    [Senate Hearing 107-283]
    [From the U.S. Government Publishing Office]

                                               S. Hrg. 107-283 Pt. 2

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2002
    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                          COMMITTEE ON APPROPRIATIONS

                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 FIRST SESSION

                                       on

                                   H.R. 2506

    AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING,
    AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2002, AND
                               FOR OTHER PURPOSES

                                   __________

                      Agency for International Development
                              Department of State
                           Nondepartmental Witnesses
                                   __________

             Printed for the use of the Committee on Appropriations

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

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                        COMMITTEE ON APPROPRIATIONS \1\

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

       Subcommittee on Foreign Operations, Export Financing, and Related
                                    Programs

                      MITCH McCONNELL, Kentucky, Chairman
    ARLEN SPECTER, Pennsylvania          PATRICK J. LEAHY, Vermont
    JUDD GREGG, New Hampshire            DANIEL K. INOUYE, Hawaii
    RICHARD C. SHELBY, Alabama           TOM HARKIN, Iowa
    ROBERT F. BENNETT, Utah              BARBARA A. MIKULSKI, Maryland
    BEN NIGHTHORSE CAMPBELL, Colorado    RICHARD J. DURBIN, Illinois
    CHRISTOPHER S. BOND, Missouri        TIM JOHNSON, South Dakota
    TED STEVENS, Alaska                  MARY L. LANDRIEU, Louisiana
      (Ex officio)                       ROBERT C. BYRD, West Virginia
                                           (Ex officio)

                               Professional Staff

                                   Paul Grove
                               Jennifer Chartrand
                             Tim Rieser (Minority)
                            Mark Lippert (Minority)

                             Administrative Support

                                 Candice Rogers
                             Angela Lee (Minority)

        \1\ Committee and subcommittee memberships--January 25, 2001 to
    June 6, 2001.

        Note.--From January 3 to January 20, 2001 the Democrats held the
    majority, thanks to the deciding vote of outgoing Democratic Vice
    President Al Gore. Senator Thomas A. Daschle became majority leader at
    that time. Starting January 20, 2001, the incoming Republican Vice
    President Richard Cheney held the deciding vote, giving the majority to
    the Republicans. Senator Trent Lott resumed his position as majority
    leader. On May 24, 2001, Senator James Jeffords of Vermont announced
    his switch from Republican to Independent status, effective June 6,
    2001. Jeffords announced that he would caucus with the Democrats,
    changing control of the evenly divided Senate from the Republicans to
    the Democrats. Senator Thomas A. Daschle became majority leader once
    again on June 6, 2001.

                        COMMITTEE ON APPROPRIATIONS \2\

                    ROBERT C. BYRD, West Virginia, Chairman
    DANIEL K. INOUYE, Hawaii             TED STEVENS, Alaska
    ERNEST F. HOLLINGS, South Carolina   THAD COCHRAN, Mississippi
    PATRICK J. LEAHY, Vermont            ARLEN SPECTER, Pennsylvania
    TOM HARKIN, Iowa                     PETE V. DOMENICI, New Mexico
    BARBARA A. MIKULSKI, Maryland        CHRISTOPHER S. BOND, Missouri
    HARRY REID, Nevada                   MITCH McCONNELL, Kentucky
    HERB KOHL, Wisconsin                 CONRAD BURNS, Montana
    PATTY MURRAY, Washington             RICHARD C. SHELBY, Alabama
    BYRON L. DORGAN, North Dakota        JUDD GREGG, New Hampshire
    DIANNE FEINSTEIN, California         ROBERT F. BENNETT, Utah
    RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
    TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
    MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
    JACK REED, Rhode Island              MIKE DeWINE, Ohio
                         Terry Sauvain, Staff Director
                     Charles Kieffer, Deputy Staff Director
                   Steven J. Cortese, Minority Staff Director
                                     ------

       Subcommittee on Foreign Operations, Export Financing, and Related
                                    Programs
       Subcommittee on Foreign Operations, Export Financing, and Related
                                    Programs

                      PATRICK J. LEAHY, Vermont, Chairman
    DANIEL K. INOUYE, Hawaii             MITCH McCONNELL, Kentucky
    TOM HARKIN, Iowa                     ARLEN SPECTER, Pennsylvania
    BARBARA A. MIKULSKI, Maryland        JUDD GREGG, New Hampshire
    RICHARD J. DURBIN, Illinois          RICHARD C. SHELBY, Alabama
    TIM JOHNSON, South Dakota            ROBERT F. BENNETT, Utah
    MARY L. LANDRIEU, Louisiana          BEN NIGHTHORSE CAMPBELL, Colorado
    JACK REED, Rhode Island              CHRISTOPHER S. BOND, Missouri
    ROBERT C. BYRD, West Virginia        TED STEVENS, Alaska
      (Ex officio)                         (Ex officio)

                               Professional Staff

                                   Tim Rieser
                                  Mark Lippert
                             Paul Grove (Minority)
                         Jennifer Chartrand (Minority)

                             Administrative Support

                           Candice Rogers (Minority)

        \1\ Committee and subcommittee memberships--July 10, 2001.

        Note.--From January 3 to January 20, 2001 the Democrats held the
    majority, thanks to the deciding vote of outgoing Democratic Vice
    President Al Gore. Senator Thomas A. Daschle became majority leader at
    that time. Starting January 20, 2001, the incoming Republican Vice
    President Richard Cheney held the deciding vote, giving the majority to
    the Republicans. Senator Trent Lott resumed his position as majority
    leader. On May 24, 2001, Senator James Jeffords of Vermont announced
    his switch from Republican to Independent status, effective June 6,
    2001. Jeffords announced that he would caucus with the Democrats,
    changing control of the evenly divided Senate from the Republicans to
    the Democrats. Senator Thomas A. Daschle became majority leader once
    again on June 6, 2001.

                                C O N T E N T S

                                  ----------

                              Tuesday, May 8, 2001

                                                                       Page

    Agency for International Development.............................     1

                             Tuesday, May 15, 2001

    Department of State: Office of the Secretary.....................    47

                            Wednesday July 11, 2001

    Department of State..............................................   117
    Agency for International Development.............................   130
    Nondepartmental witness..........................................   157
    Nondepartmental witnesses........................................   167

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2002

                                  ----------

                              TUESDAY, MAY 8, 2001

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:04 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Leahy, and Bennett.

                      AGENCY FOR INTERNATIONAL DEVELOPMENT

    STATEMENT OF ANDREW NATSIOS, ADMINISTRATOR

                 opening statement of senator mitch mc connell

        Senator McConnell. Mr. Natsios, let me apologize in advance
    for what I expect is going to be the most disjointed hearing
    you have ever participated in, because the Senate at 10:15, is
    going to go into a series of three votes. We are going to try
    to tag team this in a way that does not take up your whole day.
        It is a pleasure to welcome you to the Foreign Operations
    Subcommittee. Your background makes you uniquely qualified to
    take charge of the U.S. Agency for International Development,
    and I have no doubt that your time on the ``Big Dig'' in Boston
    will serve you well in your many tasks ahead.
        In the past, I have been extremely critical of the Agency
    for lacking a strategic vision, failing to establish concrete
    goals, and failing to deliver assistance in a timely and
    effective manner. I have repeatedly and publicly taken issue
    with poor management and ineffective leadership in Washington
    and the field. Although recently confirmed, you seem to have
    wasted no time in trying to address these shortfalls.
        You are off to a good start. Identifying management and
    personnel reform as your first priority gives me hope that real
    change at USAID is in the offing. I note that the fiscal 2002
    budget request for your Agency's operating expenses has
    increased $30 million over last year's request and I look
    forward to hearing more about how you envision those funds
    being spent.
        Your testimony that foreign assistance programs should
    serve U.S. policy objectives is on the mark. As I have often
    said, U.S. foreign assistance is not an entitlement and our aid
    must support U.S. economic, political and security goals. The
    strategic reorientation of USAID to address the trends of
    globalization and conflict give definable purpose to the
    Agency. While time will allow more informed judgment on the
    effectiveness of the four program pillars you have proposed,
    the changes you are initiating at USAID are welcomed.
        I want to comment briefly on the four pillars. As I
    understand the Global Development Alliance, the GDA pillar,
    USAID will seek partnerships with corporations, NGOs, and the
    academic community, and ask that they contribute funding,
    personnel and information to support development programs. I am
    concerned that unless the Agency addresses its management
    shortfalls, the GDA will be short lived. The strength of
    corporations, NGOs and academic institutions is that they often
    initiate and respond to program needs faster and better than
    government bureaucracy. I am curious how the GDA will operate
    and make decisions on funding priorities and would appreciate
    your thoughts in this area.
        Coming from a farm State, the pillar of Economic Growth and
    Agriculture seems to make good sense. The linkages between
    economic and agricultural development, and improvements in
    local markets and the welfare of citizens is no different
    whether in the United States, South Asia, or Africa. However, I
    wonder if democracy and governance programs should also fall
    under this pillar. I see a logical connection between economic
    development and good governance.
        The pillar of Global Health has received particular
    attention in the budget request. The request for Child Survival
    and Disease Program Fund reflects a $50 million increase over
    last year's appropriated level, with HIV/AIDS programs
    receiving a 10 percent increase. Many on Capitol Hill feel we
    ought to be doing more on HIV/AIDS, as evident in the recent
    Senate vote to double AIDS assistance to $1 billion. I look
    forward to hearing your views on that subject.
        The final pillar of Conflict Prevention and Development
    Relief encompasses democracy and governance programs and
    disaster relief. While I continue to have concerns with USAID's
    democracy and governance programs, I applaud your efforts to be
    proactive rather than reactive in responding to political and
    natural crises.
        The administration's fiscal year 2002 request for your
    Agency is an increase of $129 million over last year's
    appropriated level. The Child Survival and Disease Program
    Fund, Development Assistance, International Disaster
    Assistance, and funding for basic education programs have all
    been increased under the President's request.

                               prepared statement

        You have a unique opportunity to make a lasting mark on
    this Agency and you are going to have my support and
    encouragement in that effort.
        With that, I call on my friend and colleague, Senator
    Leahy.
        [The statement follows:]
                 Prepared Statement of Senator Mitch McConnell
        It is a pleasure to welcome you before the Foreign Operations
    Subcommittee, Mr. Natsios. Your background makes you uniquely qualified
    to take charge of the U.S. Agency for International Development, and I
    have no doubt that your time on the ``Big Dig'' in Boston will serve
    you well in your many tasks ahead.
        In the past, I have been extremely critical of the Agency for
    lacking a strategic vision, failing to establish concrete goals, and
    failing to deliver assistance in a timely and effective manner. I have
    repeatedly and publicly taken issue with poor management and
    ineffective leadership in Washington and the field. Although recently
    confirmed, you seem to have wasted no time in trying to address these
    shortfalls.
        You are off to a good start. Identifying management and personnel
    reform as your first priority gives me hope that real change at USAID
    is in the offing. I note that the fiscal year 2002 budget request for
    the Agency's operating expenses has increased $30 million over last
    year's request, and I look forward to hearing more about how you
    envision those funds being spent.
        Your testimony that foreign assistance programs should serve U.S.
    policy objectives is on the mark. As I have often said, U.S. foreign
    assistance is not an entitlement and our aid must support U.S.
    economic, political, and security goals. The strategic reorientation of
    USAID to address the trends of globalization and conflict give
    definable purpose to the Agency. While time will allow a more informed
    judgement on the effectiveness of the four program pillars you propose,
    the changes you are initiating at USAID are welcomed.
        I want to comment briefly on the four pillars. As I understand the
    Global Development Alliance (GDA) pillar, USAID will seek partnerships
    with corporations, NGOs, and the academic community, and ask that they
    contribute funding, personnel, and information to support development
    programs. I am concerned that unless the Agency addresses its
    management shortfalls, the GDA will be short lived. The strength of
    corporations, NGOs, and academic institutions is that they can often
    initiate and respond to program needs faster and better than government
    bureaucracy. I am curious how the GDA will operate and make decisions
    on funding priorities and would appreciate your thoughts in this area.
        Coming from a farm state, the pillar of Economic Growth and
    Agriculture seems to make good sense. The linkages between economic and
    agricultural development, and improvements in local markets and the
    welfare of citizens are no different whether in the United States,
    South Asia, or Africa. However, I wonder if democracy and governance
    programs should also fall under this pillar. I see a logical connection
    between economic development and good governance.
        The pillar of Global Health has received particular attention in
    the budget request. The request for the Child Survival and Disease
    Program Fund reflects a $50 million increase over last year's
    appropriated level, with HIV/AIDS programs receiving a 10 percent
    increase. Many on Capitol Hill feel we ought to be doing more on HIV/
    AIDS, as evident in the recent Senate vote to double AIDS assistance to
    $1 billion dollars. I look forward to hearing your views on this
    subject.
        The final pillar of Conflict Prevention and Development Relief
    encompasses democracy and governance programs and disaster relief.
    While I continue to have concerns with USAID's democracy and governance
    programs, I applaud your efforts to be pro-active, rather than
    reactive, in responding to political and natural crises.
        The Administration's fiscal year 2002 request for USAID is an
    increase of $129 million over last year's appropriation. The Child
    Survival and Disease Program Fund, Development Assistance,
    International Disaster Assistance, and funding for basic education
    programs have all been increased under the President's request.
        You have a unique opportunity to make a lasting mark on USAID, Mr.
    Natsios, and you have my support and encouragement.

