, 
flooding and marred by conflicts in places like Kosovo and East Timor. 
Funded by this separate account, USAID has been involved in efforts to 
deal with disasters, both political and natural in nearly every region 
of the world. For FY2001, we are requesting $220 million for the 
International Disaster Assistance Account to provide relief, 
rehabilitation, reconstruction and transition assistance to victims of 
such disasters through the Office of U.S. Foreign Disaster Assistance 
(OFDA) and the Office of Transition Initiatives (OTI). Of the total, 
$55 million is requested for OTT.
    USAID's three objectives for Humanitarian Assistance programs are 
prevention, relief and transition. These objectives form the heart of 
current relief efforts. I know you agree that emergency assistance is 
not a substitute for long term development programs but it is a 
safeguard for economic and social development.

                       DEVELOPMENT CREDIT PROGRAM

    For FY2001 we are proposing consolidation of our various credit 
programs into a single new Development Credit program. This program 
would consolidate the current Urban and Environment credit program, the 
Micro and Small Enterprise Development credit program and the 
Development Credit Authority. This new program will give USAID a 
flexible means of using credit to achieve our economic development 
objectives where credit is financially viable, where borrowers are 
credit-worthy, and where there is opportunity for effectively involving 
private lenders in development. We have requested authority to transfer 
into this new account up to $15 million from other assistance accounts 
and an appropriation of $8 million for the administrative costs of 
managing all our current and new credit activities.

                         ECONOMIC SUPPORT FUND

    The Economic Support Fund is budgeted at $2.313 billion for FY2001. 
$1.818 billion will be used for economic reforms and as continued 
support for the Middle East peace process as I described earlier, which 
includes $840 million for Israel, $150 million for Jordan, and $695 
million for Egypt. ESF funding will assist other countries in their 
transition to democracy, promote stability in Ireland and Cyprus and 
promote Human Rights. Additionally ESF funds will be used in certain 
countries to respond to environmental crises, for water management; 
primary health care, and priorities such as climate change and 
biological diversity.

                          FREEDOM SUPPORT ACT

    Mr. Chairman, the request for the FREEDOM Support Act for the 
Eurasian states is $830 million. This includes $87 million to continue 
the Expanded Threat Reduction Initiative. This initiative, to reduce 
the threat of proliferation of technology and weapons of mass 
destruction, began last year in response to growing concerns over 
security issues due to the Russian financial crisis, which has impeded 
economic progress in the region. The potential for scientists or others 
with access to this technology to sell their services to other states 
posed unacceptable risks to the United States. USAID transfers funds to 
other agencies such as DOE and State, which manage these programs. 
USAID-managed programs will continue to focus on longer-term efforts 
that support the transition to democracy and free markets and trade in 
the former Soviet states.
    We have learned that our work in the former Soviet states will take 
more time than we originally thought. While communism has failed, in 
many cases the communist mindset has not disappeared. Official 
corruption has hindered progress, both political and economic. While it 
is far too early to assess the policies that Acting President Vladimir 
Putin will embrace, we know that a free and democratic Russia is in the 
best interest of the United States. We are helping maximize the chance 
that they will stay on the right path toward a better future by working 
at the grassroots level, and in the regions far from Moscow to help 
support advocates of reform in the non-governmental and business 
communities and to build lasting partnerships between U.S. and local 
organizations. We were encouraged by the positive results of the 
election to the Duma in December, and we are emphasizing the importance 
of holding a free and fair election for President next month. We will 
encourage the winner to carry out the fundamental reforms needed for 
Russian economic and democratic development.
    While challenges continue to be great, we have also made 
considerable progress. For example Kyrgyzstan was the first NIS country 
to accede to the World Trade Organization. Armenia has excelled during 
the first six months of a comprehensive market reform program adopting 
new measures in privatization, accounting and tax reform, and land 
management. Environmental issues such as greenhouse gases are being 
addressed throughout the region.


    The request for Eastern European Democracy (SEED) Act countries is 
$610 million, which is a $77 million increase over the FY2000 funding 
level of $532.97 million. As you know, SEED is a transitional program 
to assist Central and Eastern European countries as they shift to 
democracy and free market economies.
    This request reflects a dramatic shift of funds away from 
``graduating'' Northern tier countries to Southern tier countries such 
as Romania, Bulgaria and Albania where progress has been slower. By the 
end of this year we expect all of the Northern Tier countries will have 
graduated from direct bilateral assistance. Poland, Lithuania and 
Slovakia are joining previous graduates--Estonia, Latvia, Slovenia, the 
Czech Republic and Hungary. The Northern Tier countries remain 
politically and economically important to the United States; therefore 
regional mechanisms will still be available for limited support in the 
event of a crisis and to ensure continued relationships between local 
and U.S. organizations. We hope these Northern Tier countries will be 
able to provide help and guidance to their neighbors as they move 
forward in their transition. But we are proud to say that our job is 
basically done.
    In the Southeast European countries of Bulgaria, Romania, Albania, 
Macedonia and Croatia, the conflict in Kosovo had severe economic costs 
and has set back the timetable for their full integration into the 
international economy. We are working closely with other donors to help 
these countries integrate their economies including facilitation of 
trade and customs reforms, and to continue the structural reforms that 
are building stronger democratic market economies.
    The request also includes $90 million for Bosnia-Herzegovina, a 
sharp reduction from previous years, as the program shifts from its 
earlier emphasis on reconstruction to greater efforts to establish and 
implement the legal framework and institutions of a market economy. It 
also requests $175 million for Kosovo, to help build basic 
governmental, economic and judicial structures, and to jump-start the 
economy to create jobs and provide needed basic goods and services. 
While accepting the need for a temporary UN administration, the Kosovar 
people and the U.S. are anxious to see a representative government 
    Much of the Kosovo request will go to address the need for basic 
security, good governance and human rights programs funded through 
transfers of funds to other USG agencies such as the State Department. 
USAID-managed programs, which account for less than one-third of the 
funds requested, will address the need to restore basic community 
services and infrastructure, establish the institutions of a market 
economy, restore the agricultural sector, provide credit to micro-
enterprises, and strengthen democratic institutions such as the media, 
political parties, the judiciary and other elements of civil society. 
We are creating the building blocks for a functioning and capable local 
economy and society.
    The Kosovo conflict also underscored the challenge, and the 
importance, of supporting democratic forces in Montenegro and even 
inside Serbia itself. As this Committee has recognized, support to the 
Serbian opposition is critical to build pressure against the Milosevic 
regime. Our request includes $55 million for support to media, the 
democratic opposition, and reform-minded municipalities. In Montenegro, 
we will provide vital budget support to the courageous Djukanovic 
regime, which will be complemented by our assistance in creating strong 
economic and democratic structures.
    We clearly recognize that it will take a generation or more to 
fully realize the progress made in each of these countries as they make 
the difficult transition to free and open societies.

                    P.L. 480 FOOD FOR PEACE PROGRAM

    While I am aware that a different committee authorizes the P.L. 480 
programs, I believe this Committee has an interest in this important 
part of USAID's overall program. The request for P.L. 480 Title II non-
emergency and emergency food assistance has been set at $837 million. 
This will allow the Office of Food for Peace to continue efforts to 
promote managed growth in Title II programs and to meet critical 
emergency food needs of targeted vulnerable groups including refugees, 
internally displaced families or those who lose their land or 
livelihoods due to natural or man-made disasters. This year, renewed 
attention will be given to the use of food for nutritional feeding 
programs such as the President's LIFE Initiative to mitigate the 
negative impact of HIV/AIDS in sub-Saharan Africa and India.
    On a global level, more than 800 million people are chronically 
undernourished. The P.L. 480 Food for Peace program has provided over 
$500 million in emergency food aid to an estimated 11 million people, 
it has used resources to reduce food insecurity in the developing world 
by enhancing household nutrition and increasing agricultural 
    Title II funds are also used to support the Farmer to Farmer 
program, which provides voluntary technical assistance to farmers, farm 
groups and agribusinesses to enhance the potential for substantial 
increases in food production, processing and marketing. The program 
relies on volunteers from U.S. farms, land grant universities, 
cooperatives and private agribusiness and non-profit organizations. 
Volunteers for this program have been recruited from all 50 States and 
the District of Columbia. This program has had a positive impact on the 
U.S. and raised public awareness about the needs of developing 

                           OPERATING EXPENSES

    For Operating Expenses the request is $518.96 million for FY2001. 
This is almost equal to the FY2000 level. These funds cover salaries, 
benefits and other administrative costs that assure effective oversight 
of USAID programs worldwide. OE provides the oversight of the programs 
funded through Development Assistance, Child Survival and Diseases, the 
Economic Support Fund, the Support for Eastern European Democracy Act, 
the FREEDOM Support Act and the International Disaster Assistance 
account. The requested amount will permit USAID to maintain the current 
levels of direct-hire staff overseas, though at the cost of continuing 
reductions to our staff in the U.S. It also provides for essential 
training to maintain and upgrade the skills of Agency staff. 
Additionally, OE funds will permit the continuation of Agency efforts 
to modernize its financial and other information systems. The financial 
system purchased by USAID in FY2000 will begin to be deployed overseas 
in FY2001 and will include significant upgrades to information 
technology for effective and efficient use of our automated systems.


    This is an especially challenging time to be heading USAID I want 
to work more closely with you to meet these challenges. I am making it 
a top priority to meet with more Members of Congress, one on one, in 
order to build a better understanding of the vital role of this Agency.
    This is my message to you today. USAID's work in development 
assistance takes time. It is an incremental process that pays off for 
America and for the world. Foreign assistance is a national security 
priority. USAID is a smart investment and one of the most effective 
tools the U.S. Government has in building the foundations for trade and 
markets, and the spread of democratic ideas.
    As President Clinton stated in his State of the Union address: 
``Globalization is the central reality of our time. . . . We cannot 
build our future without helping others build theirs.'' This has been 
the decade of globalization, let it become the century for 
    Thank you for your contribution to USAID's success. And thank you 
for your attention this morning.

    The Chairman. Very well. A good statement, and unusual 
around this place that it was relatively brief and to the 
    I suppose in the light of the voting situation, we start 
with just 5 minutes per Senator.
    I want to talk about the Inter-American Foundation, which 
you are familiar with.
    It was established, I believe, about 30 years ago to help 
poor people in Latin America, who are not benefiting from the 
large USAID infrastructure projects at that time.
    Now, a lot of folks do not realize that back then USAID 
spent hundreds of millions of dollars on dams and power plants 
and roads and that sort of thing. You do not do that anymore.
    You are concentrating on what the American people 
anticipate should be the real purpose, and that is helping the 
people who cannot help themselves.
    In any case, the backdrop of that, the poor people were not 
being helped and they were sort of cynical about it and it was 
during that time that Cuban revolutionaries supported by the 
Soviet Union were making converts among some in these states in 
the poor communities.
    Now, USAID now advertises itself as a development agency 
that works closely with poor people throughout the grass roots 
organizations and I think your statement emphasizes that is 
what you are trying to do. And this sounds a lot like the 
Inter-American Foundation.
    And my question is can you name me one or more activities 
that the Inter-American Foundation does that USAID is not 
already doing?
    Mr. Anderson. Thank you, Mr. Chairman. My understanding is 
that the Inter-American Foundation works with very small grants 
to, perhaps, even a few individual farmers or a small grass-
roots organization.
    While it is true that USAID works from the grass roots, 
normally our trend is to work with larger civil society groups 
and communities.
    One reason for that is the cost in resources and time and 
people here in Washington and our missions overseas that is 
required for very, very small grants to just one or two or 
three farmers.
    That is very expensive for us and with very tight budgets, 
and operating expenses especially, we have to look at how we 
contract and try to reduce the number of instruments that we 
actually have.
    So while I am not terribly experienced with the Inter-
American Foundation, I am informed that their tendency is to 
have very small and very, very rural and very local and grass 
roots activities.
    We would tend to have a bit larger program than that with 
the groups we work with.
    I will continue to think about that. I do not think I am 
going to have any other answer than that one, Senator.
    The Chairman. OK.
    Mr. Anderson. I know the thrust of your question though.
    The Chairman. That responds adequately to my question, and 
I appreciate it.
    Now, about the administration's proposed $244 million HIV-
AIDS initiative for the Third World, Franklin Graham, who is a 
friend of yours and friend of mine--he is the son of Billy 
Graham, of course--Franklin established and is now president of 
Samaritan's Purse.
    It is a worldwide humanitarian relief organization and my 
hometown paper, the Observer had an op-ed piece written by 
Franklin. I think it was earlier this month, February 5 or 6.
    Here is what it said, ``I must express a clear word of 
caution. If funds are sent to many of the governments in Africa 
or to government-run hospitals, large amounts of money will be 
    ``Much of the world intentioned aid sent to curb this 
crisis will instead end up padding Swiss bank accounts of 
corrupt bureaucrats.''
    Now, Franklin Graham, as far as I am concerned, is 
qualified to speak from experience more than any other human 
being I know. And you and I have discussed all of the projects 
that he does.
    No money is involved. He has hundreds upon hundreds of 
doctors who volunteer to go to various spots in the world and 
practice for a month or two, and various things like that.
    And I think Franklin is right, and I would just like to 
hear your comments about it.
    Mr. Anderson. I appreciate that. The HIV-AIDS programs are 
targeted primarily at the community level.
    Part of it is designed to help the health departments in 
various countries to strengthen.
    Some places, some countries where we work in Africa, the 
Ministry of Health is very poorly organized. And where we can 
give technical assistance, advice as it were, on how to 
organize themselves in their country and even provide them 
training, but no money--training for the doctors and the 
nurses, the public health-care workers and encourage them to 
get out into the villages where people really live and where 
there are lots of HIV-AIDS cases, then that is what we do.
    I agree that transferring money to ministries of health in 
Africa is not a good idea.
    The Chairman. OK. My time is expired.
    Senator Sarbanes.
    Senator Sarbanes. Thank you very much, Mr. Chairman.
    Now, just following up on this last subject, I have heard 
rumors that USAID may be thinking about ending the higher 
education program for Africans that you have had in place. 
Under the program, large numbers have been educated, and public 
health professionals, community leaders have come for 
specialized training in American universities and a number of 
institutions all across the country.
    I think most people think that the program has worked 
pretty well. And I wondered whether there was any basis to 
these rumors.
    Mr. Anderson. No. Thank you, Senator Sarbanes.
    I am not aware of--and I would not be in favor of--a plan 
to end that.
    Our universities provide unique training in the world and I 
know that people in most parts of the world would like to come 
to the United States for college and university training. And 
that is something that we have done quite effectively, as you 
say, in the past.
    It is expensive, I think, to bring someone to the United 
States for training, for education, but sometimes it makes 
sense, if there is not a proper educational institution in 
their own country, where they could get the same kind of 
    My preference, I think, would always be if someone could 
stay in their own country to get their own training. That would 
build the institution there and it would also better ensure 
that person would remain in their country and use the talents 
and education they got.
    But in some cases, I think the best option is for them to 
come to universities here.
    Now, whether or not this program, you know, what the trend 
is and the financing of it is, Senator, I'm not sure. But I 
will look at that.
    Senator Sarbanes. Well, it is the so-called ATLAS program, 
the Advanced Training for Leadership and Skills program.
    It is our leading higher education program for Africa. I 
understand that under the ATLAS program, working with the 
Council of Graduate Schools and the African-American Institute, 
we have really been able to bring people over and significantly 
enhance their professional skills.
    Of course, the premise is that those who benefit will 
return to their countries. And I gather generally that has been 
the case.
    Since we were discussing the very point of training for 
Africans, I just wanted to register that concern.
    Mr. Administrator, I have been a strong supporter of the 
American Schools and Hospitals Abroad grants program, the ASHA 
program. And there are many others in the Congress who share 
that support.
    We have not had a chance yet to examine the 2001 budget 
carefully, but I presume it will carry funding in it for the 
ASHA program. Is that correct? Do you know?
    Mr. Anderson. Your assumption is correct.
    Senator Sarbanes. OK.
    Mr. Anderson. It does. So there is no cut in that at all. 
It seems to me it was $15 million.
    Senator Sarbanes. I think that is right.
    Mr. Anderson. It was a straight line. It is in there. Yes, 
    Senator Sarbanes. Well, there are a number of American-
founded institutions in various parts of the world that look to 
that program.
    And I think most of those have been very well-run and very 
    I know we used to appropriate about $35 million, I think. 
So the figure has come down, in my view unfortunately.
    But in any event, I certainly do not want to completely 
phase out that program.
    I came here from a reception that was held earlier for a 
Catholic Relief Services worker named Loren Wille, who was 
incarcerated in the Republic of Georgia, because he was driving 
and his car skidded off a road, and the Georgian translator 
that was traveling with him was killed.
    And eventually Mr. Wille was released. It was determined 
there was no basis to charge him with anything.
    And a lot of the feeling was that it was all done in part 
in retaliation for the Georgian diplomat here who was driving 
under the influence and killed someone here in the District of 
    The Government of Georgia waived diplomatic immunity and he 
has been sent to jail. He is in jail in this country now.
    I gather our extradition treaty with Georgia permits that 
he could go back there and serve his jail sentence, which is 
apparently being discussed, and it seems to me probably worth 
    But in any event, it really leads to the question of the 
extent to which our humanitarian workers overseas increasingly 
face dangers of violence and death, and that we hear of these 
    First of all, I am concerned about the USAID workers and 
what sort of program you have for them and how you seek to 
protect them.
    And second, is USAID doing anything with the NGO and the 
PVO community to address this concern? I think it is obviously 
a real problem which needs to be confronted.
    So we are worried about our own people. And we are worried 
about the private sector people who do this kind of work.
    Many of them are religious organizations, and others are 
dedicated to this humanitarian work.
    Mr. Anderson. Humanitarian work is a very risky business.
    And humanitarian workers in recent years, as you stated, 
Senator, have come under increasing attack, whether it be a 
World Food Program plane shot down in Angola, workers killed in 
Sudan, workers in the previous Chechnya conflict killed.
    Our concerns and the State Department's concerns for 
security of humanitarian workers is an element that we keep 
before us all the time in places like Chechnya.
    We do not want our workers, we do not want Americans, we do 
not want NGO's, we do not want workers in the countries where 
we are kidnapped or killed in a conflict.
    There are an increasing number, it seems these years, of 
complex crises in the world that involve military conflict, but 
also involve huge numbers of refugees and displaced persons and 
women who have been abused and raped, and children who are 
    In those environments, our humanitarian workers and groups 
like CRS, which is one of the finest ones we work with, and 
Franklin Graham's group, Samaritan's Purse--are going to want 
to be involved in Kosova and these places.
    And I am not aware of a specific training program for them.
    But we are very concerned about it. In places we work we 
consult very closely with the regional security officer of the 
embassies before we let our people go into a place and assess 
the risk to our own workers.
    Senator Sarbanes. If I could just close, Mr. Chairman, very 
    InterAction's newsletter has an article entitled ``As 
Violence Increases, NGO's Grapple With Security Training.'' I 
just want to suggest to you that USAID should interest itself 
in this issue. Presumably you have programs for your own 
people. And there may be ways that you can be of assistance to 
the NGO's in this regard. Thank you.
    The Chairman. Thank you, Senator.
    Senator Boxer.
    Senator Boxer. Thank you so much for your courtesies, Mr. 
Chairman--thank you for holding this hearing. I will be brief, 
given the fact that we have a vote.
    Mr. Anderson, thank you for appearing before this 
committee. I am going to focus on HIV-AIDS and tuberculosis 
despite knowing that there are many other issues we are 
concerned about.
    I know you have personally seen the devastating 
consequences of AIDS in your work.
    And I know several of our Senators and staff went to Africa 
to see the devastation firsthand, which I really applaud, 
because it is not a pleasant trip. But I think it is very 
    We thought tuberculosis was a disease that was eliminated. 
In fact, we did it with the development of antibiotics back in 
the fifties, but the disease is making a comeback. And I am 
very concerned about it.
    It is showing up all over this country, Mr. Chairman, as a 
result of immigration and the fact that the world is a much 
smaller place.
    We know, any virus, any disease is one plane ride away. And 
WHO estimates that nearly 2 million people die of TB-related 
conditions annually.
    And one third of the entire world's population is infected 
with TB. This is an incredible statistic, one-third.
    I also share your concerns about HIV-AIDS and the effect 
that it is having in sub-Sahara and/or in Africa. Some 13.7 
million people in sub-Sahara and in Africa have died of AIDS. 
That's 84 percent of all the people in the world who have died 
of AIDS since the beginning of the epidemic, so we know Mr. 
Chairman where the problem is.
    I just want to make sure the chairman knows this, that 
unlike other areas of the world, the HIV-AIDS epidemic in sub-
Sahara and Africa is predominantly a woman's disease.
    A majority of infected adults, 55 percent to be exact, are 
women. And as a result, by the end of the year, the HIV-AIDS 
epidemic will be the reason that over 10 million children in 
sub-Sahara and in Africa are orphans. So many children are 
getting the disease from their mothers.
    Now, the good news about that is there has been a 
breakthrough from the pharmaceutical companies and they have 
found a way for $4--$4, to pretty much stop the transmission 
from mother to child during pregnancy.
    And what I want to say is that I think we have a moment in 
time here where we can make a difference.
    And I think it not only will impact the women and the 
children and the families in Africa, but also in our own 
country, because, again, if we are going to end this disease, 
we have got to end it worldwide.
    So Senator Smith and I have introduced bipartisan bills to 
fight the two terrible diseases of tuberculosis and HIV-AIDS.
    And I am just very hopeful that we can work with you, Mr. 
Chairman. What we have tried to do is--is increase the funding 
in increments, so that we are not just throwing money at the 
problem. And No. 2, we are being very careful not to create any 
new bureaucracies, any new ways of delivering services, but to 
make it work.
    And so Senator Smith and I are very interested, Mr. 
Chairman, in speaking with you more on both--our colleagues on 
both sides of the aisles on these two bills.
    Stopping tuberculosis, stopping AIDS, and Mr. Chairman, I 
will--I will complete my remarks here and just tell you that--
    The Chairman. Thank you, Barbara.
    Senator Boxer [continuing]. How well I remember in 1983 
when the disease was just starting, I was a very green Member 
of Congress. And I went to William Mattern, who was then the 
chairman of the Appropriations. You may remember him from 
Kentucky, a fine gentleman.
    And he said, ``OK, Congresswoman, I don't know anything 
about this, but if you say that we need a little help, we 
will,'' and I mean we started with $12 million in an 
appropriation for AIDS research, not knowing what we were 
    And I am so bound and determined in my public career to try 
and finish this whole thing off and make sure that we do not 
face these tragedies. So thank you very much for this 
    I know how much you care about it, Mr. Chairman. I look 
forward to working with you on both these issues along with 
Senator Smith.
    The Chairman. Good.
    Senator Boxer. Thank you.
    Mr. Anderson. Thank you, Senator Boxer. And this is, as you 
know, a huge priority for this administration.
    We we are increasing the funding. In 2000, it is about $200 
million from all resources. In 2001, we are moving toward about 
$254 million of total resources for HIV-AIDS mainly for sub-
Sahara Africa and India.
    Senator Boxer. Thank you.
    Mr. Anderson. Thank you very much.
    The Chairman. I have called the cloak room and told them I 
will be just a little bit late. And I will wait the return of 
Senator Chafee.
    But I would like to followup and continue for just a 
moment, if I may, about Franklin Graham.
    I think he is clearly right. I don't know of any human 
being in this world who has done more single-handedly, but with 
the voluntary cooperation of hundreds upon hundreds upon 
hundreds of people. And I am proud of my North Carolina friend.
    Now, he makes the point, and which I think we can agree 
on--let me see--he thinks that every measure must be taken to 
keep money out of the hands of corrupt governments.
    You have already addressed that. We all agree on that.
    Mr. Anderson. Right.
    The Chairman. Now, substantially more than the planned $10 
million must go to help orphans. Do you agree with that?
    Mr. Anderson. We continue to fund displaced children and 
orphans, this year for $12 million, some of which is for AIDS. 
In addition, in the President's new budget for HIV-AIDS, about 
10 percent of the money this year, $200 million is the total 
amount, about $20 million will go for assistance to HIV-AIDS 
children, including orphans, primarily in Africa.
    The Chairman. Now, there are at least 10 million HIV-AIDS 
orphans in Africa alone, is that correct?
    Mr. Anderson. It is--I believe it is.
    The Chairman. There are at least--well, let's see, $1 per 
capita or per orphan is not a very serious proposal.
    And the third thing, he believes and I share his view, more 
work with churches and people of faith in these areas must be 
attempted, in recognition of the moral and behavior factors 
associated with the transmission of HIV-AIDS.
    I just was wondering if you would comment on that.
    Mr. Anderson. We do. I was Ambassador in Tanzania, as you 
know, Mr. Chairman I lived in Tanzania for 6 years--as 
Ambassador and then previously.
    And I know that the HIV-AIDS prevention effort in Tanzania, 
and I am certain in other countries in sub-Saharan Africa, does 
include work with religious groups, both Christians and 
    In a number of the places where we work, there are a large 
number of Muslims. Any time one talks about HIV-AIDS, this is a 
difficult and touchy subject in a community--there is a lot of 
embarrassment. There is humiliation that people suffer when 
they become infected with this terrible thing.
    The Chairman. Right.
    Mr. Anderson. And the religious authorities in their 
communities are very often the most significant authority of 
any kind in their communities. Both the churches and the 
mosques--Tanzania has lots of Muslims--are concerned about this 
terrible problem.
    I think it has taken them as well as their governments some 
time to realize the extent of the problem and the extent of the 
decimation of their towns and villages that HIV-AIDS is 
    And we are, in fact, cooperating with them in things like 
voluntary testing and counseling.
    The religious groups, and oftentimes the village leaders 
together will set up a confidential place where individuals who 
want to know if they are infected can come and have voluntary 
    And I am told by the American Ambassador to Zambia who is a 
friend of mine who was here recently, that he thought that the 
voluntary testing and counseling was one of the most important 
things we do. Because then the man or woman who is tested knows 
whether he or she is HIV positive.
    And when an individual knows, then they can better make a 
decision about their future behavior and try not to infect 
someone if they are, or try not to be infected if they know 
that they are not.
    The Chairman. Well, without objection, I am going to ask 
the consent and I think it has been granted that the article by 
Franklin Graham entitled ``Africa and AIDS: Focus on the 
Missions,'' from the February 6, 2000 edition of the Observer 
in Raleigh, be included in the record at this point.
    [The article referred to follows:]

                [From the News & Observer, Feb. 6, 2000]

                 Africa and AIDS: Focus on the Missions

                          (By Franklin Graham)

                               boone, nc
    To the casual observer, there's nothing unusual about the cluster 
of ramshackle bulidlings that sit on the side of a stair-step plateau, 
a 40 minute walk off the main highway near Kijabi, Kenya.
    But in fact there is something quite remarkable about this place, a 
bush hospital with 200 beds run by the Africa Inland Mission. Offering 
primary medical treatment, emergency care, education and training in 
nutrition, public health and hygiene, it is a humble outpost the like 
of which is the only mortal hope in what today is a losing battle 
against AIDS in sub-Saharan Africa.
    Fifty-five hundred AIDS funerals take place every day. At least 23 
million of Africa's citizens have been infected with HIV. By the end of 
2000, 10.4 million African children under 15 will have lost their 
mother or both parents to AIDS.
    To say ``help is needed'' is severe understatement. Alarms are 
sounding, as the United Nations discusses with new urgency the African 
AIDS epidemic and the U.S. administration gropes for an effective role 
for this Country.
    It is urgent that the world recognizes that ``on the ground'' the 
answers are found in the simple mission hospitals, jungle clinics and 
churches and other institutions providing education and care that have 
been the ``thin red line of heroes'' against death and disease in 
Africa during the last century.
    I was delighted to hear Vice President Al Gore's pledge to seek an 
additional $150 million from Congress to combat AIDS in Africa, 
bringing the total to $325 million in the next fiscal year. But having 
provided medical, educational and relief assistance in Africa for 20 
years, I must express a clear word of caution. If funds are sent to 
many of the governments in Africa or to government-run hospitals--
tragically, most are pathetic, filthy places--large amounts of that 
money will be squandered. Much of the well-intentioned aid sent to curb 
this crisis will instead end up padding the Swiss bank accounts of 
corrupt bureaucrats.
    On the other hand, church and mission-based hospitals in Africa are 
run by people who are motivated by their faith and have committed their 
lives to bringing health and hope to people they've grown to love. 
Assistance given to these facilities will get directly to the people in 
    Dr. David Livingstone first took modern medicine to Africa more 
than 100 years ago, and today missionaries operate many of the leading 
hospitals on the continent. A good portion of the credible medical care 
in Africa is provided by mission hospitals, both Protestant and Roman 
Catholic. For decades, there has been an ironclad record of 
dependability, integrity and sacrifice. It is the unsung heroes in 
these hospitals who can best turn the tide of suffering as they respond 
to God's call on their lives to relieve unfathomable pain through 
medical care, personal relationships and the sharing of faith.
    But these people are not only worthy of the assistance, they are 
also trustworthy. They are the most effective means for providing the 
medical aid and life-saving counsel so important in the battle against 
this pernicious virus.
    The church is an appropriate participant in this battle because, 
although the demographic picture of AIDS in Africa is vastly different 
than in the West, there are strong moral and behavioral factors, with 
almost all of the transmission of the disease occurring as a result of 
sexual promiscuity.
    The vast network of mission hospitals and mobile clinics, together 
with many Christian relief and development organizations and other 
nongovernmental organizations, are the backbone of the African medical 
system. Over the years, my organization, Samaritan's Purse, has had the 
opportunity to work side-by-side with dozens of these mission 
hospitals. More recently Samaritan's Purse has utilized a handful of 
paid staff members and large number of volunteers to play a small role 
in raising AIDS awareness through training projects in Kenya, Uganda 
and the Congo.
    In Kenya, where one out of nine adults is infected with HIV 
Samaritan's Purse helps train members of the African Inland Church to 
lead the community in AIDS awareness. In Uganda and the Congo, we 
provide AIDS training materials and HIV test kits for potential blood 
donors. In addition, we help orphaned children, many of them orphaned 
through AIDS.
    While our efforts are just a drop in the bucket, the combined work 
of mission hospitals and Christian relief organizations throughout 
Africa has provided healing and comfort to countless individuals. But 
there is still an incredible amount of work at hand.
    If we maintain business as usual, or even medical missions at the 
levels that have been practiced for years, Africa's AIDS catastrophe 
will overshadow the Great Plague of the 14th century, when one third of 
Europe's people died. If something is not done, tens of millions of 
African people are likely to die of AIDS this decade, and countless 
millions of children will be orphaned.
    We must act now. The shortest and straightest line to success in 
curbing the epidemic is for the people and governments of the world to 
bolster the efforts of the church-based medical system that has been 
trusted to save the people of Africa from so many medical calamities 
for so long.