                 OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you very much, Mr. Chairman. I am
    going to put most of my statement in the record, and I ask Mr.
    Natsios to take a minute to read it. But let me just say to
    you, Mr. Natsios, that we are very fortunate to have you as the
    new Administrator for USAID.
        I think it is very fitting that you are the first one to
    testify before us on the budget. I remember your tenure as head
    of USAID's Office of Foreign Disaster Assistance, where you did
    a fine job on some of the most distressing but urgent
    humanitarian disasters. As head of World Vision, you developed
    strong ties with the NGO community, and I think that's very
    necessary.
        And I will give you one bit of advice, and that is to use
    the expertise that is so abundant on the AID professional
    staff, because they will provide support for your Agency. Do
    not keep them hidden, because you know as well as anyone how to
    build relationships with Members of Congress and those who
    support foreign aid, as well as those who have not supported
    it. And so it is not just the Legislative and Public Affairs
    Office that is the only face we see, no matter how fine a job
    they do. There is so much expertise there that we should know
    about.

                               prepared statement

        Mr. Chairman, so we can move on, I will submit the rest of
    my statement for the record, but I am very very pleased that he
    is here.
        [The statement follows:]
                 Prepared Statement of Senator Patrick J. Leahy
        Mr. Chairman, we are very fortunate to have Andrew Natsios as the
    new Administrator of the Agency for International Development, and it
    is fitting that he is the first witness to testify before this
    Subcommittee in this session of Congress.
        I remember Mr. Natsios' tenure as the head of AID's Office of
    Foreign Disaster Assistance, where he did a fine job responding to the
    most urgent humanitarian disasters. As head of World Vision, he
    developed strong ties with the NGO community which we increasingly
    count on to implement foreign aid programs.
        AID needs a new kind of leadership. It needs someone who knows the
    trenches, who recognizes that AID's staff are by far its greatest asset
    and who trusts their judgment. AID has many very talented staff who
    make life better for millions of people.
        AID also needs a leader who doesn't tolerate incompetence,
    mediocrity or staff telling him what they think he wants to hear,
    rather than the facts.
        There have been too many programs that failed by any objective
    standard, and yet the money kept flowing. Just as AID should take
    risks, it also needs to recognize when the conditions are not right,
    and to stop throwing good money after bad.
        Mr. Natsios can provide that leadership. He knows from past
    experience that AID has been in dire need of reform for years. I was
    very pleased to see in your written testimony that your first priority
    will be fixing AID's broken procurement, budgeting and information
    management systems.
        This is absolutely essential for AID's staff to be able to do their
    jobs, for AID's grantees and contractors, and for the millions of
    people in developing countries who benefit from our foreign aid
    programs.
        Mr. Natsios, if you accomplish nothing more than fixing these
    problems, you should be given a medal. I am confident that this
    Subcommittee will do everything possible to help you succeed.
        I have questions on several topics, but let me close with two
    pieces of advice. Use the expertise that is so abundant in AID's
    professional staff, to build support for your agency. Don't keep them
    hidden, as has been the custom.
        Encourage them to build relationships with Members of Congress--
    those who support foreign aid and those who have not but may not know
    what AID is doing.
        It is not enough for the Legislative and Public Affairs office to
    be the only face of AID we see, and the only voice we hear. Your whole
    agency should be that face and voice, and not just for the Congress,
    but for the public at large.

        Senator McConnell. Thank you, Senator Leahy. We also have
    Senator Bennett here this morning. Senator Bennett, do you have
    any comments for Mr. Natsios?
        Senator Bennett. I was just going to say, I did not.
        Senator McConnell. Would you like to summarize your
    statement, and we will put the full statement in the record?

                    SUMMARY STATEMENT OF HON. ANDREW NATSIOS

        Mr. Natsios. Thank you, Senator. I would request that the
    voluminous text of this address which I am not going to read to
    you be placed in the record. Having been a legislator myself
    for 12 years at the State level, I know that the most important
    part of this hearing is in the questions and answers, but given
    that this is my first appearance, I might make some brief
    opening remarks.
        I want to first say how pleased I am, Mr. Chairman, to be
    asked to testify on behalf of my new Agency's budget for fiscal
    2002. I told the staff that the only request I made for a
    position in the new administration was USAID. People at the
    White House said you must have some other second or third
    choice, and I said actually I do not, that is the only thing I
    am really interested in doing.
        This is for me the climax of my career. The work that USAID
    does around the world is of central importance from a
    humanitarian and ethical perspective, but also for American
    foreign policy. I was a military officer for 23 years in the
    reserves, I served in the Gulf War. If you talk to a lot of
    soldiers who served in many of the peacekeeping operations,
    they will tell you that the best force protector is not our
    tanks in these countries, or that we send peacekeeping forces,
    it is USAID's programs. If the programs are well run, and if
    they are administered in a visionary way working with the NGO
    community, it creates a lot of goodwill toward the United
    States and toward our troops, and stabilizes the society. This
    reduces the anger level and increases employment so that the
    young men, who are the ones usually causing trouble, are
    working instead of hanging around not clear in what their
    future looks like.
        So I think there is a direct connection between foreign
    affairs and foreign policy of the U.S. Government and USAID's
    programs. I think that in helping countries that have decided
    to move toward democratic capitalism as a system of economics
    and a system of governance, we do a lot to stabilize the world
    and create an international system that is more civilized and
    decent, with more protections for human rights and individual
    freedoms.
        Let me also say that one of the two central characteristics
    of the post cold war world are globalization and conflict. In
    effect, you would say they are almost moving in opposite
    directions. One, you have an integrating function of the world
    where the world is being tied together, and at the other hand
    you have countries which are what we call in the political
    science community ``failed states,'' countries that are
    collapsing.
        I wrote a book about this some 4 years ago, and at the
    time, I counted 24 countries that could be qualified as failed
    states. The CIA now puts out an unclassified chart every year
    listing all the complex humanitarian emergencies, and it is
    disturbing how many of them there are; how severe they are.
    There was a report done by the Carnegie Commission on Ending
    Deadly Violence, I believe it is called, and they estimated the
    total cost of our response to the Bosnian civil war as $52
    billion, including peacekeeping operations for everyone, not
    just the United States but the Europeans as well, and for all
    the humanitarian assistance over more than a decade.
        It is clear to me that it is better to prevent these states
    from failing than to clean up the mess after the catastrophes
    have taken place. We are facing serious challenges even now in
    some very large countries that are on the edge of dissolution
    politically and economically. I told our staff to begin to
    focus not just on the long-term, but on the short-term. If a
    country looks like it's heading down that slope, see what we
    can do to reprogram money in our aid budget to stop the
    collapse of these countries, because all of our aid, all of our
    programs, however successful they may be in these countries,
    can disappear overnight. When a country goes into civil war,
    the economy collapses, hyperinflation occurs, there are
    atrocities that are committed, there are militias that are
    formed, any systems of government collapse, there are no public
    services.
        So it is in our interest not just from a purely financial
    point of view, but also from an ethical and humanitarian point
    of view, to insure that we do all we can, within the
    constraints that we operate under, to prevent these countries
    from falling into the abyss.
        We should be humble, though, in understanding that in some
    cases we cannot, no matter how hard we may try, prevent these
    forces from taking over. But even if we succeed in the next 4
    years in a couple of cases in taking countries that are on the
    edge and move through skillful diplomacy and the use of
    military-to-military diplomacy, and through USAID's programs at
    the grass-roots level to prevent some of these countries from
    collapsing, it would be a great service to American foreign
    policy and to the world.
        Globalization is also important, though, because the world
    is being tied together in a way that has never existed before,
    and that can be good and it can be bad. There are many
    instances where globalization has in fact increased the
    prosperity of developing countries, but there are other cases
    where there are unanticipated and unintended consequences of
    globalization that are not terribly good.
        In some cases, countries just do not get drawn into the
    global trading system. So one of the things that we are looking
    at is a new emphasis on economic development and agriculture. I
    am a very very strong advocate of agriculture because three-
    quarters of the poor people in the world live in rural areas.
    If you want to deal with the poverty problems of the world, you
    have to deal with agriculture.
        Our agriculture budget has gone from $1.3 billion 15 years
    ago to $300 million this year, $1 billion drop. We had almost
    250 agronomists working for us in 1985; we have 46 left. That
    has been particularly devastating because in my view, the
    importance of rural development, we need to rebuild that
    capacity.
        In order for countries that are moving into the trading
    system, or want to move into the international trading system,
    reforms are required frequently; they need to invest in in
    their own countries, whether it be in infrastructure in terms
    of port facilities or airports, whether it be in their exchange
    rates, because if your exchange rate is screwed up, there is no
    way you are going to effectively join the global system. If you
    have hyperinflation, it is very difficult to be a serious
    trading partner. If you develop markets and there is so much
    political instability that your supply of materials is
    interrupted or your exports to new markets are interrupted, you
    make it very difficult in the future for people to trade with
    you, because a very important thing is stability in trading
    relationships, as I am sure you know.
        So, we will put a new focus in USAID on economic
    development, on agriculture, and on drawing countries into the
    international trading system.
        We have been leaders in the global health community for a
    very long time and I propose that we maintain that leadership.
    Now, we are facing the most visible challenges of current
    periods, particularly in Africa, but also increasingly the
    alarming growth rates of the HIV/AIDS epidemic in the former
    Soviet States. That is the place where the infection is
    spreading the fastest. We are very concerned. It is mostly
    through drug use that the former Soviet states are threatened
    with this.
        But in Africa as you know, we have four countries that will
    shortly begin experiencing a drop in population, they will be
    below maintenance in their population growth rates. And
    another, I think it is six countries, within 5 years, that will
    be at zero population growth because of the catastrophic nature
    of the AIDS epidemic.
        I talked to business people in Africa 10 years ago, health
    ministers, who said that even then, let alone now, had in their
    work force planning a certain number of people who would simply
    die from AIDS every year. This tends to be a disease that is
    more prevalent among the upper income and educated classes, it
    is a higher prevalence rate that, for example, the rural areas.
    And as a result of that, it means that the devastation to the
    economy in Africa is unimaginable, because the elites are so
    thin in size, the educated elites, to begin with, that this is
    destroying what little infrastructure in terms of human capital
    Africa has. So there is a large effort within USAID on the AIDS
    epidemic right now.
        I might add that the U.S. Government spends more money,
    internationally on AIDS than all other countries of the world,
    donor and recipient, combined. Take all of the AIDS budgets in
    Africa and in Europe, and count in the other developed
    countries like Japan, we spend more money than all of them
    combined. And our budget is inadequate to deal with this
    epidemic.
        What we have done is to experiment over a period of years
    as to what works and what does not work in terms of stopping
    the spread of this disease, and we have reached some very
    important conclusions. Our strategies in the 20 or 25 countries
    that we focus our attention on intensively are in the areas of
    prevention that we have had the most success in.
        I want to also say that one of my great interests is in
    nutrition, obviously connected to agriculture, but there is a
    lot of research that has been done in last 10 or 20 years that
    shows that micronutrient interventions in our programs can have
    a profound effect on a child's likelihood of getting a
    particular disease, of blindness, of all sorts of disorders and
    illnesses that children and adults are faced with in the
    developing world simply by improving diets.
        And so, micronutrients, micronutritional intervention is
    appropriate and is something I intend to put some real stress
    on, because we know that the payout on the other end in terms
    of benefit is so high.
        Senator McConnell. Mr. Natsios, just for your information,
    the three of us are going to have to leave here in about 3 or 4
    minutes, so I do not know if you can wrap up your opening
    statement.
        Mr. Natsios. I can, yes. I mentioned conflict prevention
    before, but I also would like to introduce the idea of
    developmental relief. Developmental relief means that we merge
    into a humanitarian relief program as we are in the middle of a
    disaster, be it famine or a war or a flood, interventions that
    will develop the country later on. We have done this very
    successfully in the NGO community. We use that term, we do not
    use it publicly, but it is something I want to introduce in a
    more systematic basis.
        Finally, let me talk about the Global Development Alliance.
    We know, if you look at the flow of money into the developing
    world, that the biggest source of revenue is not ODA anymore,
    it is in the area of private capital markets, foundation money.
    We need to, in my view, in a more systematic and a much larger
    scale than we have ever done before, develop alliances with
    these new high-tech foundations, many of which do not want to
    develop large staffs. We have the staff, the experts in the
    field that can help them spend their money. If we can take
    their objectives and our objectives, along with the primary
    capital markets, there are a lot of companies, I have talked
    with some about seeing if we couldn't do things together in
    countries where they had an interest that overlapped, and try
    to do a coordinated series of development efforts.
        What our objective would be in the first year is to choose
    two or three very large projects, not a couple million of
    dollars, tens of millions of dollars, maybe even more than
    that. We would make these agreements and announce an attempt to
    use government money as leverage to increase two or threefold
    the amount of money that might be available for these sorts of
    programs. This recognizes the reality of where money is coming
    from in the developing world, and uses our particular expertise
    in our 75 missions and among our technical staff, which remains
    very very good in terms of our health specialists, our
    environmental specialists, with tax dollars being saved in
    terms of what we can do to invest in these areas.

                               prepared statement

        Those are my comments. I will not go into depth in the
    management area, but my testimony has indicated that I am going
    to focus on four areas of management, the personnel system, the
    procurement system, the budgeting and financing system, and the
    information management system, all of which are dysfunctional
    at this point in various phases and various ways, and in my
    view need to be corrected. I will spend my first year focusing
    on those four areas, because if those are not fixed, our people
    in the field cannot get their work done. Thank you, Mr.
    Chairman.
        [The statement follows:]
                      Prepared Statement of Andrew Natsios
                                  introduction
        Chairman McConnell, Senator Leahy, Members of the Committee, good
    morning. Thank you for inviting me here today to present the
    Administration's budget request for foreign assistance programs for
    fiscal year 2002. I would like to take this opportunity to lay out my
    priorities for the Agency.
                     foreign assistance and foreign policy
        As a great power, I believe America's foreign assistance both
    serves to accomplish our foreign policy objectives, and expresses the
    deep humanitarian instincts of the American people.
        Foreign assistance is an important tool for the President and the
    Secretary of State to further America's interests. In fact, foreign
    assistance is sometimes the most appropriate tool, when diplomacy is
    not enough or military force imprudent. In general, foreign assistance
    works hand-in-hand with other foreign policy tools. Foreign assistance
    implements peace agreements arranged by diplomats and often enforced by
    the military; foreign assistance supports peacekeeping efforts by
    building economic and political opportunity; foreign assistance helps
    developing and transition nations move toward democratic systems and
    market economies; foreign assistance helps nations prepare for
    participation in the global trading system and become better markets
    for U.S exports. All of these activities help build a more peaceful,
    stable, and prosperous world--which is very much in the interest of the
    United States.
        Foreign assistance does work, but it takes years of investment and
    hard work. I am asking for your support today to let me continue that
    work.
                     globalization and conflict prevention
        USAID's fiscal year 2002 budget marks the beginning of a new
    strategic orientation and the incorporation of a new way of doing
    business to ensure that USAID's long-term development assistance and
    humanitarian/disaster relief programs better respond to U.S. national
    interests.
        The two most distinctive trends in the world since the fall of the
    Berlin Wall have been globalization and conflict. The rise of the
    internet, of a more open international trading and financial system,
    the spread of democratic capitalism as the preferred model of political
    and economic development, contrast remarkably with the increase in the
    number of failed or failing states and the increasing number of civil
    wars, many of enormous brutality.
        In many ways, globalization has meant demolishing barriers to the
    exchange of information, technology, finance, goods and services with
    startling speed over the past decade. With appropriate and timely
    assistance, the spread of information and technology can foster
    increased productivity, economic prosperity and political stability in
    developing countries--and ultimately lead to secure markets for U.S.
    exports and investments. Conversely, if developing countries and their
    people are left out of the information age, and do not realize any real
    benefits from the international trading system, then the promise of
    globalization will be squandered. In stead of prosperity and stability,
    we will likely see increased gaps between rich and poor, extremism of
    increasing violence, and acceleration of global health problems like
    HIV/AIDS and other infectious diseases. These problems contribute to
    human suffering, instability and conflict.
        The increasing number of states that are unable to deal with
    problems that are potential sources of conflict is of grave concern to
    the United States. The ensuing regional instabilities, complex
    humanitarian emergencies and, in some cases, chaos are threatening
    USAID's development objectives and broader U.S. foreign policy goals.
    Nearly two-thirds of the countries with USAID field missions have been
    ravaged by civil conflict over the past five years, in some cases
    destroying years of economic and political progress. I have witnessed
    the horror of these conflicts, the widespread starvation of civilians,
    terrible atrocities, the collapse of governments and national
    economies.
                            usaid's program pillars
        While many of USAID's programs already respond to these challenges
    individually, in order to improve the Agency's effectiveness as a key
    foreign policy instrument this Administration intends to coordinate and
    focus Agency resources and capabilities to address globalization and
    conflict.
        We will bring together USAID programs and activities into three
    program pillars that cut across all USAID funding accounts. By
    aggregating current and new programs that are mutually reinforcing into
    these pillars USAID will be able to use scarce budget and human
    resources more effectively, and to describe its programs more clearly.
    The program pillars are: Economic Growth and Agriculture; Global
    Health; and Conflict Prevention and Developmental Relief.
                        economic growth and agriculture
        More than 1.2 billion people live on less than a dollar a day; more
    than 800 million people continue to go to bed hungry; and more than 113
    million children are not in school. The Economic Growth and Agriculture
    pillar will strengthen U.S. efforts to ensure that these people are
    able to take advantage of the potential of globalization, rather than
    becoming its victims. It highlights the interrelationship and
    interdependence of economic growth and agricultural development,
    environmental sustainability, and the development of a country's human
    capital--with the ultimate goal of creating and cultivating viable
    market-oriented economies. Programs in this pillar will encourage
    economic opportunity, agricultural development, education and training,
    and effective management of natural resources.
        Without economic growth and food security, no development effort is
    sustainable. We will increase support for economic growth and
    agriculture programs that reduce poverty and hunger, while finding
    better ways to mobilize and partner with the private sector.
        Microenterprise development plays an increasingly important role in
    job creation and economic opportunity. This budget guarantees that
    USAID will remain the world's leader in microenterprise programs that
    provide microloans to the world's poorest microentrepreneurs
    (especially women), services to help improve their businesses, and
    policy changes to improve business climates.
        It's been said that the most important and rewarding investment any
    country can make is in the education of its children, and especially
    young girls. The President believes that. For fiscal year 2002, USAID
    plans to increase its support for basic education for children from
    $103 million to $123 million.
        The Economic Growth and Agriculture pillar will incorporate $3.383
    billion of fiscal year 2002 funds from all accounts.
                                 global health
        I intend to include in this pillar maternal and child health,
    nutrition, women's reproductive health, HIV/AIDS, and programs that
    address other infectious disease such as malaria and tuberculosis.
    These are global issues with global consequences: the health of a
    population directly affects their productivity, and unchecked
    infectious diseases in other countries pose threats to our own.
        USAID will maintain its international leadership in health. Our
    programs in women's reproductive health, children's health, HIV/AIDS,
    infectious diseases, and nutrition are among the best in the world. As
    a nation, we can be proud of our successes in global health. Over the
    past 15 years USAID, with Congress's support, has spent over $3.5
    billion on child survival programs. Over this same period, we have seen
    a 20 percent reduction in under-five mortality, from 145 deaths per
    1,000 live births in 1985 to about 116 per 1,000 today. Deaths from
    measles have been cut in half, from some 2 million in years past to
    about 970,000 in 1998. Increased access to Vitamin A, which USAID helps
    to distribute in about 20 countries, improves vulnerable children's
    chances of survival by up to 30 percent. Americans can be proud of the
    leadership role our country has played in eradicating polio around the
    world; the number of reported cases in the world dropped from 350,000
    in 1988 to fewer than 7,000 in 1999, a year in which 470 million
    children were immunized against polio.
        However, many problems remain. Immunization levels for children in
    some countries are stagnating or declining, and millions of children
    continue to suffer from malnutrition. Women continue to die in
    childbirth from preventable causes.
        One major and ongoing effort is to address the spread of HIV/AIDS.
    The HIV/AIDS pandemic is devastating many nations in Africa, and
    transmission is escalating in other regions. The HIV/AIDS epidemic is
    now reaching such catastrophic levels it is decimating entire
    societies, creating negative population growth rates: we are beginning
    to see famine-like conditions developing in some particularly hard hit
    countries. Up to 40 million children will be orphans because of AIDS in
    the next decade. This Administration pledged a 10 percent increase in
    USAID's HIV/AIDS funding for fiscal year 2002 to a total of $369
    million from all accounts, with the emphasis on preventing transmission
    of the disease.
        Because of our nation's efforts, we have also made great progress
    in addressing family health, reducing maternal deaths last year and
    abortions. More than fifty million couples in the developing world make
    more educated and informed decisions about having children and taking
    care of them as a direct result of USAID-supported programs. But again,
    our work is far from complete. More than 580,000 women die annually
    from preventable pregnancy-related causes. Because of the importance of
    women's reproductive health programs in helping cut child mortality
    rates and improve maternal health, the Administration requests a total
    of $475 million from all accounts for these programs. We will use these
    funds to promote improvements in maternal nutrition, access by mothers
    and children to medically trained personnel, reproductive health
    education, and to strengthen support for voluntary family planning
    practices that allow couples to choose family size and child spacing.
        The Global Health pillar incorporates $1.46 billion of fiscal year
    2002 funds from all accounts.
              conflict prevention and developmental relief pillar
        USAID continues to stand at the forefront of agencies around the
    world in its ability to respond to man-made and natural disasters. The
    request will enable USAID to maintain this capability to provide needed
    help rapidly when international emergencies occur.
        To complement our strength in disaster assistance, USAID must
    improve its ability to promote conflict prevention. To address the
    rising number of collapsed states, internal violent conflicts and
    complex humanitarian emergencies in the post-Cold War era, some of
    which have become focal points of U.S. foreign policy, USAID will
    undertake a major new conflict prevention, management, and resolution
    initiative. We want to integrate foreign policy and foreign assistance
    in a way that accommodates both short-term operational and longer-term
    structural prevention needs. To do so, we need to strengthen current
    partnerships and create new ones with the U.S. military, the
    international community, and U.S. and indigenous private and religious
    institutions dedicated to conflict prevention and resolution. This
    approach will require even closer collaboration within the U.S. foreign
    affairs community, especially between USAID and the Department of
    State.
        This initiative will integrate the existing portfolio of USAID
    democracy programs with new approaches to crisis and conflict analysis,
    and new methodologies to assist conflicting parties resolve their
    issues peacefully. Our experience has proven that by promoting and
    assisting the growth of democracy--by giving people the opportunity to
    peacefully influence their government--the United States advances the
    emergence and establishment of societies that will become better trade
    partners and more stable governments. By facilitating citizens'
    participation and trust in their government, our democracy efforts can
    help stop the violent internal conflicts that lead to destabilizing and
    costly refugee flows, anarchy and failed states, and the spread of
    disease.
        The Conflict Prevention and Developmental Relief pillar will
    incorporate $2.193 billion in fiscal year 2002 funds from all accounts.
    This amount includes $835 million requested in fiscal year 2002 for
    Public Law 480 Title II (Food for Peace) programs.
             usaid's fourth pillar: the global development alliance
        It's not enough to reconsider our priorities. We need to
    fundamentally change the way we do business. Not only has the world
    changed; but the provision of foreign assistance has changed
    drastically. The globalization of the world economy has meant that
    governments, while still essential, are not the only institutions
    through which public services are provided. The role of religious
    institutions, non-governmental organizations, private foundations,
    universities, and the private market economy in providing services and
    accomplishing public objectives has dramatically increased.
        I intend to create a fourth ``process'' pillar that defines the
    Agency: the Global Development Alliance. The Global Development
    Alliance (GDA) is USAID's commitment to change the way we implement our
    assistance mandate. We propose to serve as a catalyst to mobilize the
    ideas, efforts, and resources of the public sector, corporate America,
    the higher education community and non-governmental organizations in
    support of shared objectives. For example, a critical development need
    is to help poor countries have access to new information technologies,
    so they aren't left permanently off the digital highway. Some
    companies, like Hewlett Packard, already assist developing countries
    with information technology; I want such companies to consider working
    with us, in collaboration with U.S. universities and NGOs, to really
    make an impact.
        Why will this work? Because U.S. organizations and companies want
    to and already do try to help less fortunate people worldwide, out of
    American compassion and out of the desire to create new markets. But
    many organizations don't know how to get involved in providing foreign
    assistance, and USAID has not been prepared to take full advantage of
    the resources private organizations can bring us. The GDA will change
    this by actively seeking out partners willing to commit real
    resources--funding, information, or personnel--to support development
    programs. With these partners, we will build alliances that target
    specific development objectives, and leverage private funds from
    foundations and corporations to accomplish those objectives.
        USAID's role with these alliances will be to collaborate with non-
    governmental partners to provide the technical expertise needed to
    effectively use private funds, and to use the field-based personnel and
    management systems to track projects and funds. USAID's extensive field
    presence and technical expertise give the Agency the ability to
    integrate, coordinate, and facilitate a public-private alliance among
    U.S. development assistance actors.
        This is not an entirely new way of doing business for the Agency.
    USAID is already engaged in many successful alliances around the world.
    For example, the Global Alliance on Vaccines and Immunizations (GAVI)
    is an alliance of the United States, the United Nations, the Gates
    Foundation, the Rockefeller Foundation, and the International
    Federation of Pharmaceutical Manufacturers to coordinate a worldwide
    effort to protect children from vaccine-preventable diseases.
        The GDA will be a fundamental reorientation of how USAID sees
    itself in the context of international development assistance, both in
    how we relate to our traditional partners, and in how we seek out and
    develop alliances with new partners. Incorporating GDA as a pillar of
    our new approach means we will pursue a systematic approach to
    alliances on a much larger scale and will institutionalize these
    alliances as a central business model across Agency operations.
        To jump-start the process, I intend to assign $160 million in
    fiscal year 2002 funds specifically for GDA projects. The $160 million
    requested will generate new alliances that support the three program
    pillars, consistent with the authorized intentions of USAID's funding
    accounts. This investment will leverage private funding in program
    areas important to USAID's goals.
                             management challenges
        The Agency cannot make sweeping changes to its business model
    without overhauling the central management systems through which USAID
    does its work. USAID, and its ability to perform optimally, has been
    seriously compromised for a number of years by ineffective management
    systems--particularly those related to finance and budgeting, human
    resources, information management and procurement. The books of USAID
    have been unauditable for four years. In a recent study of federal
    agencies, USAID finished second to last in a survey of whether the
    personnel system rewards managers for accomplishing the objectives of
    the agency.
        While some progress has been made in fixing these systems, it has
    been too slow, and neither innovative nor sweeping enough to get the
    job done. As I said earlier, the business of foreign assistance has
    changed drastically in recent years. The Agency has 35 percent fewer
    staff than it did ten years ago, while the number and size of awards
    and contracts has grown significantly. The Agency has not adjusted to
    these changes.
        Let me say that I have been extremely impressed with the Agency's
    career civil and Foreign Service employees. These people are working
    their hearts out to do the very best for the American people, to
    capture the spirit of American values, and to take that spirit around
    the world. But USAID's career officers are demoralized and frustrated
    by these systems, which make it nearly impossible for them to get their
    work done. Our procurement officers are overloaded and coping with
    archaic and inefficient systems. They want to help me overhaul the
    systems. My first priority at USAID will be to get command of the
    Agency's finance, budgeting, and personnel systems. In fact, in my
    first direct discussion with Secretary Powell, he made it clear that he
    expected me to be a change agent in order to make sure that we are
    doing the best job for the American people and the people of the world
    with the money that Congress is providing us to use.
        The ultimate goal of implementing a new way of doing business and
    management reforms is to provide the most effective and efficient
    foreign assistance programs possible. USAID's experts and partners who
    live and work in developing countries are best positioned to know which
    programs will best serve U.S. national interests and the needs of
    people in those countries. I hope the Congress will help us be
    effective and efficient by reducing the number and intrusiveness of
    earmarks. Earmarks divert scarce resources away from field-initiated
    programs that address U.S. development and foreign policy goals.
                             budget request summary
        The President had a number of tough choices to make in putting this
    budget together, and I was very pleased that he saw fit to continue to
    support International Affairs programs including foreign assistance.
    For fiscal year 2002, the Administration proposes $23.9 billion for
    International Affairs programs. Of that amount, USAID will manage $7.7
    billion or 32 percent, which includes programs that USAID manages and
    those we administer in cooperation with the Department of State and
    other agencies. The fiscal year 2002 USAID budget request is an
    increase of $129 million, or less than two percent, over the previous
    year's appropriation.
        I will summarize our request in terms of existing appropriations
    accounts, and briefly describe how they relate to my focus on the
    Agency's four pillars. For your convenience, the attached tables show
    this budget request by account and by pillar.
                             development assistance
        The Administration requests $1.325 billion for Development
    Assistance (DA) programs, an increase of $23 million over fiscal year
    2001 appropriations. This account supports programs that promote
    economic growth, agricultural development, human capacity development,
    women's reproductive health, environmental protection and biodiversity,
    and democracy and governance in some of the poorest countries in the
    world. With this request, USAID will increase support for economic
    growth, renew its focus on agricultural development to reduce hunger
    and malnutrition, improve business and trade climates in developing
    countries, and continue its work to promote efficient energy technology
    in developing countries.
        The DA account also includes $358 million for USAID family planning
    programs, of a total $425 million from all accounts. We will use these
    funds to promote family health and to strengthen support for voluntary
    family planning practices, that cut child mortality rates and improve
    health by allowing couples to choose family size and child spacing.
        DA funds support all three of the Agency's program pillars:
         Economic Growth and Agriculture: $817.8 million.--DA funds in this
    pillar go to activities that ultimately serve to provide poor people,
    especially women, access to real economic opportunity. Our programs
    help expand and strengthen private markets and institutions, encourage
    agriculture development and food security, promote efficient growth and
    energy use, and protect valuable natural resources. For example,
    microenterprise development efforts play an increasingly important role
    in building futures for women and the rural poor. We expect to meet the
    congressionally authorized target of $155 million for microenterprise
    programs in fiscal year 2002. This pillar includes USAID funds to
    expand its leadership in helping the developing world participate
    effectively in the global trading system; such participation is
    critical to sustainable economic development for developing and
    transition economies, and important to the economic future of our own
    nation.
         Global Health: $375.5 million.--The majority of DA funds for
    Global Health are for USAID's family planning and reproductive health
    programs. The total request for $425 million from all accounts includes
    $358 million in Development Assistance. The President knows that one of
    the best ways to prevent abortion is by providing quality voluntary
    family planning services, and decided to maintain the fiscal year 2001
    funding level in his fiscal year 2002 budget request.
        The remainder of DA funds in this pillar fund important health
    programs such as $10 million for the Leahy War Victims Fund, which
    contributes to improving the mobility, health, and socioeconomic
    integration of civilians who have sustained physical disabilities as a
    result of armed conflict.
        Conflict Prevention and Developmental Relief: $131.7 million.--
    USAID's democracy and local governance programs funded by DA fall under
    this pillar. USAID's programs work to build democracy, support human
    rights, strengthen the rule of law, create a strong, politically active
    civil society, and combat corruption around the world. Our democracy
    efforts have paid dividends: never before in human history have more
    nations embraced democracy, and more than fifty have made a transition
    to democracy in the past fifteen years.
        But many fledgling democracies are vulnerable to military takeover,
    corruption, organized crime, civil strife and economic chaos. We will
    respond to this need with a new initiative to integrate existing
    democracy programs and new approaches in conflict prevention, including
    addressing the economic causes of conflict.
        I intend to target $110 million of Development Assistance for the