    The Chairman. Now, I think I better not push my luck too 
far on this vote and Lincoln Chafee will be back in just a 
    So we will stand in recess until he returns, which ought 
not to be more than 2 or 3 minutes.
    [A brief recess was taken.]
    Senator Chafee. Welcome, Mr. Ambassador.
    Mr. Anderson. Thank you.
    Senator Chafee. I have one quick question.
    Mr. Anderson. Yes, sir.
    Senator Chafee. The administration has identified--the 
Secretary of State in a visit here a couple of days ago 
identified four countries, Nigeria, Colombia, Indonesia and the 
Ukraine for special attention in the fiscal year 2000, 2001 
budget relationship aid program. And as the chairman said 
earlier, these four countries, I would worry about Swiss bank 
accounts--Colombia, Indonesia, Nigeria and Ukraine.
    Could you please comment on the rationale for proposing 
added attention to each of these four countries?
    Mr. Anderson. Yes. Thank you.
    The Secretary did, as you said, speak about it and because 
she is the one who has, as it were, chosen them, she is the one 
better to speak about it than I. But she and I have talked 
about these four.
    Under Secretary of State Pickering and I have talked about 
these four quite a bit, especially in the context of 
formulating our budget request.
    Because of where they are in the world and because of their 
size, the four of them have the potential to contribute greatly 
to economic growth in the region of the world where each of 
them is.
    And they have the capacity to contribute to political 
stability in the regions where they are.
    Because they can contribute positively, they can 
unfortunately also contribute negatively to those things. 
Colombia, I think, is a country of emphasis for the obvious 
reason of the drugs--coca and poppy grown there, and the 
freedom with which it finds its way into the United States.
    Nigeria--unfortunately, also drug trafficking through 
Nigeria has become a very significant problem.
    Nigeria also, some have called, the fraud capital of the 
    Nigeria is, I believe, the sixth largest exporter of oil to 
the U.S. and the world, and is important to us for that reason.
    Nigeria has been very active in peacekeeping. Their troops 
are significant in places like Liberia and Sierra Leone and 
that part of Africa. And they participate in peacekeeping 
operations in other parts of the world.
    These countries, as well as the Ukraine, are important 
regional actors, if their economies can really get off the 
ground, and if their governments stabilize and move toward 
democracy. I do not like to say, ``Choose democracy,'' because 
I think it is not one day you are not, and the next day you 
    In Nigeria, we are very pleased with President Obasanjo and 
his commitment. He has even canceled some fraudulent, corrupt 
contracts that were given by the previous administration to 
corrupt military officers.
    He is going to go back and examine government contracts 
that have been left for a long period of time, including from 
when he was in office quite a long time ago.
    So we want to help these various large regional powers. We 
want to help them if they are committed themselves to rooting 
out corruption and respecting human rights, and opening their 
economies to the world in a global marketplace and making their 
economies places where Americans would like to invest.
    So we see these four as pivotal--pivotal from a regional 
perspective and all of the increases in our programs are 
designed to help enhance political and economic stability, as 
long as we can have governments there we can work.
    Indonesia, we are all very pleased with the change in 
power; President Wahid and Vice President Megawati are saying 
the right things. They have a history of saying the right 
things, both of them do.
    President Wahid is someone that USAID actually has worked 
with for a long time. We had given support to the Islamic NGO 
that he founded and was the head of.
    So we know him quite well. And we believe he is the right 
man for the time in Indonesia.
    Indonesia is important because of the sea lanes and because 
of its size--the fourth largest country in the world and the 
largest Islamic country in the world.
    And if a true multi-party democracy can develop and take 
hold in Indonesia, that would be a very positive thing for that 
region. Because it is an Islamic country, I think it would also 
be helpful as an example to other Islamic countries considering 
    So we feel very strongly that we should be supportive of 
President Wahid and his efforts. His democracy is in its very 
    We just had a team--a State Department, USAID joint effort 
to assess where we are with Indonesia and what kinds of 
programs would be most helpful.
    Indonesia, as you know, Senator, is along with Thailand and 
the Philippines and some other countries, coming out of the 
Asian financial crisis.
    And while there are some good signs economically, we 
believe that new institutions need to be put in place so that 
the kind of crony capitalism that infected Indonesia and was in 
part responsible for what happened to them, will not happen 
again. I have in mind reforms like proper bank regulation and 
fiscal reforms.
    We feel these countries are very high priorities and 
deserve the support that we are going to give them.
    Senator Chafee. Thank you very much. It certainly will be 
challenging, considering, as you said, that one of the 
countries has a reputation as the graft--or what did you call 
it? The----
    Mr. Anderson. Fraud capital.
    Senator Chafee. Fraud capital of the world. It is very 
challenging for you to administer these increases in foreign 
    Senator Feingold.
    Senator Feingold. Thank you, Mr. Chairman. And I apologize 
for all of the different things that I needed to be at this 
morning, not being here as early as I like.
    I want to thank the administration for being here today. 
This week's schedule has been remarkably full, but 
opportunities like this one are well worth the extra effort 
    U.S. bilateral economic assistance programs account for a 
very, very small fraction of the overall budget, but they can 
have extraordinary effects abroad.
    Our aid programs serve our interests and I think reflect 
our national values. And I think it is highly appropriate that 
we take the time to talk about USAID's specific priorities this 
week, as we all try to grapple with the big picture for the 
year ahead.
    Wisely administered foreign assistance can do so much to 
advance American interests. The U.S. has a clear interest in a 
strong and healthy environment, and in fighting the infectious 
diseases that threaten all people, regardless of nationality.
    The United States has a strong stake in the development of 
human resources and institutional capacity abroad so that we 
can develop strong trading partners, who will work with us for 
mutual prosperity.
    And America has a clear interest in promoting democratic 
governance and the rule of law abroad, leading to a more stable 
and a more just world.
    We need to set our foreign assistance priorities 
thoughtfully to maximize progress toward those goals.
    It is precisely because economic assistance programs are so 
valuable that they have to be well monitored and well thought 
    U.S. dollars should be used to fight corruption, not to 
fuel corruption. And given the realities of limited resources 
and sometimes overwhelming needs, donor coordination has never 
been more important.
    I know that the administrator is well aware of these 
imperatives. And I, again, look forward to working with him in 
the year ahead on these and other issues.
    I will just ask a few questions, if I could. First, Mr. 
Anderson, on the issue of AIDS and infectious diseases, I am 
very supportive of the administration's proposals to step up 
our efforts to fight the HIV-AIDS crisis.
    As you know I recently traveled with our Ambassador to the 
United Nations, Ambassador Holbrooke, to ten sub-Saharan 
African countries, and I had a chance to see a little bit 
firsthand of the devastating impact of the disease.
    But increased funding will not by itself achieve its 
maximum potential impact, unless the African governments 
themselves muster the political will necessary to face the 
epidemic head on, for example the kind of thing we saw and many 
others have commented on with regard to Uganda's efforts to 
take on the problem.
    How can our diplomatic channels be put to use to urge these 
governments to face the problem?
    Mr. Anderson. Thank you very much, Senator. I am very 
pleased that you brought up the trip that you took with 
Ambassador Holbrooke.
    I think it was important to shine a light on that part of 
the world and on this terrible HIV-AIDS scourge.
    As you mentioned, President Musevini in Uganda really stood 
out as a leader of his people, a true leader of his people, 
when he began to publicly state what a terrible calamity they 
were facing. And he encouraged his government and his people to 
face this crisis and do something about it.
    And as you said, unfortunately, some other leaders have not 
been as forthcoming.
    HIV-AIDS, because it usually involves sex, is a very 
difficult topic for governments to talk about. And that is 
    But we--the USAID missions working with the ambassadors and 
the countries where we work in Africa--we work very closely 
together and we discuss ways in which to encourage the 
leadership of the countries to recognize the reality of the 
epidemic, to recognize the damage that HIV-AIDS is going to do 
to their economy, and even to recognize threats to stability in 
some cases. There are so many people affected, including school 
teachers, it's not just the truck drivers.
    And as Senator Boxer said, now, for the first time, there 
are more women infected than men in Africa.
    It is spreading to school teachers, civil servants, the 
professional classes. It does not stay within one class, as it 
were, of people. The countries are facing a crisis.
    It kills more people than civil wars have. And we are 
talking with them and encouraging them to act at every chance 
our ambassadors get.
    I spoke with an ambassador from Africa within the last 
week. He is in one of the countries you visited and he is very 
committed. Whenever he can, he brings up this topic at the 
highest levels of the government, he told me.
    We can only do so much, but we will continue to make the 
    Senator Feingold. And I would note that I noticed the 
commitment of many of our ambassadors and interest in this that 
I appreciate it and I would urge them on.
    Mr. Anderson. Well, I----
    Senator Feingold. I would like you to say a little bit 
about other public health threats that USAID will be addressing 
in the year ahead.
    I have heard a fair amount about malaria in some of the 
countries you went to. What kind of malaria and measles 
prevention strategies does USAID employ?
    Mr. Anderson. Malaria--which I myself have had the 
unfortunate privilege of suffering from several times when I 
lived there--malaria kills, I don't recall the exact 
statistic--but it is an incredibly large number of babies and 
young children every year in Africa.
    There are a number of things that can be done, including 
mosquito nets for beds treated with a chemical. I think 
pyrethrum is the chemical that is most often used out there.
    We encourage small businesses in various places, sometimes 
through our micro-enterprise program, which is wildly 
successful, to purchase these nets.
    They are very inexpensive to make. The chemical is very 
inexpensive. And there is a big market for it.
    And we work with health ministries in various countries in 
sub-Saharan Africa to address the problem of distribution and 
to make sure that there are mosquito nets and that people know 
exactly how they can prevent malaria, knowing that the 
mosquito--the female anopheles--bites at night and comes out at 
    If there is a mosquito net over a child's bed, that is the 
best protection against malaria.
    The President announced that he is proposing a tax credit 
for pharmaceutical companies that would work on vaccines for 
malaria and HIV-AIDS.
    These diseases, especially malaria, affect people in the 
tropics and because countries in the tropics are poorer 
countries, it is harder to get pharmaceutical companies to 
invest in research on malaria.
    If we suffered from malaria in the U.S., I suspect we would 
have already had a vaccine, because we would have had the 
economic power to demand a vaccine.
    So we are providing some assistance from our country to 
encourage the development of a malaria vaccine. It is being 
worked on. And USAID has been involved in the work.
    But apparently malaria is a very, very difficult disease, 
because it goes through various stages in the body and it is a 
really difficult one to track down.
    Senator Feingold. I appreciate your discussion on the 
malaria problem. When the committee went to the U.N. under the 
leadership of the chairman when we had an opportunity to talk 
to a number of the Ambassadors to the United Nations from a 
number of African countries in the middle of our very serious 
conversations about AIDS, a number of us--of them pressed us to 
make sure that we understood the malaria problem and--and what 
some described as a particularly dangerous form of malaria in 
some of their countries.
    So I appreciate that discussion.
    Mr. Anderson. Thank you.
    Senator Feingold. Mr. Anderson, I had the chance to ask the 
Secretary of State earlier this week a little bit about 
Colombia. And I would like to pursue that a bit with you.
    The administration has proposed a very ambitious program of 
assistance for Colombia.
    Much of the rationale for the assistance, as you know, has 
to do with the war on drugs.
    But I also know that the conflict in Colombia has forced 
thousands of civilians from their homes. I am concerned that 
this issue, which is very important for Colombia's overall 
quest for stability and strength is often ignored.
    In fact, last week, I was told that the World Food Program 
had to postpone a planned relief program for internally 
displaced people in Colombia, because it had not received any 
contributions at all from donors.
    Will USAID be addressing this issue as a part of the 
administration's Colombia initiative and specifically, if you 
know, what portion of the $1.6 billion package is to be spent 
on the internally displaced?
    Mr. Anderson. Absolutely, we are very aware of this 
    There are various estimates of what the numbers are of 
internally displaced persons now in Colombia. And the best 
figure I have seen is about 700,000 people already because of 
the instability.
    And the economic problems they face are enormous. And we 
already are working with some of them.
    Because of our experience in Peru and Bolivia with 
alternative development programs, we know that when the crops 
are sprayed or burned and destroyed, some of the farmers will 
be able to stay where they are. Part of our effort will be to 
provide them with alternative crops, with the materials they 
    We will test the soil, see what works, that kind of thing, 
work with them, ask what have they planted before--hoping that 
people can, for the most part, stay where they are.
    It does not do anybody any good if they have to leave. 
However, in some cases, we know that this very worthwhile 
effort to eliminate the illegal crops will create some more 
internally displaced people.
    Some of them are just not going to be able to stay where 
they are.
    Some of them were sort of like day workers anyway. They are 
not really committed to that part of the land, but they are 
there for the money they can make.
    And so in addition to the alternative development that we 
are going to help the farmers with, we are going to spend a 
large part of our funds to provide health care, education and 
training for these people.
    Many are going to need to become economically viable in a 
town or a city nearby.
    And undoubtedly some of them will migrate to the cities.
    Senator Feingold. Do you have any sense of what portion of 
the $1.6 billion would go to some of these?
    Mr. Anderson. It is in the several hundred million dollar 
    It is substantial--I mean, it is a lot of money to us. As a 
percentage of the overall amount, it does not look so big.
    It is a fairly large program for us to gear up. We already 
are making plans for it. But we are only going to have a very 
small program staff actually, in Colombia.
    I think we only have two American USAID direct hire 
employees--foreign service officers--there now.
    We are going to add another two very soon. They have 
already been identified, so we will have four. It is going to 
challenge us to gear up and get going but we know it is 
absolutely essential.
    Senator Feingold. Thank you for that answer.
    Back to Africa, I am pleased to see that the administration 
is calling for the reestablishment of the Development Fund for 
    Would you comment on what the rationale is for that 
decision and--and on the potential value you see in 
reestablishing the DFA?
    Mr. Anderson. Of course, Senator. Because I lived in Africa 
for 8 years, it is a special concern to me and I might have 
done it on my own. But the President himself has traveled to 
Africa. The First Lady has traveled to Africa.
    I had the privilege to host her when she visited Tanzania, 
both the First Lady and Chelsea came out there.
    So the President has, I think it is fair to describe it, a 
very special interest in Africa. He is maybe the first 
President since Teddy Roosevelt--who used to go on big game 
hunts in East Africa--to have such an interest in that country.
    This President has a real interest in Africans and their 
future. That is why the African Growth and Opportunity Act he 
has proposed is very important to him.
    That is why he has proposed such a big increase in the HIV-
AIDS budget, because it is so devastating in Africa.
    The Act is a way to bring special attention to the problems 
that Africa faces. Sub-Saharan Africa is a very large place.
    Tanzania, the country where I lived, has 30 million people 
and is the size of my home State of Arkansas, Louisiana and 
Texas combined.
    If you look at a map, it is actually a fairly small place 
on the east coast of a continent with a lot of people, a lot of 
problems. But some success stories, too.
    South Africa and Nelson Mandela's face is one that always 
pops up in my mind. He personifies the success of South 
Africans, and their ability to overcome. They are still working 
on their ethnic divisions, but their experience is something 
that we can hopefully see duplicated in other parts of the 
world. One of the big challenges that we face in the world is 
ethnic division.
    And so the President wants to bring special attention to 
that part of the world.
    Senator Feingold. And I think that is a very effective 
answer. And I appreciate it.
    I appreciate your answering all these questions. I just 
have one more, because I want to highlight another aspect of 
what I believe you are involved in, something that I have been 
very interested in.
    Corruption stands in the way of every single U.S. interest 
abroad, distorts economics, undermines the rule of law and 
political legitimacy. And in a lot of cases, it--we are afraid 
it siphons away resources away from human development.
    And we had a tremendous meeting with the administrator of 
Ethics and Integrity in Uganda. She talked to me about what she 
was trying to do and--and her needs.
    And, for example, she talked about the lack of trained 
auditors and investigators in her country. What is USAID doing 
to help countries to fight corruption?
    Mr. Anderson. Thank you for that question. The training 
that you mentioned in Uganda is one thing that we are doing in 
a lot of places: training the comptroller general and the 
auditor's office to use international accounting standards.
    One would hope that all countries would use international 
accounting standards, but a lot of countries where we work, 
which have been very centrally controlled by a totalitarian 
authority, saw no need in the past for international accounting 
standards. Only a few people ran the country anyway.
    But now, as they are opening up to the world economy and as 
their political systems are liberalizing, international 
accounting standards are very important and we do training in 
that regard.
    Institution of the rule of law is, I think, fundamental to 
the battle against corruption in a country. And that one we 
could talk about for hours and hours and we only have a few 
minutes. But it is so important I want to mention it.
    We are helping countries like El Salvador. I was just there 
a few weeks ago.
    We have political scientists from the University of Texas 
in Austin and from the State University of New York, who are 
helping the legislative assembly in El Salvador to strengthen 
its committee structure, to create a budget analysis unit, 
which they never had before.
    And we are helping them regionalize their legislative 
offices. Actually they are opening some regional offices to 
respond to people out in the rural areas of El Salvador, 
thereby strengthening the legislature. You know these 
countries, so many of them have had such a strong executive 
with no legislature and no court system. And that is almost the 
definition of corruption in a way.
    We are involved in strengthening the legislatures, in a lot 
of places, and strengthening the judicial branch.
    In the West Bank, I was there in December, I met with the 
legislative assembly of the Palestinian Authority.
    We were working with them to help them really create, in a 
way for the first time, a strong legislative branch of their 
    And the speaker of the Palestinian Assembly told me--he 
said, ``You know, we are moving from the days of PLO when we 
only had an executive. We did not have a legislative or 
judicial unit.
    ``We want to become a country. And so we know that we have 
to, as it were, take power from the executive and place some in 
the legislature and place some in the judicial branch.''
    And USAID is working with both the legislative branch and 
also the judiciary in many countries.
    Helping countries create an independent judiciary is one of 
the most important, but unfortunately one of the most 
difficult, things in developing countries.
    There has been so much corruption and in many cases, even 
where there has been something called a court, we would not 
recognize it.
    In Central America, their system involves presenting 
briefs, written briefs. The judge made a decision really 
without ever seeing anybody or taking oral testimony or having 
an adversarial examination.
    And when everything was only done in writing, it gave the 
clerk of the court an opportunity to be involved in corruption 
and the judge too. So we have encouraged reform with some 
assistance from the American Bar Association, which has worked 
with us in many countries around the world, but also in Central 
    They have gone to a more open and transparent and 
accountable system in the way they handle their trials. And 
they have already seen some positive results from it.
    Another thing that I think is important is reducing the 
numbers of permits and licenses that a businessman or anybody 
else needs to transact business in a country.
    When I was in Tanzania, USAID brought some American 
businessmen out. And we took them through all the procedures 
necessary before they could invest money in Tanzania.
    We were not doing it so much as a anti-corruption exercise 
as to help the Tanzanians see how difficult it is to invest in 
their country and show them if you really want people to 
invest, you are going to have to reduce all this red tape. 
Instead of having 70 steps--I think it was 70 something 
different things you had to do--you know maybe 12 is a lot 
    Well, what we realized was at every step in that process 
for an American businessman or a German or a Brit, at every 
step in that process was another opportunity for corruption, 
somebody to say, ``Yes. You know, I will give you this license 
if you will give $100,'' or ``I will give you this permit, but 
if you want to farm over here, you have got to go through these 
12 offices.''
    And reducing that sort of thing both makes it investor 
friendly, which is a huge priority of ours, and also helps 
reduce the opportunity for corruption.
    There are laws and ethics requirements that are like what 
we have that we share with them.
    But, Senator, frankly, if the government and the people are 
not committed to the kinds of reform that you are talking 
about, we cannot do anything about it. They have got to be 
    Some of the things outside the government we can do is 
buildup an independent media--newspapers and television and 
radio stations--watchdog groups, human rights groups and 
consumer groups. Building the civil society, strengthening from 
the grass roots, encouraging people to go to the government and 
demand that these sorts of things stop.
    That is really where corruption is going to be ended: by 
the people themselves realizing that government is there to 
serve them.
    This is a principle that you and I were born with. The 
government serves the people.
    But in many of the countries where we work, it has been the 
reverse. The people are there to serve the few.
    And it is the people themselves who are going to have to 
demand these changes.
    Senator Feingold. Well, you obviously have given this issue 
a lot of thought. And I appreciate that.
    You said many interesting things, but in particular I was 
interested in what you said about building the legislatures.
    When we were in Africa, Ambassador Holbrooke made it clear 
that he represented the executive and I represented the 
legislative side and it gave me an opportunity, for example, to 
meet with a group of legislators, which was a very interesting 
    We also had the opportunity to work--meet with a group of 
legislatures in Namibia who had come from other countries to 
help monitor the elections in Namibia.
    And that was a very stimulating conversation. I learned a 
lot. And I felt there was a tremendous eagerness on the part 
of--the different members of the legislatures--different 
legislatures to compare notes and talk about exactly what you 
    There is such an executive tradition there--in many of 
those countries--that it is a long process that I think a lot 
of Americans would find very interesting to be involved in 
strengthening the role of legislatures. It was very stimulating 
for me having only been a legislator in terms of my 
governmental activity.
    The judicial is harder and in fact, constitionalism. We 
were, I think, troubled by what is going on in Zimbabwe.
    I read today that there is a vote going to be held on a 
constitution where apparently only one side gets to put their 
position about whether the constitution should pass on the 
radio and the other side does not.
    And I know that one of the issues involved there had to do 
with what kind of judicial review would be a part of that 
constitutional system.
    And given the importance of our fundamental decisions in 
this regard, Marbuny versus Madison and other decisions, it 
sets the whole tenure for a nation and the future of its 
nation, who has the primacy in terms of the law and how 
independent those courts are.
    So this is not just in Africa, of course, but everywhere in 
the world, because these are things that Americans, especially 
young people, I think, could find very exciting to be a part of 
in the future in a cooperative way.
    So I thank you, on behalf of the chairman, I thank you for 
being here and--and on behalf of all the members of the 
    The record will be left open for additional questions for 3 
days and with that the hearing is adjourned.
    Mr. Anderson. Thank you, Senator.
    [Whereupon the committee adjourned.]
    [Additional questions submitted for the record follow:]

                   Additional Question for the Record

   Responses of USAID Administrator J. Brady Anderson to Additional 
               Questions Submitted by Senator Jesse Helms

    Question. Central to the reform of Ukraine's struggling economy is 
the reform of its agricultural sector. What are USAID plans to assist 
the modernization and marketization of the Ukraine agricultural sector 
in FY 2000 and FY 2001?
    Answer. USAID is committed to advancing agricultural development in 
Ukraine and is moving forward to support the reforms being initiated by 
the Government of Ukraine [GOU]. In FY 2000, as the GOU develops a 
reform program, USAID will maintain support for the Ukraine 
agricultural sector via several ongoing projects. These are: (a) policy 
reform assistance to the Ministry of Agriculture's Secretariat and 
Policy and Analysis Unit; (b) support for farm restructuring and land 
reform; (c) small farmer training; (d) the provision of Farmer-to-
Farmer volunteers; and (f) implementation of the agribusiness 
partnership program.
    In April 2000, the International Monetary Fund, the World Bank, and 
USAID are planning to evaluate the GOU's policy reform performance. 
Assuming consensus among international donors that Ukraine is meeting 
its policy reform commitments, USAID expects to commence the design of 
a new agricultural development project that would build on the existing 
projects mentioned above. Such a new agricultural project would be 
implemented in FY 2001 or earlier, if possible. In this effort, USAID 
expects to work closely with the World Bank to coordinate our 
assistance and to leverage it with greater multilateral resources.

    Question. Some have asserted that USG assistance programs, 
particularly those intended to promote market reform in Central Europe 
and Russia, tend to direct their efforts to regions within a country 
where there is greatest chance of reform as opposed to those regions 
where reform is needed most. In Ukraine and Russia, does the USG direct 
its market and economic reform programs to cities and regions that for 
political and economic reasons are most important to the future of 
their respective countries even if the task of reform may be more 
difficult for cultural, political and economic reasons? If not, why 
    Answer. U.S. Government assistance programs in Ukraine and Russia 
are designed to encourage reforms needed for long-term social, 
political and economic development. As reforms at the national level 
have stalled in the last few years, USAID and other agencies have 
redirected their limited resources to give more priority to assistance 
at the regional level.
    The question posits two alternative approaches to targeting 
assistance to the regions:

          (a) assisting regions that are already reform-minded in the 
        hopes of nurturing replicable ``successes,'' versus
          (b) assisting the most politically important regions, 
        regardless of their commitment to reform, in the hopes of 
        maximizing influence over the country's future direction.

    Our strategy is based on an important lesson learned from previous 
assistance efforts in the former Soviet bloc, and elsewhere around the 
world. Past experience has demonstrated that where a genuine commitment 
to reform is lacking, efforts to influence change in terms of 
government policy and practice are bound to fail. We therefore avoid 
funding assistance to regional or municipal governments that are 
resistant to or uninterested in reform.
    The U.S. Government is providing different forms of assistance in a 
very broad range of regions in both Ukraine and Russia, and at many 
levels of society within those regions. The most politically and 
economically important regions in both countries have been major 
recipients of such assistance. We recognize that the reform process in 
these countries is complex, and change is happening in the private as 
well as the public sector. We do not reject particular regions from any 
assistance at all because, for example, its governor is not reformist. 
In regions that are resistant to reforms, we focus on programs on 
individuals and institutions receptive to such USG-sponsored activities 
as exchanges, small business training and credit programs, and NGO 
grant programs. These people and institutions represent the seeds of 
future change in their regions, and should not be ignored.
    At the same time, we recognize that, given the enormous scope of 
the transition underway in Russia and Ukraine, our resources are very 
limited, and therefore we must look for ways to leverage assistance 
dollars. One potentially effective way to achieve this is to help 
progressive regions to succeed in creating a workable economic and 
political system, based on democracy and the market. These regions can 
then become models that serve to disseminate their approach to many 
more regions. This replication effect is the primary motivation behind 
the ``regional initiatives'' in Russia and Ukraine, which involve 
concentrating a large number of assistance programs in a region.
    In choosing sites for regional initiatives, we are looking above 
all for regions where chances for reform to succeed are good, and where 
the results of this success will be evident. Such regions may be among 
the most politically and economically important ones (for example, 
Samara Oblast in Russia), or they may be smaller, but nonetheless 
excellent showcases for the positive results of reform (such as 
Novgorod Oblast in Russia).
    There is increasing evidence that Ukraine's Central Government is 
now composed of a group of leaders seriously committed to economic 
reform. If they demonstrate that they are undertaking meaningful 
reforms, USAID would consider increasing its assistance directed at the 
national level, but also would continue our focus outside Kiev.


   Responses of USAID Administrator J. Brady Anderson to Additional 
              Questions Submitted by Senator Richard Lugar

    Question. The Financial Volunteer Corps [FSVC] using volunteers and 
providing non-commercial advice, has established an excellent track 
record over the past ten years in delivering technical assistance. It 
has made an important contribution to strengthening the financial 
infrastructure in numerous countries and to developing transparent 
market-oriented economies. I am interested in learning what role USAID 
envisions for FSVC in the republics of the former Soviet Union and in 
the Balkans over the next several years.
    Answer. USAID has benefited from a close working relationship with 
the Financial Services Volunteer Corps [FSVC]. FSVC provides volunteers 
and expertise in three core areas: central banking, commercial banking 
and capital markets development. Since the inception of the FSVC 
program in the early 1990s, the U.S. Agency for International 
Development [USAID] has provided more than $32 million in funding to 
the FSVC.
    USAID's vision for FSVC in the republics of the former Soviet Union 
and in the Balkans is to partner with us in promoting economic reform 
and establishing sustainable partnerships between the United States and 
the countries of Europe and Eurasia, between these countries and other 
regions of the world, and among the countries themselves.
    As our development partner, FSVC meshes its short-term technical 
assistance with our Missions' long-term strategic priorities.
    FSVC is engaged strategically with USAID at a regional level in 
Washington through our Partners for Financial Stability program. FSVC's 
dialogue with our Missions in the former Soviet Union and the Balkans 
is even more important as they have the job of sorting priorities for 
their limited country-specific programs.
    Based on ongoing and future projects, illustrative examples of our 
cooperative efforts with FSVC over the next several years include:

   Russia, where work is concentrated in commercial banking and 
        financial market management reforms. USAID and FSVC are working 
        closely to develop a sharply focused, three-year strategy for 
        continuing financial market reforms, emphasizing regulatory 
        development and implementation;
   In Albania, current and future projects may encompass a 
        broadened spectrum of activities in financial sector reform. In 
        addition to improving bank communications and settlement 
        process, FSVC may be called upon to provide assistance in 
        establishing a stock market and to advise on financial aspects 
        of privatization;
   The Republic of Georgia, has made requests to FSVC for 
        several projects which would support the efforts of current 
        USAID projects in bank supervision and electronic payments 
   In Ukraine, FSVC's work centers on USAID projects in on-site 
        bank supervision, and bank accounting as well as a capital 
        markets component;
   Macedonia's future activities will continue to support 
        banking and capital markets development and may branch out into 
        legal reviews of the commercial code, assistance in export 
        promotion, deposit insurance, bank rehabilitation and money 
        laundering detection;
   Several Missions, including Bosnia, Kosovo, Montenegro and 
        Armenia may access FSVC services in the future, once their 
        respective financial infrastructure and legal/regulatory 
        frameworks are better established.

    Question. The Congressional report for the FY 2000 Foreign 
Operations bill included sense of the Congress language which said 
``The managers encourage USAID to support the Financial Services 
Volunteer Corps [FSVC] which contributes to the process of building 
sound financial infrastructure in countries that are seeking to develop 
transparent, market-oriented economies. FSVC, as a not-for-profit 
organization, leverages its funding resources with expert volunteers 
from the U.S. financial services community to provide assistance that 
is objective, independent and free of commercial interest.'' I agree 
with this statement and would like to know what your funding 
recommendation for the FSVC in FY 2000 will be. What level of funding 
do you foresee for FY 2001?
    Answer. USAID concurs that FSVC's reputation is well deserved and 
well established, based on a decade of experience, primarily serving 
Eastern Europe and the Former Soviet States. To facilitate FSVC's 
broader participation in USAID's program, USAID's Global Bureau awarded 
to FSVC a three-year Cooperative Agreement on September 30, 1999, with 
$219,000 in core funding. This will serve as a quick-response revolving 
fund which missions will reimburse and cover some administrative costs.
    The demand for FSVC's services will depend on USAID missions' 
priorities. Based on prior years' demand and estimated new demand for 
technical support in the area of financial sector development 
worldwide, USAID estimates field demand for FSVC services at 
approximately $600,000 per year.


   Responses of USAID Administrator J. Brady Anderson to Additional 
          Questions Submitted by Senator Joseph R. Biden, Jr.

    Question. Some countries in Eastern Europe--for example, Poland and 
Hungary--have now ``graduated'' and no longer require USAID's 
involvement. What are the prospects that countries in the Balkans and/
or the former Soviet Union where USAID is now engaged will be able to 
similarly ``graduate'' some day?
    Answer. I am proud that the United States has been able to play a 
important role in the transformation of formerly communist states into 
market democracies based on the rule of law. By the end of Fiscal Year 
2000, Estonia, Latvia, Lithuania, Poland, Hungary, Slovakia, Slovenia, 
and the Czech Republic will all be in the ranks of USAID ``graduates.'' 
At that time, there will no longer be any bilateral USAID missions 
active in any of the northern tier countries of Europe.
    USAID's Bureau for Europe and Eurasia has a thoroughgoing system 
for analyzing and tracking country progress toward commonly-accepted 
graduation thresholds, for all of the sectors in which we work. A 
report on Monitoring Country Progress is updated twice annually, and 
special assessments are performed on a periodic basis by the Europe and 
Eurasia Bureau, analyzing progress against strategic indicators and 
graduation thresholds on a country-by-country basis. Examples of such 
graduation thresholds include progress toward legal and regulatory 
reform, privatization, and creation of an effective civil society.
    Although there still are a few rough spots in some countries 
(Slovakia and Lithuania, for example), our analysis indicates that the 
transition process is now essentially self-sustaining in all eight of 
these ``graduate'' countries. Regional legacy mechanisms in such areas 
as energy, the environment, and fiscal management are in place to meet 
remaining needs in the northern tier. In Slovakia, we expect to provide 
some limited assistance through regional mechanisms to shore up weak 
spots in the economic reform area.
    However, progress on reform has not seen as swift in the countries 
of Southeastern Europe and the former Soviet Union. We are applying the 
same strategic indicators and graduation thresholds that were used in 
the northern tier. At this point, we do not have target graduation 
dates for any additional countries. But, the prospects for eventual 
``graduation'' of the countries of Southeastern Europe are promising. 
The emergence of democratically-elected reform governments in such 
countries as Bulgaria, Romania, and, most recently, Croatia, has given 
the United States enthusiastic partners who are committed to the common 
values of the Euro-Atlantic community and are actively seeking to 
qualify membership in the European Union.

    Question. Specifically with regard to USAID's efforts in Bosnia and 
Herzegovina, do you believe that we are placing enough conditionality 
on our assistance to the political leadership there?
    Answer. USAID does not assist Bosnia-Herzegovina's political 
leadership. We do not implement programs designed to uphold the status 
quo. Instead, we implement programs to weaken the social and financial 
dominance of the most recalcitrant opponents of reform, whether they be 
in the Federation of Bosnia-Herzegovina or in the Republika Srpska. The 
dismantling of the three ethnically-based payments bureaus and 
development of a real and functioning independent banking system will 
dry up a major source of funds for the three dominant nationalistic 
parties. Developing an independent media will offset nationalistic 
rhetoric of state-controlled media and provide real, unbiased 
information to Bosnia's citizens. Training for moderate political 
parties and their supporters will help to prepare a new generation of 
leaders to lead Bosnia in the 21st century.
    USAID uses its political leverage and places conditionality 
whenever possible. The suspension of the USAID privatization technical 
assistance program to the Federation on December 19, 1999 brought to 
bear such public pressure and outrage against the Federation government 
officials that they moved hurriedly to try to mend their reputations. 
We saw that, if you engage and educate the citizens of Bosnia, they are 
the best check on the corrupt and obstructionist activities of their 
    More progress has been made on the conditions for privatization of 
the large enterprises of Bosnia than ever before. Before the 
suspension, only 26 of the 47 companies under the Federation 
Privatization Agency had submitted opening balance sheets and only 20 
had submitted privatization plans. Since suspension 21 additional 
companies have submitted opening balance sheets and 20 have submitted 
their privatization plans.
    The $256 million Municipal Infrastructure Program was conditioned 
on municipal officials publicly signing a Memorandum of Understanding 
to adhere to the Dayton Accords and turn over publicly indicted war 
criminals within their jurisdiction, among other conditions, in order 
to receive assistance through this USAID program. An example of the 
implementation of this conditionality is Tuzla, where, because of the 
MOU, municipal officials evicted a group of politicians who were 
occupying apartments of the minorities place claims for repossession of 
their property. After the evictions were concluded and the minority 
return took place, USAID implemented two projects: reconstruction of 
the water system in Tuzla and reconstructing the school in Lipnica.
    Another example of conditionality in the Municipal Infrastructure 
Program occurred in the eastern Republika of Srpska. The municipalities 
of Trebinje, Cajnice and Bileca proposed and had their projects 
accepted to repair the water systems in all three towns. Municipal 
officials in Trebinje and Bileca projects refused to sign a MOU to 
adhere to the Dayton Accords, therefore the projects were never 
initiated and USAID ran a heavy publicity campaign so that the citizens 
in the municipalities knew why their water system was not repaired.

    Question. Now that a peace of sorts exists in Sierra Leone, what 
sorts of programs is USAID planning to undertake in Sierra Leone? Can 
you explain what strategy donors are using to help Sierra Leoneans put 
the pieces back together in a society as devastated as theirs is?
    Answer. USAID continues to provide humanitarian and transition 
assistance to Sierra Leone. In FY 1999, USAID humanitarian assistance 
to Sierra Leone totaled $32.5 million. Planned levels for FY 2000 are 
about $44.4 million. USAID programs include food and disaster relief 
and transition assistance; non-governmental and community-based 
organization strengthening; child tracing and family reunification; 
prostheses, wheelchairs and orthotics for the disabled. USAID is 
reviewing options to bridge the transition between humanitarian and 
near-term (3-year) development priorities.
    Regarding a donors' strategy, we cannot speak for all donors, but 
it is USAID's understanding that substantial post-disarmament and post-
demobilization assistance will be made available through the World 
Bank-managed Multi-donor Trust Fund to help revitalize communities and 
reintegrate ex-combatants into communities. That program is being 
carried out in conjunction with the Government of Sierra Leone. The 
United Kingdom is the major contributor to the Trust Fund, and is 
providing support and technical advice in a number of areas, including 
disarmament, demobilization and reintegration, security, police 
restructuring, anticorruption, elections, local governance, and non-
governmental organization democracy and governance efforts. UNICEF has 
successfully been addressing needs of children affected by the war, 
including child combatants. USAID, State, and other donors through 
their contributions to the World Food Program, will continue to address 
humanitarian needs of refugees and internally displaced people. No 
United States food or disaster relief commodities are being provided to 
combatants. In Sierra Leone, USAID supports a non-governmental 
organization [NGO] coordinating body that effectively coordinates all 
humanitarian assistance. All donors and NGO's participate in bi-weekly 
coordination meetings, chaired by the director of the Government of 
Sierra Leone's National Commission on Reintegration, Rehabilitation and 
Reconstruction. The United States government participates in regularly 
scheduled meetings of the National Commission on Disarmament, 
Demobilization, and Reintegration, chaired by President Kabbah. As 
mentioned above, USAID is reviewing how we might use development 
assistance to help bridge the transition between humanitarian 
assistance and near-term development needs.

    Question. USAID has proposed a number of programs in Liberia aimed 
at promoting human rights and election assistance. How important are 
these programs to helping Liberians institute democracy and the 
observance of human rights? Will the programs that USAID is proposing 
help strengthen or preserve the Taylor government as critics contend?
    Answer. USAID's democracy and governance activities are not 
intended to lend credibility to the Taylor regime. We strongly believe 
that without a free press, without human rights champions on the 
ground, without efforts to create an independent judiciary, and without 
the mantle of visibility that United States democracy and governance 
assistance brings, the fate of those who challenge the Government of 
Liberia would be further compromised.
    The programs serve a very real purpose on the ground in that they 
help safeguard against the potential emergence of a repressive one-
party state. They also symbolize a United States government commitment 
to the tenets of democracy and human rights. The proposed programs 
support independent voices that seek to hold the government accountable 
to the people. They support Liberian human rights groups' efforts to 
provide citizens with information on and access to legal redress for 
human rights abuses. They help citizens exercise their rights and 
participate constructively in political processes.
    These programs become increasingly important as we draw closer to 
the 2003 elections. Now is the time to lay the groundwork, through a 
focused and targeted democracy and governance program, to ensure a 
variety of candidates in the 2003 election.
    USAID has provided critical limited assistance to strengthen the 
judiciary and the legislature, both of which have helped balance the 
overwhelming power of the executive. However, the bulk of our democracy 
and governance assistance has supported local non-governmental 
organizations, free media, and human rights groups. Under Brooke 
Amendment sanctions, we can no longer provide democracy and governance 
assistance to government in any form, but would like to continue 
providing a voice for citizens.
    We continue to believe it is important to bolster the elements of 
society that attempt to hold the executive regime accountable and who 
are the best hope for stability and democracy over the longer term. We 
stand ready to consult with the Committee at any time to address 
concerns and reach a mutual understanding about how to achieve our 
shared objectives in Liberia.

                        INDONESIA AND EAST TIMOR

    Question. How do we strike the right balance in aid for Indonesia, 
a pivotal state of 200 million people, and East Timor, a tiny fledgling 
nation of just 750,000? Are we assigning the right priority to each?
    Answer. USAID's approach to providing assistance to Indonesia and 
East Timor is primarily based on our assessment of the needs of each 
country in relation to the United States' strategic interests.
    Indonesia is the world's fourth most populous country, essential 
for maintaining stability in Southeast Asia, and now on its way to 
becoming the world's third largest democracy. In recognition of the 
importance to the United States of the Indonesia's economic and 
democratic transition, the Administration is proposing as much as $500 
million in assistance over the next few years, starting with an 
assistance level of $145 million in grant and food aid for FY 2000.
    East Timor's devastation requires a significant initial infusion of 
donor assistance to help restart and re-build the economy and put it on 
the path toward becoming a stable new democracy. The United States, 
through USAID, which was a lead donor in East Timor prior to the 
crisis, is particularly well positioned to jump-start East Timor's 
economic revitalization with revival of a successful coffee production 
project and initiation of community-led development programs.
    USAID is scheduled to receive a significant portion of the $25 
million FY 2000 earmark for East Timor and will utilize the funds for 
economic revitalization activities. USAID will focus on efforts to 
provide quick employment and continue building civil society.
    We expect other bilateral and multilateral donors to take on a 
greater role in East Timor's long-term development within several 
months. Consequently, the Administration proposes a much lower level of 
assistance in the next fiscal year for East Timor as other major 
funding comes on line.


    Question. What aid are we providing to Indonesia, if any, aimed at 
cultivating greater civilian control over the military and greater 
respect for basic human rights?
    Answer. It is only recently that the military has begun to 
relinquish its social, political and economic role in Indonesia. USAID 
is providing grants to civilian organizations focused on reexamining 
the role of a modern military in a democratic environment with a clear 
separation of powers and responsibilities.
    In addition, USAID provides grants to civilian organizations that 
support efforts to promote reconciliation, trust and respect between 
the military and civilian community. These USAID grants have financed 
seminars, roundtables, dialogues, media broadcasts on civilian control 
of the military and training for journalists to research and report on 
military issues.
    Throughout Indonesia, USAID has provided $800,000 in grants to 
local groups which support workshops on voter education and community 
preparedness for conflict resolution at the grass roots level and human 
rights campaigns through printed materials, electronic media and 
interpersonal contacts dealing with the issue of reconciliation.


    Question. Under what circumstances should the United States be 
prepared to resume direct aid to the Cambodian government?
    Answer. The Cambodian government is showing a willingness to 
proceed with democratic and economic reforms. A national election held 
in July 1998 led to the formation of a democratically elected coalition 
government in November 1998. An elected National Assembly and appointed 
Senate, both with a vocal opposition party, is seated and enacting 
legislation. Since February 1999 the coalition government has embarked 
upon an ambitious and comprehensive economic reform agenda that is 
reviewed quarterly with donors. These developments, together with 
further progress toward an internationally acceptable tribunal to try 
Khmer Rouge and adherence to basic standards of human rights, should 
lead the United States to consider resumption of direct aid to the 
Cambodian government to spur continued economic and democratic reform.
    The United States is alone among bilateral and multilateral 
entities in not resuming a direct relationship with the Cambodian 


    Question. What conditions would Pakistan have to meet in order to 
be eligible for USAID assistance, and what progress has it made over 
the past year?
    Answer. Legislative restrictions on USAID direct assistance to the 
Government of Pakistan have been imposed because of (1) sanctions 
following Pakistan's possession, and then testing, of nuclear weapons 
in May 1998; (2) defaults on repayment of its loans from the United 
States; and (3) its military coup of October 1999.
    Pakistan is currently eligible for, and receiving, assistance under 
USAID's Pakistan NGO Initiative [PNI]. USAID is permitted to provide 
assistance under section 541(a) of the FY 2000 foreign appropriations 
act and its predecessors. This legislation authorizes USAID assistance 
to programs of non-governmental organizations [NGO's] in a country when 
the USAID Administrator (as delegated by the President) considers such 
assistance to be in the United States national interest, and so 
notifies Congress under the regular notification procedures.
    Under PNI, USAID provides assistance to two U.S. NGO's based in 
Pakistan: the Asia Foundation and the Aga Khan Foundation. These two 
NGO's work with local Pakistani NGO's in the areas of basic education, 
literacy and skills training, basic maternal and child health, NGO 
capacity building and policy advocacy. PNI is a $19 million, seven-year 
program begun in FY 1995.
    The Department of Defense FY 2000 Appropriations Act provides 
permanent, comprehensive authority for the President to waive nuclear 
sanctions (for both Pakistan and India) to allow assistance, but does 
not provide authority to waive other legal restrictions such as those 
related to the military coups and defaulting on loan repayments.
    On November 26, 1999, the Government of Pakistan [GOP] and the USG 
signed a Paris Club bilateral agreement to reschedule GOP debt 
repayment currently in arrears. Notification of the signing of this 
bilateral agreement was sent to Congress on January 24, 2000 and 
expired without objection on February 23, 2000. Pakistan is no longer 
in arrears on its repayment of United States government debt.
    Legal restrictions on USAID direct assistance to the Government of 
Pakistan, because of the October 1999 military coup, cannot be lifted 
until the President determines that a democratically elected government 
has again taken office in Pakistan.

    Question. Can you update us on what measures are being taken to 
address concerns with the physical security of the USAID employees at 
the Ronald Reagan Building?
    Answer. Primary responsibility for the security of the RRB rests 
with the General Services Administration.
    Within the space we lease and are authorized to control, we have 
installed security systems and implemented procedures that are in 
compliance with Federal security standards. We are confident in the 
security provided by these systems and our own security staff.
    We have strong liaison with the FBI and other federal and local law 
enforcement agencies and have obtained routine access to domestic 
intelligence to keep informed of known threats.
    We continue to have concerns about perimeter security and 
unauthorized vehicle access to the building and are working 
aggressively with GSA at different levels to address these concerns. We 
are encouraged by GSA's recent acquisition of equipment to better 
control vehicle access into the building, and we will continue to work 
with GSA building management and the Federal Protective Service to 
highlight our other concerns and request assistance as appropriate.

    Question. In 1997, USAID proposed authority to begin a new loan 
program--a Development Credit Authority. The new authority was made 
contingent on the Office of Management and Budget certifying that the 
Agency had improved its loan portfolio management. That certification 
occurred late last year. The President's budget proposes consolidating 
this and other USAID credit programs into one ``Development Credit 
Account.'' The budget says that this account ``permits the Agency to 
substitute credit assistance for grant assistance to achieve'' economic 
development purposes. What is the purpose of consolidating all your 
credit programs under one account?
    Answer. Consolidation of the Agency's credit programs will 
strengthen credit management capacity by centralizing the credit 
administrative staff and streamlining credit risk analysis, credit 
portfolio management, and credit accounting systems for new credit 
activities into a single, more efficient unit.
    The consolidation of all agency credit activities under a single 
DCA appropriation account is consistent with the goals of the 
Administration and Congress to reduce the number of appropriation 
    This consolidation will also ensure that future credit assistance 
activities will be strictly subject to the reforms embodied in the 
Federal Credit Reform Act of 1991.
    The absence of line-item appropriation requests for the urban, 
environment and shelter sector and the microenterprise sector does not 
signal a retreat from these sectors. A combination of grants and DCA 
assistance will finance future work in these areas at roughly the same 
level as in prior years unless the priorities change.

    Question. In general, under what circumstances are loans preferable 
to grants?
    Answer. In most circumstances, USAID relies on grants to carry out 
its programs. However, in limited circumstances, loan guarantees and 
direct loans, utilizing the Development Credit Authority [DCA], may 
provide an additional, powerful tool. By utilizing credit rather than 
grant funding, USAID can create sustainable public/private partnerships 
for development. Credit-based development projects can mobilize local 
private resources far in excess of available public development funds. 
Thus, for example, a $350,000 investment by USAID with a commercial 
bank in Poland has made available up to $10.0 million in potential 
lending. Furthermore, by utilizing commercial sources of capital at 
market rates, DCA projects can demonstrate to private sources of 
capital that development can be both sustainable and profitable. Credit 
assistance will be particularly useful in areas such as micro and small 
enterprise, privatization of public services, infrastructure, efficient 
and renewable energy, and climate change.
    DCA is primarily intended for countries and regions where USAID has 
an active presence. Eligible projects must demonstrate the potential to 
have a positive financial rate of return so that the loans can be 
repaid. Where USAID's risk analysis of a specific project demonstrates 
that the estimated risk is too high, USAID will decline to offer credit 
assistance. In this case, grants may be the more appropriate means to 
accomplish USAID's developmental objectives.

    Question. In view of the current Administration proposals to 
provide debt relief for the poorest nations are these loans primarily 
to governments or to private entities?
    Answer. The Development Credit authority [DCA] is primarily 
intended for non-sovereign lending. Under the regulatory reforms that 
govern DCA, only a handful of USAID-assisted countries would be 
sufficiently creditworthy to qualify for sovereign risk credit 
assistance. Instead, DCA credit assistance is intended for credit 
enhancement purposes in cases where borrowers are non-sovereign 
entities and the lenders, with whom we partner, take more than 50% of 
the risk. DCA will be used for credit enhancement purposes in 
partnership with local banks and other private investors.
    There is no relationship between our DCA request and the 
President's debt reduction initiative for the poorest countries. DCA 
will not be used for sovereign lending in countries where debt is being 
forgiven or rescheduled. Only in limited circumstances may DCA be used 
for sovereign credit, however, even in sovereign transactions, the DCA 
models require true risk sharing.

                       THE AIDS CRISIS IN AFRICA


                      THURSDAY, FEBRUARY 24, 2000

                               U.S. Senate,
                   Subcommittee on African Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. William Frist 
(chairman of the subcommittee) presiding.
    Present: Senators Frist, Smith, Biden, Sarbanes, Kerry, 
Feingold, and Boxer.
    Senator Frist. Good afternoon. Our agenda today has been 
    We are going to attempt to accomplish a lot, which means 
that as the chairman, I will be swinging the gavel to keep 
people moving along. And it is going to be very frustrating, 
because of the breadth of the topic, but we are faced with a 
true crisis and, thus, the title for today is ``AIDS Crisis in 
    I am very excited about the next four panels we have before 
us, because we will address the issue of AIDS initially from a 
legislative standpoint, hear the Surgeon General of the United 
States give us some background, some understanding of the 
disease and where we are today, and travel through a range of 
panels that cover not the entire spectrum, but a large part of 
the spectrum of this crisis in Africa.
    We will have some opening statements, but I think out of 
respect for our colleagues, four of whom will be with us over 
the course of the next few minutes, we will turn directly to 
them to make some opening comments, introducing specific 
legislation that they may be involved with and establishing the 
setting from which we can emerge on the three panels that 
    With that, let me first turn and we will go straight down 
in order on the agenda on panel one to Senator John Kerry from 
    Senator Kerry.


    Senator Kerry. Mr. Chairman, thank you very, very much, and 
thank you, Senator Feingold, for your leadership on this issue 
and for affording us the opportunity to have this very 
important hearing today.
    We are going to hear from a lot of experts on later panels 
about the scope of the AIDS epidemic in Africa, so I am not 
going to take a lot of time to underscore it.
    But I want to say on a personal level, and I know my 
colleague, Barbara Boxer, and Senator Durbin join me in feeling 
that the proportion of this calamity in sub-Saharan Africa is 
absolutely stupefying.
    There are not words to adequately describe it. It is as 
compelling and as sobering an issue as any of us could face 
    And it seems to me that when you contemplate that of the 33 
million people on this planet who are infected with HIV, 
perhaps 95 percent of them are in developing countries. It will 
kill more than 2.5 million people this year. During the time it 
takes me to testify, some 60 people are going to become 
infected with HIV.
    And I think that no nation, but particularly our Nation 
with the extraordinary talent we have, with the technology we 
have and with the money we have, can possibly fail to take a 
leadership position and to respond to this.
    Now, how do we do that? This is an epidemic out of control. 
And we should all remember that borders do not matter, as you 
well know, Mr. Chairman, when you are dealing with contagion.
    I believe that there are an enormous range of steps that we 
can take. Senator Feingold, Senator Boxer, Senator Durbin and 
others have taken the lead in offering plans and I joined with 
them on their bills.
    But frankly, the scope of this epidemic requires perhaps 
even a bolder response than we have yet contemplated. It 
requires us to look beyond preventing and treating the disease, 
especially when you figure the numbers of people we are dealing 
with, the amount of time that takes, the complexities 
sociologically, all of the infrastructure issues that are 
linked to trying to treat those who are infected and prevent 
new transmissions of HIV.
    And while I am extraordinarily supportive of those 
programs--we have seen locally in Massachusetts how many of 
them work very effectively--I believe that there is something 
else we can do. It is time for us to lead the world in 
developing a vaccine.
    Vaccines, most people will acknowledge, are the most cost-
effective weapon in the arsenal of modern medicine to stop the 
spread of contagious diseases. They offer a relatively 
inexpensive means of lowering society's overall costs of 
medical care.
    Prime examples of the success are the three million 
children whose lives are saved every single year as a result of 
early childhood immunizations against diphtheria, polio, 
pertussis, tetanus, measles, and tuberculosis.
    Mr. Chairman, consider the alternatives that we have right 
now. Pharmaceutical products like the highly touted anti-viral 
cocktail for treating AIDS patients can cost on average as much 
as $15,000 a year. Now, that is obviously a princely sum even 
in a wealthy country like ours.
    But for nations with a per capita income of $700 or $800, 
like Malawi, such treatments and drugs are nowhere in the realm 
of possibility.
    They also require an incredible infrastructure and 
investment in medical compliance, which is difficult to adhere 
to in this country, let alone in any of the developing 
    So for these nations, finding an affordable vaccine for 
AIDS is really the only option. It offers them an opportunity 
for gaining control over the epidemic.
    Unfortunately, of the $2.4 billion or so spent on overall 
AIDS research last year, only a fraction was spent on AIDS 
vaccine research.
    The World Bank estimated that between $280 million to $350 
million was spent worldwide on finding a vaccine for AIDS in 
1999, or somewhere between 10 or 15 percent of the total amount 
    Furthermore, of the $300 million or so spent on HIV vaccine 
research, less than $50 million came from private sector 
research and development budgets.
    Simply put, our biotechnology and pharmaceutical industries 
do not believe that investing in AIDS vaccine research is a 
good investment.
    So, Mr. Chairman, we have a responsibility to change that 
equation, that economic perception or judgment. Investing in an 
AIDS vaccine is one of the best investments that we could make 
as a Nation.
    And for Africa, I suggest respectfully, it may be the only 
hope for survival.
    While continued and expanded investments in our research 
engines are vitally important--I refer to the AIDS research at 
the National Institutes of Health--we should explore additional 
strategies to stimulate the private sector in research and 
    Mr. Chairman, I was amazed to learn that of the $56 billion 
a year spent globally on health research, well over 90 percent 
is spent on research into health problems that occur in only 10 
percent of the world's population.
    Amazingly, of the 1,200 new drugs commercialized between 
1975 and 1997, only 13 were for tropical diseases, diseases 
such as malaria and tuberculosis, which combined kill close to 
3 million people a year.
    So we can change this approach of the pharmaceutical 
companies. Do they not invest because there is no hope of 
finding a vaccine for malaria or AIDS? The answer is no. Is it 
because the science is insurmountable? The answer is no.
    It is simply because these vaccines do not offer the same 
return to shareholders as the return from Viagra or Lipitor, or 
Prozac or other blockbusters here in the United States.
    Now, I do not blame any company for responsibility to 
shareholders. But let us take our moral imperative and our 
common sense and change the equation for them economically.
    So what do we do? Well, what we need to do is give 
pharmaceutical companies the financial incentive to achieve 
what we know is possible and let them work their magic.
    These are the same engines of growth and technological 
progress which have helped extend life expectancy beyond what 
was imaginable at the turn of the century.
    And now we can do this with respect to this scourge. How? 
And I will be very quick. Here is how you do it. The 
legislation that I introduce today, the Vaccines for the New 
Millennium Act provides a number of market incentives to 
encourage private sector investment in life-saving vaccines.
    They could be classified in two ways, as a push mechanism 
for lowering the cost of R&D; and as a pull mechanism to show 
that the market will exist if the pharmaceutical companies 
provide the product.
    On the push side, we expand the development tax credit from 
20 percent to 50 percent for research related to developing a 
vaccine for AIDS, malaria and tuberculosis or any infectious 
disease which kills over 1 million people a year.
    The tax credit is incremental. And I will not go through 
the details of how it works, but we will submit that in the 
    Second, the bill allows small biotechnology companies which 
do not have tax liability to pass a smaller tax credit through 
to investors. And firms with assets under $50 million can 
choose to pass through a 25 percent tax credit to investors who 
provide financing for research and development of one of the 
priority vaccines.
    Both of these proposals have been endorsed by a combination 
of public health advocacy groups and industry, including AIDS 
Action Council, the Global Health Council, the American Public 
Health Association, the AIDS Vaccine Advocacy Coalition, 
Chiron, Vaxgen, and others.
    Third, the bill authorizes voluntary contributions to the 
Global Alliance for Vaccines and Immunizations and the 
International AIDS Vaccine Initiative.
    I might add that that is being supported by a number of 
nations and international donors, including an incredibly 
generous gift by the Bill and Melinda Gates Foundation, who 
today have issued a statement supporting our legislation and 
the efforts of the Clinton administration to move down this 
vaccine road.
    So, Mr. Chairman, this bill includes other ways that we 
could accelerate the intervention and production of life-saving 
vaccines, for example the tax credit proposed by the President.
    That credit doubles the purchasing power of non-profit 
organizations and others who purchase vaccines for developing 
    Our plan also establishes a life-saving vaccine purchase 
fund, which has been advocated most prominently by Jeffrey 
Sachs, my friend from Massachusetts, who will appear on a later 
    So I believe that this proposal really offers the best 
chance we have beyond prevention, which we ought to be doing, 
and beyond the treatment, which we obviously also need to do.
    But ultimately to gain control of this on a global basis as 
well as to deal with malaria, infectious tuberculosis and other 
diseases, I believe this is the approach.
    We were working on this for about 2 years, Mr. Chairman. 
This past weekend, it was endorsed as a positive step by 
academics, pharmaceutical executives and governmental leaders 
at a high-level conference convened by the University of 
California in San Francisco, the World Bank and the Global 
Forum for Health Research.
    Congresswoman Nancy Pelosi will introduce similar 
legislation in the House of Representatives. It is my hope that 
we can pass it in the Senate.
    And I thank you for your attention.
    [A news release from Senator Kerry follows:]

               [For Immediate Release--February 24, 2000]

        News From John F. Kerry, U.S. Senator From Massachusetts

   kerry announces comprehensive vaccine plan--vaccines for the new 
           millennium act combats world's deadliest diseases
    Washington, DC.--U.S. Senator John F. Kerry, today announced his 
proposal to spur research and development of vaccines against HIV, 
malaria and tuberculosis. His nine-point plan, the Vaccines for the New 
Millennium Act, unifies the public health community advocates and the 
private sector in the fight against the world's deadliest infectious 
diseases. The Kerry plan provides tax incentives for vaccine R&D, 
creates market mechanisms for the purchase and distribution of vaccines 
in developing countries, authorizes funding for multilateral vaccine 
and immunization efforts, and establishes a commission to coordinate 
public-private partnerships for vaccine development. Kerry announced 
his plan at a hearing of the Africa Affairs Subcommittee of the Senate 
Foreign Relations Committee.

          Last year tuberculosis, AIDS and malaria killed 5.2 million 
        people. This is not a problem waiting to happen--it is already 
        a catastrophe of the worst order. Today, I am presenting the 
        first comprehensive plan in the Senate to begin to reverse this 
        death spiral. Affordable and effective vaccines against these 
        three diseases are the only sure way to eradicate these 

    Kerry's bill provides creative financing mechanisms to unleash the 
energy of the private sector, which offers the best hope for new 
vaccine breakthroughs. The bill increases the existing R&D tax credit 
for qualified research into vaccines against TB, malaria and AIDS, and 
establishes an investment credit for smaller biotechnology companies 
which engage in lifesaving vaccine research. In addition, the bill 
builds on President Clinton's call for a vaccine purchasing tax credit 
which would double the purchasing power of non-profit organizations 
which buy and distribute new vaccines against any disease which kills 
more than one million people a year.
    The Kerry plan also includes a trust fund for the purchase of new 
vaccines, thereby creating a market for developing countries which 
desperately need vaccines. It calls on the President to negotiate with 
other countries and multilateral banks to establish an international 
fund to finance the purchase of new vaccines. It also authorizes U.S. 
contributions to the Global Alliance for Vaccines and Immunizations as 
well as the International AIDS Vaccine Initiative.

          We, as a responsible member of the international community, 
        should instill the appropriate incentives to encourage research 
        in lifesaving areas the pharmaceutical and biotech sectors have 
        previously ignored. This is a moral imperative.

    Senator Frist. Thank you very much, Senator Kerry. The 
member statements will be made a part of the record in their 
entirety. The members obviously are welcome to leave; I know 
that a number of you have other hearings going on as we go 
    Let me turn to ranking member, Senator Feingold and then 
Senator Boxer.


    Senator Feingold. I want to thank you, Mr. Chairman, for 
holding this important hearing. And of course, I want to thank 
all the witnesses for being here today. We have excellent 
panels in store for us.
    And I know the time is very short, so I want to just speak 
for literally 1 minute and say, first, how much I enjoyed 
Senator Kerry's remarks and how much I appreciate the passion 
and commitment that both Senator Durbin and Senator Boxer have 
already brought to this issue. I am grateful for it.
    We can, of course, all cite the appalling statistics, and 
many of us have already had some human encounters with the 
human face of this tragedy.
    For me, the devastating statistics took on a new life the 
day that I learned that some reports estimate life expectancy 
in Zimbabwe has dropped from 65 to 39, because of this 
    And when I was walking past the Parliament building in 
Harare in December, I asked somebody how old you had to be to 
become a member of the legislature there, the Parliament. The 
answer is 40, 1 year older than the life expectancy.
    Likewise, many of us have a responsibility to take 
legislative action to stop the relentless march of this disease 
across the African Continent and through countless African 
    And Senator Feinstein of California, Senator Boxer's 
colleague and I, have introduced an amendment to the African 
Growth and Opportunity Act, and have it in the bill at this 
point in the Senate version, designed to stop our Government 
from pressuring governments that take legal measures to improve 
access to AIDS drugs in their countries.
    And I have co-sponsored Senator Moynihan's initiative to 
step up the fight against mother-to-child transmission of HIV.
    I know that all the distinguished Senators testifying 
before us today have introduced some proposals of their own. I 
hope that this hearing will give this subcommittee and, indeed, 
all of the members a chance to consider possible responses and 
initiatives in a careful and collaborative fashion. I know the 
chairman shares that sentiment with me.
    Mr. Chairman, I also ask that the statement of James Love 
of the Center for Study of Responsive Law be submitted for the 
record. Mr. Love has worked extensively on some of the 
intellectual property issues relating to pharmaceuticals.
    And I, again, thank you for holding this hearing.
    Senator Frist. Thank you. It will be made a part of the 
    [The statement referred to is on page    :]
    Senator Frist. Senator Boxer.


    Senator Boxer. Thank you so much, Mr. Chairman, Senator 
Feingold. Thank you both for your leadership on this and for 
giving me this opportunity to testify.
    If you want to put on the 5-minute clock, that's fine. And 
then when it turns red, I will close my----
    Senator Frist. OK. Thank you.
    Senator Boxer. Really, it helps me----
    Senator Frist. OK. Will do.
    Senator Boxer [continuing]. Keep track of time. Otherwise, 
I tend to lose track of time.
    Senator Frist. A good precedent for everybody here today. 
Thank you very much.
    Senator Boxer. All right. Mr. Chairman----
    Senator Feingold. Thank you for setting that precedent 
    Senator Frist. Well, we went through 11 minutes there.
    Go ahead, Senator.
    Senator Boxer. All right. Well, let me just say, you know, 
sometimes people who like our work will come up to us and say, 
``You are doing God's work,'' which I take as the ultimate 
compliment. And sometimes I think we do not always, and we do 
    But I have to say to this subcommittee, you are, because 
this is a very, very serious matter that is impacting innocent 
people all over the globe. And I am just so pleased to see the 
bipartisanship taking shape around it.
    I want to also thank, in addition to both of you, Ron 
Dellums, who was a former Congressman as you probably know, for 
many, many years from northern California, who testified before 
Senator Specter and Senator Harkin and myself and Senator 
Feinstein in San Francisco a year ago or so, and--and in the 
most dramatic terms, the eloquence that I just could never 
emulate, told us about what was happening in Africa. Many of us 
were unaware of the impact that we now are aware of.
    As you know, Mr. Chairman, no place on Earth is harder hit 
by AIDS than Africa. And the United Nations has said it is, 
``The worst infectious disease catastrophe since the bubonic 
    So here we are sitting in the midst of this plague and 
thank goodness we are doing something about it, or we will soon 
do something about it.
    The statistics, 13.7 million people in sub-Saharan Africa 
have died of AIDS, it's an amazing statistic. Last year, two-
thirds of all new cases of HIV/AIDS were in sub-Saharan Africa. 
And of all the people in the world living with HIV/AIDS, 69 
percent of them live in sub-Saharan Africa.
    Unlike many areas of the world, the epidemic there is 
predominantly a woman's disease. And I have had a chance to 
express that to Senator Helms, because I think we are going to 
need him to get more involved in this.
    And he was very interested in learning more. And so I am 
hoping we can share the results of this hearing today with the 
    A majority of infected adults, 55 percent to be exact, are 
women. And this creates a ripple effect. When women get the 
disease, they often pass it to their unborn babies.
    As a result, 10 percent of the HIV/AIDS cases in sub-
Saharan Africa are children. And when women die, their children 
become orphans.
    And, Mr. Chairman, this is a fact that has the greatest 
impact on me. By the end of this year, the HIV/AIDS epidemic 
will be the reason that over 10 million children in sub-Saharan 
Africa are orphans--10 million children. That number equals the 
total number of children living in California, the largest 
State in the Union.
    And I would suggest in some of your States, it is many 
times more the numbers of children living in your States.
    Now, imagine if every single child in California was an 
orphan. That is what we are talking about in sub-Saharan 
Africa. And even worse, the number of children orphaned there 
because of HIV/AIDS could double, triple or even quadruple in 
the next decade if we do not do something.
    This is a global catastrophe. And we must lead the way, as 
my colleague John Kerry so eloquently said, ``It is up to us to 
lead the way.'' That is what world leadership is.
    I am happy to tell you that Senator Gordon Smith and I have 
worked together on this. And along with many of you, we are 
helping each other move this forward.
    He and I have introduced the Global AIDS Prevention Act. 
And it calls on the USAID to make HIV/AIDS a priority in the 
foreign assistance program and to undertake a comprehensive 
coordinated effort to combat HIV/AIDS.
    We do not set up any new bureaucracies. We go along with 
the entities that are already there on the ground, doing a good 
job. But we give them more resources and we ratchet it up over 
the next several years.
    I want to say something on a very personal level. I want 
you to think about this. In 1983, I was sworn into the 
Congress, to the House. And there were a few cases of this 
mysterious disease, and I turned around to get the help of my 
colleague, Phil Burton. And we started to work on it. And then 
he passed away. And I found myself the lone Congressperson from 
San Francisco with this mysterious disease.
    Mr. Chairman, we have made tremendous progress in learning 
to cope with this disease, how to prevent it, how to cope with 
it, what we need to do to stop it. We have a long way to go, 
but at the minimum we have got to take what we already know and 
apply it to Africa, while we help John in his efforts to get a 
    I want to say on the good news front, there is a new tablet 
called Navirapine.
    This new tablet Navirapine is going to be very effective, 
already is, in preventing mother-to-child transmission. And it 
costs half--no--a percent of what the AZT costs. And it only 
takes two dosages, one to mother, one to the child.
    And the group Pediatric AIDS Foundation, which as you know, 
was founded by Elizabeth Glasser, is out there now in Africa 
trying to help get this drug out. So we have made progress.
    Let me close by saying this: We need to do more on this 
    We also need to do more on the fight against tuberculosis. 
And I have, again, been working with Gordon Smith on that. And 
as we spoke earlier today, this is a humanitarian issue. This 
is a moral issue. It is a very spiritual issue.
    It is also a question of common sense as Senator Kerry 
said. If we do not do something about these epidemics abroad, 
we will never resolve our problems here at home.
    So, again, I thank you for doing this. And you can count on 
me, as I know you can count on all of us, to join hands across 
the aisle to get something done. And I know we know what to do. 
It is just the will to do it.
    Thank you very much.
    [The prepared statement of Senator Boxer follows:]

              Prepared Statement of Senator Barbara Boxer

                       the aids crisis in africa
    Mr. Chairman, thank you for allowing me to testify before the 
Senate Foreign Relations Subcommittee on African Affairs on the AIDS 
crisis in Africa. I appreciate having this opportunity and am grateful 
to see that so many of my fellow colleagues share my strong concerns 
about this terrible epidemic.
    As you know, no place on Earth is harder hit by AIDS than Africa. 
As the United Nations has said, it is ``the worst infectious disease 
catastrophe since the bubonic plague.''
    Since the beginning of the HIV/AIDS epidemic, 13.7 million people 
in sub-Saharan Africa have died of AIDS. That is 84 percent of all the 
people in the world who have died of AIDS since the beginning of the 
    Last year, two-thirds of all new cases of HIV/AIDS were in sub-
Saharan Africa. And of all the people in the world living with HIV/
AIDS, 69 percent of them live in sub-Saharan Africa.
    Unlike any other area of the world, the HIV/AIDS epidemic in sub-
Saharan Africa is predominantly a woman's disease. A majority of 
infected adults--55 percent to be exact--are women.
    This creates ripple effects. When women get the disease, they often 
pass it along to their unborn babies. As a result, about 10 percent of 
the HIV/AIDS cases in sub-Saharan Africa are children. More 
dramatically, when women die, their children often become orphans.
    And Mr. Chairman, this is the fact that has the greatest impact on 
me: by the end of this year, the HIV/AIDS epidemic will be the reason 
that over 10 million children in sub-Saharan Africa are orphans. Ten 
million children--this number is equal to the total number of children 
living in California today. Imagine if every single one of them was an 
orphan. That is what we are talking about in sub-Saharan Africa. Even 
worse, according to those who are working on this issue in Africa, the 
number of children orphaned there because of HIV/AIDS could double, 
triple, or even quadruple in the next decade.
    This is a global tragedy, a global catastrophe, a global emergency. 
It requires a global response. And the United States must lead the way.
    That is why I have introduced, along with my colleague on the 
Foreign Relations Committee, Senator Gordon Smith, the Global AIDS 
Prevention Act. It calls on the United States Agency for International 
Development--USAID--to make HIV/AIDS a priority in the foreign 
assistance program and to undertake a comprehensive, coordinated effort 
to combat HIV/AIDS.
    Under my bill, this comprehensive effort would address four 
essential priorities. The first is primary prevention and education. We 
have seen in San Francisco and elsewhere in the United States that 
prevention and education is still the best vaccine in fighting HIV/
AIDS. The second priority is to provide medications to prevent the 
transmission of HIV/AIDS from mother to child. I have spoken with the 
Pediatric AIDS Foundation on this issue, and there are optimistic signs 
that a drug called Navirapine, which costs $4 a tablet, can be 
effective in preventing mother-to-child transmission.
    The final two priorities in my bill are to provide care for those 
living with HIV/AIDS, and voluntary testing and counseling.
    To meet these priorities, my bill would increase funding for 
USAID's international HIV/AIDS effort. Over five years, the bill would 
authorize $2 billion for the fight against AIDS, and at least $1 
billion of that is dedicated to the problem in sub-Saharan Africa.
    As I mentioned, I am joined in this effort by Senator Gordon Smith. 
He and I worked together last summer in introducing a separate bill to 
fight the international tuberculosis problem, but let me be clear, TB 
is not an unrelated issue.
    Tuberculosis is a disease that is spread from person-to-person 
through the air, and extremely dangerous for people infected with HIV. 
According to the Centers for Disease Control and Prevention, TB is the 
world's leading cause of death among people infected with HIV. In fact, 
TB is the cause of death for one out of every three people with AIDS 
worldwide. So I think it is important to address this issue in our 
discussion about AIDS in Africa.
    These global diseases know no borders. Given that the world is 
increasingly interconnected, the United States will never be able to 
eliminate HIV/AIDS and TB in this country without eliminating them 
    Once again, Mr. Chairman, thank you for holding this important 
hearing. I look forward to working with you on these critical issues.

    Senator Frist. Thank you, Senator Boxer. Thank you for your 
commitment to this issue as we all join hands to address it.
    Now, Senator Richard Durbin.


    Senator Durbin. Chairman Frist and Senator Feingold, thank 
you for this hearing.
    As I approached the hearing room, I noticed a long line of 
students waiting to come in and be part of the audience. I 
thought it was entirely appropriate that of all the hearings on 
Capitol Hill, they would choose this one.
    There may not be another hearing on the Hill more important 
to their future than our discussion about this epidemic on the 
poorest continent on the face of the Earth.
    And I hope that those who are following it by C-SPAN or in 
the audience will listen carefully, because some of us have had 
an opportunity to visit Africa. I do not profess to be an 
expert. I was there for 10 days. I came away with one of the 
most profound experiences of my life.
    I went there to look at a lot of things, to look at food 
aid and micro-credit and trade. I came back saying there is one 
issue that just overwhelms everything. That is the AIDS 
epidemic. The AIDS epidemic may be the greatest moral challenge 
of our time.
    Will a world of relative worth rally to save the poorest 
continent? Will superpowers reach out to save the poorest and 
the powerless? That is our challenge here.
    There have been some excellent suggestions from my 
colleagues, Senator Kerry, Senator Boxer. I am co-sponsoring 
legislation with Senator Kerry involving the World Bank. Their 
suggestions on vaccine, Senator Boxer's suggestions, are all 
    I have put a bill in. I have no pride of authorship 
whatsoever. And I hope that all of us can set that aside for a 
moment and really look at the goal here that we are trying to 
    I was just overwhelmed in visiting South Africa, Kenya, and 
Uganda. Sandra Thurman was with me and as our National AIDS 
Director, her group--and she had been there before. I visited 
some places that she was well known at, including Tusa and 
Kampali, Uganda.
    But I can tell you that the people I met there were some of 
the most inspiring people I have ever met. These are nations 
that have turned into hospices. These are people who know they 
are doomed. They look at their children longingly, knowing that 
they will never see them reach an adult life.
    They try to cope with counseling and support groups and 
just the most routine therapies and medicines, knowing full 
well that they will never ever be able to reach the drugs and 
medicines available in the West that might prolong their lives 
a few years or perhaps even longer.
    And I came away from that experience thinking to myself, we 
ought to be doing things that work. The easiest reaction for 
people in the United States is to say, it is impossible, 10 
million orphans and tens of millions infected, the rate of 
infection growing in some countries--I think the natural 
reaction is to turn away from it, not to look at it.
    Now, Senator Kerry has said and Senator Boxer has said, we 
cannot afford to do that. This is a global world.
    What happens in Africa, what happens in Asia, affects 
Springfield, Illinois and Tennessee and Wisconsin and Maryland. 
We are all in this together.
    Here is one of the things that I came forward with, and it 
is, believe me, I hope it is part of the bigger package. It 
does not solve the problem. But here is what I found when I 
went there.
    There is no place for these orphans to go. There is no 
orphanage. There is no institution that is going to absorb 1.7 
million orphans in Uganda. It is not going to happen.
    The only hope for these children is in an extended family, 
that some relative's family, perhaps--I hope a relative--will 
reach out and bring the children in when both the mother and 
father have died from AIDS. And it is happening over and over 
    What will enable these families in some of the poorest 
countries on Earth to absorb two, four, five or six AIDS 
orphans? My experience is sometimes it is very simple.
    There is a lady named Bernadette that I bet will be talked 
about quite a bit when Sandy comes up. This is a lady who has 
lost 10 of her 11 children. She has been written up in Newsweek 
magazine. These 10 kids died from AIDS. And she has brought in, 
what, 34----
    Ms. Thurman. Thirty-five.
    Senator Durbin [continuing]. Thirty-five grandchildren into 
her home. She is almost 70 years old. How can she cope? How can 
she get by? Let me give you two things included in my bill that 
we ought to think about.
    Microcredit: Sometimes extending to these poor mothers $100 
or $200 in credit can change their lives and revolutionize it. 
They can buy some goats, some chickens. They can expand their 
sales in the market. Now, they can bring those mouths into feed 
from their brother's family. Now, they can take care of these 
orphans. Microcredit works.
    The FINKA program, which has been helped by USAID is a good 
illustration of that. It is 98 percent return and payback, 2 
percent default; any bank in America would jump at those 
    But this money can transform lives and empower these 
families and particularly these mothers to bring in AIDS 
    My observation, very quickly, is that if you take a look at 
any of these countries in Africa, you will find those making 
the most progress dealing with development and coping with this 
epidemic are those which are empowering females, giving the 
women in that society a voice and a role and an opportunity to 
help solve the problems.
    The second issue, very quickly, is food aid. We already are 
engaged in massive food aid distribution. I would like to see 
us focusing that food aid to the families that are adopting 
orphans and bringing them in. Give them special treatment, 
special help.
    That is the best way to keep these orphans off the street. 
They turn to the streets. They become petty thieves and 
prostitutes, and you know that the ultimate result of that will 
be horrible.
    I will close by saying this: Many people have discounted 
this year on Capitol Hill. They have said that because of a 
looming Presidential election, we are likely to accomplish 
little or nothing.
    I hope they are wrong. Can we as a group, Democrats and 
Republicans, resolve to do this on a bipartisan basis, to not 
leave town in the year 2000 without putting together our very 
best effort in a bipartisan response to this AIDS epidemic in 
Africa and Asia?
    I think our investment in time and energy on a bipartisan 
basis with skills from persons like yourself, Senator Frist, 
with your own medical background, could be invaluable.
    We are not going to cure this epidemic. Perhaps some of the 
things suggested by John and others will move us toward that. 
But at least for this time and place, let us find ways to 
provide support for those families who could bring these 
orphans in.
    Thank you.
    Senator Frist. Thank you very much.
    Senator Smith, welcome. Your name has been mentioned as 
part of legislation. We would like to turn to you for a few 


    Senator Smith. I hope it has been mentioned in good terms, 
    Senator Frist. Yes, it was.
    Senator Smith. Thank you, Mr. Chairman, members of the 
    I am pleased to be here with my colleagues on a bipartisan 
basis about a disease that does not know national boundaries 
and, frankly, does not care how we register politically.
    I was honored a few months ago when Senator Boxer came to 
me and asked me to join her in introducing the Global AIDS 
Prevention Act. I know there are other approaches to this, but 
this is ours.
    Our legislation authorizes $2 billion over the next 5 years 
to support the Agency for International Development's efforts 
to prevent and treat HIV/AIDS abroad.
    Fully half of the funds authorized would go to fight AIDS 
in the sub-Saharan African area. The remainder will go to other 
areas, including some countries of Southeast Asia where 
infection rates are growing at alarming rates as well.
    While the nations of the sub-Saharan Africa have faced a 
myriad of disasters in the last decades of the 20th century, 
few reached the proportions that the spread of AIDS has on 
every level of life in that area.
    I have read news accounts recently of this. I do not think 
we can even begin to comprehend the horror in which life is 
lived in this area. The statistics are mind-numbing. In some 
countries, one in four adults is living with HIV.
    Life expectancies in those countries over the next 5 years 
have been slashed from the mid-60's to the early 40's. 
Cumulative deaths attributable to AIDS number over 13 million 
by 1999. And the number of children orphaned by AIDS is 
estimated between 7 million and 10 million.
    It is incredible to me that there are not even 1 million 
children in my entire state. And here you have these kinds of 
numbers among the most innocent of our planet.
    An estimated 1 million children in Africa are being 
infected per year. These numbers impact every facet of life in 
this region of Africa, where populations of adults are not able 
to enter the work force or care for their children.
    And the economy in that circumstance simply cannot grow. 
Where millions are orphaned and many time watching their 
parents die, a future that includes--does not include any basic 
education leaves a very bleak future indeed.
    In places like this, governments struggle with civil strife 
unimaginable. And basic medical needs of its populations are 
simply unmet.
    Perhaps you have read in U.S. News and World Report a story 
that talked about how this was localized even on a category of 
teachers there. I was amazed. I mean, you have where teachers, 
one in three, are--or are infected.
    And what kind of a future do children have without 
teachers, without education? But the teacher community, just 
taking that one slice has been decimated in this area.
    I am proud of the private and religious organizations that 
have heroically struggled to fight the impact on families. 
However, it is clear that the scope of the AIDS crisis requires 
additional support. In a region of the world where infection 
rates reach one out of four of adult population, our diplomatic 
efforts to Africa are simply not meeting the task.
    While the internal political strife in some of these 
countries can be equally heartbreaking in outcome, the ongoing 
devastation by the spread of AIDS in some of these countries 
needs to be addressed in a broad and an immediate way.
    You can see this type of foreign aid is a branch of our 
diplomacy. If we are to help the countries of sub-Saharan 
Africa facing this very real problem, this has to be one of our 
first steps.
    I am pleased, as I said, that there are others with other 
ideas on how to do this, but Senator Boxer and I have a bill 
that does increase funding dramatically.
    I am not saying we just throw money at it. I am saying we 
target it in ways that actually arrest the spread of this 
disease. But I believe there is bipartisan support in this 
committee, in the Senate that we do something, and that it 
includes a dramatic increase in funding.
    I look forward, Mr. Chairman, to working with you and my 
other colleagues to make sure that this is a priority, that 
this can happen in this Congress and it can happen with 
Republicans and Democrats acting in concert as human beings.
    [The prepared statement of Senator Smith follows:]

               Prepared Statement of Senator Gordon Smith

    Mr. Chairman, thank you for your interest in the AIDS epidemic in 
Africa and for holding this important hearing.
    Several weeks ago I joined my colleague, Senator Barbara Boxer, to 
introduce ``The Global AIDS Prevention Act.'' This legislation 
authorizes $2 billion over the next five years to support the Agency 
for International Development's (AID) efforts to prevent and treat HIV/
AIDS abroad. Fully half of the funds authorized would go to fight AIDS 
in sub-Saharan Africa. The remainder will go to other areas, including 
some countries of southeast Asia where infection rates are growing at 
alarming rates.
    While the nations of sub-Saharan Africa have faced a myriad of 
disasters in the last decades of the 20th century, few reach the 
proportions that the spread of AIDS has on every level of life in that 
area. The statistics are mind-numbing--in some countries, one of four 
adults is living with HIV/AIDS. Life expectancies in those countries 
over the next five years have been slashed from the mid-60s to the 
early 40s. Cumulative deaths attributable to AIDS numbered over 13 
million by 1999 and the number of children orphaned by AIDS is 
estimated between 7 and 10 million. An estimated 1 million children in 
Africa are HIV positive.
    These numbers impact every facet of life in this region of Africa. 
Where populations of adults aren't able to enter the work force or care 
for their children, an economy cannot prosper and grow. Where millions 
are orphaned, many times watching their parents die, a future that 
includes any basic education is likely not to happen. Where governments 
struggle with civil strife, the basic medical needs of its populations 
go unmet.
    U.S. News and World Report last week put this issue in the most 
alarming context--with a two page article that underlined the toll on 
society in Africa. AIDS is killing Africa's teachers, and U.S. News 
cited estimates of HIV infection rates of 1 in 3 in some countries of 
Africa. Of course AIDS affects more than teachers, but just looking at 
the impact on a society without teachers puts the devastation in very 
real context. How does a society function without teachers? How does a 
generation of children face the future without education?
    I am proud of the private and religious organizations that have 
heroically struggled to fight the impact on families, however, it is 
clear that the scope of the AIDS crisis requires additional support. In 
a region of the world where infection rates reach one out of four of 
the adult population, our diplomatic efforts must first and foremost 
include a means to stop this epidemic.
    While the internal political strife in some of these countries can 
be equally heartbreaking in outcome, the ongoing devastation spread by 
AIDS in some of these countries needs to be addressed in a broad and 
immediate way. This type of foreign aid is diplomacy. If we are to help 
the countries of sub-Saharan Africa, facing this very real problem has 
to be the first step.
    I am pleased that there are other bills in the Senate now with 
different approaches to this issue. Our bill does increase funding 
dramatically. In general I do not believe that the federal government's 
solution to a problem should be throwing more money at a situation. But 
I believe there is bipartisan support here on this Committee to 
increase funding and I believe that we can work within the Committee to 
make sure that it will be spent wisely in the best possible manner.
    I look forward to working with you Senator Frist and the Chairman 
to authorize sufficient funds to fight AIDS world wide.