    Global Development Alliance. There are many exciting opportunities for
    strong public-private partnerships using DA funds, and this investment
    indicates my commitment to seeking new partners and leveraging private
    funding for our development programs.
                       child survival and disease account
        We have requested $1.011 billion for the Child Survival and Disease
    Program Fund (CSD) for fiscal year 2002, an increase of $50 million
    over fiscal year 2001 appropriations. This amount includes a transfer
    of $110 million to the United Nations Children's Fund (UNICEF).
        The CSD funds cover programs that address child survival and
    maternal health, HIV/AIDS, other infectious diseases such as malaria
    and tuberculosis, reducing the spread of antimicrobial resistance, and
    improving basic education. Experts say that these programs save more
    than three million lives a year, and have helped drop infant mortality
    rates in the developing world to their lowest levels ever.
        Of this request, $901 million falls under Global Health. This
    request meets the Administration's commitment to increase funding to
    support prevention and care programs that combat the HIV/AIDS pandemic.
    The funding target of HIV/AIDS programs in fiscal year 2002 is $369
    million from all accounts, including $329 million from CSD. We will use
    these funds to expand primary prevention efforts and reduce the risk of
    mother-to-child transmission, improve community and home-based care,
    and increase support for those suffering from the AIDS virus. We will
    also target resources to help the growing crisis of AIDS orphans.
        The remaining $110 million in CSD is for basic education, which
    comes under the Economic Growth and Agriculture pillar. We have also
    targeted $12.6 million from the Development Assistance to bring the
    total request for basic education to $122.6 million. Basic education
    plays a critically important role in protecting both the health and the
    future of children in developing countries. We want children to go to
    school and receive a quality education, not to work for pennies wages
    in lousy conditions. Toward that goal, USAID's basic education programs
    work to strengthen education and teacher training programs throughout
    the developing world, with particular focus on Africa.
        USAID will set aside $25 million in CSD for our fourth pillar, the
    Global Development Alliance. The Agency has developed successful
    public-private alliances in the past to address important health needs.
    I mentioned GAVI earlier; another example is USAID's and Rotary
    International's successful public-private partnership to eradicate
    polio--a partnership that led to polio vaccinations for literally
    hundreds of millions of children. We will use this funding to form and
    bolster such public-private alliances that allow us to tackle critical
    health, nutrition and education needs more effectively than ever.
                               regional requests
    Africa
        Reflecting our priority to promote stability and integrate sub-
    Saharan Africa into the global economy, the Administration is
    requesting a total of $1.055 billion in fiscal year 2002 for this
    region.
        This amount includes $434 million from Development Assistance, $356
    million from the Child Survival and Diseases Program Fund, and $105.5
    million of ESF. Also, we intend to program $160 million of Public Law
    480 Title II resources for developmental food programs in Africa.
        As Americans, we are not content to sit idly by while people suffer
    from starvation, disease, and tyranny. We want to try to solve those
    problems, and we want people to be able to build their own societies
    and take advantage of economic opportunities. USAID's work to address
    health challenges and promote broad-based economic and social
    development in Africa goes to the heart of American values. And by
    encouraging participation in the global trading system, addressing the
    HIV/AIDS epidemic, and building stability by setting the foundations of
    democratic governance, we also support U.S. national interests in
    Africa.
        There has been significant progress in Africa. Countries that only
    ten years ago were ruled by dictators are today democracies, such as
    Nigeria and Mozambique. The growth rate in sub-Saharan Africa has
    averaged 4.9 percent over the past five years, the highest in two
    decades. Unfortunately, a combination of poverty, infectious diseases,
    conflict, complex emergencies and natural disasters have tarnished the
    promise of progress in sub-Saharan Africa. Nearly half of sub-Saharan
    Africa is at risk of violent conflict and instability. Recognizing the
    importance of conflict prevention to our entire development mission, we
    will integrate conflict analysis into the Agency's strategic planning
    process for this region.
        USAID's challenges in Africa span all three of our program pillars,
    and we will use our new program focus to meet these challenges in a
    targeted, coordinated, and effective manner. Of the total request for
    Africa, $401.4 million would fund activities in Economic Growth and
    Agriculture, $376 million would fund activities in Global Health, and
    $277.75 million would fund activities in Conflict Prevention and
    Developmental Relief.
        In addition, we will use the Global Development Alliance to build
    stronger public-private partnerships that will leverage much-needed
    financial and human resources for our development goals, particularly
    in key sectors of agriculture and basic education.
    Asia and the Near East
        In fiscal year 2002, the Administration intends to request $2.34
    billion from all accounts for the Asia and Near East region. This
    amount includes $205.5 million in Development Assistance, $112.1
    million from the CSD account, and $1.9 billion in ESF. In addition, the
    Administration requests $140 million in Public Law 480 Title II
    resources for the region.
        The Asia and Near East region (ANE) encompasses East Asia, South
    Asia, and the Middle East/North Africa. The stability and growth of
    this very large and diverse region is essential to U.S. national
    security and economic interests. The United States trades more with
    this region than any other; after Europe, the ANE region is the second
    most important market for U.S. goods and services. The challenges in
    this region are equally diverse: addressing humanitarian needs,
    supporting conflict prevention and democratic transition, promoting
    sustainable economic growth, and tackling HIV/AIDS and mother-child
    health.
        USAID's programs in this region support economic and political
    reform and transparency in East Asia; promote more equitable economic
    growth and reduced poverty in South Asia; seek to improve the supply
    and efficient allocation of water resources, and expand employment
    opportunities in the Middle East; combat the spread of HIV/AIDS, and
    promote clean and efficient energy use. In so doing, we not only help
    the people of this region, but also improve business climate and
    opportunities for U.S. businesses. I also want to give USAID's Asia and
    Near East staff credit for leading the attack in this region on two
    reprehensible practices: the trafficking of women and girls, and
    abusive child labor. This Administration will continue to support those
    efforts.
        With this request, we intend to provide $1.76 billion for programs
    under Economic Growth and Agriculture; $267 million under Global
    Health; and $310 million under Conflict Prevention and Developmental
    Relief. We will use the Global Development Alliance to create new
    partnerships here, building on the success of the U.S.-Asia
    Environmental Partnership, which has a great record of matching U.S.
    businesses with environmental and energy efficiency opportunities in
    the region.
        One management challenge USAID must resolve is the increasing
    amount of work in ``non-presence'' countries--countries with USAID
    programs but without a USAID mission. USAID already supports programs
    in Pakistan, Vietnam, Burma, and 15 other non-presence countries in the
    region; we must identify new ways to maximize the efficiency of our
    personnel and management resources throughout this region.
        The ESF funds are primarily used to support economic growth
    initiatives in the Middle East, including $720 million for Israel, $655
    million for Egypt, $150 million for Jordan, and $75 million for the
    West Bank and Gaza. ESF will also fund bilateral programs in Cambodia
    and Mongolia.
        The Public Law 480 Title II funds will help improve child survival
    and nutrition in India and Bangladesh.
    Latin America and the Caribbean
        Because the countries assisted by USAID in Latin America and the
    Caribbean (LAC) are our neighbors, their economic, social, and
    political development have an extremely important impact on our own
    security and well-being. Americans benefit directly when the economies
    of developing LAC countries expand and their markets open. Since 1990,
    the number of U.S. jobs supported by exports to the region has
    increased by 2.3 million. But when nations in this region face
    political instability and failing economies, the United States sees the
    consequences directly through increased illegal immigration and illegal
    narcotics. None of us should ignore the cross-border spread of
    communicable diseases such as TB and HIV/AIDS. Finally, environmental
    degradation and pollution can affect U.S. border states directly and
    also aggravate regional instability and migration, as well as increase
    the risk of death and destruction from disasters in the region.
        To fund USAID's programs in this region, the Administration
    requests a total of $878.6 million from all accounts. The request
    includes $207.3 million in Development Assistance, $100.2 million from
    CSD, $177.5 million from ESF, and $108.1 million of Public Law 480
    Title II funds. USAID's total funding incorporates $292.5 million from
    the International Narcotics Control account, included in the State
    Department's budget request
        We intend to allocate $398 million of total funds for Economic
    Growth and Agriculture, $153 million for Global Health, and $327.5
    million for Conflict Prevention and Developmental Relief.
        USAID's programs in the Western Hemisphere support U.S. national
    interests. We will continue to work to prevent conflict by encouraging
    democracy and good governance throughout the region. We will continue
    to work to increase economic opportunity and reduce poverty, through
    microenterprise programs, improving access to quality education and
    training, and encouraging better management of the environment. Equally
    critically, the United States must ensure that post-hurricane and post-
    earthquake reconstruction in Central America not only replaces what was
    destroyed, but builds back better in ways that lay the foundation for
    sustainable growth.
        Let me briefly discuss the Andean Regional Initiative. The
    President and Secretary Powell recognized that the United States must
    adopt a regional strategy to assist Colombia and the neighboring
    democracies to confront narco-terrorism and the associated threats to
    their societies. In fiscal year 2002, the Andean Regional Initiative
    will provide $494 million from DA, CSD, ESF, International Narcotics
    Control, and Public Law 480 Title II accounts for non-enforcement
    related activities in Bolivia, Brazil, Peru, Ecuador, Colombia, Panama,
    and Venezuela. We will use these funds in a regional framework to
    intensify Alternative Development programs that move farmers from coca
    to licit crops, and for democracy programs that improve local
    governance and the administration of justice.
    Europe and Eurasia
        The stability and security of Europe and Eurasia directly impacts
    fundamental U.S. security and economic interests. USAID's challenge is
    to help nations in this region continue their transformation from
    authoritarian, centrally planned and oppressive societies into
    participatory democracies with strong market economies. Our work in
    this region shows both the incredible risks and rewards of foreign
    assistance as a tool of U.S. foreign policy. On one hand, USAID
    assistance last year provided crucial support to democratic elections
    in Croatia and Serbia, bringing a decade of political misrule and
    Serbian expansionism to an end. On the other, current ethnic clashes in
    Macedonia remind us how fragile stability and democracy are in the
    region.
        The Administration's total fiscal year 2002 funding request for
    USAID programs in the region is $1.46 billion. The request includes
    $610 million for the Assistance for Eastern Europe and the Baltic
    States (AEEB) account; $808 million for the Assistance for the
    Independent States of the Former Soviet Union (FSA) account; $39.6
    million from ESF; and $6.5 million from the CSD account.
        The Global Development Alliance will play an extremely important
    role in this region. The partnerships the Agency already has developed,
    such as with the American International Health Alliance, have brought
    additional knowledge and resources to these countries. Ultimately,
    these private-public partnerships help sustain progress when USAID's
    role inevitably starts to decline. USAID will use GDA funding to
    aggressively seek out new ways to engage potential partners in the
    delivery of foreign assistance to the people of this region.
        This request includes $145 million in AEEB funds for Montenegro and
    Serbia. This request allows the United States to continue its important
    efforts to prevent conflict, reform the economy, and build the
    institutions that underpin a market-oriented, democratic society. Our
    work in Montenegro will encourage the rule of law and democratic
    processes as Montenegrins decide whether to remain part of Yugoslavia
    or become independent.
        USAID's request of $39.6 million in ESF funds for this regions
    includes $19.6 million for the International Fund for Ireland, $5
    million for Irish visas, and $15.0 million for Cyprus.
        Economic Growth and Agriculture will receive $700.4 million to
    foster the emergence of competitive, market-oriented economies in which
    people, not governments, control economic resources. Conflict
    Prevention and Developmental Relief will receive $688.1 million in
    support of programs in this pillar, covering a continuum of assistance
    from humanitarian relief, to easing the transition from disaster to
    development, to promoting peaceful and accountable government by
    promoting democratic processes and freedom of information. In
    recognition of increasing health risks in the region, Global Health
    will receive $75.6 million to improve primary health care and fight the
    spread of infectious diseases including HIV/AIDS and tuberculosis.
        The new Administration is undertaking a series of foreign policy
    reviews, of which Russia will be the first. This review may result in
    changes to the U.S. assistance program over the near future.
                               development credit
        Another important tool in USAID's development arsenal is the
    Development Credit Program. When appropriate, the Agency can use credit
    in the form of direct loans or loan guarantees to support true risk-
    sharing ventures with private firms. That credit authority gives USAID
    the ability to mobilize substantial private capital for development
    purposes.
        This program consolidates former credit programs: Urban and
    Environment Credit Program, the Micro and Small Enterprise Development
    Program, and the Development Credit Authority. By consolidating various
    credit initiatives under the Development Credit Program, the Agency
    ensures that all credit activities will use the same strict rules
    regarding accountability and risk-sharing. The Agency has officially
    instituted a clear policy that the consolidated credit program will not
    engage in sovereign risk activity.
        For fiscal year 2002, the Administration is requesting transfer
    authority of up to $25 million from other USAID program accounts (DA,
    CSD, ESF, SEED, FSA) for the Development Credit Program. We also
    requested $7.5 million for administrative costs of the expanded
    program. This request for $25 million in transfer authority for the
    Development Credit Program could mobilize $250 million or more of local
    private capital for projects that support our development goals in
    countries where we work.
                       international disaster assistance
        The fiscal year 2000 request for International Disaster Assistance
    is $200 million, an increase of $35 million over the fiscal year 2001
    appropriated level (not including supplemental appropriations). This
    request is to fund the work of USAID's Office of Foreign Disaster
    Assistance (OFDA) to support emergency relief and rehabilitation
    programs in response to natural and manmade disasters, and other
    emergencies that displace large numbers of people.
        Our ability to respond rapidly to emergencies is known and
    respected worldwide, and USAID staff work in close collaboration with
    U.S. and international agencies and private organizations. I take some
    pride in having been a part of building that respect during my previous
    life here. These programs are first and foremost to meet the critical
    needs of vulnerable people in emergency situations. But that is not
    enough--we also use our Disaster Assistance funds to help countries
    adopt disaster prevention and mitigation measures so the next calamity
    cause less damage. Right now the Agency is in the process of preparing
    for the upcoming hurricane season, working with the Fairfax County and
    Miami-Dade County Search and Rescue Teams and prepositioning emergency
    disaster kits at Homestead Air Force Base in Florida.
        Demands on disaster assistance resources have increased for a
    number of years. In particular, complex emergencies--involving civil
    conflicts and often complicated by natural disasters--account for the
    lion's share of International Disaster Assistance Funds, more than 70
    percent. These emergencies can require long-term relief assistance for
    those displaced or devastated by the conflicts.
        All International Disaster Assistance funds fall into the pillar of
    Conflict Prevention and Developmental Relief. I intend to use $25
    million of these funds for implementation through the Global
    Development Alliance. For example, we will use the GDA to develop new
    partnerships with faith-based organizations already providing relief to
    disaster victims around the world.
                             transition initiatives
        For the Transition Initiatives (TI) account, we have requested $50
    million, the same as appropriated this fiscal year. These funds, which
    fall under the Conflict Prevention and Developmental Relief pillar,
    support the work of the Office of Transition Initiatives (OTI).
        I have already spoken at length about the emergence of conflict as
    a defining trend of this new century, and the importance of conflict
    prevention to both our development and humanitarian goals and to U.S.
    national interests. OTI supports conflict prevention by assisting
    countries making the transition from complex emergency to economic and
    political stability. OTI provides fast, flexible, short-term, high-
    impact assistance designed to strengthen peace, reconciliation, and
    reconstruction efforts.
                                   esf funds
        The Economic Support Fund (ESF) account advances the economic and
    political foreign policy interests of the United States. ESF funding
    can be used, for example, to finance balance of payments and economic
    stabilization programs, often in a multilateral context.
        For fiscal year 2001, USAID is requesting $2.29 billion in ESF
    funds. As detailed in other parts of my testimony, this funding will be
    used to support the Middle East peace process and several initiatives
    Latin America, Asia and Africa. Of this amount, $1.75 billion will fall
    under Economic Growth and Agriculture, $115 million under Global
    Health, and $328 million under Conflict Prevention and Developmental
    Relief.
                               operating expenses
        For fiscal year 2002, USAID requests $549 million in Operating
    Expenses (OE) compared to this year's post-rescission OE level of $532
    million. However, factoring in other OE funding sources, such as local
    currency trust funds, the total OE budget--at $613 million--is just $1
    million more than the current year budget, an increase of less than 1.5
    percent.
        These funds cover the costs of salaries, benefits, and other
    administrative costs of Washington and overseas operations associated
    with management of USAID's $7.7 billion worldwide programs.
        The Secretary has spoken of three priorities for the Department of
    State's operating funds: hiring staff, modernizing information systems
    and improving facilities security. These are the same priorities for
    USAID's OE account. First, the request will permit the Agency to
    continue its efforts to restore its direct-hire staff, which has been
    reduced to unacceptably low levels through the same combination of
    attrition and previous administrative cost-cutting efforts affecting
    many other federal agencies. It is absolutely essential that the Agency
    have sufficient funds to recruit, train and deploy the additional staff
    needed to assure adequate stewardship of its program responsibilities.
        Second, the OE request includes the funds needed to continue
    modernizing USAID's information technology and financial management
    capabilities. The request will permit the Agency upgrade its
    telecommunication capacity and continue modernization of its accounting
    and procurement systems.
        And third, the request includes funds to upgrade the security of
    vulnerable overseas posts which are not collocated with embassies. It
    is critical that we have funds to assure the security of our Foreign
    Service personnel abroad. Additionally, $50 million has been included
    in the Department's budget request to improve USAID facilities security
    in countries where our missions are located on embassy grounds.
        In order to have the funds to cover these priorities while also
    meeting projected federal pay increases and high inflation rates
    overseas, I will have to identify ways to cut costs and increase
    productivity both at headquarters and in our Missions overseas. This I
    plan to do. I understand the budget pressures you face, but you should
    know that this OE request is critical to USAID's operations--and is the
    bare minimum I need for the staff and technology to successfully carry
    out transformation of the Agency.
                               inspector general
        The Administration requests $32 million for fiscal year 2002, an
    increase of more than $5 million over fiscal year 2001. The Office of
    the Inspector General (OIG) plays an important role in helping USAID
    implement its strategies effectively, and in protecting the integrity
    of the Agency. This request covers operations, including the salaries,
    expenses, and support costs, for the work of the to conduct audits and
    investigations relating to the programs and operations of USAID around
    the world, plus the foundations assigned to the OIG for review. In
    fiscal year 2001, the OIG's funds included $3.8 million of no-year
    funds that the OIG had identified and reported to OMB and the Congress.
    These funds will be depleted during fiscal year 2002.
                                   conclusion
        With this budget request, we have taken the first steps toward the
    transformation this Agency must embrace in order to respond to
    fundamental changes in foreign policy and foreign assistance. Our new
    approaches will enable us to coordinate our programs and leverage
    substantial private resources to achieve our development and foreign
    policy goals. The result will be a world that is safer, more
    prosperous, and more free than ever. I appreciate the President's and
    the Secretary's confidence in me to begin this process, and I ask for
    your support as well.
                    summary of usaid fiscal year 2002 budget
        For fiscal year 2002, the President is requesting appropriations of
    $7,716,500,000 in discretionary funds for USAID-administered programs,
    including those jointly administered with the State Department. This
    compares to the fiscal year 2001 level of $7,587,278,000 when $223.825
    million in supplemental funding is excluded.
        The fiscal year 2002 USAID budget is presented in a new, simplified
    way, which aggregates funding for the various appropriations accounts
    into the four pillars on which USAID's programs are focused. The Global
    Development Alliance GDA) is the over-arching, process pillar (and will
    receive ``seed'' funding in fiscal year 2002) which is supported by
    three program pillars.
        The following ``cross-walk'' relates this new configuration of
    pillars to the current program appropriations account structure managed
    by USAID (excludes USAID OE and other admin. accounts).