    Senator Frist. Thank you very much. I want to thank all 
four of my colleagues who have come forward. It is a bipartisan 
    And as you sit here and listen, clearly none of what each 
of you have put forward excludes the other. And in truth, it is 
going to take a package.
    Over the course of the afternoon, we will be talking about 
how to dissect the problem to make sure that the resources are 
invested in a wise way, taking into account, your suggestions; 
and hopefully by the end of today, we really will be able to 
come up with a comprehensive approach. I want to thank each of 
    It is interesting that the impact of travel there--my own 
interest came from working in hospitals in Africa in three 
different countries, where the incidents of the patients who 
had come into that operating room of AIDS/HIV positivity was 
about one in four.
    And, again, not enough of our colleagues have had that 
opportunity or taken advantage of that opportunity to travel. 
But as you listen and you see the experiences, you see how 
important it is.
    But I thank all of you very, very much.
    Senator Kerry. Sir, can I ask that the statement from the 
Gates Foundation be placed in the record?
    Senator Frist. Without objection, it will be made a part of 
the record. And your entire statements will be made a part of 
the record.
    [The statement referred to follows:]

               [For Immediate Release--February 24, 2000]

  Statement From the Bill & Melinda Gates Foundation on Senator John 
           Kerry's (D-MA) Vaccines for the New Millennium Act

    The Bill & Melinda Gates Foundation today announced its support for 
Senator John Kerry's (D-MA) and the Clinton's administration's work to 
develop and distribute life saving vaccines. Senator Kerry today 
introduced the Vaccines for New Millennium Act, a proposal which would 
authorize U.S. government expenditures to organizations including the 
Global Alliance for Vaccines and Immunizations (GAVI) and the 
International AIDS Vaccines Initiative (IAVI).
    These organizations are also grantees of the Bill & Melinda Gates 
Foundation. In November 1999, the Foundation announced a $750 million 
grant to the GAVI to help ensure that children in developing countries 
are immunized against major killer diseases in the new millennium. The 
Foundation also gave more than $25 million to IAVI in an effort to 
develop a vaccine that would immunize against the AIDS virus.
    The Bill & Melinda Gates Foundation supports efforts to spur 
research and development into vaccines to fight the spread of diseases 
such as AIDS, tuberculosis and malaria. We are pleased to see the 
comprehensive plan being introduced today by Senator John Kerry at the 
Africa Subcommittee of the Senate Foreign Relations Committee.
    The Foundation supports the plan's goal of establishing as a major 
objective of U.S. foreign policy the universal vaccination and 
immunization of all children from preventable diseases within 10 years.
    Access to vaccines can save the lives of as many as three million 
children every year. The Foundation has been pleased to support GAVI, 
which works with the pharmaceutical industry, international governments 
and others to improve distribution and stimulate the development of 
vaccines and IAVI, an international non-profit organization working to 
speed the development and distribution of an AIDS vaccine.

    Senator Frist. Thank you very much.
    I will ask the second panel to come forward. As they are 
coming forward, again, let me point out that the idea is to 
introduce some of the legislation that is before the U.S. 
Congress and then to introduce the administration's policy and 
programs as well as to what we know about the disease, followed 
by a discussion on the global impact and economics of AIDS. And 
then there is what it is actually like to deal with AIDS on the 
ground in Africa.
    As we have heard, our topic today is a matter of life and 
death, not just of a person or the community or of a family or 
even just of a nation. It is a matter of life and death for an 
entire continent.
    Today, we are going to hear a lot about the extent of the 
disease, the implications for humanity. We have already heard 
of the trends that are becoming increasingly terrifying and, in 
many ways, apocalyptic.
    I think what is important for our subcommittee and our 
larger committee to both understand and focus upon is the fact 
that all goals that the United States has in Africa--goals that 
we share with Africa--are being seriously compromised in some 
shape or form, if not completely undermined, by AIDS.
    Our subcommittee has looked at trade issues, education and 
health, imports, exports from Africa, corruption, stronger 
democracies, efforts toward peace.
    This one issue that we are addressing today will undermine 
each and every one, all of those, will sap the life from some 
of the most promising generations and productive generations, 
unless we act and act in a responsible way.
    Thus, I view this topic today as one of the greatest--and I 
hesitate to say the greatest--but among the greatest policy 
challenges for the United States in Africa--for the United 
States, for Africa, and for Africans themselves. I think we do 
have to be mindful that the United States can and should be a 
great force for good in Africa.
    We will hear about the fact that the United States is 
charitable, is compassionate and as this hearing demonstrates, 
I believe we have the political will to take a more aggressive 
posture toward combating AIDS in Africa.
    The real challenge is going to be, I believe, to determine 
how best to use those resources, which are, in fact, limited--
but how best to use those resources in order to maximize the 
potential for good on the African Continent.
    And it is rare that subcommittees and committees address 
with such a clear focus, issues of life and death as we are 
    [A news release from Senator Frist follows:]

               [For Immediate Release--February 24, 2000]

       News Release From Bill Frist, U.S. Senator From Tennessee

frist warns aids epidemic to become biggest foreign policy challenge in 
    Washington, DC.--Chairing a hearing today of the Senate Foreign 
Relations Subcommittee on African Affairs, U.S. Senator Bill Frist (R-
TN) warned that the growing AIDS epidemic in Africa is affecting all 
aspects of relations with the continent and is certain to pose the 
biggest challenge to Africa and to United States policy toward Africa.
    ``The United States' goals in Africa--expanding trade, better 
education and health, stronger democracies and preserving peace--will 
all be undermined if the AIDS epidemic continues to plague the 
continent at its current rate,'' said Frist. ``The cost in human life 
and societal and economic disruptions from this crisis demand that we 
don't simply turn our backs. Instead we must seek answers that offer 
hope to Africa's future generations. Simply spending more money is not 
the answer. We must determine how we can best use our resources to 
address this crisis.''
    According to reports from the United Nations, 23.3 million adults 
and children are infected with the HIV virus in Africa, representing 
nearly 70 percent of the worldwide total of infected people. In some 
African countries, 20 to 26 percent of adults are infected and an 
estimated 13.7 million Africans have already lost their lives to AIDS. 
In fact, AIDS has surpassed malaria as the leading cause of death in 
    AIDS is having a devastating impact on social and economic 
consequences, depriving Africa of skilled workers and teachers, while 
reducing life expectancy significantly in many countries. The problem 
is uniquely acute in Africa because of the region's widespread poverty. 
In many cases, health systems are ill-equipped for prevention, 
diagnosis and treatment.
    Senator Frist used today's hearing to take a broad overview look at 
the crisis in Africa and examine specific proposals being offered by 
the Administration and Senate colleagues. Frist heard from Dr. David 
Satcher, Surgeon General and the Director of the Office of National 
AIDS Policy, who described the extent of the disease, its implication 
for humanity and current efforts underway by the Administration. He 
also heard from Senators John Kerry (D-MA), Barbara Boxer (D-CA), 
Gordon Smith (R-OR) and Richard Durbin (D-IL) about their specific 
proposals for addressing the African crisis.
    Senator Frist is chairman of the African Affairs Subcommittee and 
has traveled to Africa to participate in medical missionary work to 
examine first-hand the challenges African healthcare systems face.

    Senator Frist. With that, let me turn to our second panel, 
the Surgeon General, David Satcher, who has taken such a 
leadership position in this issue and so many issues; and 
again--both have already been introduced in other people's 
comments--Ms. Sandra Thurman, Director, Office of National AIDS 
Policy. And I want to welcome you both.
    Dr. Satcher.


    Dr. Satcher. Thank you very much, Senator Frist, and thanks 
for this hearing. To the other members of the Subcommittee on 
African Affairs, let me say how delighted I am to have this 
opportunity to share my perspective and concerns about AIDS in 
    I am sure you have heard many times of this pandemic being 
compared with the plague of the 14th century that wiped out a 
third of the population of Europe and more than 20 million 
people; or with the influenza pandemic of 1918, which killed 
somewhere between 25 million and 40 million people in the 
    I want to say that I believe that in a sense we have never 
seen anything like the AIDS pandemic, and I am going to tell 
you why.
    Let me just emphasize again that we are talking about a 
pandemic that has already killed over 16 million people in the 
world, and a pandemic in which there are about 34 million 
people living with the virus.
    As you have heard, nearly 70 percent of those people living 
with the virus are in sub-Saharan Africa; and over 80 percent 
of the people who have been killed by the virus are in sub-
Saharan Africa.
    In sub-Saharan Africa, there are 12 to 13 African women 
infected for every 10 African men. Now, that is different from 
this country where, as you know, this has been predominantly a 
male disease, even though the infections in women are 
    But there are very interesting differences. I think this 
figure is an interesting one, and it is real, the fact that 
every day, 15,000 to 16,000 new people are infected by the AIDS 
virus in the world. And, again, over 70 percent of those are in 
sub-Saharan Africa.
    It is also interesting, I think, that when this epidemic 
started in Africa, it was primarily in the upperclass. It was 
in businessmen who traveled, and they often encountered 
commercial sex workers. And they then in turn spread the virus 
to their partners back home.
    And now, of course, it is primarily a disease that 
threatens mostly the poor and the uneducated, but still very 
much a disease of all the people.
    How is it different? I think one of the most important 
things is to point out how this virus is different, because I 
do not think we have ever seen a virus like this which, in 
fact, infects the host; becomes a part of the cell of the host, 
the genetics of the host in essence; reproduces itself within 
the cell. And this can go on for ten or more years without the 
host being ill or even, in some cases, even knowing that he or 
she is infected.
    That was not true with the plague. That was not true with 
the influenza pandemic. They hit hard and fast. People died, 
almost 40 million people within 2 years with influenza 
    We are in at least the second--the end of the second decade 
of this pandemic, and we are just beginning to see the impact 
of it. There are still millions of people infected with this 
virus who do not even know they are infected.
    And so the difference here is: How do you convince people 
that you are dealing with something as serious as the AIDS 
pandemic when so many people who are infected are healthy, 
walking around every day, working every day, doing well? But in 
time, as we are seeing in sub-Saharan Africa, the epidemic 
    So I think that challenge that we are facing in terms of 
education and prevention, but also that partnership in a sense 
between the virus and the host, which goes on for so many years 
and which allows the virus to be spread to other people, it 
interacts with ignorance. It interacts with poverty. It 
interacts with prejudice in terms of sexism, and it interacts 
with denial.
    And we have seen all of those things in sub-Saharan Africa 
and in other places throughout the world. And it is a unique 
kind of public health challenge, which we do not have a record 
of having been successful in conquering, so it is a new 
challenge that we are facing.
    I want to talk a few minutes about the public health 
approach to this problem, because I think it does dictate how 
we are going to face it.
    As you know, there--we generally define four steps in the 
public health approach. The first step is to answer the 
question, ``What is the problem, and what is the magnitude of 
the problem?''
    That is the surveillance step. We--regardless of the 
problem, we want to know: How big is it? How does it affect 
different--how does it affect different people, different 
genders, different races, et cetera?
    It is very important and you must have the systems in place 
in order to pass this step. You have to have testing, accurate 
testing. You have to have people being willing to be tested. 
You have to have in place a system that randomly tests, to be 
    The second step is to answer the question: ``What are the 
risk factors or the causes of this problem?'' And in this case, 
of course, we know the virus causes the problem, but in 
addition to the virus there are other risk factors.
    For example, in Africa, working with Tanzania, we were able 
to demonstrate a few years ago, primarily NIH-funded research, 
that aggressive treatment of sexually transmitted diseases, 
other sexually transmitted diseases, could reduce the rate of 
infection of HIV by as much as 40 percent.
    And what we discovered, of course, was that the presence of 
another sexually transmitted disease, like gonorrhea, herpes, 
significantly increased the spread of HIV in people who have 
those sexually transmitted diseases.
    So one of the approaches that has to be taken in dealing 
with this epidemic is to aggressively treat other sexually 
transmitted diseases and, therefore, slow the spread of HIV 
    The third step in the public health approach is to define 
interventions that work. The best example, of course, if you 
are dealing with polio and you get a vaccine like the polio 
vaccine, you have discovered an intervention that works.
    And the only challenge then is to go to the fourth step and 
implement it widely.
    I think when it comes to interventions that that can work 
in Africa. I do think we have some, and that we need to 
implement them aggressively. But they have to be comprehensive. 
I do not think we can select one and exclude the others.
    And I would like to focus on three. And the first one is 
prevention. The second one is treatment. And the third one is 
to continue the research to develop new treatment and to 
develop a vaccine.
    I think we have to do all three of those things, and that 
requires infrastructure development, which I will also mention.
    There are some very striking examples of success in 
prevention in Africa. Now, obviously in this country, around 
the middle of the 1980's we were seeing 100,000 to 150,000 new 
HIV infections a year. We have--since the early 1990's, we have 
been seeing about 40,000 new infections a year. We made a lot 
of progress in prevention.
    It is not enough; we need to do much more, but we have 
demonstrated that we could reduce the spread of HIV in this 
    In Africa, we worked very closely with Uganda. And Uganda 
has what I think is a very encouraging record, because there 
was a time in Uganda when women coming to the reproductive 
health clinics, 35 to 40 percent of them were positive for HIV. 
And that is within the last 10 years.
    Uganda had outstanding leadership from the top, President 
Museveni. There was open discussion about this epidemic. There 
were signs placed on the streets about the magnitude of this 
problem and what needed to be done.
    And what we have seen over the last 10 years is a dramatic 
decline to about 11 to 12 percent now of women coming to those 
clinics being positive for HIV. So Uganda has demonstrated that 
prevention can work.
    Senegal has also been a good example. In that country, the 
religious community has been working very closely with the 
political leadership. Senegal has had one of the lowest rates 
of HIV infection of any country in Africa. And that continues 
as we speak.
    But it has demonstrated how openness and education and 
aggressive testing and counseling is a part of this prevention. 
In other words, when people come and you test them and if they 
are positive and you tell them they are positive, on the basis 
of that, you can counsel them about how to change their 
    If you test them and they are negative, then you counsel 
them and tell them how to stay negative. But it is in the 
context of knowing their test results.
    So in order for a prevention program to be successful, we 
think it has to be combined with testing and counseling, very 
effective testing and counseling.
    The other thing is that we have to remember--because we 
have had some very, I think, interesting partnerships--that 
many of the countries that are suffering most now from this 
epidemic went through a period of denial. And this was at a 
time, of course, when the epidemic was increasing, that many 
people were infected but didn't know it. Everybody was quiet 
about the epidemic. Nobody was willing to talk about it until 
very recently, within the last year or two.
    Those countries have been hit very hard with this pandemic. 
And I think now it is going to be very difficult in those 
    But if we start today with aggressive prevention programs--
and in their case, we have already started--we will make a 
difference to millions of people.
    The second step, and it is sort of a bridge between 
prevention and treatment here because as you know, one of the 
most important success stories with this epidemic in this 
country has been the fact that we have actually reduced the 
spread of HIV from mother to child by 72 percent since 1992, 
1993, by treating the mother with a course of AZT in the inter-
natal period, during delivery and after delivery, mother and 
    We worked very closely with some of our colleagues in 
Africa, the CDC, NIH studies in Abijan, sub-Saharan of the 
Ivory Coast, Cote d'Ivoire, in Thailand and in Uganda, 
demonstrated that a shorter course of AZT could reduce the 
spread of HIV by as much as 50 percent from mother to child.
    So that reduced the cost from about $800 to $1,000 in this 
country to a net setting of about $50.
    As you heard from Senator Boxer, research done in Uganda 
recently funded by NIH has demonstrated that Navirapine can 
reduce the spread as much at a cost of $4--a complete cost of 
$4 to treat mother and child and reduce the spread of AIDS from 
mother to child by more than 50 percent.
    That is not happening in most African countries. We still 
have about 500,000 cases of newborns every year being infected 
by HIV from mother to child. So we need to find a way to 
implement those programs.
    I know I am getting a little long.
    Treatment, I think it is important to point out that we in 
this country, of course, have benefited significantly from 
treatment. And it is because of how much we know about the 
    Again, it is the virus, it is the nature of the virus--the 
fact that we know how it incorporates itself into the cell. We 
know how it goes through a transcription to become--from RNA to 
    We know how it gets out of the cell and, therefore, we have 
developed drugs to stop each one of those points. So it is the 
knowledge of the virus that has allowed us to develop as many 
as 14 effective anti-retroviral agents now.
    And as you know, the death rate from this disease has 
decreased since 1995 from over 50,000 a year to less than 
20,000 deaths a year.
    People with this disease are living much longer. They are 
working every day. They are living productive lives. We do not 
know how long this drug--these drugs will be effective. There 
is concern about resistance developing. But without question, 
these drugs have been effective.
    Now, about the use of these drugs in Africa: Now, as you 
know, one of the real challenges that we face is that these 
drugs are very costly. And you have heard about the budgets of 
the countries in Africa. But there is something else that I 
think needs to be pointed out, and that is that it also takes 
an infrastructure to develop one of these treatment programs in 
order for it to be effective.
    It takes a medical care infrastructure. It takes a public 
health infrastructure that we should be working with Africa to 
develop. And that in some ways is just as important if not more 
important than getting the drugs themselves there.
    I think we are working with our colleagues, especially 
working with WHO and the World Bank and UNAIDS on looking for 
ways to get treatment to countries in Africa that where now it 
is unaffordable.
    I think we are going to see progress in that area, but I do 
not think we can forget the fact that without an infrastructure 
to make sure that people are tested and counseled and followed-
up on on a regular basis, the drugs will not solve the problem. 
In fact, the problem of resistance development will be 
exacerbated tremendously.
    So we have to look at the complete picture when it comes to 
treatment. We believe that treatment is important. We believe 
that treatment expedites prevention, and we have something to 
say to people about what happens after you are tested and you 
are positive.
    I think it helps us to encourage people to come for testing 
and counseling.
    Finally, we do need to continue our research to develop new 
drug treatments and new vaccines. The good news, of course, is 
that we have had phase one and phase two trials in this country 
and in Africa and in Thailand. And we have begun phase three 
trials in Thailand. CDC is providing technical support to our 
colleagues in Thailand.
    I was able to visit that program on my way back from 
Vietnam recently. Thousands of people have enrolled in that 
phase three drug trial. And as, you know, phase one and two 
primarily looked at safety and dose range.
    Phase three, you enroll large numbers of people to--in 
order to determine whether there is a significant decrease in 
the risk of their getting infected. That is where we are in 
    Let me, however, caution, this is a very difficult virus. 
As you know with influenza, we still have to have a new vaccine 
every year. Some people feel that in this case, we could need a 
new vaccine every month or more often. We just do not know.
    But the nature of this virus is such that it is going to be 
very difficult to have an effective vaccine.
    Let me conclude by saying, the unfolding AIDS crisis 
requires, I think, orchestrated multi-faceted and aggressive 
response, well coordinated. It requires partnerships on a 
global basis. It requires leadership within the countries in 
Africa and in this country.
    And we have learned a lot. But we still have a lot to learn 
about this epidemic and pandemic.
    Thank you.
    [The prepared statement of Dr. Satcher follows:]

    Prepared Statement of Surgeon General David Satcher, M.D., Ph.D.


    Thank you for the opportunity to come and speak with you as a 
physician and public health professional on the enormous unfolding 
global crisis of HIV/AIDS and its impact on Africa. On January 10, 
2000, the United Nations Security Council held a meeting focused on 
health--the first time ever in the history of the Council's 4,000 
meetings which date back over a half century. I accompanied Vice 
President Gore to that meeting as part of his delegation. Never before 
had a sitting Vice President addressed the Council, not to mention a 
Surgeon General and Assistant Secretary for Health. Why does the United 
Nations consider the HIV/AIDS crisis a threat to security? In a word, 
instability. Not only has this pandemic wiped out soldiers and military 
personnel, but it has also impacted other professionals such as 
teachers, businessmen, and laborers who are vital to the future of a 
nation. HIV/AIDS is a serious public health problem of such magnitude 
that it threatens the very security of many African countries.
    Both the dimensions of this epidemic, and the capacity of existing 
health care systems to halt its relentless march, demand urgent action 
to halt the toll of human suffering and loss of life. The attention 
that this Committee is devoting to the AIDS crisis in Africa is 
extremely valuable to the creation of new partnerships that can 
strengthen the global response to HIV/AIDS.

                         SCOPE OF THE EPIDEMIC

    The HIV/AIDS epidemic will soon become the worst epidemic of 
infectious disease in recorded history. In the 1300s, the bubonic 
plague decimated the population of Europe with 20 million deaths, and 
the influenza epidemic of 1918-1919 killed more than 20 million people 
    At the end of 1999, 16.3 million people are estimated to have 
already died from AIDS worldwide and another 33.6 million individuals 
are living with HIV/AIDS. Without a cure in sight, the toll of AIDS in 
terms of lives lost is on a rapid rise.
    Nowhere has the impact of the epidemic been more severe than in 
Africa. Of the 33.6 million people living with HIV, an estimated 23.5 
million (nearly 70%) are in Africa. An estimated 13.7 million people 
have died of AIDS in Africa, over 80% of the deaths due to AIDS 
worldwide. In 1998 in Africa, when 200,000 people died as a result of 
armed conflict and war, AIDS alone killed 2.2 million people. The 
progression of this disease in Africa has outpaced all projections. In 
1991 the World Health Organization projected that 5 million people 
would die of AIDS between 1991 and 1999, but half that number now die 
each year.
    In many southern African countries, HIV/AIDS has become an 
unprecedented emergency, with one in four or five persons (20%-26%) 
between the ages of 15 and 49 years living with HIV infection. Women 
are more heavily affected than men. New information suggests that 
between 12 and 13 African women are currently infected for every 10 
African men; this disparity is greatest among girls aged 15-19, who are 
five or six times more likely to be HIV positive than boys their own 
age. The next generation of children of Africa will be doubly burdened 
by their own HIV infection, or by growing up without the nurture and 
protection of a parent.
    HIV/AIDS also interacts with a number of other infectious diseases, 
such as tuberculosis and other sexually transmitted diseases. 
Individuals with immune systems weakened by HIV are more susceptible to 
infection with TB, and TB is widely prevalent across the African 
continent. HIV infection is also more easily transmitted in a setting 
of untreated sexually transmitted diseases. The predominant mode of HIV 
transmission in Africa is unprotected heterosexual intercourse, 
highlighting the importance of prevention and early treatment of STDs 
as an HIV prevention strategy.

                       THE PUBLIC HEALTH APPROACH

    The HIV/AIDS epidemic in Africa, as it has done throughout the 
world, has shown us the interrelationships of social behaviors, 
cultural and religious belief systems, and economic and political 
systems as they influence public health and the delivery of health care 
and prevention interventions. The traditional approach of public health 
is to:

   define the problem
   determine the risk factors or causes of the problem
   develop interventions and strategies to address the risk 
        factors or causes, and
   implement interventions and evaluate their effectiveness

    We have learned a great deal about the virus which causes HIV/AIDS, 
and a number of studies are ongoing to examine the specific subtypes of 
the virus which are most prevalent in Africa. Understanding the 
pathogenesis of infection, modes of transmission, and parameters of how 
infections are moving through a population serve as the cornerstone of 
a public health intervention. These basic science inquiries, and the 
equally important understanding of the behavioral risk factors and 
social contexts that facilitate continued spread of the disease, 
continue to inform the public health response to ending this tragic 
    What is needed to overcome this expanding epidemic is a sustained 
orchestrated worldwide effort that includes elements of prevention, 
treatment and ultimately a preventive vaccine. Together, the world 
community can do this.


    Prevention is our first and best line of investment to end the 
global HIV/AIDS epidemic. As the world increasingly becomes a global 
village, an epidemic that continues unchecked in any region will 
ultimately affect us all. The good news is that we can change the 
future course of the HIV epidemic through effective actions taken 
today. Over the last two decades we have learned many things, and there 
are many examples that demonstrate that the tide of HIV/AIDS can be 
turned. The challenge is to take this knowledge and support its 
application systematically, not in isolated communities or a few 
countries. Bringing prevention efforts up to a scale that can turn the 
tide of the HIV epidemic should be among our highest public health 
    Achieving the goals of prevention requires a number of elements: 
the availability of accurate information; the ability to act on that 
information without fear of stigma or prejudice; and the means to 
protect oneself from exposure to the virus. With respect to HIV/AIDS, 
it also means the ability of a mother to protect her unborn or newborn 
child from exposure to HIV before birth or through breast milk. The 
ability to screen and treat other sexually transmitted diseases also 
serves as a primary prevention tool for HIV.
    Prevention efforts are most effective when they are grounded at the 
community level and responsive to the social and cultural contexts in 
which people live their lives. All too often, stigma and prejudice 
continue to preclude access to prevention information that can minimize 
the spread of infection. There are many examples of effective 
prevention efforts in Africa, as in Uganda--where the whole nation has 
mobilized to end stigma, urge prevention, and change behavior, with a 
resulting dramatic drop in the HIV infection rate. In Uganda, the HIV 
infection rates in certain antenatal clinics have decreased from 30% to 
15% as a result of these efforts. Scientists and health professionals 
from the National Institutes of Health and the Centers for Disease 
Control and Prevention have worked in partnership with their Ugandan 
colleagues to evaluate the impact of prevention interventions and 
support research to develop new prevention tools. In Senegal, the 
religious and political leadership of the country joined together early 
in the epidemic to invest in getting prevention messages out, and the 
result has been one of the lowest HIV infection rates on the continent. 
These are but a few examples of some successes achieved on a continent 
where the epidemic is raging.


    There is also hope for people living with HIV/AIDS to live longer, 
healthier and more productive lives due to the discovery of new 
antiretroviral treatments, and effective drugs to treat common 
opportunistic infections which cause great suffering and early death. 
The natural course of HIV disease in the United States has seen a great 
change due to these therapies, with many more adults and children now 
living longer healthier lives, participating in their communities and 
the workforce, and parents caring for their children. Our ability to 
slow the progression of immune dysfunction, and to diagnose, prevent 
and treat the concurrent opportunistic infections has greatly decreased 
morbidity and mortality in the developed world.
    One of the greatest successes has come in the ability to reduce 
transmission of HIV from mother to child, through HIV counseling, 
testing and use of antiretrovirals such as AZT and Navirapine. In the 
United States, there has been a 72% decline in the number of HIV-
infected babies born between 1992-1998 with the use of AZT in the 
prenatal, labor and delivery, and postpartum period. However this 
complex regimen is expensive and requires a level of medical 
infrastructure not available in many areas of the world. The urgency to 
develop affordable and practical therapeutic interventions for 
developing countries is profound. In some areas of sub-Saharan Africa, 
30 percent or more of pregnant women are infected with HIV, and 25%-35% 
of their infants will be born infected. In response to this pressing 
need, a partnership effort between Uganda and NIH scientists identified 
a highly effective, safe and inexpensive drug regimen for preventing 
perinatal HIV transmission. Administration of one oral dose of 
Navirapine to a mother at the onset of labor and another dose given to 
her baby, cut the rate of HIV transmission in half compared with a 
similar short course of AZT--for a cost of $4.00 instead of the roughly 
$800 required for the AZT regimen now recommended in the United States. 
If widely implemented in developing countries, this intervention 
potentially could prevent some 300,000-400,000 newborns per year from 
beginning life infected with HIV.
    To maximize the benefits of antiretroviral therapies, their safe 
and responsible use requires a level of medical care and infrastructure 
that presents an enormous challenge to the developing world. But first 
steps can be taken by supporting the development of community-based 
capacities to diagnose HIV and provide low cost treatment for common 
opportunistic infections that kill prematurely and cause great 
suffering. It has been our experience that community-based services, 
built upon partnerships among existing community institutions, serve as 
the most effective and sustainable model to provide the net of 
prevention, health and social services vital to curtailing this 
devastating epidemic. As the Governments of Africa and their health 
leaders determine how best to involve communities, determine and 
address the needs of their people and what their systems can support, 
the worldwide public health community must stand ready to help.


    The importance of developing an effective vaccine for HIV is 
paramount, as the greatest hope for ending the epidemic lies in this 
intervention. Vaccines have been the most significant public health 
intervention to eradicate or curtail the incidence of feared diseases, 
such as polio, smallpox, diphtheria, tetanus and many others. This 
Administration has made the development of an HIV vaccine a priority, 
and my HHS colleagues are working in collaboration with international 
partners to ensure these products will be effective against the virus 
strains that are predominant in Africa. A year ago, the first vaccine 
trial in Africa began in Uganda under the sponsorship of the NIH and 
carried out by Ugandan investigators. The first Phase III vaccine trial 
is now underway in Thailand with CDC support.
    The utility of an HIV vaccine must take into consideration the 
availability of a health care system that can safely deliver the 
vaccine to large and often isolated populations. This remains a barrier 
today to the delivery of many existing vaccines in Africa and 
developing nations in other parts of the world. Even as we press 
forward to develop effective vaccines, it is imperative that we not 
ignore those who are already living with HIV infection. Our experience 
in this country has shown that developing medical systems of care for 
already infected persons becomes a critical component of an effective 
prevention effort.


    The full dimensions of the unfolding AIDS crisis are becoming 
better understood. The need to mount an orchestrated, multifaceted and 
aggressive response is inescapable. Current national/country level AIDS 
activities in Africa must be expanded dramatically and rapidly to make 
a substantial impact on the course of the disease. As effective 
approaches are defined, we need to find ways to support their wide 
application, working closely with public health leaders on the front 
lines. Experience from some countries has shown that when governments 
commit their own political prestige and financial resources, involve 
broad aspects of society at the community level, and directly confront 
issues of prejudice and behaviors that hold a high risk of 
transmission, the rate of new infections can be slowed and communities 
can begin to develop more durable responses to effectively cope with 
the HIV epidemic. We have seen over and over again in the Western world 
the need for a sustained prevention-medical treatment continuum. 
Developing strategies that are episodic in targeting at risk 
populations can inevitably lead to high rates of recidivism and a 
resultant resurgence of new infections.
    It is critical we not minimize the human side of this epidemic. The 
statistics describe a public health crisis that has largely gone 
unchecked, and do not reflect the extent of human suffering. The 
extraordinary human toll is evident, the millions of potentials 
unrealized, the expanding wave of grief that extends beyond the 
individual, their family and community is self-evident. As part of the 
Human Family, we will all be feeling the repercussions of this 
extraordinary human loss for generations to come. We are committed to 
look for every opportunity to assist African countries in their 
continuing efforts to end this epidemic.

    Senator Frist. Thank you, Dr. Satcher. Thank you for your 
real leadership that overview as well as specific 
recommendations. That is very, very helpful.
    Ms. Thurman, welcome.

                     POLICY, WASHINGTON, DC

    Ms. Thurman. Thank you. And I thank you, Mr. Chairman and 
members of the subcommittee and full committee.
    I am delighted to be with you today to talk about the AIDS 
pandemic, particularly as it affects Africa. And I have to say 
that your willingness and eagerness to deal with this issue is 
very much appreciated and certainly very much needed. So I 
thank you.
    And we have heard your colleagues and our Surgeon General 
lay out a very vivid picture of the scope of this tragedy, 
particularly as it relates to the public health crisis.
    But I would like to use my time today to talk with you 
about its impact on the stability of families and communities 
and, indeed, nations. And I would like to share with you some 
of the--of my experiences with the faces behind these facts and 
    And I would like to outline for you some of the key 
components of the administration's strategy to combat the 
    By any and every measure, AIDS is a plague of Biblical 
proportion. It is claiming more lives than all of the armed 
conflicts occurring on the African continent today.
    But unlike other wars, it is increasingly women and 
children that are caught in the crossfire of this relentless 
pandemic. In Africa, as you heard, an entire generation is in 
jeopardy. And already in sub-Saharan Africa, as many as one-
third to one-fifth of all children have lost one or more 
parents to AIDS.
    And within the next decade, we estimate that more than 40 
million children will be orphaned as a result of AIDS in 
Africa. That is the equivalent of all the children in the 
United States living east of the Mississippi. The numbers are 
just staggering.
    AIDS has wiped out decades of steady progress and 
development--steady progress in improving the lives and health 
of families throughout the developing world.
    Infant mortality is doubling. Child mortality is tripling. 
And life expectancy is dropping in many countries by 20 years 
or more.
    Clearly, AIDS is not just a health issue. It is an economic 
issue. It is a fundamental development issue, and it is a 
security and stability issue.
    AIDS is having a dramatic effect on productivity, trade and 
investment, striking down workers in their prime, driving up 
the cost of doing business and driving down GNP.
    Dr. Sachs will address some of the economic impact a little 
later on. But it is also affecting the stability and security 
in the region.
    As you all know, the U.N. Security Council just last month 
held a day-long session on HIV and AIDS. It is the first time 
ever that the United Nations Security Council has focused on a 
health issue in one of its meetings. And I think that speaks to 
a growing awareness that AIDS is a security threat that 
requires global mobilization.
    This reality was also addressed in a report recently 
released by the National Intelligence Council that I encourage 
you all to look at.
    It documents that the impact of this pandemic is far worse 
than we ever anticipated and that it is not just an African 
issue or an American issue, that the center of the pandemic or 
the epicenter of the pandemic will be in Asia and India in 
another 15 years, if we do not do something to stop it now.
    But our message today is not one of hopelessness and 
desolation. On the contrary, I hope to share with you a real 
sense of optimism, because amidst all of this tragedy there is 
hope. And amidst this terrible crisis, there is an opportunity 
for all of us to empower women, to protect children, and to 
support families and communities throughout the world in our 
shared struggle against AIDS.
    It is important to remember that what we are talking about 
today is not these figures and facts, but faces and families. 
It is not numbers, but it is names.
    And Senator Durbin has talked to you about my hero in the 
epidemic that many of us in this room have met, Bernadette, who 
lost 10 of her 11 adult children and is supporting 35 
grandchildren with the money that she has from a community 
banking program.
    In fact, she has 15 of her grandchildren in school and is 
able to provide modest treatment for the 5 of her grandchildren 
who are infected with HIV.
    I think that is extraordinary, but Bernadette is not alone. 
There are young people from Lusaka doing street theater to 
educate their peers about HIV and AIDS.
    There are women in Soweto who have formed support groups to 
provide care for other women who are living with HIV and AIDS.
    Communities around the world are mobilizing and are 
creating extraordinary ripples of hope.
    The good news is, as many have stated, that we know what 
works. We have the knowledge. We have the tools to prevent 
disease and to care for the sick. What we are lacking in many 
instances is the political will to do so.
    The Surgeon General has outlined the successes in Uganda 
and Senegal. There is one reason for that. I guess there are 
really two. The first is leadership and the second is a steady 
resource of support needed for these communities on the ground 
to do this very important work.
    The United States has been engaged in the fight against 
AIDS here at home since the early 1980's. But increasingly we 
have come to realize that when it comes to AIDS, both crisis 
and opportunity have no borders.
    We have much to learn from the experiences of other 
countries, like Uganda and like Senegal.
    We have done much, but there remains much more to do in the 
United States and around the world for us to be able to bring 
these important programs to scale.
    During the past 3 years, I have visited Africa four times; 
I have visited eight countries. We have taken Members and staff 
from both parties and chambers to look firsthand at both the 
triumphs and tragedies of the epidemic in Africa.
    And the response to the findings of those trips, as many of 
you know, was that the administration last year requested and 
the Congress appropriated an additional $100 million in fiscal 
year 2000 to enhance our global AIDS efforts.
    The new initiative provides for a series of steps to 
increase U.S. leadership through support for some of the 
extraordinary community-based programs currently being funded 
through USAID and to provide the much-needed technical 
assistance that these developing nations struggling to respond 
to the needs of their people need.
    This effort more than doubles our funding for programs of 
prevention and care in Africa, and challenges our G-8 partners 
to increase their efforts as well.
    And while this is a significant increase in our own 
Government's investment in the global battle against AIDS, it 
just begins to reflect the magnitude of this rapidly escalating 
    The initiative focuses on four key areas: prevention, basic 
education, mother-to-child transmission counseling, and 
    It focuses on home and community-based care, including some 
basic medical care for the diseases that the Surgeon General 
has talked about: tuberculosis, sexually transmitted diseases, 
other opportunistic infections, as a result of HIV infection; 
certainly care and support for children orphaned by AIDS; and 
last, the all-important development of the infrastructure that 
people have mentioned, so necessary to do all of the other 
things that we have talked about.
    Some of the other key components of this initiative include 
an increase in our efforts to include AIDS in our foreign 
policy dialog; and to engage the private sector and include the 
corporate sector, including foundations, labor, the religious 
community and other non-governmental organizations in this 
    You will find a more complete description of the 
initiative; I have included it in the record for review.\1\
    \1\ See ``Report on the Presidential Mission on Children Orphaned 
by AIDS in sub-Saharan Africa,'' accessible at www.whitehouse.gov/onap
    But while this initiative greatly strengthens the 
foundation of a comprehensive response to the pandemic, UNAIDS 
has estimated that it will take at least $1 billion to develop 
a comprehensive prevention program in Africa. Currently, all 
the donors combined, both public and private are spending a 
little less than $350 million.
    In addition, UNAIDS estimates that in order for us to even 
begin to deliver care and treatment to those who are currently 
infected, it will take another $1 billion. And we have barely 
scratched the surface when it comes to delivering care and 
treatment to people infected with HIV.
    We have only begun this work. And in the face of such 
tremendous need, the administration has requested in the 
President's 2001 budget submission an additional $100 million 
to enhance and expand our efforts to combat AIDS in Africa and 
around the world.
    These funds will enable us to bolster our efforts already 
underway at USAID and CDC, and expand our approach to include 
the Department of Labor and the Department of Defense to 
address HIV and AIDS transmission in the workplace and in the 
    Let me repeat, however, that the United States cannot and 
should not do this alone. This crisis will require engagement 
from all segments of all societies working together, every bi-
lateral donor, every international lending institution; the 
list goes on and on.
    The bottom line is this: We have no vaccine and no cure in 
sight. And we are just beginning to see the impact of this 
global pandemic.
    What we are seeing in Africa today is only the tip of the 
iceberg. And as goes Africa, so will go India, the rest of 
Asia, and the former states of the Soviet Union.
    There must be a sense of urgency in working together with 
our partners in Africa and around the world to learn from the 
experiences that we have had here in the U.S. and in Africa and 
to share those successes, and avoid the failures with those 
countries that are currently standing on the brink of disaster.
    We look forward to working with all of you here in the 
Congress and receiving the broad-based bipartisan support that 
this crisis deserves.
    AIDS is not a Democratic or Republican issue. It is a 
devastating human tragedy that cries out for all of us to help.
    In one word, I guess, in many ways, Africa's destiny is our 
destiny. But there is hope on the horizon, but that hope will 
only be realized if we take constructive action together.
    Thank you.
    [The prepared statement of Ms. Thurman follows:]

                  Prepared Statement of Sandra Thurman

    Mr. Chairman and other members of this Subcommittee and Full 
Committee, I am delighted to be with you today to talk about the global 
AIDS pandemic--with a special focus on AIDS in Africa. Your interest in 
addressing this crisis is very much appreciated--and desperately 
    We have heard your colleagues and our Surgeon General lay out a 
vivid picture of the scope of this tragedy--particularly as it relates 
to the public health crisis. I would like to use my time with you to 
talk about its impact on the stability of families, communities and 
nations. I would like to share with you some of my experiences with the 
faces behind these shocking facts. And I would like to outline for you 
some key components of our enhanced Administration response to this 
global pandemic.
    By any and every measure--AIDS is a plague of Biblical proportion. 
And it is claiming more lives in Africa than in all of the wars waging 
on the continent combined. But unlike other wars--it is women and 
children that are increasingly caught in the crossfire of this 
relentless epidemic.
    In Africa, an entire generation of children is in jeopardy. 
Already, in several sub-Saharan African countries, between one-fifth 
and one-third of all children have already been orphaned by AIDS. And 
the worst is yet to come. Within the next decade, more than 40 million 
children in Africa will have lost one or both parents to AIDS. 40 
million. That is about the same number as all children in the United 
States living east of the Mississippi River. Or taken another way, it 
is almost the same number as all children in public school in this 
country. Left unchecked, this tragedy will continue to escalate for at 
least another 30 years.
    In just a few short years, AIDS has wiped out decades of hard work 
and steady progress in improving the lives and health of families 
throughout the developing world--infant mortality is doubling, child 
mortality is tripling, and life expectancy is plummeting by twenty 
years or more.
    AIDS is not just a health issue; it is an economic issue, a 
fundamental development issue and a security and stability issue.
    AIDS is having a dramatic effect on productivity, trade and 
investment--striking down workers in their prime, driving up the cost 
of doing business, and driving down GNP. Professionals have been hit 
particularly hard in sub-Saharan Africa, including civil servants, 
engineers, teachers, miners, and military personnel. In Malawi and 
Zambia, more than 30% of teachers are HIV positive. Some mining firms 
in South Africa are reporting that nearly half of their workers are 
already infected. And many businesses are hiring at least two workers 
for every one skilled job, assuming that one will die from AIDS.
    According to the Economist magazine, recent studies have found that 
AIDS is seriously eroding the economies of many of our partner nations. 
In Namibia, AIDS cost the country almost 8% of its GNP in 1996. By 
2005, Kenya's GNP will be over 14% smaller than it would have been 
without AIDS.
    Similarly, in Tanzania, The World Bank has predicted that its GNP 
will be 15% to 25% lower as a result of AIDS. The South African 
government has estimated that this epidemic costs the country 1% of its 
GNP each year, a situation that will only worsen without strong 
    AIDS is also effecting stability in the region. As you all know, 
the UN Security Council recently held a day-long meeting on HIV/AIDS. 
This historic event highlighted the growing awareness that AIDS is a 
security threat that requires a global mobilization. This reality was 
also addressed in a report recently released by the National 
Intelligence Council. The Report draws several very disturbing 
conclusions including the following:

   The epidemic is far worse than predicted.
   Development of an effective global surveillance and response 
        system is at least a decade or more away.
   The economic costs of infectious diseases--especially HIV/
        AIDS--are already significant and could reduce GDP by as much 
        as 20% or more by 2010 in some sub-Saharan countries.
   Some of the hardest hit countries in sub-Saharan Africa--and 
        possibly later in South and South-East Asia--will face a 
        demographic upheaval as HIV/AIDS and associated diseases reduce 
        human life expectancy by as much as 30 years and kill as many 
        as a quarter of their populations over a decade or less, 
        producing a huge orphan cohort.
   Nearly 42 million children in 27 countries will lose one or 
        both parents to AIDS by 2010; 19 of the hardest hit countries 
        will be in sub-Saharan Africa.
   The relationship between disease and political instability 
        is indirect but real.

    The prevalence of HIV in the armed forces of many African countries 
is already staggeringly high. The Economist has estimated the HIV 
prevalence in the Congo range at 50% to 80%. Other recent reports have 
projected that the South African military and police are also heavily 
impacted by HIV. Moreover, as these troops participate in an increasing 
number of regional interventions and peacekeeping operations, the 
epidemic is likely to spread.
    Extremely high levels of HIV infection among senior officers could 
lead to rapid turnover in those positions. In countries where the 
military plays a central or strong role in government, such rapid 
turnover could weaken the central government's authority. For those 
countries in political transition, this kind of instability could slow 
or even reverse the transition process. This is a dynamic that deserves 
serious attention not only in Africa, but also in the Newly Independent 
States of the Former Soviet Union, and in India where AIDS is 
intensifying its deadly grip.
    The South African Institute for Security Studies has also linked 
the growing number of children orphaned by AIDS to future increases in 
crime and civil unrest. The assumption is that as the number of 
disaffected, troubled, and under-educated young people increases, many 
sub-Saharan African countries may face serious threats to their social 
stability. Without appropriate intervention, many of the 2 million 
children projected to be orphaned by AIDS in South Africa alone will 
raise themselves on the streets, often turning to crime, drugs, 
commercial sex, and gangs to survive. This seriously affects stability 
and promotes the spread of HIV among these highly vulnerable young 
    Yet my message to you today is not one of hopelessness and 
desolation. On the contrary, I hope to share with you a sense of 
optimism. For amidst all of this tragedy, there is hope. Amidst this 
terrible crisis, there is opportunity: the opportunity for us--working 
together--to empower women, to protect children, and to support 
families and communities throughout the world in our shared struggle 
against AIDS.
    It is important to remember that what we are talking about today is 
not numbers but names, not facts and figures but faces and families. 
Let me tell you the story of one inspirational grandmother I met in a 
small village outside of Masaka, Uganda.
    Bernadette has lost 10 of her 11 adult children to AIDS. Today, at 
age 70, she is caring for her 35 grandchildren. With loans from a 
village banking system, she has begun growing sweet potatoes, beans, 
and maize, raising goats and pigs, and trading in sugar and cooking 
    With the money she earns, she is now able to send 15 of her 
grandchildren to school, provide modest treatment for the 5 who are 
HIV+, and begin construction on a house big enough to sleep them all. 
In her spare time, she participates in an organization called ``United 
Women's Effort to Save Orphans''-- founded by the first lady of Uganda, 
Mrs. Museveni--linking in solidarity thousands of women allied in the 
same great struggle.
    And these women are not alone. From the young people doing street 
theater in Lusaka to educate their peers about HIV to the support 
groups in Soweto providing home and community based care for people 
living with AIDS--communities are mobilizing and creating ripples of 
    These are the faces of children and families living in a world with 
AIDS. And their spirit, their determination, and their resilience lead 
us on.
    The good news is, we know what works. With our partners in Africa 
we have developed useful knowledge and effective tools. Together, we 
have designed model programs and proven that they work. And today, we 
know how to stem the rising tide of new infections, how to provide 
basic care to those who are sick, and how to mobilize communities to 
support the growing number of children orphaned by AIDS. Uganda has 
demonstrated that with strong political commitment and sustained 
nationwide programs, HIV prevalence can be cut in half. And Senegal has 
shown that HIV can be stopped in its tracks and prevalence can be kept 
low. But there is more, much more that needs to be done if we are to 
bring these successes to scale.
    The United States has been engaged in the fight against AIDS here 
at home since the early 1980s. But increasingly we have come to realize 
that when it comes to AIDS--both the crisis and the opportunity have no 
borders. We have much to learn from the experiences of other nations, 
countries, and the suffering of citizens in our global village touches 
and affects us all.
    The United States has been the leader in the battle against AIDS. 
The Administration has taken an active role in sounding the alarm on 
the AIDS crisis in Africa, and in ensuring that the United States 
supports African efforts to combat this deadly disease.
    Since 1986, this nation has contributed over $1 billion to the 
global fight against AIDS. More than 50% of those funds have been used 
to address the epidemic in sub-Saharan Africa. Overall, nearly half of 
all of the development assistance devoted to HIV care and prevention in 
the developing world has come from the U.S. The United States has also 
been the leading supporter of the Joint United Nations Programme on 
HIV/AIDS--UNAIDS--contributing more than 25% of its budget.
    It is a strong record of engagement and one of which we can be 
proud, but unfortunately it has not kept pace with this terrible 
pandemic. We have done much, but there remains much more that the 
United States and other developed nations can and must do.
    During the past year and a half I have made four trips to eight 
African countries. Together with members and staff from both parties 
and chambers we went to witness firsthand both the tragedies and 
triumphs of AIDS in Africa. In response to the findings of these trips, 
the Administration requested and the Congress appropriated an 
additional $100 million in FY2000 to enhance our global AIDS efforts.
    This new initiative provides for a series of steps to increase U.S. 
leadership through support for some of the extraordinary community-
based programs currently being funded through USAID and to provide much 
needed technical assistance to developing nations struggling to respond 
to the needs of their people infected and affected by AIDS. This effort 
more than doubles our funding for programs of prevention and care in 
Africa, and challenges our G-8 and other partners to increase their 
efforts as well. This initiative is a significant increase in the U.S. 
government's investment in the global battle against AIDS and it begins 
to reflect the magnitude of this rapidly escalating pandemic.
    The initiative focuses on four key areas:

   Prevention. Specifically, we hope to implement a variety of 
        prevention and stigma reduction strategies, especially for 
        women and youth, including: HIV education, engagement of 
        political, religious, and civic leaders, voluntary counseling 
        and testing, interventions to reduce mother-to-child 
        transmission, and enhanced training and technical assistance 
   Home and community-based care. This will help create and 
        enhance counseling and support systems, and help clinics and 
        home health workers provide basic medical care (including 
        treatment for related illnesses like STDs and TB).
   Care of children orphaned by AIDS. We hope to improve our 
        ability to assist families and communities in caring for their 
        orphaned children through nutritional assistance, education, 
        training, health, and counseling support, in coordination with 
        micro-enterprise programs.
   Infrastructure. These funds will help to increase the 
        capacity for the effective delivery of essential services 
        through governments, NGOs, and the private sector. We also need 
        to enhance surveillance systems so that we can better track the 
        epidemic and target HIV prevention efforts.

    Some of the other key components of this initiative include an 
increase in our efforts to include the AIDS epidemic in our foreign 
policy dialogue, both to encourage and support political leadership in 
hardest hit countries and to promote an increased response by our 
developed nation partners. We are also taking steps to increase our 
coordination with the private sector and the many non-governmental 
organizations working in Africa, including religious organizations.
    You will find a more complete description of this initiative--both 
the problems and solutions--in the report released by the 
Administration last summer. I have submitted a copy to this 
Subcommittee and would like to request that it be included in the 
record as part of my remarks.
    While this new initiative greatly strengthens the foundation of a 
comprehensive response to the pandemic, UNAIDS has estimated that it 
will take $1 billion to establish an effective HIV prevention program 
in sub-Saharan Africa. Currently all donors combined are contributing 
less than $350 million to that end. In addition, UNAIDS estimates that 
it will take a minimum of $1 billion to begin to deliver even the most 
basic care and treatment to people with AIDS in the region. We have not 
even begun to scratch the surface when it comes to delivering 
    In the face of such tremendous need, the Administration has 
requested, in the President's 2001 Budget submission, an additional 
$100 million increase to enhance and expand our efforts to combat AIDS 
in Africa and around the world. These funds will enable us to bolster 
our efforts already underway at USAID and CDC, and to expand our 
approach to include the Departments of Labor and Defense for efforts to 
address HIV/AIDS transmission in the workplace and in the military.
    Let me repeat, however, that the United States cannot and should 
not do this alone. This crisis will require engagement from all 
segments of all societies working together. Every bi-lateral donor, 
every international lending agency, the corporate community, the 
foundation community, the religious community and every African 
government must do their part to provide the leadership and resources 
necessary to turn the tide. It can be done.
    The bottom line is this: We have no vaccine or cure in sight, and 
we are at the beginning of a global pandemic, not the end. What we see 
in Africa today, frankly, is just the tip of the iceberg. As goes 
Africa, so will go India and the Newly Independent States of the Former 
Soviet Union. There must be a sense of urgency to work together with 
our partners in Africa and around the world to learn from the 
experiences there and to share the successes and avoid the failures in 
countries now standing on the brink of disaster. Millions of lives--
perhaps hundreds of millions of lives--hang in the balance.
    We look forward to working closely with each and every one of you, 
and are so grateful that this issue is receiving the broad-based 
bipartisan support it deserves. AIDS is not a democratic or republican 
issue--it is a devastating human tragedy that cries out to all of us 
for help.
    We are one world--and in many ways--Africa's destiny is our 
destiny. There is hope on the horizon--but that hope will only be 
realized if we take constructive action together. Today, let us commit 
to seize this opportunity. And let me conclude by thanking this 
Subcommittee for its interest in this issue, and offer my continued 
assistance as you seek ways to respond to this terrible tragedy. As 
Archbishop Tutu said: ``If we wage this holy war together--we will 
    Thank you.

    Senator Sarbanes. I did not have an opportunity to make an 
opening statement. I am going to have to depart, and I regret 
that. But, I just want to----
    Senator Frist. Take a few minutes now.
    Senator Sarbanes. I just wanted to commend you for holding 
this hearing. I think it is a very significant and important 
initiative, and I know that you and Senator Feingold have been 
very much focused on this issue, along with other members of 
the committee.
    It seems to me that we ought to be able to enact an 
important piece of legislation in this Congress this year, and 
in the next few months. I think it is a very important 
    I want to thank the Surgeon General, and I want to thank 
Sandy Thurman, who I think has done an absolutely terrific job 
of focusing attention on this issue and providing some very 
significant and important leadership.
    And I very much hope that before this Congress adjourns, in 
fact, well before that, that we can get something on the books 
that will provide a framework within which they can work and 
make some important and significant advances.
    I mean, this is--I am encouraged by the sense now that 
there are some paths we can follow that will provide some 
solutions. I mean, everyone comes in and says how terrible the 
situation is, and I think we need to do that to make people 
appreciate how severe the problem is.
    Although, I think, one reason some people are reluctant to 
come to grips with it is because they do not see any way out of 
it. And I think if you can combine an emphasis on how serious 
the problem is, but also presenting alternatives for working 
through the problem, we might be able to develop a greater 
willingness both here and indeed over there, as well, because I 
understand that is a very significant problem.
    A greater willingness to come to grips with this problem. 
So, I look forward to looking with you, and Senator Feingold, 
and your other colleagues, Senator Biden and others who have 
taken a keen interest to see if we cannot get some legislation 
on the books.
    I do apologize to these other panels that we will be 
hearing from today that I cannot stay. And I do want to say to 
Father D'Agostino that I have heard a great deal about the good 
work that he is doing at his orphanage in Kenya. And one of the 
members of your board, Ben Polumbo, is a close friend of mine, 
and he has very much brought me up to date on the extraordinary 
work that you are doing. And I apologize to my colleagues and 
to those giving testimony that I cannot stay.
    Senator Frist. I appreciate your comments, and the reason 
this construct of this hearing is very much to talk and hear 
about the successes instead of just the money, and just the 
investment which is critically important, and the construct of 
this hearing is very much to look at the very positive things 
to show the great advances that have been made. And that is why 
this panel itself is important. Senator Biden, do you want----
    Senator Biden. I would ask that my opening statement be 
placed in the record, and as we say in this body, I would like 
to associate myself with the remarks of Senator Sarbanes in 
thanking both of you for being so committed to dealing with 
    And also that the one thing that came across to me was the 
point that Senator Sarbanes made. I think part of the reason 
why there is this sense of impotence, and as a consequence, a 
notion that no matter how much money we appropriate or spend, 
it does not make any difference, is that I would bet you that 
if you took a national poll, and you gave the American people 
the statistics about the circumstances in Africa, south of the 
Sahara in particular, the American public would say we would 
like to help, but there is nothing to do.
    And so we must emphasize what we can do and how what we do 
can be of consequence. And the last point I will make, is I 
happen to belong to what used to be called an Arms Control and 
Observer Group, which is a fancy way of saying there is ten of 
us that have been appointed to a committee to deal with the 
strategic balance in arms control issues that are going on with 
Russia now.
    And Mr. Talbott is testifying in the secret room we have, 
S-407, at 4, and I am going to have to go to that because of my 
responsibility on that committee. But, I will stay until then 
and maybe a little beyond, and I do apologize to the other 
    It is not out of lack of interest. It is because I am on 
another committee that I happen to rank higher on and am 
supposed to be there more on. And so--both of these guys know a 
hell of a lot more than I do anyway, and I follow them both.
    Senator Sarbanes. He is going to make Secretary Strobe 
Talbott appreciate why AIDS control ought to rank up with arms 
control in terms of significance in dealing with the 
international environment.
    Senator Biden. Bring him down here. We will just have the 
meeting right here. But, thank you, Mr. Chairman.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Senator Joseph R. Biden, Jr.

    I would like to welcome all of our witnesses to today's hearing and 
to thank each of you for coming. The subject of HIV/AIDS in Africa is 
one of intense interest here in the Senate, as evidenced by the 
presence of my colleagues who will testify shortly, and the number of 
bills that have been introduced since we began the legislative session 
this year aimed at halting the spread of this deadly disease.
    HIV/AIDS is the 21st century's bubonic plague. There is no need for 
me to tell anyone of our witnesses what a devastating impact that AIDS 
is having in sub-Saharan Africa. It is destroying the very fabric of 
African societies. According to news reports, it is killing the 
professional classes, the civil servants, the teachers, and military 
officers. Teachers are dying faster than academic institutions can 
train replacements. I have read that some African militaries have an 
infection rate upwards of 40 percent.
    AIDS is devastating the rural areas. AIDS orphans are shunned, 
ignored and neglected because of the stigma associated with the 
disease, due to fears that they might be infected with the virus, and 
due to ignorance about how the disease is spread. Millions of children 
are left parentless in countries where government social safety nets 
are too weak to support them. They are left to fend for themselves.
    The result is millions of orphans literally living in the streets. 
They may or may not be HIV positive, but they are almost certain to die 
of starvation, or to become the victims of some sort of violence or 
    In essence we have a situation where two generations of people are 
being lost. The adults are dying at an astronomical rate. The children 
are being neglected to the point where it will be almost impossible for 
them to contribute in any meaningful way to society when they reach 
    James Wolfensohn's remarks before the UN Security Council about the 
level of funding needed to combat the disease in Africa are truly 
sobering. If he is correct, this means that the efforts of the 
international community are only one tenth those needed to halt the 
spread of this modern day plague. It is apparent that more needs to be 
    I will close by underscoring two things: First, the international 
community cannot fight AIDS in Africa alone. We are going to need more 
than cooperation from our African partners. We need their active 
participation. The focus and commitment of African governments, heads 
of state and of civil society is urgently required if the spread of 
HIV/AIDS is to be slowed at all, let alone checked and halted.
    Second, there are treatments available in the United States which 
can considerably lengthen and improve the quality of life of those 
living with HIV/AIDS. The impact in Africa should these drugs be made 
affordable and available would be profound. At the very least, it would 
slow the loss of the professional and working classes which are the 
backbone of these countries. It would cut down on the number of AIDS 
orphans and the resultant social problems.
    There has to be a way to make these treatments available to those 
living with AIDS in Africa, and I hope that we are able to explore the 
possibility during the course of this hearing.
    Again, I thank each of our witnesses for coming here today and I 
look forward to hearing your testimony.

    Senator Frist. If you let me just ask one question and then 
I will turn to my colleagues. We do have three--three, or two 
additional panels. Doctor Satcher, Africa is 10 percent of the 
world's population. You have 70 percent of the world's 
infections. What is the short answer as to why AIDS has spread 
so extensively in this continent and has taken such a hold in 
Africa as we have heard? In truth, it is worldwide, but why 
there, why the hold there sooner than other continents?
    Dr. Satcher. I think the shortest answer is, I do not know. 
I think we do not know, and I think the conference out in San 
Francisco recently demonstrated that. Every time we look at 
data, we learn something new. For example, we learned that in 
different countries in Africa where the behaviors are the same, 
the Rabi infections are different.
    And we do know, for example, that there are some things 
like the problem with respect to sexually transmitted diseases 
that influence the transmission of HIV, but we are also 
beginning to think that there is some host genetic factors. I 
think in one study, about 15 percent of commercial sex workers 
demonstrated resistence to HIV.
    They were very active commercial sex workers, a lot of 
different partners, and yet after years, they had not become 
infected. In one case, some of them took off 2 months, and when 
they came back to that profession, they were infected. And the 
question is, why? What was the difference?
    What was the nature of the resistence that broke down with 
this period off? So we are still learning. So we do not really 
know all the reasons, but let me just say that I think we do 
know that there are some factors that tend to perpetuate this 
infection, and exacerbate it. And certainly, denial, when we 
are not open in discussing it, and--this similar thing happened 
in India.
    We have not talked about India, but six and a half million 
cases are there in India, and I am not sure what the future 
holds, but we are concerned about it. But, injection drug use 
and heterosexual spread are factors. Primarily in Africa, it 
has been a heterosexual spread of this disease.
    As I said, we think it started with commercial sex work 
with travelers and then spread. But in environments of poverty 
and environments for women do not have the kinds of rights that 
give them some say in control in terms of sexual relationships, 
and in an environment where people are not educated about the 
risks, I think they are fertile environments for the spread of 
this virus. So you have to say that is part of it, but we also 
have to admit that we do not know the full answer.
    Senator Frist. Thank you. Could you just comment on the 
subtype C virus? I get asked all the time to bring people up to 
date, and that is why I appreciate you coming here in terms of 
the science itself. HIV I-subtype C virus is the principal 
cause of AIDS in Africa, is that correct?
    Dr. Satcher. Well, in some areas, there are differences. We 
are doing a study right now, and the reason I am going to be 
hesitant to respond because we have a special study going 
looking at the subtypes in Africa, and we are going to need to 
see that through.
    But, subtypes are different in different parts of the 
world, and that is why also, when you are developing a vaccine, 
you really have to target the subtypes in different areas. But 
certainly, the subtypes in Africa and the subtype C is more 
    Senator Frist. And from the exact same standpoint, which is 
important as we develop strategies and give incentives, is 
there a subtype that is more likely to be amendable to vaccine 
    Dr. Satcher. I do not think we know yet. I really do not 
think we know the answer to that, yet.
    Senator Frist. Thank you.
    Dr. Satcher. But we have got to find out sooner.
    Senator Frist. That's right. Makes every day critical. 
Thank you. Senator Feingold.
    Senator Feingold. Mr. Chairman, Dr. Satcher spoke of the 
importance of testing. What can you tell us about some of the 
lower cost testing options that are available now, specifically 
saliva-based testing. Is it effective, and is it widely 
    Dr. Satcher. Well, again, saliva-based testing is fairly 
new. We still rely primarily on testing of the blood, but we 
know that saliva-based testing can be accurate when done 
appropriately. But it is very early, I mean, in the use of it 
in terms of large populations of people.
    And so, we still primarily rely on blood. You know, I 
worked with Uganda. One of the most important things, I think, 
was the development of rapid testing. If you can test people 
when they come to the site, and they can get their results in 
terms of having to go home and come back in 2 weeks, most 
people are not going to come back in 2 weeks.
    So the rapid testing technique which we developed in 
conjunction with our colleagues, I think has made a big 
difference in terms of prevention, testing and counseling 
    Senator Feingold. Let me ask both of you. Well, you have 
talked about the spread of AIDS in Africa and the epicenter 
moving from eastern to southern Africa, and as everyone has 
said, you see the progress in Uganda and Senegal.
    Could each of you speculate on the future of this in 
Africa, the places that are likely to be hot spots, in the 
negative sense, in the future, and where can we look to for 
successes, such as Uganda and Senegal in the relatively near 
future? Start with Dr. Satcher and then Ms. Thurman.
    Dr. Satcher. Well, I think--history, I think, tells us that 
we can look for successes in those countries where you have the 
leadership, progressive leadership, in discussing this 
epidemic, and in providing the resources.
    One of the things we have not talked about, and I want to 
make sure that we do not miss it. I did talk about the 
importance of aggressive treatment of sexually transmitted 
    That requires a primary care system being in place. We talk 
a lot about the drugs, but in the absence of a primary care 
system in place, people do not get treated for sexually 
transmitted diseases that we know how to treat.
    And therefore, in those countries, we know that the spread 
is going to be exacerbated. The success stories are going to 
come, I think, in the countries where there is leadership, 
where there is commitment to supporting a primary care 
    Senator Feingold. Is there anywhere in particular where you 
feel that leadership is coming in addition to the country's----
    Dr. Satcher. Well, honestly, we know a lot about Uganda. We 
know a lot about Abidjan, Cote d'Ivoire----
    Senator Feingold. Ivory Coast.
    Dr. Satcher. Tanzania, Senegal, but I also think that South 
Africa is working very hard now. They have a lot to overcome. 
They have 1,500 new infections every day in South Africa, but 
they are committed to working hard.
    We are working very closely with them. We expect to see 
some success there because they have good leadership and a 
commitment to primary care, making sure that we treat 
opportunistic infections that go along with this epidemic, we 
are aggressive about it. Those things, I think, are going to 
make the difference.
    Senator Feingold. Thank you, Doctor. Now, Ms. Thurman.
    Ms. Thurman. I think I would add to that that we see some 
real success in Zambia, for instance. Real leadership on the 
part of President Chiluba. We have seen a drop now in 
infections in young people in the age range of 15 to 19. And so 
I think that is encouraging.
    Certainly, President Mbeki in South Africa has taken this 
issue on and is showing great leadership. We see leadership in 
Tanzania and Kenya. We are seeing some real movement there. 
Certainly in Ghana and West Africa, which has a low prevalence 
rate, we have seen a lot of activity on the part of the First 
Lady and the President in addressing HIV and AIDS head on.
    We hope they will share this success of Senegal, by getting 
ahead of the game and keeping the prevalence low. I think we 
are--I see a trouble spot, however, in Nigeria. We see the 
infection rate beginning to creep up. The infection rate 
currently in Nigeria is a little less than 6 percent in the 
population overall.
    We understand that military personnel coming back from 
peacekeeping missions are now showing a 15 percent prevalence 
rate. So that tells us that as people move around, we can see 
Nigeria getting in trouble. I think that is an area we need to 
put some special attention.
    Senator Feingold. That is very helpful. Let me just 
followup with you on another matter. You indicated to me a 
while ago that the administration was reviewing the Feinstein/
Feingold amendment which prohibits the Government from 
pressuring countries using legal means to gain access to HIV/
AIDS pharmaceuticals. What has been the result of that review?
    Ms. Thurman. Certainly, that Feingold and Feinstein 
amendment, I believe, supports the administration's policy. And 
so we support----
    Senator Feingold. The administration supports that 
amendment which is in the Growth and Opportunity Act at this 
point. I thank you for that, and I thank you, Mr. Chairman.
    Senator Frist. Senator Biden.
    Senator Biden. I would like to followup if I may with both 
you on many questions, but on two issues that have already been 
raised. You pointed out at least in one country, possibly two, 
where African heads of state have taken an interest, you have 
had progress.
    I was quite frankly surprised, and I do not know why I 
should have been, but I was surprised to find out that when the 
conference was called in Zambia last September, inviting nine 
African heads of states, not one head of state showed up, 
including the President of the host country.
    Why in the heck was that? I mean, what is--let me explain a 
little more precisely. We all know the cultural/religious/moral 
and we could go on, differences that for the longest time 
paralyzed our debate about AIDS here in this country.
    And we would be foolish if we did not acknowledge that 
there was a need for a broader education in crossing religious 
and cultural boundaries. So there is something there. I mean, I 
am a plain old politician. I am not an African President, but 
African Presidents are plain old politicians, whether they are 
totalitarian or democrat.
    There is no difference. God has not made a new brand of 
politician in the millennium. So there has got to be some 
reason. What is the political, or social, or cultural reason 
for what is by a Western standard at least, ignoring or the 
attempt to ignore or deny the existence and/or the extent of 
the problem?
    Dr. Satcher. I will be brief because I do not really know 
the answer to that, but I think we do know that going back to 
what I said about the nature of AIDS and the fact that people 
can be infected for years, 10 years or more, and not even know 
they are infected.
    This epidemic can be very quiet. And I think there is a 
tendency to deny the fear that it is going to hurt the image of 
a country, tourism, et cetera. I think all of those things are 
factors. And there are many examples of where leaders have 
waited until this epidemic exploded.
    Senator Biden. Well, how many heads of state have acted? I 
mean, if you had to count of all the African countries, which 
heads of state would you count? You do not have to give me 
their names, but the number; how many would you count as being 
fully engaged and energized in dealing with this problem? An 
honest answer.
    Dr. Satcher. Senator Biden, I would say that within the 
last 2 years, I think the leadership in South Africa has 
stepped up to the plate. And apologize for, in fact, ignoring 
and denying the existence of this problem, and the negative 
attitude toward women that went along with it in terms of the 
blame. In some countries, women are blamed for this problem, 
and sometimes they are put out of their homes when the men 
discover that they are positive, even though in many cases he 
was the one who brought it into the home in the first place. So 
we have seen all of that. We have seen all those things, in 
    Ms. Thurman. I think certainly, all the things that you 
have mentioned. I mean, there is stigma, and there are cultural 
norms, and all the rest, but I think from a political 
standpoint the thing that has been our most difficult challenge 
is that when leaders name a problem, then they are compelled to 
have to do something about it.
    And in countries that are very poor and countries that 
spend only $5 per capita on health care overall, in countries 
that are in armed conflict and spending a lot on military, or 
countries that are trying to make ties with other nations and 
development investment, all of those are issues that I think 
prohibit many leaders from stepping up to the plate and taking 
this on head on.
    I think that is why it is so important, however having said 
that, that this Congress, this Senate, that the President, that 
the Vice President, that the other people and leadership in 
this Nation are being very open and vocal about the need to do 
something about AIDS in Africa and showing a willingness to 
take this on because it sends a very strong message to leaders, 
not only in Africa, but elsewhere.
    Senator Biden. Well, my time is almost up. Let me follow up 
on one other part that you both touched on. One of the things 
that I personally have been involved in and wish I had not been 
involved in it as I am, is this notion of training peacekeeping 
forces, or the need for peacekeeping forces.
    And up until a few years ago, Third World countries have 
viewed participation in that as a way to earn dollars. And has 
caused some serious dilemma in a two tiered world system here 
at the U.N. and other places about the utility of the use of 
these forces and so on.
    But, you said something that struck me. We are having a 
significant increase in the number of African troops that we, 
the United States, are helping train for peacekeeping missions. 
And yet you point out that in the case of Nigeria, that there 
is a 15 percent infection rate of those very troops as they 
head back home.
    AIDS requires mobility to spread geographically. Are we 
doing the right thing? I mean, is there reason to be concerned 
about ``training African troops'' I mean, if I read the 
numbers, my staff tells me and correct me if I am wrong, 40 
percent--estimates are that 40 percent of all military--is that 
the number, 40 percent of all military personnel extending to 
South Africa--is it all military or just South African 
    In the South African military, reports have suggested that 
as much as 40 percent of their military may be infected with 
HIV. Now if that is true in South Africa, I would assume since 
you have given us numbers and other data has indicated that 
other states may have a higher infection rate, in terms of 
sound public policy, international in this case public policy, 
what is the right thing for us to be doing here? I mean, should 
we be--maybe that is not for you to answer, but could you talk 
to me about that piece of it?
    Ms. Thurman. Well, I think that when we look at military, 
it is one of the reasons that the administration has requested 
money in the DOD budget to deal with HIV and AIDS. And the fact 
of the matter is that there are very high rates of infections 
in Africa, but that is going to be the same in the rest of the 
developing nation as we look down the road a few years.
    I think our challenge is going to be to use those 
militaries which are some of the best infrastructure that we 
have in Africa, certainly much better organized and funded than 
the health care infrastructure is, and to use that opportunity 
to provide education and training, and in some instances, some 
basic health care counseling and testing and the rest. We have 
seen, again, great success in Uganda, and in fact, Uganda's 
response to the epidemic was in large part due to the high 
infection rate in their military. And so I think we have an 
opportunity that we would be very remiss if we did not seize to 
use our military apparatus to engage with other militaries to 
provide education and support.
    Senator Biden. And again, if I just close this, Mr. 
Chairman, I beg your indulgence for another 60 seconds here. I 
guess I should not be asking you two the question that is 
really sort of perplexing me right now.
    The military is the structure that is the most disciplined 
and the most bureaucratical manageable, and it is a good thing 
for the United States military to be training African military 
in terms of awareness. Keep in mind however, that the only 
reason we are training them is for them to pick up from their 
African country and go abroad.
    That is the reason we are training them. We are training 
them to participate in peacekeeping activities in far foreign 
nations. Is that good public policy?
    Because if you are picking up an infrastructure that you 
are training, not withstanding the fact that you are training 
them as well about the disease, if we do that, you are still 
sending somewhere between 15 and 40 percent of those folks into 
another area of the world who are infected with the disease, 
and I doubt whether you assume that they will be celibate the 
entire time they are out of country. That is not the history of 
militaries for the past three centuries.
    Senator Frist. I need to move to the next panel. Let us 
respond quickly.
    Dr. Satcher. It is a major challenge and a major 
opportunity and we are working very closely with South Africa 
around that. But also, look at our experience with Thailand. It 
was primarily a problem with the military, major problem, but I 
think the success in Thailand demonstrates that you can deal 
with that.
    I think we have an opportunity to work very closely with 
the military in Africa. U.N. Security Counsel discussed that 
problem in its January 10 meeting, but I think it is an 
opportunity as well as a challenge today.
    Senator Biden. I thank you both.
    Senator Frist. It is an important issue that we had the 
opportunity to discuss before and I think further discussion 
and further disclosure on that in getting real direction, is 
critical. Senator Feingold.
    Senator Feingold. Mr. Chairman, just before Senator Biden 
leaves, he has asked as always, a couple of very good and tough 
questions. And I will defer until later to talk about the 
attitudes of the Presidents. But, his issue about the military, 
I think is very important.
    I would just note that a country like Nigeria is involved 
with sending its troops to different places, regardless of our 
policy any ways, such as in Liberia, and that this is a problem 
in any event. We have an opportunity to get involved in trying 
to educate these countries about how to solve this problem.
    I just want to put in the record, that my understanding is 
that Senator Levin, the ranking member of the Armed Services 
Committee has a strong interest in working on this aspect of 
the problem.
    Senator Biden. Let me make it clear. I am not suggesting 
that we should not train. I was not suggesting that. I was just 
wondering. Thank you.
    Senator Frist. Provocative as always. Thank you, Senator 
Biden. I think what we will do is keep the record open for 
another 6 days to submit questions. Again, I appreciate it very 
much your perspective. It's very useful in terms of setting the 
stage for today. Thank you both very much.
    Our third panel to come forward, Dr. Jeffrey Sachs, 
director, Institute for International Development, Harvard 
University, who has testified numerous times here, is with us 
once again. Dr. Harvey Bale, director-general, International 
Federation of Pharmaceutical Manufacturers Association from 
Geneva, Switzerland.
    Dr. Peter Lurie, deputy director, Public Citizen's Health 
Research Group, here in Washington, DC. A number of issues we 
will touch upon today including the economic impact of AIDS 
during this panel. Dr. Bale, in particular, I want to welcome 
you from Geneva.
    He is an economist with the International Pharmaceutical 
Manufacturers which represents people broadly across the world, 
who will focus on the economic research and development of 
drugs to treat AIDS, and Dr. Peter Lurie, who is a physician, 
will be telling us more about drug companies and the licensing 
issues to treat AIDS in Africa.
    Welcome to all three of you and I think we will have your 
presentations in the order that I introduced you. Dr. Sachs 
first. Welcome.