                                                              FISCAL YEAR 2002 USAID BUDGET REQUEST
                                                                    [In millions of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              CSD         DA        IDA         TI     PL 480 II     ESF        AEEB       FSA       Total
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Economic Growth and Agriculture......................      110.3      817.8  .........  .........  .........    1,754.5      269.2      431.2    3,383.0
    Global Health........................................      900.7      375.5  .........  .........  .........      114.6       13.5       55.6    1,459.9
    Conflict Prevention and Developmental Relief.........  .........      131.7      200.0       50.0      835.0      328.3      327.2      321.3    2,193.5
    State Department Initiatives.........................  .........  .........  .........  .........  .........       91.6  .........  .........       91.6
                                                          --------------------------------------------------------------------------------------------------
          Total USAID....................................    1,011.0    1,325.0      200.0       50.0      835.0    2,289.0      610.0      808.0    7,128.0
                                                          ==================================================================================================
    Of which: Global Development Alliance................       25.0      110.0       25.0  .........  .........  .........  .........  .........      160.0
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Note.--The fiscal year 2002 USAID request includes funding for the Child Survival and Disease Programs Fund (CSD), Development Assistance (DA), the
      Economic Support Fund (ESF), Assistance for Eastern Europe and the Baltics (AEEB), and Assistance for the Independent States of the former Soviet
      Union (FSA), as well as funding for International Disaster Assistance (IDA), Transition Initiatives (TI), Development Credit programs, and
      administrative expenses. Public Law 480 (Food for Peace), is administered by USAID but formally requested by the U.S. Department of Agriculture.