    Dr. Sachs. Thank you very much, Mr. Chairman. Thank you for 
the opportunity to be here. I apologize for not having prepared 
testimony before hand, but I have a good excuse. I am just 
coming back from Nigeria last night, so I bring you fresh 
    And I hope it is worth the bargain. You have heard many 
eloquent statements in the last hour about the depth of the 
crisis. And I think the task at hand is very clear and that is 
to fashion an effective response. There can be no doubt that 
this is one of the greatest challenges in the entire world.
    Ms. Thurman noted that this will wipe out decades of 
developments. I would just rephrase a little bit what she said 
when she said decades of steady progress. If only it were true.
    This is going to set back a continent that has not had 
steady progress, that is already, even without this epidemic, 
been in an extremely deep, and I would say deepening crisis, 
were the measures had been taken in the last 20 years through 
the multi-lateral institutions and our own AID agencies have 
not been very effective to date.
    And then, this crisis comes on top of what is already an 
extraordinarily a deep crisis. We face therefore, a very grave 
challenge. I have had the opportunity to discuss these issues 
with this subcommittee before and let me just repeat a point 
that I had a chance to make last time we talked, and that is 
that when one looks at the development crisis in Africa, even 
without AIDS, one has to say that the public health crisis may 
be the most important single factor of all in Africa's failure 
to achieve sustained economic growth.
    So we normally think of development producing good health, 
but I think the research is showing, and the experience and 
common sense is showing, that the Congress proposition, that 
poor health is a fundamental barrier to successful development, 
is equally true.
    And when we ask why Africa of all the regions of the world 
that has had the very hardest time, there is little valid in my 
mind that the profound diseased ecology of the continent, the 
fact that you have the most efficient vectors of malaria by 
far, that you have for many, many deep reasons of the tropical 
environment of Africa, a burden of infectious disease that is 
many folds higher than in other parts of the world, that that 
has been one of the core conditioning factors of Africa's poor 
economic development.
    We have to address the health crisis, in other words, in 
order to get at the development crisis. And unfortunately, we 
did not really recognize this for a long time. All of the 
structural adjustment programs of the last 20 years, I thought 
that by turning macroeconomic dials, one could save the days. I 
am a macro economist.
    I believe in turning those dials, but I can also tell you 
that they do not get to where we need to go when you have a 
continent where the burden of disease is such that life's 
expectancy is already only 52 or 53 years even before the AIDS 
epidemic started to hit.
    So we have a fundamental public health crisis in Africa 
that needs to be addressed, of which HIV/AIDS has become, by 
far, the dominant factor, but it was bad enough already, and it 
needed a major--it was a fundamental challenge for us and for 
Africa, even beforehand.
    Let me also note that the economic effects of AIDS, or 
malaria, or cystosomiasis or of the other multiplicity of 
diseases and disease groups in Africa are extremely complex. 
They are not well understood.
    They are multi-factorial, and they hit the economy in so 
many different ways that the cumulative effect is absolutely 
profound. They effect not just the lost days of work and the 
lost years of life, but also the possibility of running stable 
educational systems, the possibility of investing in ones own 
future, the possibility of attracting foreign direct investment 
where we know that the malaria barrier or now the AIDS barrier 
is keeping out foreign investors that might otherwise go into 
the continent and be a major force for development there.
    My own guess, but it is purely a guess, is that the AIDS 
epidemic will take off 1 to 2 percentage points of growth per 
year, in GDP, but that is on top of another couple of 
percentage points that malaria and other interactions of 
malnutrition and infectious disease already take away, so that 
we are talking about a continent in the grips of a generalized 
public health crisis, and a development strategy should start 
at that point.
    We are not there yet. There is no plan that I know of that 
our Government or the international institutions has 
formulated. And one of the things that this committee could be 
extraordinarily helpful on, in addition to completing 
legislation this year, would be to push the administration to 
develop a more comprehensive framework, and to push the 
administration to work together with the rest of the world to 
develop a global framework.
    This is not in place as far as I can see right now, and it 
is one of the main messages that I would like to leave under my 
brief remarks. We need a global plan in two senses. One is a 
global plan that engages the global community. Of course, it 
should engage Africa, but it should engage all of the major 
donor countries. This is not just a U.S. burden. This is a 
worldwide effort that needs to be raised and the multilateral 
institutions need to play a very important role. We need a 
global plan in a second sense which is that it should be global 
in the sense of a comprehensive development strategy, working 
together with Africa in which HIV/AIDS is seen as part of a 
more general set of problems that need to be treated together.
    We have heard, for example, many of the previous witnesses 
have noted that without a working health care system more 
generally, it is very hard to do some of the effective AIDS 
interventions. But we do not have working health care systems 
in a lot of the continent, and I will come back to a basic 
reason for that in a moment.
    Now, I would say that there are at least three basic 
directions that a comprehensive plan should have. First, there 
are many types of interventions that could probably be 
effective already now.
    We have heard some of the preventative interventions and 
other kinds of surveillance and treatment interventions. We 
could discuss those in more detail in questions if you would 
like. Second, we need much more focus on basic science. We do 
not have the answers to a lot of the most basic questions, and 
as Dr. Satcher noted, when you asked him about the clads of HIV 
virus in sub-Saharan Africa, in the February 11 issue of 
Science, they report the latest findings from studies, and 
essentially, and I will just paraphrase, there is tremendous 
perplexity about the fact that you cannot lick the extent of 
the epidemic with nature of sexual behavior, so clearly as one 
would imagine.
    So as the Science issue reports, researchers found little 
connection between HIV prevalence and life time numbers of 
sexual partners, contact with sex workers, condom use with sex 
workers, or age at first sex.
    And what they say is that we believe that differences in 
sexual behavior will probably outweigh differences in the 
efficiency of HIV transmission. This is a startling finding, 
but it shows how much basic science and immunology, and 
epidemiology is yet to be done and in situ for us to get sound 
answers but we are not investing very much in that, as usual, 
for that kind of in situ, immunological and epidemiological 
    And third, there is the applied research for vaccines which 
will be absolutely fundamental. Let me talk about funding 
sources briefly, if I might. I see four types of sources which 
I would like to mention.
    First is debt cancellation and debt relief aid, an issue 
that we have discussed before. I can tell you, Senators, we 
have not yet done what needs to be done in that most basic 
    And to this day, the IMF does not seem to understand that 
there is a link between AIDS, for example, and debt 
cancellation. So to this day, and I mean until yesterday 
evening in Laos, you have the IMF saying, ``You do not need 
that relief,'' without even looking at the social conditions. 
In Nigeria where President Obasanjo has said, ``This is what I 
truly need to be able to fund social spending.''
    Last year, we got from Nigeria $1.9 billion of debt 
service, and you know what they spent on health care? $360 
million. We took six times more out of the country in debt 
servicing than they spent on health care. This, if I could 
characterize it, is not serious international policy by the 
IMF, the World Bank, the U.S. Treasury, the U.S. Government, or 
the other creditors.
    If you want to find a lot of money for this, look to the 
debt service payments because we are bleeding the continent, 
and to this moment, the IMF is not registering the reduction in 
correspondence with the crisis. And I have written to the IMF 
in the last couple of days, saying that in the first four debt 
reduction cases that they put on their web sites, I have gone 
back to look at the underlying analysis.
    There is not even a paragraph of attempt in any one of the 
four countries who link social spending to the amount of debt 
relief. It is as if the issue is not even joined. This is the 
first place to look because we can get billions of dollars of 
relief, but to this day, the administration has told Nigeria, 
we are not discussing debt cancellation with you.
    And if ever there was a policy that could leverage our 
funding for about $150 million of appropriations for Nigeria, 
we probably leverage about $25 billion of worldwide relief for 
Nigeria, a lot of which could be turned into increased social 
expenditure. So, there are tricks to this that really make a 
great deal of sense and we are not even at the starting line on 
this yet.
    Senator Biden. Mr. Chairman, let me briefly intervene. The 
Secretary of the Treasury is coming up to testify to us his 
single highest priority is debt relief.
    Dr. Sachs. And I would be happy to submit some queries that 
I have about how to make the connection between what is on 
offer and what is really needed? Because we are not there yet. 
The logical connection has not been established.
    He is on the right side of the issue within the sense of 
pushing hard to get it, but we are not getting the connection 
between the depth of the relief or the coverage of countries 
and the social needs. We have an absolutely bizarre 
bureaucratic mechanism for deciding these things where the 
relief is linked to an arbitrary multiplier of exports, not to 
anything about social conditions, AIDS, needs, programs. It is 
weird. It is absolutely very strange. Second----
    Senator Frist. Let me get you to summarize, and we will 
come back and question and answer.
    Dr. Sachs. I will stop in 1 minute then. The second point 
that I think is very important is we will make appropriations I 
think, in addition to debt cancellation, although I tell you, 
debt cancellation through growth leverage for our buck that you 
can find if it is deeper than we have right now.
    We have to decide whether to put that through USAID or 
through the UNAIDS. And I think we make a mistake actually, to 
put this strongly to a USAID rather than through the global 
UNAIDS effort.
    This is not hugely popular in this Congress, perhaps, but 
we have a multilateral international group of actors that are 
charged with the global coordination, and we do not fund them, 
and we do not help them to operate effectively. So I would urge 
that we put them into the global effort and then multiply our 
contribution by demanding that what we put in gets multiplied 
by five or by ten by other donor countries. And we make the 
real package that is really global, not a bunch of particular 
projects of our own USAID agency.
    This is not going to make friends necessarily with an 
agency that I work closely with, but I do not think that in 
this case we are doing the best to get the global leverage if 
we do not fund the international program more effectively. A 
third, I will mention, I am a big fan, and I have tried to 
analyze this carefully as possible a kind of vaccine promotion 
initiative, and I just want to be on the record definitely as 
supporting the direction that we are moving, although I think 
there are a lot of details that need to be discussed. And the 
fourth place where we can get some help is from the 
pharmaceutical companies.
    I know my friend, Harvey Bale, will speak to that. I do 
believe in two tier pricing for a number of the most important 
AIDS drugs, particularly those that stop vertical transmission.
    We have to engage the private sector constructively, not to 
break their markets here, but to push them, and urge them, and 
help them to deliver, at cost, these drugs to the poorest 
countries in the world. And I think that those are four ways to 
    Senator Frist. Good. Thank you. And I am sure that we will 
come back to this discussion. Thank you, Dr. Sachs.
    Dr. Bale, welcome.


    Dr. Bale. Thank you, Mr. Chairman. Thank you Mr. Chairman 
and members for inviting me. I am visiting over here on my way 
to Tokyo from Geneva, and it is a pleasure to participate in 
such an important forum as this. As you--well, perhaps you do 
not know, IFPMA represents the industry to the World Health 
Organization, UNAIDS, the World Market Profit Organization, the 
World Trade Organization. We are also partners in the Global 
Alliance for Vaccines and Immunization and the Medicines for 
Malaria Venture.
    I would like to sum up by making a number of key points 
that are in the written testamony in fuller detail.
    Our industry is dedicated to augmenting its effort to fight 
the AIDS crisis. Our primary role is in providing and combating 
AIDS through its new discovery and development capabilities, 
vaccines, medicines, and treatments. Today, there are about 15, 
as Dr. Satcher mentioned, about 15 antiretrovirals on the 
global market, with more in the industry's research pipeline. 
Today, there are over 100 new AIDS medicines in our industry's 
R&D pipeline, including 35 new antivirals [ARVs] and 10 
vaccines for HIV prevention. This research will yield shorter-
course treatments, such as Navirapine from Boehringer-Ingelheim 
for preventing mother-to-child transmission of HIV; more 
convenient and tolerable regimens, such as tests of ``one-pill-
a-day'' regimens being tested by various research companies, 
including Bristol-Myers-Squibb; and scientific breakthroughs 
which could open up whole new avenues to fight HIV, such as a 
recent announcement by Merck scientists that they have found 
two experimental compounds which were able to obstruct the 
activity of an enzyme called integrase which plays a critical 
role when the AIDS virus infects cells.
    Second major point, we believe that the HIV crisis requires 
a comprehensive multi-sector response. I think this has been 
said already. And let us get a coalition of stakeholders. No. 
1, set up educational programs that change attitudes and 
behavior to curb the HIV spread. Two, enhance the capacity of 
health systems to deliver essential medical care. Three, 
encourage new innovation, new therapies, and new vaccines while 
improving access to existing ones in such regions as Africa.
    More generally, innovative approaches are needed to attack 
disease patterns in the poorest countries. And more resources 
are required as Jeffrey has mentioned. Fortunately, novel 
approaches are being explored in a sense that the WHO, and the 
World Bank, and UNAIDS are looking at ways to guarantee a 
market for vaccines for diseases predominant in developing 
companies--heading up an idea that has been raised before by 
Professor Sachs.
    The Medicines for Malaria Venture is another way of 
introducing public-private partnerships and we are proud to be 
a full partner in it. This public-private partnership is 
designed to develop new antimalarial drugs as an investment in 
resources to find new treatments for this wide spread disease. 
We would urge the Congress as part of its' attack on poverty 
and disease in Africa and elsewhere, to back this public-
private partnership by joining several other countries that 
have already funded the MMV.
    The financial requirements to contribute positively to this 
are very small at the beginning but have major potential 
benefits, if we can find one new antimalarial every 5 years, is 
enormous. Another mechanism can be explored: the orphan drug 
legislation, the tax credit, and market exclusivity provisions 
of the U.S. orphan drug legislation.
    We note positively the proposal by the administration to 
set up a market-based mechanism to support vaccine development 
for HIV, malaria, and tuberculosis. New incentives, however, 
should not be limited to vaccines. Breakthroughs in drug 
treatments may come more quickly than new vaccines and may 
provide cures, which would have an important impact in quality 
of life for those millions already living with disease. Despite 
the large amount of research being conducted into HIV/AIDS, 
most estimates still reflect a view that a very effective 
vaccine may still be at least 5 or 10 years away.
    Let me summarize with some major conclusions because I 
think a number of points have been made about infrastructure 
requirements, and these are enormous. And in fact, these 
infrastructure requirements dwarf the cost of medicines.
    Cooperation among public institutions and the private 
sector is the only route. It is the only route that can work in 
an effective way. We in industry are working on more effective 
therapies and vaccines, but delivery will be a critical problem 
and this involves several key issues, including the following: 
One, political commitment. Concrete actions by countries 
affected are needed to prevent the spread of AIDS and to treat 
those affected. Raising AIDS awareness is a priority and it is 
essential. It is only now being done in some countries.
    As UNAIDS' executive director, Peter Piot has mentioned, 
pumping money into a country where AIDS is a low priority will 
do nothing to affect the epidemic.
    Second, international funding. Professor Sachs has already 
mentioned this. More international funding is needed. Looking 
at the issue of drugs, bridging the cost gap in the case of 
drugs and future vaccines between the costs and prices of AIDS 
products that would be coming forward; while getting cheaper, 
they will often still be much more expensive than people in 
poor countries can afford.
    How do we bridge that cost gap? You need more funding. 
Infrastructure and distribution improvements are obvious, so I 
will skip it. Serious partnerships are essential. Our companies 
have been working with UNAIDS and countries on pilot projects 
in several countries.
    Cote d'Ivoire has been mentioned, Uganda, Chile, Thailand. 
A true partnership is required at the national level. Not all 
countries have responded positively to mother-to-child programs 
offers of medicines, even at a substantially discounted price.
    It seems that some countries prefer to use an approach of 
charging that AIDS drugs have too much toxicity, or they try to 
find some other excuse for simply not treating their citizens. 
And finally, innovation. One of the most critical elements of a 
global strategy is to foster continued innovation through 
academic and industrial R&D.
    We have responded, but we have to do more. We do not have a 
vaccine. We are working on them. But without a strong global 
patent system, we would not have these medicines today or we 
would not have them in the future.
    Industry R&D can only continue when there is respect for 
implementation of full intellectual property rights. More and 
more concerns about access to AIDS medicine in Africa and 
elsewhere, but this access has very little to do with patents. 
In fact, I quote one or two of the executives that have been 
out to Africa in the last few weeks. They claim it is 
irrelevant. I will argue at least that it is not significant. 
Many developing countries today do not respect patents. There 
are generic versions of AZT on the market today. If one looks 
at India, where large populations with AIDS infections exist 
and AIDS is growing very rapidly, generic versions are 
prevalent in this part of the world. Should there be an access 
problem? In theory, no. But there is. The question is, why? The 
question really is, why where there are not patents being 
protected. There are a number of other issues, Mr. Chairman, 
that I would like to go into, and perhaps undoubtedly you will 
want to save for questions. I just want to say that there is a 
    We cannot address the AIDS crisis, neglecting the other 
issues of TB, hepatitis, upper respiratory ailments, and other 
disease that are becoming equal dangers in the future in Africa 
and elsewhere. Again, I urge the administration to look at the 
Medicines for Malaria Venture. They are working on getting new 
antimalarials out there, and eventually, a vaccine.
    In closing, I just want to convey to this committee, the 
global pharmaceuticals industry's commitment to be a partner in 
this exercise and increasing its efforts in the future. Thank 
    [The prepared statement of Dr. Bale follows:]

             Prepared Statement of Dr. Harvey E. Bale, Jr.


    Mr. Chairman and other Members of the Subcommittee: I am the 
Director-General of the International Federation of Pharmaceutical 
Manufacturers Associations (IFPMA), based in Geneva, Switzerland, 
representing the research-based industry in over 55 countries. The 
Pharmaceutical Research and Manufacturers of America (PhRMA) is one of 
our important members. We represent our industry before the World 
Health Organization, the World Trade Organization, the World Bank, the 
World Intellectual Property Organization and other UN agencies, and the 
OECD. We are also full partners in the Global Alliance for Vaccines and 
Immunization (GAVI) and the Medicines for Malaria Venture (MMV).
    Our mission is to seek to work with international agencies and 
national governments to find new ways to bring the therapeutic 
technologies and know-how of our industry together with efforts to 
reduce disease burdens. We also address the most important conditions 
necessary to strengthen the capability of our industry to continue to 
develop innovative therapies and vaccines: i.e., intellectual property 
rights, competition-based health care delivery systems, effective 
product regulatory systems and open information delivery policies for 
health care professional and patients.
    We are here today to focus on one of the most serious global 
threats to public health globally and the worst threat to Africans' 
well being and the economic development of the sub-Saharan African 
region. The research-based pharmaceutical industry is strongly 
committed to helping people living with AIDS--who wait for better and 
less costly therapies and, hopefully in the not-too-distant future, a 
vaccine or vaccines to effectively prevent further HIV infections. I 
will seek to relate our perspective on this serious problem and to 
suggest what is needed.


    HIV/AIDS is indeed the public health crisis in Africa. Over 34 
million people in the world are currently infected with HIV/AIDS, with 
95% of those living in developing countries. Most tragically, over 13 
million children have lost one or both parents. Two-thirds of those 
infected live in sub-Saharan Africa, and more than 80 percent of the 
world's HIV/AIDS deaths have been in this region. HIV/AIDS is now the 
number one killer in Africa, taking more African lives each year than 
all the conflicts in the region combined, and HIV-related illnesses are 
an additional burden on already weakened public health services. 
According to WHO's 1999 World Health Report, HIV/AIDS has become the 
disease with the greatest impact on mortality in Africa. Indeed, life 
expectancy in Africa is declining because of AIDS, and in some places 
may fall back to 1960s levels, according to Dr. Peter Piot, Executive 
Director of the Joint United Nations Program on HIV/AIDS (UNAIDS). This 
would mean a drop in expected life spans from 59 years in the early 
1990s to just 45 years by 2010. As Dr. Piot recently noted, ``AIDS in 
Africa has become a full-blown development crisis, and is on its way to 
becoming the single greatest threat to human security on the continent. 
. . . Few sectors of African society remain untouched by AIDS. The 
epidemic is wiping out health, social and economic gains that Africa 
has worked towards for decades.'' Furthermore, AIDS is decimating the 
most productive elements of African society. UNDP Administrator Brown 
declared at the first meeting of the UN Security Council this year that 
``an extraordinary depletion of the region's human capital is underway. 
There are estimates that the number of active doctors and teachers in 
the most affected countries could be reduced by up to a third in the 
coming years.''


    The pharmaceutical companies responsible for the discovery, 
development and supply of medical products for managing HIV/AIDS are 
acutely aware of the urgent need to tackle the epidemic in Africa and 
other parts of the developing world. We are devoted to finding hope for 
those affected by the tragedy unfolding before us, as literally 
millions of men, women and children are swept away to untimely deaths 
by the rising AIDS pandemic. We call upon all parties, national 
governments and international organizations to take coordinated strong 
action to fight AIDS. We in industry are prepared to participate in 
augmenting our contribution to the struggle against AIDS, based on our 
special expertise and scientific and technical resources.
    Industry's primary role in combating HIV/AIDS worldwide is through 
its unique role in the discovery and development of new vaccines, 
medicines and treatments for disease and disorders. Indeed, it is 
important to recall that, twenty years ago, AIDS was not yet 
identified. At that time AIDS was considered untreatable as well as 
incurable, subjecting those infected with HIV to certain misery and 
untimely death. Today, there are about 15 antiretrovirals on the global 
market, with more in the industry's research pipeline. This tremendous 
advance in treatment is possible thanks to the billions of dollars that 
the industry has devoted to AIDS medicines and vaccine research, 
including research into treating opportunistic infections related to 
AIDS. Today, there are over 100 new AIDS medicines in our industry's 
R&D pipeline, including 35 new antivirals and 10 vaccines for HIV 
prevention. Such research will, we hope, one day yield: shorter-course 
treatments, such as Navirapine from Boehringer-Ingelheim for preventing 
mother to child transmission of HIV; more convenient and tolerable 
regimens, such as tests of ``one-pill-a-day'' regimens being tested by 
various researchers, including Bristol-Myers-Squibb; as well as 
scientific breakthroughs which could open up whole new avenues to fight 
HIV, such as a recent announcement by Merck scientists that they have 
found two experimental compounds which were able to obstruct the 
activity of an enzyme called integrase that plays a critical role when 
the AIDS virus infects cells. New treatments developed by the 
pharmaceutical industry and introduced in the last several years--e.g., 
antiretrovirals (including the protease inhibitors and non-nucleoside 
reverse transcriptase inhibitors) as well as anti-infectives and 
antifungals to combat opportunistic infections--have begun to change 
the pattern of the AIDS epidemic.
    Industry R&D can only continue when there is respect for and 
implementation of protection for intellectual property rights which 
promote and protect such research. The challenge now is to improve 
therapies and the search for cures, continue to extend access to these 
breakthrough medicines to all affected populations and ultimately to 
develop an effective vaccine--or several vaccines. Allowing market 
incentives to proceed without counterproductive interventions is 
vitally important in creating an environment favorable for developing 
new vaccines, treatments and possible cures for HIV and AIDS-related 
conditions. Drug research and development by the research-based 
pharmaceutical industry is financed by companies' own internal 
resources, and on average it takes hundreds of millions of dollars to 
research, develop and test a new medicine, including treatments for 
AIDS. It is vital that this research is not hindered by quick-fix 
solutions such as compulsory licensing, parallel trade and other 
measures which may sound attractive to some in the short term, but 
would fatally retard R&D into HIV/AIDS related medicines in the medium 
and long-term, disappointing the hopes of millions who look for a cure 
for AIDS. Today, we no longer speak of ``incurable diseases''--only 
those diseases for which we have not yet developed a cure or vaccine. 
There are real concerns about access to AIDS medicines in Africa and 
elsewhere, but this access has little to do with patents, and weakening 
patents would not--I repeat, not--significantly improve access for 
reasons discussed below.
    First, many developing countries are not yet TRIPS-compliant and 
some such countries, such as India, already produce generic copies of 
patented AIDS drugs. If patents were indeed the problem, large 
populations within these countries should have easy access to these 
copied, generic versions of AZT and other medications; but in India and 
parts of Africa this is demonstrably not the case.
    Second, the cost of a pharmaceutical product is only a small part 
of the overall AIDS treatment costs, including training, patient 
diagnostics, treatment supervision and safe drug distribution--elements 
absolutely essential to ensure the effective use of complex AIDS 
treatment regimens.Third, the ex-manufacturer price of drugs in 
developing countries is often only a small part of the final retail 
price for consumers due to high import tariffs, taxes and wholesale and 
retail distribution margins. In America, these mark-ups may add perhaps 
40-60% to costs. In Africa, they often add 100-300% to ex-manufacture 
    Fourth, parallel trade and systematic compulsory licensing regimes 
(which were abandoned by Canada and New Zealand 10 years ago), weaken 
patent protection, but are claimed as cost saving policy instruments by 
advocates. Actually, when one observes price differences across 
national boundaries one is seeing differences in retail prices--which 
are reflective of many factors including the margins mentioned 
previously and which do not form a basis for parallel trade. In any 
case, where parallel trade exists (e.g., within the European Union) 
evidence shows that the benefits of parallel trade to consumers are 
small because such trade mainly benefits the parallel traders, not 
consumers, because the former capture most of the ``rents'' arising 
from the differences in ex-manufacturer prices across countries. Some 
activists promote compulsory licensing as another ``solution'' to 
access to AIDS drugs. Such advocates present compulsory licensing as a 
way to create a more competitive market akin to post-patent generic 
competition in the United States and a few other industrialized 
countries. However, as compulsory licensing is a deliberate action by 
governments, it can lead to a limited number of licenses being issued, 
with recipients potentially being chosen due to political favors rather 
than objective criteria. Thus, price benefits may be minimal, while the 
quality of a copied version may not be equivalent to the original.
    Finally, many of the millions of people of Africa earning less than 
a US dollar a day, and their governments, cannot afford good quality 
generic versions of AIDS drugs either. Patent-pirated versions appear 
in Africa and their prices are often not significantly lower. And there 
are bottom limits to prices, set by costs; and at these levels the unit 
costs (especially when the rest of the full costs of a treatment are 
added in) are well beyond the capability of the poorest patients who 
need the most help.


    We believe that the AIDS crisis requires a comprehensive, 
multisectoral response, led by committed governments and 
intergovernmental institutions--the World Health Organization and the 
World Bank. We must as a coalition of stakeholders (1) step up 
educational campaigns to change attitudes and behavior to curb the 
spread of HIV; (2) enhance the capacity of health systems to deliver 
essential medical care to the people living with the disease; and (3) 
encourage further innovation into new therapies and vaccines while 
improving access to existing ones in regions such as Africa. We must 
also recognize that the problem of access to drugs for AIDS and related 
conditions is one aspect of the broader issue of access to adequate 
health care generally.
    More generally, innovative approaches may be needed to attack 
disease patterns in the poorest countries. And more resources are 
required. Fortunately, novel approaches are being explored. For 
example, UNICEF, WHO, the World Bank and UNAIDS are looking at ways to 
guarantee a market for vaccines for diseases predominant in developing 
countries, picking up on an idea of creating a fund (to purchase 
vaccines) raised initially by Professor Jeffrey Sachs.
    The Medicines for Malaria Venture (MMV) is another example of 
innovative public/private sector partnerships to address the need to 
develop new medicines for special categories of diseases--in this case 
malaria. This public-private sector partnership in the Medicines for 
Malaria Venture (MMV) designed to develop new antimalarial drugs is an 
excellent investment of resources to find new treatments for this 
widespread disease, which infects millions of people in developing 
countries, while researchers search for an effective antimalarial 
vaccine to protect future generations. We would urge the Congress and 
Administration to financially back the public/private MMV initiative, 
joining several other countries that have already done so. The 
financial requirements to contribute positively are relatively small 
compared to the very large potential benefits that will accrue to 
millions of malaria-threatened populations in Africa and elsewhere.
    Other mechanisms should be explored as well. These include 
developing policy measures similar in concept to U.S. orphan drug 
legislation, which includes tax credit and market exclusivity 
provisions. We note positively the proposal by the Administration to 
set up a market-based mechanism to support vaccine development for HIV, 
malaria and tuberculosis. New incentives should not be limited to 
vaccines, however. Breakthroughs in drug treatments may come more 
quickly than new vaccines and may provide cures, which would have an 
important impact on quality of life for those millions already living 
with these diseases. As with all innovative drugs, the investment in 
developing new antiretrovirals and researching an HIV vaccine is 
immense. The continually mutating nature of HIV adds additional 
complications to the search for more effective treatments as well as 
possible vaccines or even cures for AIDS. We must accept that, despite 
the progress being made, bringing an effective treatment, cure or 
vaccine to market will be a long and demanding process. Despite the 
large amount of research being conducted into HIV/AIDS, most estimates 
still reflect a view that a very effective vaccine may still be at 
least five or more years away.


    Individual companies are working in partnership with the public 
sector and civil society to fight against AIDS worldwide, particularly 
in Africa. Such partnerships include the following:

   For over ten years, GlaxoWellcome's ``Positive Action'' and 
        Merck's ``Enhancing Care Initiative'' have been offering 
        support to communities for education, training, and social 
        action projects to improve their capacity to deliver care to 
        people in developing countries; GlaxoWellcome also partnered 
        with UNICEF, providing sharply discounted antiretroviral 
        products for projects in the Mother to Child Transmission 
        (MTCT) Program as well as providing its products at 
        substantially discounted prices through the UNAIDS HIV 
        Treatment Access Initiative Pilot Program. GlaxoWellcome has 
        also played a leading role in the Global Business Council on 
        HIV/AIDS, bringing business leaders from many industry sectors 
        together to develop, in cooperation with UNAIDS and NGOs, an 
        effective corporate response to the epidemic.
   Bristol-Myers-Squibb has committed $100 million for HIV/AIDS 
        Research and Community Outreach in five African Countries under 
        their ``Secure The FutureTM'' Program, focusing on women and 
        children in South Africa, Botswana, Namibia, Lesotho and 
        Swaziland. An example of efforts supported by this initiative 
        is a joint study of HIV-1C, a strain of HIV particularly 
        prevalent in Africa, conducted by the Harvard AIDS Institute 
        and the government of Botswana, supported by a US$18.2 million 
        grant from BMS.
   Launched in November 1997, the UNAIDS HIV Drug Access 
        Initiative is designed to develop innovative, effective models 
        to improve access to needed drugs to treat HIV, its 
        opportunistic infections, and sexually transmitted diseases in 
        the developing world. The Initiative seeks to address the many 
        challenges of developing-country drug access, such as lack of 
        medical infrastructure, drug distribution channels, drug 
        supply, professional training, and patient support through 
        facilitating collaboration among pharmaceutical companies, 
        health care providers, national governments, nongovernmental 
        organizations, and people living with HIV/AIDS. Pilot projects 
        designed to increase access are underway in Uganda, Vietnam, 
        Chile and the Ivory Coast. Pharmaceutical partners in the 
        UNAIDS initiative include: GlaxoWellcome, F. Hoffmann-LaRoche, 
        Virco NV, Bristol-Myers-Squibb, Organon Teknika, Merck&Co., and 
        DuPont Pharma.

    There are also industry initiatives in the eradication and 
prevention of other serious diseases impacting developing countries: 
AIDS is by no means the only serious threat to the well-being of the 
poorest developing countries. Often overlooked are the extensive 
activities of companies contributing their patented or off-patent 
medicines or technology for specific diseases of poorer countries. 
These programs were launched and are succeeding because as 
preconditions governments were required to fully commit to the success 
of the campaigns. This commitment is critical and offers lessons for 
the attack against AIDS in Africa and elsewhere. Examples of such 
company actions include:

   Merck has donated ivermectin free of charge for as long as 
        it is needed to fight onchocerciasis (river blindness). Key 
        international partners involved with Merck have been the WHO, 
        World Bank and the Carter Center.
   SmithKline Beecham and Merck are donating albendazole and 
        ivermectin (two antiparasitic drugs for lymphatic filariasis) 
        free of charge for use in countries where LF in endemic. This 
        also done with support of WHO and other agencies.
   GlaxoWellcome is donating a antimalarial combination drug 
        (Malarone) free of charge to the public sector in malaria-
        endemic countries for treatment of cases which are resistant to 
        standard first-line treatments.
   To help in WHO's global fight to eradicate polio, Aventis 
        Pasteur has donated 50 million doses of oral polio vaccine to 
        cover the vaccine needs for National Immunization Days 
        scheduled in five conflict affected areas in Africa in 2000-
        2002. Countries to be covered are Angola, Liberia. Sierra 
        Leone, Somalia and South Sudan.
   Pfizer is donating an antibiotic azithromycin to combat 
        trachoma in 5 developing countries (Morocco, Ghana, Mali, 
        Tanzania and Vietnam) in collaboration with the Edna McConnell 
        Clark Foundation.
   Recently, Aventis Pharma donated the patent rights on life-
        saving eflornithine to WHO to treat African trypanosomiasis 
        (sleeping sickness). This concluded a 15-year old public/
        private sector collaboration between Hoechst Marion Roussel and 
        WHO, during which the development of the drug and its approval 
        by drug authorities were finalized. The partnership in the 
        effort to ensure efficient distribution of this drug includes 
        WHO, Aventis and NGO's.
   Hoffmann-LaRoche has conducted the ``Sight & Life Program'' 
        dedicated to the prevention of xerophthalmia and other adverse 
        effects of vitamin A deficiency that impairs the health of 
        children in numerous developing countries. In this initiative, 
        Hoffmann-LaRoche donates vitamin A in many countries in Africa, 
        Asia and Latin America, as well as educational materials.

    There are other industry-wide efforts to improve health worldwide 
in partnership with the public sector including:

   The new Medicines for Malaria Venture (MMV), started in 
        partnership between WHO, pharmaceutical industry and other 
        parties has been established to stimulate the discovery and 
        development of new treatments for this wide-spread disease. We 
        are seeking to develop a new anti-malarial therapy every 5 
        years beginning in this decade. We do not preclude, indeed we 
        hope, that a new malaria vaccine might also come from the MMV 
        or separately.
   The IFPMA and its vaccine company members are in full 
        partnership in the Global Alliance for Vaccines and 
        Immunization (GAVI). Through the Alliance, member partners will 
        address ways to accelerate the development and introduction of 
        new vaccines specifically needed by developing countries. The 
        vaccine industry members of the IFPMA will, in cooperation with 
        their GAVI partners, work to ensure accessibility to the 
        vaccines and other related elements that are necessary for the 
        immunization of all the world's children, with a particular 
        focus on poor populations and countries.
   The WHO/CEO Roundtable process involves not only a yearly 
        meeting between the Director-General of WHO and CEOs of IFPMA's 
        companies, but also WHO/industry working groups on issues 
        relating to research and development, drug quality and access 
        to drugs. For example, the WHO/CEO Roundtable process supports 
        the ``Malaria Pathfinder'' initiative, which is a joint WHO/
        industry program examining ways to sustainably improve 
        antimalarial access and rational use at the household level (in 
        some cases, at the district level) as measured by improvements 
        in rapid procurement and dispensing of appropriate treatments. 
        A joint communique on the most recent meeting of the WHO/CEO 
        Roundtable is available on the IFPMA and WHO web sites: (http:/
        /www.ifpma.org and http://www.who.int/medicines/).


    It must be recognized that only a committed effort by national 
governments can be effective in fighting AIDS, as the spread of AIDS is 
very much linked to poverty and underdevelopment which make people more 
vulnerable to becoming infected with HIV. Furthermore, there are 
several barriers to access to health care, barriers which industry can 
play only a limited role in overcoming. Indeed, the manufacturers' cost 
of pharmaceutical products is small in comparison to the overall 
distribution costs required to reach populations affected by AIDS or 
even to the retail price paid by the end consumer.
    Understanding barriers to access is extremely important because 
they would make even free-of-charge antiretrovirais impossible for 
people living with AIDS in Africa to access regularly and effectively, 
making treatment useless and even possibly dangerous. Indeed, 
inappropriate use of these powerful drugs can and has resulted in 
strains of HIV developing which are resistant to all known treatments, 
making our search for a cure even more difficult. Also, due to the 
complexity of ARV regimens and the possible toxic side effects of these 
powerful drugs, appropriate medical support and careful monitoring is a 
vital part of using ARVs. According to UNAIDS and WHO, certain services 
and facilities must be in place before considering the use of 
antiretrovirals in any situation:

   Access to functioning and affordable health services and 
        support networks into which ARV treatments can be integrated so 
        that the treatments are provided effectively;
   Information and training on safe and effective use of ARVs 
        for health professionals in a position to prescribe ARVs;
   Capacity to diagnose HIV infection and to diagnose and treat 
        concomitant illnesses;
   Assurance of an adequate supply of quality drugs;
   Sufficient resources should be identified to pay for 
        treatment on a long term basis; patients must be aware that 
        treatment is ``for life'';
   Functioning laboratory services for monitoring, including 
        routine hematological and biochemical tests to detect 
        toxicities, must be available;
   Access to voluntary HIV counseling and testing (VCT) and 
        follow-up counseling services should be assured, including 
        counseling people living with HIV/AIDS on the necessity of 
        adherence to treatment.

    The barriers to access detailed below make it very difficult and 
even impossible to create the infrastructure described above which is 
so vital for the effective use of antiretrovirals and other medications 
for treating AIDS and related conditions. Therefore, examining access 
to AIDS health care from a broader perspective will help policy-makers 
focus their attention on reforms in the areas likely to have the 
greatest impact.
Military, Social and Political Issues
   Military spending priorities: The existence of international 
        and civil wars in many developing countries increase peoples' 
        vulnerability to HIV-infection and prevent people living with 
        AIDS from being treated. Even in countries where there are no 
        wars or external threats, governments give a higher priority to 
        spending money on ``defense'' than on healthcare, including 
   Lack of priority due to political cynicism: Effective 
        treatments are being offered by companies (often at substantial 
        discounts) and cheaper therapies are becoming available. Yet, 
        in some countries, groundless excuses for not increasing 
        spending on AIDS treatments, such as an alleged excessive 
        toxicity of antiretroviral AIDS drugs, have been made. These 
        excuses mask the basic cynicism that some governments have 
        concerning treating poor people living with AIDS or in 
        preventing mother-to-child transmission of AIDS. A very recent 
        article in the African press quoted a government official from 
        the region as saying that trying to prevent mother-to-child 
        transmission in impoverished areas would only shift the cause 
        of mortality later on. In other words, the government that this 
        official serves is making policy based on the cynical 
        observation that poverty and malnutrition could lead to the 
        same result as HIV in the motherless and impoverished child.
   Tolerance of corruption: In countries where official 
        corruption is prevalent, health care access is impeded through 
        the pilferage and diversion of products and services, with the 
        poorest elements of society being harmed the most.
   Inefficiency and wastage: UNAIDS has found that, although 
        the World Bank and other international agencies make money 
        available for AIDS projects in Africa, much of it goes unspent 
        because of bureaucratic complexities and other problems;
   Literacy and language barriers: If the patient is illiterate 
        and/or does not understand the language used by the health care 
        providers, then they will have difficulty in accessing care;
   Minority (including ethnic or gender) groups may experience 
        discriminatory attitudes from health care providers. Illegal 
        immigrants may fear discovery or be not entitled to full access 
        to health care facilities, thus hindering their access to care;
   Stigma: The stigma attached to being HIV-positive in many 
        cultures has led to ostracization, abandonment, violence and 
        even murder of people living with HIV. In light of these 
        dangers, people will refuse to be tested for their HIV status 
        and, if they do discover that they have HIV, they will be 
        afraid to seek appropriate treatment due to the possible 
        repercussions if others were to find out their status.
Financial Hurdles
   The shortage of financial resources in the poorer developing 
        countries is the most important barrier to access to health 
        care, including medicines, in these countries. International 
        aid agencies, as well as industrialized countries, often play 
        an important role in financing health care infrastructure in 
        the poorest developing countries.
   In many countries in Africa and elsewhere, governments 
        require patients to ``co-pay'' for therapy costs (including 
        diagnostics, training, health care infrastructure, etc.), 
        ranging from $35 to hundreds of dollars per month. Clearly few 
        can afford such payments; so that less than 1% of HIV infected 
        patients receive such therapy. (In comparison, in Brazil a much 
        higher percentage of infected persons receive therapy; but 
        Brazil is aided by World Bank funds.)
   Many countries due to insufficient resources can provide not 
        even rudimentary health care. For example, annual spending on 
        health in some African countries is under US$4 per capita. This 
        lack of spending can also result from governments not setting 
        health care services, including care for people living with 
        HIV/AIDS, as a high enough priority in determining the use of 
        national resources.
   Inadequate purchasing power for medicines and a lack of an 
        adequate number of medical professionals and hospital 
        facilities to deliver health care result from this lack of 
        adequate financial resources.
Physical Infrastructure Barriers
    Lack of physical access to health care facilities or personnel is 
another major barrier to access in developing countries. There are 
several factors leading to such inadequate access:

   Adequate clean food and water is needed. Therapy for HIV/
        AIDS requires healthy food intake in some relation to the time 
        of drug ingestion as well as access to clean water. Both are 
        often missing in the developing world.
   Inadequate health care facilities to meet the needs of a 
        growing population due to insufficient public and private 
   Insufficient transportation infrastructure to permit access 
        to medical care providers for much of the population.
   Unequal distribution of health care facilities that may be 
        concentrated in densely populated urban areas, leaving wider, 
        rural areas without adequate coverage.
Bad Micro-Economic Policies
   Protectionism: Many governments protect their local 
        insurance and pharmaceutical companies from foreign 
        competition, making local insurance and pharmaceutical costs 
        higher than they should be. Tariffs imposed on imported 
        pharmaceuticals raise drug cost margins to patients. In 
        developing countries, the final price to a consumer is often 3-
        5 times the price received by the manufacturer, whereas in 
        developed countries, the ratio is often less than twice the 
        manufacturers level.
   Non-competitive distribution networks: Protected wholesale 
        and other distributors can artificially raise distribution 
        margins, making drug costs in developing countries high--
        perhaps even higher than in some developed countries.
   Poor Intellectual Property Protection: The lack of adequate 
        and effectively enforceable intellectual property rights hurts 
        access to health care and pharmaceuticals by eliminating 
        incentives for research and development of new products in at 
        least two ways:
                  (1) local firms in countries with good scientific 
                infrastructure devote resources to copying (often 
                without regard to Good Manufacturing Practices (GMP)) 
                instead of focusing on research into diseases prevalent 
                locally; and
                  (2) countries which allow international patent 
                exhaustion (i.e., parallel trade) discourage local 
                pharmaceutical investment and the offer of companies to 
                supply the local market on terms that local patients 
                and governments would find more advantageous.
   Price Controls: Governments may look at price controls as 
        one solution to access. However, price controls tend to damage 
        incentives for research and development industry, they can also 
        negatively affect the development of a GMP-based local generics 
        industry. Furthermore, price controls destroy competition and 
        usually evolve from being limits on price increases (or 
        ``ceilings'') to become fixed price ``floors'' preventing 
        consumers from enjoying benefits of market competition. One 
        need only look at comparisons in changes in post-patent prices 
        between Europe, where price controls exist, and the United 
Informational Gaps
   People may fail to access health care due to a lack of 
        information about the need to treat diseases such as 
        tuberculosis, hepatitis, or hypertension.
   Patients may not know how or where to access health care 
        (particularly in the cases of minorities or immigrants).
   Self-medication by poorly informed patients may lead to 
        ineffective drug utilization.
   Poorly informed physicians in developing countries often 
        treat illnesses such as diarrhea inappropriately with 
        antibiotics or they may not always be aware of the most cost-
        effective therapy.
   There is often the lack of information about the quality of 
        generic products. In most developing countries, providers and 
        patients prefer brand name products because they are unsure of 
        the origin, safety and reliability of generic products.
   Lack of adequate training for inspectors and regulators 
        regarding pharmaceutical product quality issues hinders 
        people's access to quality health care. Such insufficient 
        training allows substandard and counterfeit drugs to enter 
        national markets, which endangers the population's health, 
        engenders uncertainty about the effectiveness of treatments, 
        and often crowds quality out of the market.
   Gray-market or illegal workers not contributing to the 
        national tax system may be excluded from the social and workers 
        health insurance system of their country of residence.
Cost and Price Issues
    How important are price and cost issues? We firmly believe that 
they are secondary or tertiary problems in Africa compared to those 
discussed above. Some have charged that patents for pharmaceutical 
products reduce access to these products. This focus on patents (and 
prices) ignores the complexity of the access to healthcare issue and 
prevents policy-makers from considering real solutions to this issue. 
This is recognized by patient groups and public-sector decision-makers 
alike. For example, the European Coalition of Positive People publicly 
stated with regard to HIV/AIDS drugs recently that focusing on patent 
protection and pricing is ``simplistic and fails to take into account 
the serious practical problems that need to be addressed . . .'' Drugs 
could be free and still not be appropriately used without adequate 
health care systems. In fact, they would rapidly become ineffective. 
The cost of drugs to patients in Africa is determined principally by 
distribution, infrastructure, training and other factors discussed 
above. The issues of patents and prices of AIDS drugs are not the key 
    Approaching the access issue solely through debates over price is 
not only simplistic, as noted above, but also factually incorrect. 
Patents do not, in fact, have an influence on access to the drugs, 
which the population in developing countries actually consumes. These 
are primarily off-patent drugs; for example, almost all of the products 
on the WHO Essential Drug List are off-patent. Furthermore, many 
developing countries do not currently have TRIPS-compliant intellectual 
property legislation and the poorest of these countries will not be 
required to implement such legislation until 2005, perhaps even later 
if they apply for a longer transition period. Therefore, access to the 
drugs for which this population is looking is not inhibited by patent 
protection. Indeed, developing countries without effective patent 
protection have already started producing their own versions of 
patented AIDS products, including India and Brazil.
    An additional indication that prices are not the major barrier to 
access to drugs is shown by the experiences of several companies when 
they instituted the programs (mentioned specifically above) to donate 
their products for free or at dramatically reduced prices. Drugs that 
had been offered at a zero price could not find their way to patients 
until the barriers and issues were addressed that constitute the real 
obstacles. The targeted populations could only receive the drugs they 
needed after national governments and international agencies undertook 
concrete actions to ameliorate these barriers to access.
    One would expect that, if intellectual property protection were 
really a barrier to access that some claim that it is, there should be 
no problem for the population of these countries to obtain drugs at 
``affordable'' prices. However, the evidence shows otherwise: Again, 
why is it that in India--where patent protection is not required by 
TRIPS and where unprotected copies of AIDS drugs (patented in Europe 
and elsewhere) are available from a number of local producers--that 
there is a drug access problem and the AIDS epidemic is reaching 
alarming proportions?
    Accepting the alleged, but spurious, links between intellectual 
property rights, prices, and access to pharmaceuticals could lead 
political decision-makers to institute policies such as parallel trade 
and compulsory licensing, which destroy the basis upon which further 
scientific progress is based: intellectual property rights. By 
threatening to take away the fruits of innovative companies' labor, the 
advocates of compulsory licensing and other attacks on intellectual 
property rights are driving research-based companies away from working 
on diseases particularly affecting developing countries. If there are 
to be cures and vaccines for diseases and conditions that are currently 
incurable or untreatable, further research must be protected and 
encouraged. After all, before one can realistically talk about gaining 
access to drugs and vaccines, these substances first need to be 
discovered, developed, tested and registered, a costly process taking 
years to accomplish. Without protection, companies simply cannot devote 
the huge resources (literally hundreds of millions of dollars) 
necessary for bringing new products to market.