        The following table provides budget account details.

                                  USAID BUDGET
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                         Fiscal year
                                                ----------------------------
                                                      2001          2002
                                                 appropriation     request
    ------------------------------------------------------------------------
          Foreign Operations Subcommittee

    USAID--Directly Managed:
        Child Survival and Disease Programs           960,881     1,011,000
         Fund (CSD)............................
            [includes transfer to UNICEF]......      [110,000]     [110,000]
        Development Assistance (DA)............     1,302,129     1,325,000
            [Incl. transfers to Int.Am.Fdn/           [27,938]      [28,150]
             Afr.Dev.Fdn]......................
                                                ----------------------------
              Subtotal--DA/CSD.................     2,263,010     2,336,000
                                                ============================
    International Disaster Assistance..........       299,340       200,000
    Transition Initiatives.....................        49,890        50,000
    Credit Programs--Subsidy:
        Development Credit Programs [by                [4,989]      [25,000]
         transfer].............................
        Development Credit Programs by                  1,497   ............
         appropriation.........................
        Other Credit Programs [by transfer]....  .............  ............
        Other Credit Programs by appropriation.         1,497   ............
    Administrative Expenses:
        USAID Operating Expenses (OE)..........       531,827       549,000
        Development Credit Programs--Admin.             3,991         7,500
         Expenses..............................
        Other Credit Programs--Admin. Expenses.           499   ............
        Inspector General Operating Expenses...        26,941        32,000
        Foreign Service Disability & Retirement       [44,489]      [44,880]
         [mandatory]...........................
                                                ----------------------------
          Subtotal--USAID Direct...............     3,178,492     3,174,500
                                                ============================
    USAID Jointly Manages with State
     Department: \1\
        Economic Support Fund & International       2,314,896     2,289,000
         Fund for Ireland......................
        Central America/Caribbean Disaster       .............  ............
         Recovery Fund.........................
        Assistance to the Independent States          808,218       808,000
         (FSA).................................
        Assistance for Eastern Europe and the         674,338       610,000
         Baltics (AEEB)........................
        Plan Colombia request [USAID managed          [90,000]  ............
         portion]..............................
        Andean Counter Drug Initiative [USAID    .............     [292,500]
         portion]..............................
                                                ----------------------------
          Foreign Operations Subtotal..........     6,975,944     6,881,500
                                                ============================
              Agriculture Subcommittee

    Public Law 480 Food For Peace Title II.....       835,159       835,000
                                                ============================
          USAID Total..........................     7,811,103     7,716,500
    ------------------------------------------------------------------------
    \1\ Some funds are transferred and managed by othe agencies; levels
      shown reflect the full appropriation.

    Note.--Fiscal year 2001 includes enacted supplementals, which included
      $135 million of International Disaster Assistance funds for Southern
      Africa floods; $76 million of Assistance for Eastern Europe and the
      Baltics funding; and $13 million in USAID Operating Expenses to
      provide administrative support in Kosovo. Fiscal year 2001 levels
      reflect a rescission from all accounts of .022 percent.

        Senator McConnell. Let me apologize again for the
    interruption we are about to have. We have three votes, so it
    is good that cell phones are now common and a lot of your staff
    is here. Hopefully you can do something useful. I am not sure
    it makes sense for us to slip back to the hearing in between
    votes, that would be so disjointed.
        What we will do is catch the first vote at the end, and
    then the second vote, and the third vote at the beginning, and
    I will start back over here. Hopefully my colleagues will be
    able to come back as well.
        The hearing is in recess for the moment.
        [A brief recess was taken.]
        Senator McConnell. Again, I apologize for the delay. I
    would like to focus, if I could Mr. Natsios, on the Middle
    East. I do not have to tell you that over the course of the
    last 3 or 4 months, the previous Israeli administration offered
    essentially everything to the PLO. They offered them control of
    the neighborhoods in East Jerusalem; they offered them a
    capital in East Jerusalem; they offered them 96 percent of the
    West Bank, and joint control of the holy places in Jerusalem,
    and 100 percent of Gaza.
        That was met, as we now know, with a refusal, and I have
    asked a number of Israeli politicians over the last few months:
    was there anything else that could have been offered? No one
    has been able to think of anything.
        There was a fascinating article in the Washington Post
    yesterday, which I suspect you saw, which questioned whether
    Arafat really has any control over the violence. The Israelis
    have always argued that he does and therefore, should be
    responsible for the behavior of the Palestinians. Others say
    that he does not.
        Regardless of whether he does or does not have control, I
    have often felt that foreign assistance is not an entitlement.
    If you live in this country and you are 65 years old, you get
    Social Security. But if you are a country and you have been a
    long-time recipient of U.S. foreign assistance, should you get
    assistance no matter how you act?
        I am told the number one hit selling song in Egypt these
    days is entitled ``I Hate Israel.'' The state owned news
    service is spouting antisemitic rhetoric like nothing we have
    seen in years. By any objective standards, the Egyptians, at
    least in the last few years, have not been very constructive
    players in the Middle East even though they still have a
    nominal peace treaty with the Israelis.
        I am curious as to whether you think, the budget request
    for Egypt, the West Bank, and Gaza Strip should continue as
    business as usual?
        Mr. Natsios. Let me first say, Senator, that there are
    certain issues where there is a heavy foreign policy focus, and
    this particular question you have asked is probably one of the
    most sensitive ones the Secretary is dealing with. And so for
    me to make comments that could affect his conversations with
    the Israelis, Palestinians and Egyptians would be a little
    dangerous for me, given that I have only just been sworn in.
        Senator McConnell. It could end up being a short tenure.
        Mr. Natsios. It could be a very short tenure, the shortest
    in USAID history. And having been a former military officer and
    having a former four star general and Chairman of the Joint
    Chiefs as Secretary of State, there is a sense of hierarchy,
    and I report to him.
        But let me make a couple of comments on the general
    proposition without specifying a specific country.
        Senator McConnell. I would be satisfied with that, just a
    general proposition of whether foreign assistance is completely
    unrelated to behavior.
        Mr. Natsios. The first thing I would say is that there are
    different categories of foreign assistance. If, for example, we
    are in a country where there is an extremely oppressive
    government, or predatory government, not just authoritative,
    predatory, and we oppose the government overtly, our foreign
    policy is very clearly against that government, but we are
    providing assistance to human rights organizations that are
    monitoring atrocities that might be committed that might be
    ongoing in the society, or sometimes we provide assistance to
    people who have been running an election, different parties.
    That kind of assistance I am not sure is wise to shut off,
    because it is the one thing in the society that exists that is
    allowing us to counter the tyranny of the government.
        So I think the first thing that I would say is that you
    need to look at what the assistance is.
        Senator McConnell. What if it is military assistance?
        Mr. Natsios. Oh, military assistance for me, you shut it
    down, from my perspective. In fact, I would shut down economic
    assistance and certain other kinds of direct development
    assistance, except things like child survival, HIV/AIDS.
        Senator McConnell. I agree with that. So military
    assistance in your view, could well be conditioned on behavior?
        Mr. Natsios. That is my personal opinion but needless to
    say, I do not control----
        Senator McConnell. I understand that, and I am not trying
    to trick you. I understand that you are not going to answer
    that question and if I were in your seat, I would not either.
    But, I am interested in your general view about whether ``once
    a recipient always a recipient'' makes sense with respect to
    our foreign assistance.
        Mr. Natsios. I think that it is a dangerous idea to attach
    to our foreign assistance programs a notion of entitlement. It
    is not just in terms of foreign policy but from a developmental
    point of view, the idea is for us to leave the country
    eventually when the country becomes more prosperous; you do not
    want to be there forever. If a country gets drawn into the
    dependency syndrome that takes place in some countries, because
    they think we are going to subsidize everything forever, it is
    not healthy to the society. So I think there has to be a
    psychology to this where the countries in which we work know
    that under certain circumstances we will withdraw. I think
    entitlement is a bad idea as a general proposition.
        Senator McConnell. Looking at Bolivia, for the last 16
    years USAID has been involved in alternate development
    activities to stem the growth of coca. The programs have
    largely been successful. In the last 4 years, 18,000 families
    received assistance on alternate crop development, 3,000
    kilometers of roads and 110 bridges were built, and 15 health
    posts and one hospital were chartered.
        Colombia's alternate development needs never were part of
    the Andean Initiative. Can we realistically expect alternative
    development activities to take root in Colombia given the
    continuation of civil strife in the coca growing regions?
        Mr. Natsios. Mr. Chairman, this was perhaps the first
    briefing I asked for when I arrived at USAID because this
    affects profoundly the program in Colombia and our direct and
    immediate national interests, and is a clear foreign policy
    issue before the U.S. Congress.
        I have to say, when I went to see Senator McCain to
    introduce my successor, a brigadier general retired to run the
    big D, he kept focusing on Plan Colombia and I kept trying to
    introduce my successor to him. And he simply told me I could go
    down and explain. So when I go to USAID, I said Senator McCain
    likes the program. I am not quoting anything he has not said
    publicly, and I would like to know about this program, because
    I want to know whether the program is successful. Is it for
    public relation purposes you are saying it is successful, or is
    it truly a good use of money.
        The director of the program is one of our most able foreign
    service officers, George Wachtenheim, who is a very experienced
    foreign service officer and is known for getting things done
    and getting them done right. The briefing I had from him and
    several other people familiar with the program is not only are
    we showing signs of success fairly quickly, but that it looks
    like we can expand the program along the lines we had looked
    at.
        Senator McConnell. They cannot operate in the areas
    controlled by the insurgents though, can they?
        Mr. Natsios. No, but we are operating in a lot of areas
    that are close by, and it does not take a lot of encouragement
    for many of these farmers to switch over to licit crops. And I
    cannot remember the figure; I think we are up to 7,000 farmers
    that we have enlisted in this program since December. We give
    them seeds and tools, and help them with inputs to facilitate
    their moving into the normal market system for agricultural
    programs.
        Senator McConnell. What are we doing about human rights?
    Funding for Plan Colombia has always been very controversial.
        Mr. Natsios. It has been, and that is a certain issue for
    me because I am very much interested in the human rights issue,
    given the atrocities that I have seen committed over the last
    12 years in different countries.
        The first thing is, we are funding what are called houses
    of justice. The normal legal system in Colombia is not
    something that poor people have access to, so there is a sense
    of alienation between people in some of the rural areas,
    particularly in the areas in which the drug organization
    exists, and the judicial system. I don't remember the exact
    number of these houses of justice that exist, but they are up
    and running now and they are apparently working quite
    successfully.
        They are basically what we would call a lower court in the
    United States. They are more accessible by people. People go in
    and bring their disputes and get them resolved in an honest
    way.
        We are also funding human rights organizations that are
    looking at these issues within Colombia. Part of our program is
    in the human rights and justice area, for the very reason that
    you mentioned.
        Senator McConnell. Did you have something to add there?
        Mr. Natsios. Fifteen of the 30 planned casas de justicia
    are operating today, and they are processing about 150 cases a
    day--free of charge. We have strengthened the public defenders
    offices in 10 of Colombia's 31 state capitals.
        Senator McConnell. Let me shift to a different part of the
    world. I have had a longstanding interest in the situation in
    Burma, which is one of the most outrageous regimes in the
    world. I want you to know that I am not going to support any
    program inside Burma due to the lack of the transparency and
    accountability of the junta. I do not know if you have any
    plans for programs inside Burma. Are you planning on doing any
    programs in Burma? This would be futile under the current
    situation.
        Mr. Natsios. I do not believe we have any plans for any
    program nor do we have any running in Burma now, though I
    should say, the HIV/AIDS epidemic is spreading across Southeast
    Asia now, and I do not think it respects national boundaries,
    but we do not have any programs.
        Senator McConnell. Well, as bad as it has been in Thailand,
    you would expect it to end up in Burma.
        Mr. Natsios. Exactly.
        Senator McConnell. That is really a horrible situation. The
    previous Secretary of State appeared before the Senate, and she
    admitted, too, that it is simply impossible to get concerted
    action from the ASEAN nations because of Burma. It is a source
    of ongoing frustration. I am beginning to wonder if it will
    ever change. If it does, that will probably be a place where
    USAID is going to be needed.
        In Cambodia, speaking of disappointments, a coup d'etat in
    1997 was followed by flawed elections in 1998. Corruption and
    human rights abuses have continued by a government essentially
    in power since the 1980s.
        My question is, under your pillar of conflict prevention,
    will democracy building programs in Cambodia be a priority?
        Mr. Natsios. We have democracy and governance programs
    right now in Cambodia, and they are focused on human rights in
    the development of civil society to promote the level of NGOs.
    We do run only one program in cooperation with the government
    and that is the HIV/AIDS program; everything else is run
    through NGOs. I know World Vision, the NGO that I was an
    executive with for 5 years, has a very large Cambodia program,
    and I visited it along with seeing the other NGO programs
    there. Many of them are quite good, in the child survival area
    in particular, because there are also a lot of mine victims, I
    am sure you have know.
        Senator McConnell. I have seen them, I have been there.
        Mr. Natsios. It is grim.
        Senator McConnell. Very depressing.
        Mr. Natsios. Very depressing. And so, there are prosthetics
    programs now. But in terms of working with the government, I
    would not support any programs beyond the HIV/AIDS program in
    terms of working with the government itself.
        I was one of the members of the team in, I think it was
    1999, that monitored the Cambodian elections. I was asked by
    one of the groups, International Republican Institute, that
    monitored those elections--1998, excuse me, thank you.
        I did not have the same view as the public relations view
    of how those elections were run myself, but that was just my
    opinion from my experience there.
        Senator McConnell. Well, continuing to span the world,
    Macedonia has certainly been back in the news lately. The
    Macedonian Government has called for a state of war against the
    NLA, the Albanian National Liberation Army. Ethnic Albanians in
    Macedonia, which as you know are about a third to a quarter, of
    the population, do have some legitimate grievances with regard
    to equal representation within the government. Obviously, a
    state of war will only exacerbate tensions between ethnic
    Albanians and Macedonians and will likely result in even
    greater civilian casualties.
        I wonder if you have been on the job long enough to have an
    assessment of the situation and what proactive steps the Agency
    may be facing to address the concerns inside Albania of the
    ethnic Albanians?
        Mr. Natsios. I met with the president of Macedonia last
    week.
        Senator McConnell. I did, too.
        Mr. Natsios. I had a very good conversation with him, and I
    emphasized in my conversation with him how pleased we were at
    the restraint in the initial phases of this conflict that the
    Macedonian military showed in the villages, because we are in
    those villages. There was a relatively minimal amount of damage
    in that phase.
        I told him that it was in the interests of the United
    States as well as stability in the Balkans for a more judicious
    approach for dealing with the insurgency, that there had to be
    some review of the provisions of the constitution which the
    Albanian minority's leadership believes needs to be addressed,
    need to be changed.
        Of course, all of this was something we did in concert with
    the State Department because they delivered exactly the same
    message. There is an USAID effort to rebuild the housing that
    was destroyed in those villages up near the Kosovar border, and
    we are putting that on a fast track because there is hope that
    this could come out the right way if it is handled well.
        The more extreme the reaction, the more likely we will
    destabilize a society that was moving along in the right
    direction, slowly, perhaps not as fast as the Albanian minority
    would like to, but they were trying to do the right thing. And
    the fact that they have a functioning democracy, it seems to
    me, has helped a lot in containing this.
        We hope that they will continue to show restraint, because
    if they do not, then we are going to have an uglier situation.
        Senator McConnell. I have not been entirely happy with the
    way the Macedonians have treated the Albanians over the last
    few years. In the press over here it always seems like the
    Albanians are the problem but I think it has frequently been
    the opposite.
        Next door in Montenegro, there were press reports that we
    had been using foreign assistance as leverage prior to the
    recent Montenegran elections to discourage those forces there
    who were seeking independence. Is there any truth to that?
        Mr. Natsios. I am not aware of that. We have our acting
    assistant administrator that tells me we are not doing that.
        Senator McConnell. Are you proposing to withholding
    assistance to Montenegro?
        Mr. Natsios. I was unaware that we were withholding
    assistance. Are we? Oh, the election. Yes. As you know, there
    were elections recently.
        Senator McConnell. That's what I was talking about.
        Mr. Natsios. I am sorry. The election results were not
    definitive, it was a very close election, much to my surprise
    personally. I had expected it would be much more decisive than
    it was. And there is a review going on now. Pending that review
    I won't be able to make a comment, and we will see what the
    State Department decides.
        Senator McConnell. Is there any connection between
    assistance to Montenegro and cooperation of the current
    Yugoslav regime in turning over Slobodan Milosevic to the
    Hague?
        Mr. Natsios. My understanding is, and again, I have only
    been on the job a couple of weeks, is that the U.S. Government
    continues to strongly press the Serbian Government for
    accountability of the atrocities that took place during the
    Bosnian civil war. To what degree our aid is involved in those
    discussions, I have to tell you, Senator, at this point I can't
    tell you, I don't know.
        Senator McConnell. I have to offer an amendment on the
    floor, and what I am going to do is pass the gavel to Senator
    Leahy for his questions, and then to Senator Bennett, who I am
    sure may have some thoughts as well.
        I have a few more questions I am going to submit in
    writing. I thank you very much for being here today.
        Mr. Natsios. Thank you, Mr. Chairman.
        Senator McConnell. I look forward to you having a
    successful tenure.
        Senator Leahy. Thank you, Mr. Chairman. I understand that
    we will keep the record open today so if others have questions,
    they can submit.
        The discussion on Colombia was unfortunately interrupted
    because of these votes this morning. I know Senator Bennett has
    other duties too, but I do want to ask a couple of questions.
        Colombia has actually signed up about 11,000 families for
    alternative development programs, because they have agreed to
    destroy their coca crops. But the aid they are supposed to get,
    which is to be $900 a family, will not begin until June, so
    they have to take us on faith, I guess.
        I have not seen the monies for protecting human rights
    delivered very quickly. You have the problem of prosecuting
    human rights crimes for some, particularly within the military,
    because they go to military courts and maybe one sacrificial
    lamb is tossed out, but everybody else, nothing happens to
    them. It is only if they are prosecuted in civilian courts that
    you have any chance at justice.
        Now you have the expansion of support for the
    paramilitaries by some within the Army, and it makes violations
    of humans rights worse, so I continue to have a great deal of
    concern about Plan Colombia.
        In many ways I think that our whole approach is somewhat
    like Moses commanding the tide to stop coming in, and the tide
    is attracted by us, and if we would stop spending so much money
    on drugs, we could stop all these drugs from Colombia, stop all
    these drugs from Peru, but with the demand, it will come from
    somewhere.
        I think we have been remarkably ineffective in some of our
    programs here in the United States and unwilling to fund
    education and treatment programs for our young people, and this
    does not come under USAID, I understand, but my belief is we
    need to get them away from the drug scene.
        And the billions we spend down there, I am afraid that some
    of this may end up being like the old cold war. If we had
    someone with a terrible human rights record or a dictatorship
    or whatever, they would say I am anticommunist, we would say
    oh, here, how much money can we give you. And today if they say
    they are antidrugs, it is almost the same way--we will close
    our eyes to the human rights violations.
        I have a lot of respect for President Pastrana in Colombia,
    but I am not too impressed with our programs other than sending
    a lot of military money and closing a blind eye to the
    paramilitaries.
        The President's budget is $5 million above the 2001 level
    for Development Assistance, which is, when you count inflation,
    really a cut. And yet, this is the heart and soul of AID's
    programs. Since the early 1990s there have been cuts in all
    these development activities--agriculture, family planning, and
    so on.
        Senator McConnell and I have fought to stop the cuts, and