    Industry, which has much experience--not only in developing the 
drugs available today to patients everywhere and in developing the 
drugs and vaccines in the pipeline for tomorrow's use--but also in 
health care delivery systems experience which can be brought to the 
table if asked to do so--firmly insists that there are a number of key 
elements to resolving the AIDS crisis. They are:

          (1) Partnerships among public institutions and with the 
        private sector is the only effective route. Recognize that no 
        single solution will solve this problem. We in industry are 
        working on more effective therapies and vaccines, but delivery 
        will be a critical problem and this involves several key 
        issues, including the following:
          (2) Political commitment and concrete actions by countries 
        affected to prevent the spread of AIDS and to treat those 
        affected. Raising AIDS awareness and as a priority is vital. 
        Prevention through education must be a high priority. Regarding 
        funding, as UNAIDS' Executive Director has noted, pumping money 
        into a country where AIDS is a low priority will not end the 
        epidemic. ``If a country does not recognize that it has an AIDS 
        problem, then it is not willing to take on the tough 
        questions,'' Dr. Piot said: ``Outside support for something 
        that can only be solved from the inside will not work.'' 
        Figures in 1997 show that international aid paid for the bulk 
        of the millions spent on AIDS prevention in Africa in 1997. 
        Uganda accounted for much of the money that the African 
        countries spent. National priorities in Africa need to be 
        shifted away from arms and weapons towards healthcare, 
        including AIDS care, if this epidemic is to be fought 
          (3) International funding is needed to meet the crisis: 
        Bridging the cost gap, in the case of drugs and future 
        vaccines, between costs and prices of AIDS products and what 
        people in poorer countries can afford will need new 
        international financial support.
          (4) Infrastructure and distribution improvements: So much of 
        current drug supplies are wasted. Why is it that the price paid 
        by a patient for quality AIDS and other drugs in parts of 
        Africa and other developing countries is three to five or more 
        times the price received by the manufacturer--because of the 
        level of taxes, tariffs, monopolistic distribution systems, 
        etc.--so that if you were to cut the manufacturers' price by, 
        say, 50%, patients would not significantly benefit; and then if 
        you counted in the cost of the health support services needed 
        for AIDS treatments, a drug price reduction may not reduce 
        overall costs of delivery at all.
          (5) Serious Partnerships: Our companies have been working 
        with UNAIDS and countries on the pilot projects but supplying 
        medicines and expertise in their use. Industry knows that it 
        must contribute in this extraordinary crisis. But true 
        partnership is required, not one-way partnership. For example, 
        not all countries have responded positively to mother-to-child 
        program offers of medicines, even at discounted prices. It 
        seems that some countries prefer to use legalistic approaches 
        to undermine patents instead of working together with industry. 
        Partnership means we all must be committed. As a sign of the 
        seriousness which the industry gives to partnership efforts, 
        IFPMA and major pharmaceutical companies have represented the 
        research-based pharmaceutical industry in deliberations of the 
        International Partnership Against AIDS in Africa organized by 
        UNAIDS, most recently in New York at a meeting convened by UN 
        Secretary-General Kofi Annan. This partnership brings together 
        stakeholders in this issue, including donor countries, NGOs, 
        the private sector and the African countries themselves. It is 
        our hope that this dialogue will create effective and practical 
        ways for all of us to work together to fight the AIDS menace.
          (6) One of the most critical elements of a global strategy is 
        fostering continued innovation through academic and industrial 
        R&D. The industry has responded to the need for AIDS medicines 
        and has spent billions of dollars to make current treatments 
        available; but we are not there yet. We do not yet have a cure. 
        We do not have a vaccine. We are working on them. Over 100 new 
        medicines are in the industry's development pipeline, including 
        second-generation protease inhibitors, new drugs for 
        opportunistic infections and vaccines against HIV. But without 
        a strong patent system we would not have these medicines today 
        or in the future. Attacking patents on AIDS medicines would 
        means causing industrial R&D to shift away from AIDS research 
        to more research on heart disease, cancer, depression. etc. The 
        only winner in a strategy to weaken patents is the industrial 
        copier or parallel trader, and the loser is the AIDS patient 
        worldwide who is waiting for help.

    One caveat must be raised here. We cannot, in addressing the AIDS 
crisis, neglect the importance of addressing other serious threats to 
the health of Africa and other poor regions of the world. Malaria, TB, 
hepatitis, respiratory ailments and other diseases may become equal 
dangers in the future. I urge the Congress and Administration to 
support public-private initiatives such as the Medicines for Malaria 
Venture and the Global Alliance for Vaccines and Immunization. Let's 
also explore new vehicles for developing new vaccines and drugs taking 
the tax credit and market exclusivity aspects of the U.S. Orphan Drug 
legislation as examples of possible approaches that may be needed in 
addition to traditional patent protection.
    In closing, I want to convey the desire of the R&D pharmaceutical 
industry that IFPMA represents to work more with countries, WHO, UNAIDS 
and other parties on this most serious matter for Africa. With resolve 
and with positive partnerships, we believe that we all can make a real 

    Senator Frist. Dr. Bale, thank you. Thank you for being 
with us.
    Dr. Lurie.


    Dr. Lurie. Good afternoon. I would like to take my time to 
describe the details of a rather straightforward six point plan 
that I think can make a big difference in the HIV epidemic in 
the short-term. I am not going to focus on research issues like 
on vaccines, important as they are. These proposals pay off 
relatively quickly.
    Many of these elements are extremely cost effective, and 
others, would in fact, cost the U.S. Government absolutely 
nothing to implement. But instead, we will see United States 
policies that are low on funds, short on specifics, and in some 
cases, are actually antagonistic toward some of the proposals I 
will put forth.
    Proposal No. 1, prevention of infant transmission. We have 
heard quite a bit about this today. Data showing 50 percent 
reduction in HIV transmission from mother-to-infant due to the 
drug Navirapine. What this means is it costs $40 in drugs to 
save the life of an infant.
    There is very little more cost effective in medicine today. 
If there is only one thing that you could do to make an impact 
on HIV/AIDS in sub-Saharan Africa tomorrow, this would be it.
    No. 2 and this point has been made as well today, the 
treatment of sexually transmitted diseases. A 1995 study from 
Tanzania showed a 42 percent reduction in the transmission of 
HIV if sexually transmitted diseases were appropriately 
handled. Again, though, there is an enormous gap between 
science and policy.
    The larger parts of sub-Saharan Africa do not enjoy the 
benefits of this cost-effective intervention, $218 to prevent 
an HIV infection. And, in particular, they do not enjoy a 
stable supply of pharmaceuticals, in part, because of price.
    No. 3, compulsory licensing and parallel imports. I do not 
think this is the place to get into details of the economics. 
And we agree that infrastructure is important.
    But this is a pharmaceutical company's rather lame excuse 
for avoiding the issue of pricing. Infrastructure and pricing 
are important. Both must be addressed. And because they are two 
things that need to be addressed, it does not mean that you 
simply cower away from the other.
    This issue has produced an avalanche of misleading 
information from the pharmaceutical industry and the unseemly 
specter of the U.S. Government interceding on behalf of multi-
billion dollar pharmaceutical corporations at the expense of 
the lives of people in developing countries.
    Now, we heard Dr. Satcher briefly refer to the notion of 
HIV resistance to antiretroviral drugs. I discussed this in my 
written testimony, and shall not go into it in great detail 
here except say that this argument has neither a scientific nor 
a moral basis. What industry seems to be arguing is that people 
in sub-Saharan Africa are best protected by us--by us--from the 
dangers of these drugs. That is paternalism in the extreme. But 
let us be clear, compulsory licensing and parallel imports do 
not require any country to engage in these practices. But the 
aggressive posture of an industry and of this administration 
has prevented these developing countries from exercising choice 
as to whether or not to use these legal mechanisms.
    In the background in this funny debate over resistant 
strains is the unstated concern that the resistant HIV strains 
that we are worried about are ones that are going to come back 
and infect Americans. What the pharmaceutical industry is 
really arguing is that Africans should remain untreated so that 
Americans might live longer. This is reprehensible and is also 
not scientifically supportable.
    We also heard much about the need for profit on the part of 
pharmaceutical industry. The argument is that if we just allow 
the companies to continue doing their research, the right 
affordable drug will come along. Try making their argument to 
an HIV-infected person in sub-Saharan Africa today where, in a 
world where compulsory licensing and parallel porting are 
relatively infrequently invoked, they still do not have access 
to the potentially lifesaving medications that we now have. Why 
should they have any reason to believe that it will be 
different the next time? The drug companies are rolling in 
    Research and Development are not a top priority for the 
U.S. drug companies. The top ten firms realized an average of 
1.5 times more in profits than they invested in R&D in 1998, 
and the pharmaceutical industry is the most profitable in the 
United States where profits are measured by the return on 
sales, assets, or equities. And the pharmaceutical industry has 
been a median 1.7 times more profitable than other industries 
in this country.
    We as tax payers are engaging in an enormous handout to the 
pharmaceutical industry; $27.4 billion in income tax credits, 
including the research and experimentation credit, between 1990 
and 1996.
    Research is often conducted at the NIH and has produced 
important drugs. Boehringer-Ingelheim did not come up with 
Navirapine. The NIH funded that study. The same is true for AZT 
and DDI, and some others.
    Nonetheless, the administration has devoted itself to 
acting as a bagman for this highly profitable industry at the 
expense of access to drugs for people in developing countries. 
Time and again, in South Africa, Thailand, now in Brazil, we 
have the U.S. Government interceding on behalf of the 
pharmaceutical industry to either oppose compulsory licensing 
and parallel importing, or else try to undermine a local 
generic drug industry.
    President Clinton says that all of this is going to change. 
But if you are on the ground in the Dominican Republic, or if 
you are on the ground in Thailand, things do not feel any 
different. The last three quick points. Treatment of 
opportunistic infections. This is what people who have HIV 
ultimately die of, from lack of sulfa-like drugs that are 
relatively cheap right now or could be made so by compulsory 
licensing or parallel importing.
    Five, debt relief. Dr. Sachs is absolutely right, but I 
want to turn his notion around and to say that while we have 
looked at the impact of HIV upon the economy and upon 
development, we have not looked at the notion that the 
structural adjustment policies imposed on these countries, now 
producing these massive debt burdens, may in fact be in part 
responsible for the mess that we now find ourselves in.
    These export-driven programs have helped undermine rural 
economies by focusing on agri-business over local subsistence 
economies. The programs have built up massive transportation 
infrastructures to serve export economies so that people are 
moving back and forth perhaps transmitting disease. They have 
concentrated people in cities where drug use and commercial sex 
work is more prevalent.

    And finally, they have undermined government social 
spending so that there is not sufficient money around for 
condoms, for education, for sexually transmitted disease 
treatment, and the like. These programs, in part, are at the 
root of the problem that we look at today.

    And to have debt repayment of the size proposed, as Dr. 
Sachs pointed out, is minuscule compared to what is needed, and 
is conditioned sometimes upon a repeat of the conditions that 
we seem to have made in the past. This seems to me absurd.

    Finally, we always say do not throw money at a problem, but 
the fact is that you do need money in this particular 
circumstance. The President is proposing an increased budget 
for international AIDS effort, and that is all to his credit.

    But, nonetheless, it amounts to an anemic $10 per person 
living with AIDS or HIV. If we are going to make a difference, 
we have to go beyond mere statements of support to encompass 
the kinds of concrete actions that I have described in this 
testimony. To not do so will undermine the U.S. claims to be a 
world leader in the world's fight against HIV/AIDS. Thank you.

    Senator Frist. Thank you, Dr. Lurie. Dr. Lurie, in terms of 
the money that is currently being spent and I know you 
commented on the budget in the future, the money that has been 
spent in the past in your studies, has it been spent well, or 
poorly, or inadequately as you look at the challenges that we 

    Dr. Lurie. There is an enormous amount of need out there. 
And it is very difficult to put blame in that sense. Really 
what is needed is enormously more money than has been provided, 
but I think personally, that not enough money has been directed 
at the kinds of things that I have talked about today.

    I think that counseling and testing as advocated by Dr. 
Satcher is probably not going to have a large impact upon the 
HIV epidemic in Africa. I think the kinds of social changes 
that would result from debt relief, pointed out by Dr. Sachs, 
are far more likely to have an impact.

    Things that I have talked about are generally things that 
have been proven in randomized control trials to work. Mother-
to-infant transmission, there is no question that these drugs 
work. There is no question that sexually transmitted diseases 
treatment will result in a decrease in transmission of HIV. 
That, I think, is where our efforts need to be made.

    Senator Frist. Dr. Sachs, Dr. Bale, I guess both of you can 
comment on the incentives that might be given to the 
pharmaceutical companies to invest. These hearings need to 
focus on short-term and the long-term, and need to focus on the 
supply and the demand side of the equation. Dr. Sachs we will 
begin with you.

    What are the sorts of things we can do in the year 2000 
with the U.S. drug companies and the international drug 
companies that we might use to incentivize the system?

    Dr. Sachs. I think broadly speaking, there are three stages 
to bringing an effective treatment all the way to 
implementation. The first is basic science and there is still a 
lot of basic science to be done, both here and in Africa. And, 
indeed, basic science should be funded in both places.

    Second, is R&D within the pharmaceutical companies to 
support through tax incentives and other means. Some of the 
costs of development which are extremely high. Neither of those 
which are so-called push mechanisms in the jargon which is now 
being used, really would bring either drugs or vaccines all the 
way to availability of very poor people.

    Poor people could not afford the end product and they do 
not provide a market by themselves. Somebody has to buy that 
stuff in the end. Moreover, if it is going to be developed 
through phase one, two, three clinical trials, for example, to 
get a vaccine, the pharmaceutical companies and the biotech 
firms which are going to do a lot of that in the end, are going 
to have to know that somebody is going to buy it.

    So the notion is to put a poll mechanism in place as well. 
And that is some notion of a guaranteed market. The way that 
the Clinton administration has proposed to add our part in 
fiscal year 2001 budget is ingenious, but I am not convinced it 
is enough, and it has to be multilateralized.

    The ingenious is to say rather than a fund, we will give a 
tax credit, so we will double whatever somebody pays to buy the 
drug. If UNICEF is going to end up paying $1, the company, in 
effect, will get $1 tax credit.

    It will be as if there is $2 of market incentive there. I 
support that very much. Now, but I am not sure that by itself 
without also providing the guaranteed funding for UNICEF which 
does not have anything like this amount of money available, 
that we have really done the full job of creating the poll 

    I know because of many of discussions of this issue in 
Europe in the last couple of months with senior officials in 
all of the major European governments, that there is tremendous 
multilateral interest in the concept of creating a committed 
market to get a spur to R&D. And I hope the Clinton 
administration is doing the work to create the multilateral 
framework. It has taken an important step with an innovative 
mechanism that it has proposed. But, now to combine that with 
Germany, which has expressed interest, the Netherlands, and 
many, many other governments, is something that could be done 
by the time of the summit to really nail down the poll 
mechanism in addition to----

    Senator Frist. The structure that that is done through--the 
forum it is done, the multilateral component is what?

    Dr. Sachs. If it is for that, it seems to me that we have a 
framework called GAVI which has been established partly to 
house the new Gates funding, but it is in a sense a 
multilateral effort that is creditable, in my view, bringing 
together the public sector and the private sector, and it could 
be the house of a multilateral effort from scientific credit 
ability helping to usher in tests and bringing partnership with 
the recipient countries and helping to coordinate a United 
States, European, Japanese contribution at the same time. So I 
would point to GAVI as a very promising way to proceed in a 
legislative forum and in a negotiating forum.

    Senator Frist. Let me go ahead and turn to Senator Feingold 
and Dr. Bale, I will let you comment after that.
    Senator Feingold. Thank you, Mr. Chairman. Let me ask all 
of you something. Article 31 of the agreement on trade related 
aspects of intellectual property rights outlines conditions, of 
course, under which countries may legally resort to measures 
like compulsory licensing.
    Referring specifically to quote, ``The case of a national 
emergency or other circumstances of extreme urgency.'' Now 
starting with Dr. Lurie, would you agree that the AIDS epidemic 
in Africa is the type of situation referred to by Article 31 
and the other clauses and referred exemptions from standard 
patten protection procedures?
    Dr. Lurie. If the AIDS epidemic is not it, it will never 
come along.
    Senator Feingold. Dr. Sachs.
    Dr. Sachs. I think it is a national emergency. It could 
justify the use of this mechanism.
    Senator Feingold. And Dr. Bale.
    Dr. Bale. Well, I think in principal, it could be, but if a 
country has a national emergency and AIDS is the No. 1 threat 
to it's national security, then I think you have to look at the 
details of the case.
    One country in particular that has been mentioned quite 
often is South Africa. It has been mentioned as a case-in-
point, where there are legal cases that are pending in both the 
courts in international disputes. Here is a case where AIDS is 
a serious problem. But, is it the No. 1 issue? I am not sure, 
because clearly what we see here last fall was a decision by 
the South African Government to spend $5 billion on new 
submarines, aircraft carriers, and other things for which they 
do not need because they know they do not have any enemies.
    On the other hand, they refuse to buy AZT or Navirapine and 
claim that the drugs are toxic. So I think you have to look at 
the issue case by case; but there are clauses that are in the 
TRIPS agreements, are there for a purpose which is to provide 
an escape valve for certain cases that go beyond the normal 
circumstances that we see from day to day.
    Senator Feingold. I take your point about South Africa, but 
I did hear you say that you would not necessarily say this does 
not fall within the language, is that correct?
    Dr. Bale. That is correct.
    Senator Feingold. Thank you very much.
    Thank you. Dr. Lurie, I understand the UNAIDS program has 
recently issued a document on the ethical conduct of HIV 
vaccine trials. And I understand you have done some work on 
    Dr. Lurie. That is correct.
    Senator Feingold. Could you just comment on the report and 
its conclusions a little bit?
    Dr. Lurie. Yes, it has been an ongoing consultation process 
that took about 2 years to produce this document. And this 
document should be seen as part of a conserted effort by people 
in the research industry, by whom I mean the pharmaceutical 
industry, the NIH and the CDC, to water down the existing 
protections that exist for research subjects.
    Under the current guidelines, the Declaration of Helsinki, 
in particular, one is obligated if one is a researcher to 
provide the best known effective therapy. And there is no 
qualification for if you are in a poor country for example.
    What these UNAIDS vaccine guidelines, as well as attempts 
to water down the Declaration of Helsinki itself, and another 
document that goes by the acronym CIOMS, would allow the 
injection of an economic factor into this such that if you 
lived in a poor country, it now would become acceptable to not 
provide effective therapy.
    And indeed, as we have seen in the case of the mother-to-
infant transmission studies, the results of which have been 
referred to numerous times today, literally thousands of women 
were provided with placebos even though more effective 
medications existed.
    There are the kinds of studies that could take place. And 
again, I emphasize the leading role that the NIH and the CDC 
have taken in the watering down of all these different 
    Senator Feingold. Anybody else want to comment on that one?
    Dr. Sachs. I cannot comment on the particular 
recommendations, but I do want to say that economics belongs 
here centrally because we face the tragic reality that these 
countries are now spending about $5 per capita in total health 
spending for everything.
    So, the notion that our standards could just be transmitted 
or that is the moral way when it might be a $16,000 drug 
regiment is not a realistic approach. I am not talking about a 
$4 dose for Navirapine. I am talking about antiretrovirals and 
    Just to make very clear, we are talking about places where 
you have per capita income of $200, that even if by some 
miracle, because most countries do not do this, even if they 
mobilize 5 percent of gross national product for health, that 
would be the principal sum of $10 per capita per year.
    That is for everything and they face crises all over the 
place, like getting clean water, diarrheal disease, acute lower 
respiratory infection, and many, many other absolute killers of 
millions. We have a generalized public health crisis in these 
countries. They need a lot more money. We need to be spending a 
lot more money on this problem, but we are also absolutely 
going to have to design the regiments to face these economic 
    Senator Feingold. Dr. Bale.
    Dr. Bale. Senator, I just also wanted to say that in a 
crisis such as we face today, we have to look at the 
appropriate tools. I mean, the question of legality may not be 
the key issue, whether a policy instrument is legal or not. The 
question is, is it the right policy?
    I think funding is the issue. I think the industry's 
contribution and innovation and trying to lower the cost of 
medicines through innovation and through competition, is 
another way. I do not believe, quite frankly, that any of the 
messages that I have heard regarding issues such as compulsory 
licensing and parallel trade are solutions.
    So maybe at one extreme and unusual circumstances, such as 
a health crisis potentially legal, the question is, do such 
measures make good policy? And there have not been any cases 
recently that show that.
    Senator Feingold. Well, I thank all of you, and Mr. 
Chairman, my time has elapsed.
    Senator Frist. While we are getting another panel together, 
let me just give any of you an opportunity to make some closing 
comments. I know we had a lot of things going back and forth, 
and I appreciate all of you being relatively brief. Your entire 
statements, sirs, are made a part of the record so we will have 
that opportunity. But let me say, Dr. Lurie, any final 
    Dr. Lurie. Yes, I suppose I would just add on that 
compulsory licensing issue again. Nobody is operating from the 
naive notion that compulsory licensing or parallel importing is 
going to magically solve the problem so the developing 
countries have access to medications.
    I mean it is one component of that. For some particular 
countries, compulsory licensing will mean the difference 
between access and non-access. And for some particular people 
who live in some poor countries, it will mean the difference 
between access and non-access.
    So to simply disregard it because Dr. Bale can come up with 
some problem that he sees as larger, I think is really not the 
appropriate policy approach.
    Senator Frist. Thank you. Dr. Sachs.
    Dr. Sachs. I wanted to bring greetings from President 
Obasanjo and also to convey his plea, actually, to the United 
States which is that he has said that he regards the debt 
reduction as fundamental for the future of Nigeria, for the 
consolidation of democracy, and for the ability for a debt-
starved government to address these social emergencies.
    I regard, as a professional economist, I regard his 
assessment as absolutely correct. And I think that for an 
extremely small amount of money, we could do a vast amount of 
good for the most populous country of sub-Saharan Africa and to 
more generally, help the whole region if we generalized that.
    Just to conclude since you are seeing the Treasury 
Secretary next week, if there was a serious attempt to link the 
capacity to pay not to some notion of exports which came out of 
thin air, but to the real sale of the crisis that these 
countries face, what would happen is that all of the debt 
servicing would stop.
    The debts of these poorest countries would be canceled, and 
we would find no more effective way to get the billions of 
dollars that are needed to rebuild health care systems in the 
region than that. And we know that the total cost to the U.S. 
tax payer would be tiny if we did that because what we would do 
is leverage the entire world creditor community of which we are 
only a small part.
    So I must say, to this moment, I still remain perplexed at 
our hesitancy in taking that leverage. When President Clinton 
announced that for some of the poorest countries the U.S. would 
cancel 100 percent of the debts, and Congress partially funded 
that in fiscal year 2000, immediately the UK came in and said, 
``OK. We will do that, too.'' And then France jumped in and 
said, ``No, we will do that to.'' We are world leaders in this.
    And if we take the lead, we will leverage the entire world 
in getting a realistic savings from these countries. If we just 
stop the outflow of this, you will find billions of dollars per 
year that can then be mobilized to the problems and we really 
could fund the UNAIDS objectives, and we really could get clean 
water, and existing vaccines to those who need it.
    That is President Obasanjo's message for Nigeria, and I 
think it is a more general message for us. We are very close to 
that, but we have not grabbed it yet.
    Senator Frist. Well said. Dr. Bale.
    Dr. Bale. Just in closing, Mr. Chairman, to come back to 
your question about incentives, and where they should be 
placed, and how they should be placed very quickly. As I 
mentioned, there is a lot of work that is going on in AIDS and 
we certainly do need to work toward an AIDS vaccine, and 
anything that can be done to incentivize that through tax 
credits, market exclusivity, funds, et cetera, I think would be 
worthwhile doing.
    I would say that more importantly in some of the disease 
areas that are really neglected, we in the industry will admit 
more has to be done even though companies are doing research on 
TB and malaria. We have to focus in on a lot of these areas and 
look at the truly neglected areas of research.
    In this regard, I will repeat again. I urge the 
administration and Congress to consider very carefully these 
new malaria initiatives that are partnerships of these 
multilateral institutions that Jeffrey has talked about. These 
are multilateral initiatives.
    The UK, the Dutch Government has started to contribute 
funds to this project, this Medicines for Malaria Venture. And 
it points out the problem that while vaccine technology in the 
field of TB, malaria, and AIDS is right now very difficult, we 
can make progress on some very good breakthrough medicines. So 
let us put some focus on there: incentivize breakthrough 
medicines as well as vaccines. Thank you.
    Senator Frist. Thank you. Again, I apologize for keeping on 
schedule. We will probably have questions to submit, but thank 
all of you for your participation today. We will ask our fourth 
panel to come forward. Again, a panel that comes back to a lot 
of the issues that have been referred to today, and that is the 
    We will hear from two panelists today, Father Angelo 
D'Agostino. He runs a large orphanage in Nairobi, Kenya. And 
Mr. Franklin Graham, president of Samaritan's Purse in Boone, 
North Carolina. Father D'Agostino, as we have heard earlier 
today mentioned, has been a tireless advocate for orphans, and 
Mr. Franklin Graham has been a forceful proponent of using 
missions hospitals throughout Africa in fighting AIDS. Clearly, 
in terms of infrastructure, missions hospitals throughout 
Africa play a large role as they are a very high percentage of 
health care facilities in Africa. And we will first begin with 
Mr. Graham.

                        PURSE, BOONE, NC

    Mr. Graham. Thank you, Mr. Chairman. And I want to thank 
you for your personal interest in this crisis in Africa and 
personally going yourself to see for yourself the situation 
that exists.
    As one who has spent over 20 years traveling to Africa and 
working in the area of health care, I have gained some 
knowledge concerning the AIDS epidemic that is ravaging the 
sub-Sahara in Africa. The social, political, economic and 
spiritual problems are immense. Perhaps the following comments 
will be of some value.
    No one infected with the AIDS virus has ever survived. Some 
people may have reprieve of as much as 8 to 10 years as a 
result of multiple drug HIV treatments, but everyone infected 
with the AIDS virus will die from it unless they die of 
something else first.
    No magic bullet drug therapy is likely to become available, 
at least, for several years. If it ever does become available, 
it will no doubt be very expensive and therefore not readily 
available to people in developing countries.
    Current triple drug therapy for HIV-positive individuals is 
very expensive and it only buys time. Patients who are HIV-
positive develop suppression of their natural immune systems 
defenses and are easily prey for infections, especially TB. 
Because of AIDS, tuberculosis has become a major health threat 
worldwide, with the number of patients with active TB rapidly 
    Furthermore, drug resistant TB is becoming a major threat 
worldwide, and even flying on a commercial airliner presents a 
risk of contracting TB.
    Compassionate and caring Christians first introduced health 
care to Africa. In the mid-1880's, Dr. David Livingston, a 
Scottish doctor, was one of the first to bring missionary 
medicine to Africa. History considers him one of the most 
important European explorers in Africa and one of the pioneers 
in the abolition of the slave trade. He blazed the trail for 
future missionary medicine to be practiced across the 
    Since the days of Dr. Livingston, there have literally been 
thousands of Western missionary doctors who have followed in 
his footsteps. After World War II, there was a huge increase in 
the missionary medical effort in Africa. Most nations in the 
sub-Sahara have church-related mission hospitals that would 
either be Protestant or Roman Catholic. The total number of 
church-based hospitals and clinics in Africa today is well over 
    In almost every instance, these mission hospitals provide 
the very best health care in the entire country. And I 
emphasize, the very best health care in the entire country. 
Unfortunately, most African governments are politically corrupt 
and guilty of gross mismanagement at every level, pilfering 
treasuries and natural resources for personal use.
    U.N. sponsored programs reflect many of the same problems. 
Government run hospitals and clinics are mismanaged, poorly 
staffed, and are not in a position, in most cases, to deal with 
this grave crisis.
    There are exceptions, of course. There are excellent 
hospitals in South Africa, Zimbabwe, and a few good private 
hospitals, such as in Kenya; however, most of these private 
hospitals are out of the reach of the poor. The mission 
hospitals carry the brunt of the health care in the sub-Sahara.
    I do not believe that any effective program addressing the 
HIV virus can be carried out while ignoring the church in 
Africa. The missionary doctors and nurses, themselves, are 
dedicated to the care of the physical, mental and spiritual 
needs of the African people. Many have years of experience 
dealing with the HIV virus.
    Short of a medical anecdote for the HIV virus, the only 
true solution to the AIDS epidemic in Africa and worldwide is 
behavioral change. While governments, schools and others seek 
to educate people in how to avoid becoming infected by the HIV 
virus through practical, safe sex means, such as use of 
condoms, these measures are inadequate. This has been shown to 
be particularly true as the African crisis has escalated.
    Education is inadequate without the teaching that the only 
reliable way to avoid contracting AIDS through sexual conduct 
is by maintaining a life-long monogamous relationship. But just 
as important, we must recognize that the ability to adopt such 
dramatic lifestyle changes is almost impossible without the 
moral conviction that sex outside of marriage between a man and 
a woman is contrary to God's law.
    The crisis will be curbed only when the moral teaching of 
God's word permeates African society. In this matter of AIDS, 
this will happen only through the work of the Christian church 
and when the church and mission-based hospitals and clinics are 
strengthened and equipped in their physical, social and 
spiritual ministries.
    Where do we begin? By enlisting the help of all churches 
across Africa, and especially the churches involved in health 
care, because the church is in every Africa community.
    From there, I believe we must educate at the local level by 
enlisting the help of pastors, tribal chiefs, political 
leaders, and policymakers at the community level, informing 
each group as to the facts about HIV--how it is transmitted, 
who is at risk, et cetera.
    In Kenya, where one out of nine adults is infected with 
HIV, the organization I work with, Samaritan's Purse, helps 
train members of Africa Inland Mission in Kenya to lead the 
community in AIDS awareness.
    In Uganda and the Congo, Samaritan's Purse provides AIDS 
training materials and HIV test kits for potential blood 
donors. In addition, we help orphan children, many of them 
orphaned through AIDS.
    While our efforts are just a drop in the bucket, the 
combined work of mission hospitals and Christian relief 
organizations throughout Africa has provided healing and 
comfort to countless thousands of individuals. Last year, we 
placed over 400 doctors and nurses in Africa as short-term 
volunteers. They served in over 20 mission hospitals.
    The church, and specifically missionary medicine, is the 
key, Mr. Chairman, to reaching people in Africa, presenting to 
them the spiritual, moral and medical reasons for monogamous 
sexual relationship with one person of the opposite sex to whom 
one is married and with none other.
    If this happened, even then, everyone in the world will 
still have to face possible infection by the AIDS virus through 
blood transfusions. Everyone in the world will also have to 
deal with the increased risk of becoming infected with possibly 
drug resistant TB and other super infections which are 
developing secondarily because of the AIDS epidemic.
    This ultimately results from those who persist in having 
this always deadly HIV virus to others as part of seeking 
sexual gratification for themselves. There are Biblically based 
moral standards that cannot be ignored. And these must be 
taught if we are to win the battle. This is why it's imperative 
for the church to be at the heart of this effort.
    What can Congress do? First, I urge you to look favorably 
on requests for funding of the AIDS package, to help with the 
AIDS crisis in Africa, but be sure that education efforts 
include instruction on the importance of sexual abstinence 
outside of marriage.
    And please, please consider earmarking substantial funds to 
strengthen the church and mission-based hospitals and clinics 
that hold the key to reducing this crisis situation.
    With God's help and by looking to Him, I believe He will 
give us the answers and show us the way. If we choose to ignore 
God and His standards, I believe this plague of Biblical 
proportions will not only continue to consume millions of 
Africans, but will eventually consume many millions in this 
    We cannot ignore the Hand of God. If we fail to ask for His 
help, we will be the ones to suffer.
    [The prepared statement of Rev. Graham follows:]

               Prepared Statement of Rev. Franklin Graham

    As one who has spent over 20 years traveling to Africa working in 
the area of health care, I have gained some knowledge concerning the 
AIDS epidemic that is ravaging the sub-Saharan Africa. The social, 
political, economic, and spiritual problems are immense. Perhaps the 
following comments will be of some value.
    No one infected with the AIDS virus has ever survived. Some people 
may have a reprieve of as much as 8-10 years as a result of multiple 
drug HIV treatments, but everyone infected with the AIDS virus will die 
from it, unless they die of something else first.
    No ``magic bullet'' drug therapy is likely to become available (at 
least for several years). If it ever does become available, it will no 
doubt be very expensive and therefore not readily available to people 
in developing countries. Current triple drug therapy for HIV positive 
individuals is very expensive and it only buys time.
    Patients who are HIV positive develop suppression of their natural 
immune system defenses and are easy prey for other infections, 
especially TB. Because of AIDS, tuberculosis has become a major health 
threat worldwide with the number of patients with active TB rapidly 
escalating. Furthermore, drug resistant TB is becoming a major threat 
worldwide (and even flying on a commercial airliner now presents the 
risk of contracting TB).
    Compassionate and caring Christians first introduced health care to 
Africa. In the mid-1880s, Dr. David Livingstone, a Scottish doctor, was 
one of the first to bring missionary medicine to Africa. History 
considers him one of the most important European explorers in Africa 
and one of the pioneers in the abolition of the slave trade. He blazed 
the trail for future missionary medicine to be practiced across the 
    Since the days of Dr. Livingstone, there have literally been 
thousands of western missionary doctors who have followed in his 
footsteps. After World War II, there was a huge increase in the 
missionary medical effort in Africa. Most nations in the sub-Saharan 
have church-related mission hospitals that would either be Protestant 
or Roman Catholic. The total number of church-based hospitals and 
clinics in Africa is over 500. In almost every instance, these mission 
hospitals provide the very best health care in the entire country.
    Unfortunately, most African governments are politically corrupt and 
guilty of gross mismanagement at every level, pilfering treasuries and 
natural resources for personal use. UN sponsored programs reflect many 
of the same problems. Government-run hospitals and clinics are 
mismanaged, poorly staffed, and are not in a position in most cases to 
deal with this grave crisis.
    There are exceptions of course. There are excellent hospitals in 
South Africa and Zimbabwe, and a few good private hospitals such as in 
Kenya; however, most of these private hospitals are out of reach for 
the poor. The mission hospitals carry the brunt of health care in the 
    I do not believe that any effective program addressing the HIV 
virus can be carried out while ignoring the Church in Africa. The 
missionary doctors and nurses, themselves, are dedicated to caring for 
the physical, mental, and spiritual needs of the African people. Many 
have years of experience dealing with the HIV virus.
    Short of a medical antidote for the HIV virus, the only true 
solution to the AIDS epidemic in Africa--and worldwide--is behavioral 
change. While governments, schools, and others seek to educate people 
in how to avoid becoming infected by the HIV virus through practical, 
safer-sex means, such as use of condoms, these measures are inadequate. 
This has been shown to be particularly true as the African crisis has 
    Education is inadequate without the teaching that the only reliable 
way to avoid contracting AIDS through sexual contact is by maintaining 
a lifelong monogamous relationship. But just as important, we must 
recognize that the ability to adopt such dramatic lifestyle changes is 
almost impossible without the moral conviction that sex outside of a 
marriage between a man and a woman is contrary to God's law.
    This crisis will be curbed only when the moral teachings of God's 
Word permeate African society. In the matter of AIDS, this will happen 
only through the work of the Christian church, and when church and 
mission based hospitals and clinics are strengthened and equipped in 
their physical, social and spiritual ministries.
    Where do we begin? By enlisting the help of all churches across 
Africa, and especially the churches involved in health care, because 
the Church is in every African community. From there, I believe we must 
educate at the local level by enlisting the help of pastors, tribal 
chiefs, political leaders, and policy makers at the community level, 
informing each group as to the facts about HIV. How is it transmitted? 
Who is at risk? etc.
    In Kenya, where one out of nine adults is infected with HIV, the 
organization I work with, Samaritan's Purse, helps train members of 
Africa Inland Mission in Kenya to lead the community in AIDS awareness. 
In Uganda and the Congo, Samaritan's Purse provides AIDS training 
materials and HIV test kits for potential blood donors. In addition, we 
help orphaned children; many of them orphaned through AIDS. While our 
efforts are just a drop in the bucket, the combined work of mission 
hospitals and Christian relief organizations throughout Africa has 
provided healing and comfort to countless individuals.
    The Church, and specifically missionary medicine, is the key to 
reaching people in Africa, presenting to them the spiritual, moral, and 
medical reasons for a monogamous sexual relationship with one person 
(of the opposite sex) to whom one is married, and with none other. If 
this happened, even then, everyone in the world will still have to face 
possible infection by the AIDS virus through blood transfusions. 
Everyone in the world will also have to deal with the increased risk of 
becoming infected with possibly drug-resistant TB and other ``super-
infections'' which are developing secondarily because of the AIDS 
epidemic. This ultimately results from those who persist in passing 
this ``always deadly HIV virus'' to others as part of seeking sexual 
gratification for themselves. There are biblically based moral 
standards that cannot be ignored, and these must be taught if we are to 
win this battle. That is why it is imperative for the Church to be at 
the heart of this effort.
    What can the Congress do? First, I urge you to look favorably on 
requests for funding of aid packages to help with the AIDS crisis in 
Africa. But be sure that educational efforts include instruction on the 
important of sexual abstinence outside of marriage. And, please 
consider earmarking substantial funds to strengthen the church and 
mission-based hospitals and clinics that hold the key to reducing this 
crisis situation.
    With God's help, and by looking to Him, I believe He will give us 
the answer and show us the way. If we choose to ignore God and His 
standards, I believe this plague of biblical proportions will not only 
continue to consume millions of Africans but will eventually consume 
many millions in this country. We cannot ignore the Hand of God. If we 
fail to ask for His help, we will be the ones to suffer.

    Senator Frist. Thank you, Mr. Graham.
    Father D'Agostino.

                         NAIROBI, KENYA

    Father D'Agostino. It is getting late, Mr. Chairman. And I 
know we're all tired. I do appreciate your giving me this 
    So, I will put aside the text and get right to the point, 
which is, essentially, what you have just heard.
    I have been in Africa for 20 years, now. And I see the 
corruption at work. I see the disintegration of governments and 
poverty increasing to a dimension that is unimaginable. The 
slum sections have grown threefold since I have been there.
    So, we must remember that the missionaries have been in 
place for over 100 years. They know what they are doing. They 
are reliable. They are knowledgeable. They are God-centered and 
committed. They are not working for profit. And they are, in 
the case of medicine, which I am acquainted with, providing 
very good medicine, even in pretty--some pretty dire 
    So, it is a fact that the USAID did make a token attempt at 
providing churches with some kind of help, but it was just a 
token. What the--what Franklin just said is--cannot be stressed 
enough. Some very direct aid to the church structures--they 
have the infrastructures that they have worked out over the 
years that we can capitalize on. They can--they are willing to 
do it. They want to do it. They are unable to do all they can, 
because they do not have the financial resources.
    If you could take the example, for instance, of how 
Communists was--communism was defeated in some way. But the 
avoidance of the governmental structures and having the U.S. 
Government funds and aid of food go directly to the church 
structures in Poland, I think you will see that that really 
contributed greatly to the demise of communism.
    And I think it can contribute likewise to the demise of--
the conquering of the AIDS problem in Africa, if we can get 
directly to the proven structures that have been able to bring 
help to the people. And those are the churches.
    Now, in the countries I know, especially Kenya and 
Tanzania, there are very well developed structures of churches, 
organizations of churches; the NCCK--the National Council of 
Churches of Kenya, and the Kenya Catholic Episcopal Conference 
that work quite well together and can be used as a conduit to 
bring that help to those--to the churches. They--it would be an 
excellent ecumenical effort and very much worthwhile.
    The thoughts of the Muslim churches--the Muslims have come 
in, in cooperation with these churches recently. And also, the 
Hindu churches, which are quite numerous in Kenya.
    There is one last point I would like to bring up, and that 
is the question of condoms, which I would like to leave aside 
the fact that in this forum, I--let me speak as a physician. 
They do not work in Kenya. They--the reason is the cultural 
imperatives. There are cultural demands and--that just make it 
an uphill fight. Despite all the millions of dollars that--and 
hundreds of millions of condoms have been distributed, there 
has been no significant change in the rate of instance of 
    There are two countries, Uganda and Senegal, and they are 
given as some kind of an example of the success of condoms. 
That is--there is some very recent studies to show that, on the 
contrary, at the same time the condom campaigns were 
instituted--very serious church campaigns for--exactly what 
Franklin was just talking about--were instituted--and 
especially in Uganda--I know the person, the imminent Irish 
Catholic nun physician who devoted her whole life, although she 
was a surgeon by training, to setting up behavioral change 
programs and were very successful throughout the country.
    So, now, they are taking a second look and seeing that 
maybe they had just as much or maybe more effect than the 
condoms. And Senegal is known to be a religiously oriented 
country, too. And so--I do not know as much about that, but I 
think that has a lot to do with it, too.
    I do agree that poverty, however, is a great contributor to 
the whole problem of AIDS. And Dr. Sachs was right in the debt 
reduction. But one has to be very, very careful. Just a 
straight debt reduction is not going to help anything, except 
the corrupt governments already. One has to really think hard 
on how to do that debt reduction. Believe me, this--you are up 
against some formidable forces, and it has to be really closely 
studied before it is put into effect.
    That is all I have to say.
    Senator Frist. Thank you. Father D'Agostino, how many 
children do you have in your orphanage now?
    Father D'Agostino. At the moment, we have 70 children. That 
is only a drop in the bucket. What we have done is institute a 
community-based program to extend the care to these HIV-
positive children in the community, by identifying extended 
family members, as was mentioned earlier, and supporting them 
in one way or another.
    That was started 2 years ago, and recently aided and 
abetted by a grant from USAID, which is doing quite well.
    Senator Frist. And all of the children are HIV-positive.
    Father D'Agostino. Yes. We have--they are all HIV-positive 
and orphans.
    Senator Frist. And are they--are they treated in any way--
medically treated?
    Father D'Agostino. Well, not with the antiretrovirals, no. 
We just cannot afford that at all.
    Senator Frist. And what do you use?
    Father D'Agostino. Just the--the regular antibiotics for 
opportunistic infections--Bactrim, Septra, and that sort of 
    Senator Frist. And what you have heard today from the 
previous panel, do you see that medicines, if the price is low 
enough, will be able to infiltrate the structure that you see 
on the ground? You are the one witness today who we have heard 
from who is really on the ground in Africa, taking care of 
    How do you put this perspective of having medicines? Can 
you make them inexpensive enough to where it will have an 
    Father D'Agostino. Yes. I think that in our hands and in 
the hands of the mission clinics, it will definitely have an 
effect, but giving it across the board to prevent children 
born--to lower the incidence of the in vitro transmission is 
very difficult. The infrastructures are not there. Women come 
in and--at the last minute or maybe they deliver at home or in 
the bush, and you just--it is very difficult to contact them. 
And it is difficult to be able to quantify the--to deliver what 
you want to have delivered.
    Senator Frist. And the children that are HIV-positive, how 
long do they live?
    Father D'Agostino. Pardon me?
    Senator Frist. How long do they live?
    Father D'Agostino. There are two groups. The rapid--the 
rapidly progressive disease. They only live, if they are born 
HIV-positive, a few months. And then others in our hands live--
well, we have one boy who is 18 years old. If they are given 
good nutrition, good all around care and the antiopportunistic 
medications, they can live--well, the bulk of them are eight or 
nine to ten. And I think that they could live quite a bit of 
time, even without the antiretrovirals. But with the 
antiretrovirals, it will certainly ensure that their life will 
be of normal expectancy.
    Senator Frist. And the other funding for your orphanage 
comes from where? You mentioned that you have started to get 
some money from USAID.
    Father D'Agostino. We start--for the first--unfortunately, 
5 years ago, when I approached USAID, they turned me down; the 
same year they gave $10 million for the preservation of 
    They have changed their tune a bit lately. And as I say, we 
are getting some, but the ones that helped us originally were 
from Italy, the very generous Swiss Foundation, the Japanese 
Government, the Dutch Government, other governments, but not 
the United States, until just recently.
    Senator Frist. Thank you.
    Senator Feingold.
    Senator Feingold. Mr. Chairman, you have been so generous 
with your time that I am not going to ask this panel any 
questions. I am just going to make a couple of comments. And I 
do want to say that you have been tremendously generous to do 
this long of a hearing. I appreciate it.
    I just want to be absolutely sure that as we look at this 
problem, we make sure that we do not look at anything that 
would reflect on suggesting that the people of Africa are 
really to blame for what has happened here.
    I would note some of the success stories in Africa--Uganda, 
dominantly a Christian country; Senegal, I understand, 
dominantly an Islamic country. A country that I was in 
recently, where--frankly, a wonderful country, but where things 
appear to be in some denial is a dominantly Protestant 
    So, I want to make sure that nothing we say here today 
could suggest that somehow this is something that is going to 
be solved simply by following any particular religious 
    And I would also suggest, in respectful disagreement with 
the comments about debt relief, that when you are dealing with 
a country, like Nigeria, with such a dramatically, very 
cultural, religious and ethnic background, if the President of 
that country, as he has done, both to Dr. Sachs and to me and 
others, says the debt relief is the thing that they need, and 
given the turnaround that has at least begun in Nigeria, I 
think we ought to at least listen and hope that maybe that 
would have something to do with stopping AIDS in its tracks in 
a country that apparently is just on the upsurge now, but does 
not have anywhere near the rate of infection of some the 
countries in southern Africa.
    So, I would just offer that with all respect and gratitude 
to the witnesses for being here today. And again, Mr. Chairman, 
this has been an outstanding hearing. And I look forward to 
working with you and under your leadership to come up with a 
package that we could present to the Senate.
    Thank you so much.
    Senator Frist. Thank you. And again, I think we will have 
several questions for this panel, as well.
    Mr. Graham, You have mentioned there are 500 or 
approximately 500 mission hospitals. We heard Father D'Agostino 
say it took USAID a while, and the funding came, and there had 
been other priorities in the past. Do you have any impression 
of whether or not aid is coming to these mission hospitals, in 
terms of addressing the HIV issue?
    Mr. Graham. Mr. Chairman, I would say I know of a few of 
the hospitals that have received USAID for specific projects. 
Usually, they are development projects. But that would be just 
a handful out of that 500. Most would not receive a penny from 
USAID. And some of that is because they are church-related or--
well, they are all church-related, but that may be some of the 
reasons why they have not been given any money.
    But as our friend here said, these people are compassionate 
people. These doctors and nurses are not there for profit. They 
have been called by God to that part of the world. And they are 
giving their lives to these people of Africa. And they will do 
all they can to save the lives of all Africans.
    Let me just say something about debt relief concerning 
Nigeria. This country is one of the leaders in human rights 
abuses in Africa. In some of the northern states, they are 
instituting Islamic law; forcing Christians to become Muslims. 
And I would hope that we would not forgive one penny of debt 
until they guarantee human rights for all of its citizens and 
the freedom to worship God, as all citizens see fit. And I 
think that is a very important question.
    Senator Frist. Thank you both. As I said in my earlier 
comments, it is rare that Congress has such a clear 
understanding of making life and death decisions, and to have 
both of you before us, really is testimony to that.
    The issue of infrastructure: people actually on the ground; 
how the resources that are devoted to that continent, to those 
nations, are actually used and fulfilled is something that I 
hope that we can continue to both oversee and, in part, direct.
    It is clear that we need more resources in this entire 
arena, but I think it is equally important that we make sure 
that the resources that we use are used wisely and in a way 
that both prepares for the future, but also carries out our 
responsibilities today.
    It is clear--and Father D'Agostino, you made it very clear 
that we are not going to be able to help everybody in the 
classical sense of having any medicine that is going to 
successfully treat and cure individuals. And there is much that 
we need to do. Yet, based on the information that we learned 
today, and hopefully have established a foundation today, we 
will be able to develop a cohesive, comprehensive policy on the 
part of the U.S. Senate, the U.S. Congress, and the United 
States of America.
    As we heard, it is a global effort. It is an effort that 
requires a lot of strategy, a lot of resources, both 
unilaterally and multilaterally.
    And I just personally want to thank both of you, who came a 
long way to testify today, for your contribution to our better 
understanding what is an issue that affects each of us 
indirectly, some of us very directly, but affects the world in 
a very, very real way.
    With that, thank you very much. And I appreciate 
everybody's interest today. It is an issue that we will 
continue to address in a very aggressive fashion.
    We stand adjourned.
    [Whereupon, at 5:18 p.m., the hearing was adjourned.]
    [Additional questions and additional related statements 

           Additional Questions and Statements for the Record

Responses of Surgeon General Dr. David Satcher to Additional Questions 
                    Submitted by Senator Jesse Helms

    Question. What are the biggest barriers to care for HIV in the 
developing world?
    Answer. It is important to keep in mind that the care and treatment 
of person living with HIV/AIDS (PLWHAs) include mental as well as 
physical care and treatment. I strongly believe that the one cannot be 
separated from the other. However, I will focus on physical care and 
treatment in my response.
    The following classes of drugs are the most important for the care 
and treatment of PLWHAs: anti-infective drugs, anti-cancer drugs, 
palliative drugs, and antiretroviral drugs (ARVs). There has often been 
a focus on ARVs, but the other classes of drugs are often at least as 
important and often more cost-effective.
    Most developing countries face one or more of the following 
challenges to increasing access to care and treatment: limited 
financial resources, problems with prioritization of drug needs, 
inadequate health care (medical and public health) infrastructures, and 
inadequate distribution and administration systems. In addition, even 
when there is access to care and treatment there are issues around 
correct and supervised use, adherence, and development of resistance.
    It is important not to generalize about all developing countries. 
There are many differences among countries even in sub-Saharan Africa. 
There are opportunities for the use of all four classes of drugs 
including ARVs in a number of developing countries even in the face of 
the aforementioned challenges.

    Question. What programs have been successful in reducing these 
barriers? What programs have already proven successful in making lower-
cost drugs available to people in the developing world?
    Answer. Programs based upon public-private partnerships and 
focusing on the continuum of medical and public health interventions 
from research to prevention to care and treatment has been previously 
or potentially successful. Public-private partnerships include two or 
more of the following categories of partners: recipient countries 
(e.g., countries in Asia, Latin America, and sub-Saharan Africa); donor 
countries (e.g., Australia, Belgium, Canada, Denmark, Finland, France, 
Germany, Japan, Luxembourg, the Netherlands, Norway, Sweden, 
Switzerland, the United Kingdom, and the United States as well as the 
European Union); international organizations (e.g., the United Nations 
in general, Joint United Nations Program on HIV/AIDS (UNAIDS) 
cosponsors UNICEF, UNDP, UNFPA, UNDCP, UNESCO, WHO, and the World Bank 
in particular, and regional institutions); nongovernmental 
organizations (NGOs) (e.g., AIDS service organizations (ASOs), colleges 
and universities, community-based organizations (CBOs), foundations, 
private voluntary organizations (PVOs), and professional associations); 
and the private sector (e.g., pharmaceutical companies). Two examples 
of public-private partnerships are the HIV Drug Access Initiative of 
UNAIDS and the Secure the Future Program of Bristol-Myers Squibb.
    UNAIDS launched the HIV Drug Access Initiative on November 5, 1997. 
The aim of the initiative is to make HIV-related drugs more accessible 
to broad sectors of populations in developing countries. The 
participant countries in the trial phase of the initiative are Chile, 
Cote d'Ivoire, Uganda and Vietnam. The four countries were chosen to 
allow for adequate evaluation of the initiative in a variety of 
geographic, social, cultural, economic, and structural situations and 
to allow for adequate assessment and subsequent adjustments of the 
functioning of the new mechanisms and structures being established in a 
wide range of settings. The participant pharmaceutical companies are 
Bristol-Myers Squibb, GlaxoWellcome, Hoffman-La Roche, Organon Teknika, 
and Virco N.V. Participant countries will work to adapt their health 
infrastructures to ensure effective distribution and use of the HIV/
AIDS-related drugs, and the participant pharmaceutical companies will 
subsidize purchases of the drugs. Cote d'Ivoire and Uganda announced 
the arrival of the first shipments of drugs and their distribution on 
June 30, 1998.
    Bristol-Myers Squibb (BMS) launched the Secure the Future Program 
on May 6, 1999. The aim of the program is to find sustainable and 
relevant solutions for the management of HIV/AIDS in women and children 
and provide resources to improve community education and patient 
support. The objectives of the program are to develop and implement 
models for managing HIV/AIDS, develop and implement a capacity-building 
program for the care and support of HIV/AIDS, and develop and implement 
local training programs to strengthen public health capacity. The 
participant countries are Botswana, Lesotho, Namibia, South Africa, and 
Swaziland. Other participants include the Joint United Nations Program 
on HIV/AIDS (UNAIDS), Baylor College of Medicine, Texas Children's 
Hospital, Morehouse School of Medicine, the Medical University of 
Southern Africa (MEDUNSA), Harvard AIDS Institute, and the 
International Association of Physicians in AIDS Care (IAPAC). The two 
components of the program are the BMS HIV Research Institute and the 
BMS Foundation Community Outreach and Education Fund. BMS has committed 
$100 million over five years for the program.

    Question. If compulsory licensing of AIDS drugs is permitted as a 
response to the spread of AIDS in Africa then what justification is 
there for limiting compulsory licensing to AIDS treatment? What is the 
rationale for permitting compulsory licensing of AIDS drugs but denying 
that policy with respect to other life-saving drugs? If compulsory 
licensing is a valid response to the HIV problem, isn't it a valid 
response to all health care and infrastructure development problems in 
the developing world? For example, couldn't the rationale underlying 
the use of compulsory licensing in this context be used to justify 
future compulsory licensing of water purification, sanitation and other 
environmental technologies, architectural and engineering technologies 
to construct earthquake-resistant structures, communications and 
computer technology to improve access and delivery of critical human 
services (such as in the areas of medicine and education), and the use 
of patented medical techniques and processes in developing countries? 
Isn't it true that all U.S. holders of patents on products, processes, 
and/or techniques that have applications in the developing world could 
potentially be subject to compulsory licensing if this precedent is 
    Answer. It is important to note that the Office of the United 
States Trade Representative (USTR) and not the Department of Health and 
Human Services (DHHS) develops and implements United States Government 
(USG) trade policy. However, the President announced on December 1, 
1999 that ``there will be a more direct interaction between USTR and 
[DHHS] on health-related intellectual property issues . . . [and USTR 
and DHHS] will develop a cooperative approach on health-related 
intellectual property matters consistent with [the USG] goal of helping 
poor countries gain access to affordable medicines.'' He explained that 
the aim of the approach is to ``ensure that the application of U.S. 
trade law related to intellectual property, consistent with 
international trade treaties, is sufficiently flexible to respond to 
public health crises.'' He recognized that ``the challenge of improving 
access to treatments without stifling innovation is one that eludes 
simple answers.'' He also recognized that ``a modern patent system 
helps promote the rapid innovation, development, and commercialization 
of effective and safe drug therapies for diseases such as HIV/AIDS.'' 
He declared that ``sound public health policy and intellectual property 
protection are, and must continue to be, mutually supportive.'' 
However, it would be best to address general questions on USG trade 
policy and specific questions on compulsory licensing to USTR. I will 
make a few observations.
    The Agreement on Trade-Related Intellectual Property Rights (TRIPs 
Agreement) of the World Trade Organization (WTO) allows compulsory 
licensing under conditions described in Article 31. The conditions 
include the following:

          (b) Such use may only be permitted if, prior to such use, the 
        proposed user has made efforts to obtain authorization from the 
        right holder on reasonable commercial terms and conditions and 
        that such efforts have not been successful within a reasonable 
        period of time. This requirement may be waived by a Member in 
        the case of a national emergency [such as HIV/AIDS] or other 
        circumstances of extreme urgency or in cases of public non-
        commercial use. In situations of national emergency or other 
        circumstances of extreme urgency, the right holder shall, 
        nevertheless, be notified as soon as reasonably practicable. In 
        the case of public non-commercial use, where the government or 
        contractor, without making a patent search, knows or has 
        demonstrable grounds to know that a valid patent is or will be 
        used by or for the government, the right holder shall be 
        informed promptly;

          (g) authorization for such use shall be liable, subject to 
        adequate protection of the legitimate interests of the persons 
        so authorized, to be terminated if and when the circumstances 
        which led to it cease to exist and are unlikely to recur. The 
        competent authority shall have the authority to review, upon 
        motivated request, the continued existence of these 

          (g) the right holder shall be paid adequate remuneration in 
        the circumstances of each case, taking into account the 
        economic value of the authorization;

          (g) the legal validity of any decision relating to the 
        authorization of such use shall be subject to judicial review 
        or other independent review by a distinct higher authority in 
        that Member; and

        any decision relating to the remuneration provided in respect 
        of such use shall be subject to judicial review or other 
        independent review by a distinct higher authority in that 

    It is important to note that compulsory licensing is only one of a 
number of mechanisms which have been suggested to increase access to 
care and treatment. Other suggested mechanisms have included the 
following: bulk purchasing, drug donations, generic production, 
parallel importing, preferential pricing, purchase funds, arid tax 

    Question. Wouldn't compulsory licensing undermine the development 
of technology for use in the developing world? In fact, as a 
development policy, doesn't it limit the incentives for investment in 
developing uses that could benefit developing countries? As a response 
to health care problems, doesn't compulsory licensing act as a 
disincentive to the development of medical and pharmaceutical 
technologies for use in the developing world? If this policy is 
adopted, aren't the incentives for developing vaccines for AIDS, 
malaria and other diseases actually undermined, if not, altogether 
    Answer. As above, it is important to note that the Office of United 
States Trade Representative (USTR) and not the Department of Health and 
Human Services (DHHS) develops and implements United States Government 
(USG) trade policy. It would be best to address general questions on 
USG trade policy and specific questions on compulsory licensing to 
USTR. However, as above, I will make a few observations.
    Very few medical and public health practitioners see compulsory 
licensing as a panacea. Some practitioners see a possible potential use 
of compulsory licensing in limited cases under the conditions described 
in Article 31 of the TRIPs Agreement.
    The United States Government (USG) has worked and will continue to 
work to increase incentives and decrease disincentives for the research 
into and development of vaccines for AIDS, malaria, and other diseases 
for the developing world. The President recently announced the 
Millennium Vaccine Initiative. The Millennium Vaccine Initiative has 
the following five components:

   $50 million in the President's FY2001 budget as a 
        contribution to the vaccine purchase fund of the Global 
        Alliance for Vaccines and Immunization (GAVI); Presidential 
        leadership to ensure that the World Bank and other multilateral 
        development banks (MDBs) dedicate an additional $400-$900 
        million annually of their low-interest rate loans to health 
        care services;
   Significant increases in federally funded basic research on 
        diseases which affect developing nations;
   A new tax credit for sales of vaccines for infectious 
        diseases to accelerate their invention and production; and
   A call to our Group of Seven (G-7) partners to join our 
        efforts to ensure a future market for these vaccines.


  Responses of Dr. Jeffrey Sachs to Additional Questions Submitted by 
                          Senator Jesse Helms

    Question. How would you evaluate and strengthen the 
Administration's proposed tax credit scheme for new vaccines, as 
announced in the State of the Union speech? Since a number of observers 
believe that vaccines for HIV, TB and malaria could be many years off, 
should we also try to ``incentive,'' new breakthrough drug therapies 
for these three diseases? Finally, should we distinguish the three 
disease areas in terms of type or coverage of any new incentive plan?
    Answer. By far the key strengthening needed is to internationalize 
the program so that all major countries are contributing to the package 
of incentives. The participation of the other countries would give 
tremendous leverage to the initiative. The Administration should be 
encouraged to work with other countries to have them contribute to an 
overall international package of incentives. While the tax credit is an 
important and worthy step in the right direction, the creation of a 
vaccine purchase fund to which each country makes a financial 
commitment to the future purchase of vaccines, would probably be a more 
straight-forward, long-term strategy for the major countries to 
coordinate their actions.
    Please note that the legislation introduced by Senators John Kerry 
and Bill Frist includes the creation of such a vaccine purchase fund.
    Yes, we should also contribute to drug development schemes, 
although the design of such schemes would have to be somewhat different 
from the vaccine approach. As noted below, the MMV is a useful program 
for developing new anti-malarials, but it does need strengthening in 
its design.
    There is a case for creating distinct incentive funds or tax-credit 
allowances for each of the disease categories. Though the details of 
how much to segregate or combine the incentive schemes requires some 
further elaboration.

    Question. What is your view of the GAVI and the MMV? Should. the 
U.S. Congress support these programs?
    Answer. GAVI is extremely important and can provide a core 
institutional framework for all of the global vaccine efforts. The U.S. 
should work with GAVI and also contribute directly to GAVI.
    The MMV is also a useful initiative for developing anti-malarial 
drugs. It should be strengthened, however, to combine the R&D support 
that is now in the initiative with some kind of market-incentive 


Responses of Dr. Harvey E. Bale, Jr., to Additional Questions Submitted 
                         by Senator Jesse Helms

    Question 1. If compulsory licensing of AIDS drugs is permitted as a 
response to the spread of AIDS in Africa; then what justification is 
there for limiting compulsory licensing to AIDS treatments? What is the 
rationale for permitting compulsory licensing of AIDS drugs, but 
denying that policy with respect to other life-saving drugs? If 
compulsory licensing is a valid response to the HIV problem, isn't it a 
valid response to all health care and infrastructure development 
problems in the developing world? For example, couldn't the rationale 
underlying the use of compulsory licensing in this context be used to 
justify future compulsory licensing of water purification, sanitation 
and other environmental technologies, architectural and engineering 
technologies to construct earthquake-resistant structures, 
communications and computer technology to improve access and delivery 
of critical human services (such as in the areas of medicine and 
education), and the use of patented medical techniques and processes in 
developing countries? Isn't it true that all U.S. holders of patents on 
products, processes and/or techniques that have applications in the 
developing world could potentially be subject to compulsory licensing 
if this precedent is established?
    Answer. It is indeed important to note that compulsory licensing of 
HIV/AIDS drugs could set a dangerous precedent for using this extreme 
measure for other treatments as well. Furthermore, there is the danger 
that, if compulsory licensing is used for drugs, this mechanism could 
also be used to force U.S. and other patent-holders to give up their 
rights to their inventions in many sectors which could have 
applicability to problems in developing countries. This spill-over 
effect could have a serious impact on industries aside from the 
pharmaceutical industry which depend on intellectual property for their 
    It must be realized that, in TRIPS, compulsory licensing was 
designed to be used only under very stringent conditions in a non-
discriminatory manner, not as a ``cure-all'' for endemic infrastructure 
problems in developing countries, which is apparently the aim of some 
international activists. It is unfortunate that some governments have 
seized upon the arguments given to them by international activists 
(that patents are the problem for access) and use them as an excuse for 
not taking serious steps to fight the epidemic in their countries. 
Indeed, there are cases of countries experiencing explosive growth in 
AIDS which prefer to spend their resources on armaments and military 
adventurism rather than on health care for people living with AIDS. As 
these governments do not themselves set health care as a priority for 
their own people, it is wrong to charge that the industry is not doing 
enough in the fight against AIDS.

    Question 2. Wouldn't compulsory licensing undermine the development 
of technology for use in the developing world? In fact, as a 
development policy, doesn't it limit the incentives in developing uses 
that could benefit developing countries? As a response to health care 
problems, doesn't compulsory licensing act as a disincentive to the 
development of medical and pharmaceutical technologies for use in the 
developing world? If this policy is adopted, aren't the incentives for 
developing vaccines for AIDS, malaria and other diseases actually 
undermined, if not altogether eliminated?
    Answer. Compulsory licensing and other attacks on intellectual 
property rights strongly discourage investment and research in the 
areas covered by the compulsory license or even threatened with a 
compulsory license. Allowing market incentives to proceed without such 
counterproductive interventions is vitally important in creating an 
environment favorable for developing new vaccines, treatments and 
possible cures for HIV and AIDS-related conditions. After all, drug 
research and development by the research-based pharmaceutical industry 
is financed by companies' own internal resources, and on average it 
takes hundreds of millions of dollars to research, develop and test a 
new medicine, including treatments for AIDS. Such financing comes about 
solely through the revenues generated by existing products already on 
the market; if that revenue stream is unfairly curtailed, then funding 
for further research will suffer correspondingly.
    It is vital that research is not hindered by quick-fix solutions 
such as compulsory licensing, parallel trade and other measures which 
may sound attractive to some in the short term, but would fatally 
retard R&D into HIV/AIDS related medicines in the medium and long-term. 
As such innovation is vital for progress in fighting diseases and other 
conditions, including those particularly affecting developing 
countries, the use of compulsory licensing would dramatically undermine 
the incentives for conducting research in this area. In the end, the 
ones who would really suffer from these policies would be people living 
with AIDS and other diseases for which there is currently no effective 
treatment or cure and whose hopes for new developments would be dashed 
by such a policy.
    Innovation and development through the pharmaceutical industry's 
R&D efforts can only continue when there is respect for and 
implementation of protection for intellectual property rights which 
promote and protect such research. The challenge now is to improve 
therapies and the search for cures, continue to extend access to these 
breakthrough medicines to all affected populations, and ultimately to 
develop an effective vaccine--or several vaccines, which, as UNAIDS 
says, is the only way to effectively stop and one day roll back the 
spread of the HIV pandemic.

    Question 3. What are the biggest barriers to care for HIV in the 
developing world?
    Answer. In looking into the issue of barriers to access to care, it 
must be recognized that a prerequisite for even starting to approach 
these barriers is the commitment of national governments in developing 
countries to take committed action. Only a committed effort by these 
governments can be effective in fighting HIV/AIDS, as the spread of HIV 
is very much linked to poverty and underdeveloprnent which make people 
more vulnerable to becoming infected with HIV. Furthermore, there are 
several barriers to access to health care, barriers which industry can 
play only a limited role in overcoming. Indeed, the manufacturers' cost 
of pharmaceutical products is small in comparison to the overall 
distribution costs required to reach populations affected by AIDS or 
even to the retail price paid by the end consumer. The top four 
barriers to access can be grouped into the following categories:

   Military, Social and Political Issues
   Financial Hurdles
   Physical Infrastructure Barriers
   Unhelpful Micro-Economic Policies

    (For a fuller discussion of the barriers to access, please see my 
        prepared testimony.)

    Questions 4 and 5. What programs have been successful in reducing 
these barriers? What programs have already proven successful in making 
lower-cost drugs available to people in the developing world?
    Answers. Several programs have been effective in helping overcome 
barriers to access to healthcare and pharmaceutical products in 
developing countries. A key element in all of these strategies has been 
decisions by national governments in developing countries to take 
serious and concrete action to overcome these barriers; the 
pharmaceutical industry has worked together with such governments to 
complement their efforts to improve health care for their people.
    In the fight against AIDS and other diseases or conditions 
particularly affecting developing countries worldwide, individual 
companies are working in partnership with the public sector and civil 
society, particularly in Africa. (For details of individual company 
programs, please see my published testimony.) Furthermore, industry-
wide efforts to improve health worldwide in partnership with the public 
sector are underway, including the new Medicines for Malaria Venture 
(MMV), the Global Alliance for Vaccines and Immunization (GAVI), and 
the WHO/CEO Roundtable process. (Further details on these programs are 
available in my published testimony). We would urge the Congress and 
Administration to financially back the public/private MMV initiative, 
joining several other countries that have already done so.
    More generally, innovative approaches and more resources will be 
needed to attack disease patterns in the poorest countries. 
Fortunately, novel approaches are being explored. For example, UNICEF, 
WHO, the World Bank and UNAIDS are looking at ways to guarantee a 
market for vaccines for diseases predominant in developing countries, 
picking up on an idea of creating a fund (to purchase vaccines) raised 
initially by Professor Jeffrey Sachs. Other mechanisms should be 
explored as well. These include developing policy measures similar in 
concept to U.S. orphan drug legislation, which includes tax credit and 
market exclusivity provisions.

    Question. It was said in the hearing by Dr. Lurie that Navirapine 
is the product of the NIH? Could you comment on this and on the more 
general question of the role of government vs. industry research in the 
AIDS and other disease areas?
    Answer. Drug discovery and development are overwhelming conducted 
by the research-based pharmaceutical industry, not by governments. To 
take the concrete case addressed at the hearing, Navirapine was not a 
government-origin drug. In fact, it was discovered at Boehringer-
Ingelheim's laboratories in Ridgefield, Connecticut, and the 
development and registration trials were done solely by Boehringer-
lngelheim. The only involvement of the National Institutes of Health 
(NIH) was through the cooperation in the use of Navirapine in clinical 
trials in Uganda for preventing mother-to-child transmission of HIV. 
This use of Navirapine by NIH was only for investigating this specific 
application--product development and clinical trials for registration 
purposes were all done by Boehringer-Ingelheim.
    While NIH and other public-sector researchers are indeed doing very 
important work, experience shows that it is industry which discovers 
the vast majority of new pharmaceutical substances. Furthermore, only 
research-based pharmaceutical companies undertake the very expensive 
and lengthy process of trials and development to bring a product to 
market. This is especially true in terms of AIDS research. It is 
important to recall that, twenty years ago, AIDS was not yet 
identified. At that time AIDS was considered untreatable as well as 
incurable, subjecting those infected with HIV to certain misery and 
untimely death. Today, there are about 15 antiretrovirals on the global 
market, all of which were tested, developed and brought to market by 
pharmaceutical companies. Ten of them were discovered by industry, 
including all of the protease inhibitors and nonnucleoside reverse 
transcriptase inhibitors which are key to breakthroughs in triple 
    Furthermore, there are over 100 new AIDS medicines in our 
industry's R&D pipeline, including 35 new antivirals and 10 vaccines 
for HIV prevention. Such research will, we hope, one day yield: 
shorter-course treatments, such as Navirapine from Boehringer-Ingelheim 
for preventing mother to child transmission of HIV; more convenient and 
tolerable regimens, such as the ``one-pill-a-day'' regimens being 
tested by various researchers, including GlaxoWellcome and Bristol-
Myers-Squibb; as well as scientific breakthroughs which could open up 
whole new avenues to fight HIV, such as a recent announcement by Merck 
scientists that they have found two experimental compounds which were 
able to obstruct the activity of an enzyme called integrase that plays 
a critical role when the AIDS virus infects cells.

    Question. You mentioned the Medicines for Malaria Venture (MMV) in 
your statement. Could you provide more details and explain further why 
you believe that the U.S. government should support it? How many other 
governments are financially contributing? What would be an appropriate 
amount to contribute each year?
    Answer. The Medicines for Malaria Venture (MMV) is a new approach 
to the discovery and development of medicines for malaria, as well as 
an innovative example of public/private sector partnership to improve 
access to health care in developing countries. It intends to discover, 
develop and commercialize antimalarial drugs at prices that are 
affordable to the populations worst hit by malaria at a rate of one new 
product every five years. If funding targets are reached, it is 
expected that the first product to be generated by MMV will be 
commercially available before 2010.
    The innovative nature of MMV is shown by its being structured like 
a small virtual R&D company which will use the pharmaceutical 
industry's expertise in drug discovery and development together with 
academia's and the public sector's experience in basic biology and 
field studies. All processes will be outsourced, but appropriately 
managed by a central unit. After discovery of possible compounds with 
anti-malarial potential, MMV will identify and license companies to 
produce and commercialize successful products on criteria which ensure 
appropriate distribution and an affordable price.
    Funding for MMV are coming mainly from government funding agencies, 
foundations and philanthropic donations. The initial goal for MMV is to 
raise US$15 million for 2000, with a target of US$30 million per annum 
for the following three years. To date, US$8.75 million have been 
raised for 2000, of which US$2.5 million have come from the government 
of the Netherlands, US$700,000 from the government of Switzerland, and 
US$1.5 million from the United Kingdom government, which has also 
pledged US$1.5 million for 2001. The balance of funding for 2000 has 
come from WHO's Roll Back Malaria program (US$2.5 million), the 
Rockefeller Foundation (US$1.3 million) and the World Bank 
(US$250,000). As the U.S. government generally supports programs such 
as UNAIDS with a quarter of the program's annual budget, a possible 
level for U.S. support to MMV would be US$3.75 million for 2000, rising 
to US$7.5 million for subsequent three years.

    Question. You noted in your statement the problems with the use of 
``compulsory licensing'' and ``parallel trade.'' Could you explain 
further your concern and could you give the Committee references in the 
literature that would be reliable source materials?
    Answer. In recent years, countries have strengthened intellectual 
property protection for pharmaceutical products and, as part of this 
trend, compulsory licensing policies have been withdrawn from use. The 
WTO TRIPS Agreement further narrows the scope of use of these measures 
and reflects the global trend to respect the right of innovators to 
have a limited period of effective patent protection. One should not 
read into the TRIPS Agreement's provisions on compulsory licenses 
support for compulsory licenses as a preferred public policy measure. 
While the TRIPS Agreement recognizes that there are circumstances that 
may require a country to issue compulsory lic