    the budget is no longer decreasing the way it was in the mid-
    1990s, but looking ahead, what do you see as AID's number one,
    two, and three funding objectives?
        Mr. Natsios. Are you talking about generally or in
    Colombia?
        Senator Leahy. Generally.
        Mr. Natsios. Well, the three focuses that I mentioned in my
    testimony are the areas that I would like to put emphasis on in
    future years, in 2003 and 2004. This budget obviously was done
    primarily by the last administration. We made some amendments
    to it, but I have to say, we did not make any huge amendments.
    It is just a little too early to do that, given how new I am
    and the administration is.
        But the budget was not cut for 2002, and I think given the
    other Federal problems, no cutting is a good sign. Colin Powell
    and the President, are both strong supporters of these kinds of
    programs. And I think what counts is what you actually propose,
    and given what happens to some of the other departments, I
    think their actions show that.
        In terms of my own personal priorities and the areas that I
    advocate on in the future, in the health area, the HIV/AIDS
    epidemic is destroying whole societies as I said in my
    statement, and we need to get a hold of that before the whole
    continent is crippled permanently.
        The second item in the health area that I mentioned, I will
    repeat it, is in the micronutrient area, because we know we can
    make a lot of progress for modest investment in children's
    health over a long period of time with a micronutrient
    strategy. And so, I would like to put more money in that area.
        This is in the larger scheme of things and future years.
        The second area that I have a deep interest in is in
    agriculture and when I say agriculture, I don't just mean
    growing crops. Agriforestry is part of agriculture. The
    development of world markets is part of agriculture; you have
    to move your surpluses around. If you don't have rural roads,
    you cannot move your surpluses, so there is no incentive for
    the peasants to grow more food.
        There is a lot of research that has been done that is not
    getting out into the field among the subsistence farmers who
    tend to be very poor, there is poor nutrition. We find that if
    you increase the family's income, you can do that through
    agriculture, it affects everything else. The kids get better
    fed, they are better clothed, they get private medical care
    that they would not have gotten otherwise. They get to pay
    their school fees so they can go to school. So, a livelihood
    strategy in the rural areas of agriculture makes great sense to
    me and I would like to put a lot of emphasis on that.
        But, there are other areas of investment in agriculture, in
    tree farming. Through the biodiversity programs we have
    discovered the new uses of newly discovered species that have
    very large markets. And what we need to do is convert some of
    these discoveries into sustainable programming where we don't
    have whole forests cut down because the trees are valuable.
        There is a lot of research that has been done through the
    CGIAR, the Consultative Group for International Agriculture
    Research. The agriforestry program in Kenya is one of the best
    of the 17 institutes they run on agriculture around the world,
    and they have done a lot of work in this area that I would like
    to use in our programs and expand.
        The third area is in conflict prevention. The NGO community
    has been experimenting for a decade or more, some of them like
    the Mennonites and the Quakers have been involved in this for a
    century. But a lot of the operational NGOs have been trying
    techniques at calming down very provocative situations that
    could explode in various areas of the world, and some of them
    have been very successful.
        This is not a very expensive area, but if we could prevent
    one or two wars by a modest investment, I think it is worth
    doing that.
        Senator Leahy. I have heard that USAID is planning to
    sharply cut funding for renewable energy and clean energy
    technology. I am not sure I understand why. There is a lot of
    opportunity to invest in infrastructure and energy technology
    in developing countries that benefits everybody, it benefits
    them, it benefits the environment, it benefits our country. Why
    would we cut that?
        You talk about planting forests and so on, yet in some
    places there is desertification because everybody cuts down
    what trees there are, and it is hard to tell them, you know, in
    10 years we will have this forest and they say my kids are
    going to freeze to death tonight, I have to cut down the wood.
    Why would AID cut back on funding for renewable energy and
    energy technology?
        Mr. Natsios. If you look at the budget, Senator, there are
    a number of accounts where there appears to be a reduction.
    What there in fact was is we moved money into a reserve fund.
    Actually we are not moving the money, the money is still in
    those accounts, but it has been reserved for what we call
    Global Development Alliance, which I actually wanted the
    Secretary of State to announce later this week, which he will
    do. What it is is an attempt to use USAID's financial
    resources, technical expertise and field missions, and leverage
    private sector money from the capital markets, from NGOs with
    private funding, from some of these new high-tech foundations
    that have been formed, and from our universities and colleges,
    and try to create an alliance using that $160 million as
    leverage in some of those areas.
        Now, we cannot tell you which deals are going to be put
    together, which alliances are going to succeed, but our idea
    here is to multiply the amount of money----
        Senator Leahy. Can you give us some indication of how much
    will go into renewable energy and clean energy sources?
        Mr. Natsios. We made cuts in a number of the activities,
    including that account.
        Senator Leahy. I understand, but do we know, if it is all
    leveraged and we get the private sector to help in carrying out
    our responsibilities, do we end up having more going into
    renewable energy and things that may help these people in these
    countries or not?
        Mr. Natsios. I can't tell you which agreements are going to
    make it; we have not negotiated them yet. We are going to try
    in each of the sectors, but I cannot assure you that someone is
    going to contribute money in precisely the areas that we are
    spending money on now. We are going to look at those areas,
    Senator.
        Senator Leahy. The reason I ask, we could direct a certain
    amount of policy, the government, you, Congress, the President
    and so on, but Senator McConnell and I have been carrying on
    the battle, sometimes it is very unpopular doing it, on foreign
    aid. It is very easy for people when they talk about foreign
    aid to say I do not hold a passport, I will never leave the
    country while I am in the Congress, I don't want to give money
    to foreigners, what have they ever done for us, and that sort
    of thing.
        We now spend in actual dollars far far less as a percentage
    of our overall budget or even our gross domestic product, we
    spend far far less than a lot of countries who do not have the
    international responsibilities that we do. We spend a lot less
    than the countries that do not begin to have as much to gain by
    these expenditures as we do.
        You spoke of conflict resolution. We sometimes will spend
    tens of millions, even hundreds of millions in a massive effort
    to get people out of an area after the fact, but if we spent a
    higher percentage of that before the fact, we might prevent the
    conflict to begin with. I am not suggesting we would solve the
    world's problems by any means, but we seem to have an almost
    isolationist attitude when it comes to this when there is so
    much we could accomplish.
        Global health, you know, ebola plague or any disease like
    that is only an airplane trip away from us, and it is like
    pulling teeth sometimes to get money to work to eradicate this.
    Look at AIDS, threatening in Africa to wipe out the economic
    gains of the past quarter century. There are millions of
    refugees, half a dozen wars raging, 2 to 3 million people die
    in the Congo, mostly from disease and starvation, and nobody
    seems to notice. We have immense needs there, but it takes
    leaders who are not corrupt and are willing to work with civil
    society, and if we are going to have some kind of a Marshall
    Plan for Africa, there are not too many of those leaders
    around.
        We spend in foreign aid pennies per capita in Africa, and
    in some much more developed nations, we spent hundreds, even
    thousands per capita. I am just wondering if we have our
    priorities right.
        If you had a billion dollars extra for Africa, which would
    mean instead of going and spending 5, 6, 7, 8 cents per capita,
    whatever it is, you bring it all the way up to 14 cents or a
    dollar. A lot of the developed countries we send aid to, would
    consider that insulting.
        Suppose you could do it, where would you spend it first?
        Mr. Natsios. In Africa. Well, Africa has different
    development problems than most other areas of the world.
        Senator Leahy. True.
        Mr. Natsios. And we don't have as many success stories
    there as we do in other areas of the world. So, I think we
    would have to invest our resources in those countries which
    have shown some local leadership in making some progress, in
    Ghana for example, in Senegal, in Botswana. In Mozambique,
    probably the best success story in Africa that we see right now
    is Mozambique. When I visited Mozambique 12 years ago, it was
    the basket case of Africa, probably on a par with Sudan.
        Senator Leahy. This was when?
        Mr. Natsios. This was 12 years ago in the middle of the
    civil war which killed 2 or 3 million people.
        Senator Leahy. In fact, we began the Leahy War Victims Fund
    in Mozambique.
        Mr. Natsios. We appreciate that.
        Senator Leahy. Because I felt, and Melissa Wells, our
    ambassador at the time felt, and the president of the country
    felt that it was a wonderful way to get something done, even
    though we faced--probably you also remember that our State
    Department and others said, well, we will do a little project
    there, a few thousand dollars, and we can split it up with all
    these other countries. And I said no, why not do it right? And
    it worked.
        Mr. Natsios. Well, there was a combination of several
    factors that led to the current state of affairs in Mozambique,
    which has moved to a market economy; they have about six
    cabinet ministers who were educated in the west and who are
    undertaking a major reform of the Mozambican regulatory
    structure to encourage more investment.
        There has been a huge success in agriculture. Up in the
    middle part of the country, there are four provinces that are
    very rich in agricultural lands, and those were devastated by
    the war, and they are now producing surpluses that were being
    exported until recently into Malawi and Zambia.
        There has been expansion of the cashew industry, food
    processing is beginning. The floods unfortunately were quite
    devastating, as you know, but they have made a lot of progress,
    and they did it because there was local leadership, there was
    some people willing to take some risks, and there was a
    willingness on the side of both sides in the civil war to
    peacefully resolve issues in the future.
        And I have to say this. One of the things I am interested
    in is seeing if we cannot use some of the religious groups
    around the world that specialize in mediation to try to help us
    in this area. And the peace talks in Mozambique, this is not
    well known in the United States, were in fact negotiated by a
    Catholic lay order from Rome called the Order of D'Argenio, and
    that is a group of Catholic lay people, men and women, who do
    this sort of work. They do it in the Balkans, but they started
    the peace talks in Mozambique, and they were the ones that
    facilitated them as a disinterested third party. And it helped
    enormously in ending the civil war, bringing peace to the
    country.
        There are lots of groups like that around that we need to
    encourage. The USAID is funding, for example, the Henry Durant
    Center, which is connected to the ICRC in Geneva, and they are
    doing some very important conflict resolution interventions in
    some very unstable areas of the world right now.
        So there is outside help, but also local initiative and
    support, willingness to negotiate.
        Senator Leahy. We could do a lot more by going to
    countries, even countries where we may disagree with their
    government at the time, and having exchange programs, student
    programs, and we will get some people over here that may be
    anti-American, but will also see how democracy works, and those
    may be the people 15 or 20 years ago that are sitting down
    doing conflict resolution today. Thank you.
        Mr. Natsios. If I could just add one comment on that,
    Senator, when I was with World Vision, I would go into civil
    war areas and see who worked with the NGOs, from the local
    population; I don't mean the westerners. And it was very
    interesting, because the wages were so low in these countries
    and there are so few jobs, the truck drivers for most of the
    NGOs, for example, had master's degrees, everybody has a
    college degree. So one of the effects of the NGO program, this
    is not why they exist, but this is one of the good unintended
    consequences is they keep hundreds of people on their staff to
    do relief work in the emergency that maintains the middle class
    in the country.
        There are thousands, tens of thousands of people who stayed
    in Liberia and Surinam and the Congo who worked for NGOs, who
    were people from the country educated in the United States
    primarily, who were able to keep life and limb together for
    their families by taking this NGO job to do some important
    immediate work, but that serves the basis for the middle class
    to help rebuild the society after the war is over.
        Senator Leahy. Thank you.
        Senator Bennett. Mr. Natsios, may I start by saying I am
    impressed with your patience and your knowledge and your
    performance here today, and I think the country is well served
    by your willingness to accept this assignment.
        Mr. Natsios. Thank you, Senator.
        Senator Bennett. Indeed, your enthusiasm and your actual
    proselytizing for this particular assignment strikes me as
    maybe a demonstration of some mental dysfunction on your part.
        Nonetheless, it is salutatory and well received.
        Let us talk a little bit about the health situation in
    Russia. You have listed your three priorities and I have noted
    them, and I frankly applaud you on your choice. I think health
    first, then agriculture and then conflict prevention, that is a
    good way to stack the priorities.
        Let us talk about the health delivery situation in Russia.
    The last time I had any kind of analysis of the circumstance in
    Russia I was told HIV/AIDS was in epidemic status, as was
    tuberculosis. Can you comment on that?
        Mr. Natsios. I had a visit to my office when I was the
    director of the Office of Foreign Disaster Assistance before
    the Soviet Union collapsed by a professor at Georgetown
    University, Murray Fishbein as I recall his name, who wrote at
    the time the preeminent work on Soviet health systems, and he
    was in some quarters ridiculed because people said no, it could
    not possibly be this bad. I do not recall the exact statistics,
    but it was a striking number, for example, of hospitals that do
    not have running water, they do not have hot water, they have
    outhouses for toilet facilities, in hospitals.
        I recall studies that I read of the number of times that
    the typical Soviet child would be immunized, 20 or 30 times a
    year they would get shot with various kind of medical
    interventions. I am sorry, I cannot remember the different
    kinds of diseases that children were being immunized against,
    but there were no standards in the factories where the serum
    was being produced for the children, or for the adults for that
    matter, and so they did not know what kind of dosage they were
    getting.
        If you go through the Soviet health system, it more
    resembles the poorest of the developing world in some areas
    than it does a western society, which some people at one time
    thought the Soviet Union was. They have made some progress in
    some areas in the last 10 years, but the average life
    expectancy for Russian males has deteriorated in the last 10
    years, which is almost unbelievable when you think about it.
        So it is very serious. We have a very heavy focus in our
    portfolio, our ongoing health and social services program in
    Russia is about $125 million and there is a heavy health focus
    on it. We do have an HIV/AIDS prevention program that has been
    started there.
        I know World Vision, once again just to give you an example
    of an NGO program that worked very well, had a modest grant
    from USAID about 8 or 9 years ago to develop a curriculum to
    train nurses, because the argument within World Vision was, if
    you really want to influence the way in which the health care
    system works, retrain the nurses. And most of the nurses had
    high school degrees; they were more like orderlies are in this
    country. They did not have a nursing profession as we would
    understand it. So we developed a textbook in Russian and
    created nursing federations, nursing associations in each of
    the republics, through which the text was used and curriculum
    was developed for courses to improve the quality of nursing or
    to create nursing education programs. That has improved the
    quality of nursing care in hospitals across Russia, a small
    program but it had a big impact.
        Senator Bennett. Well, that triggers a report to you of the
    comment that was made in the conference that I attended, where
    the circumstances of the Russian health situation was laid out
    in absolutely stark terms, and they made the same comment you
    did about the falling life expectancy, and said that Russia's
    population will shrink from 140 million to something like 80
    million within the next 40 years, that having a new child in
    Russia is an economic disaster for the parents, and therefore,
    the birth rate is very very low, abortion is rampant throughout
    the country, in an effort to make sure they do not have a new
    child.
        The comment made by the experts that appeared before us,
    members of both the House and Senate was that at least in the
    last 8 years or so, America's financial involvement with Russia
    had been counterproductive. The experts, and these were not
    politically chosen, these were out of academia, said that the
    American State Department and the IMF both had to bear some of
    the responsibility for the deterioration in Russia because of
    the way the money was distributed and the way it exacerbated
    some of the problems. And even the Russian central president
    said don't give us any more money, which was a very interesting
    thing for an appropriator like myself to be told.
        They said, the thing we need most is NGO involvement of the
    kind that you have just described. I had not intended to go
    through this, but you just described World Vision as an NGO,
    and they said that makes more difference than large sums of
    money funneled through the government that end up leaking into
    a variety of little buckets and other places, and does not get
    where it needs to go.
        Given your background and your experience with an NGO, this
    is not the kind of question that deserves standard
    administration response, but just something for you to think
    about. Maybe you ought to try to funnel AID's activities into
    places like Russia in more of an NGO sort of delivery system
    than the traditional government delivery system, and think in
    whole new terms in that particular paradigm.
        Let me switch countries on you but stay in the same mode. I
    was visiting with Youssef Boutros Ghali, who is the Economics
    Minister in Egypt, and I said to him, what do you need the
    most. And he said people. Trained people. And then in a
    statement that is probably a little bit of hyperbole he said,
    if I had 10 trained people I could trust, I could fire the
    other 50,000 who work for me.
        And then he told me this story, which is in the same vein.
    He said, I have asked AID for scholarship money to help me get
    these 10 people. He himself holds a Ph.D. in economics from
    MIT. He said, they won't give it to me, they say you will just
    pick your nephew or your political supporters and send them to
    America as political patronage on our nickel, and we are not
    going to do that. So he said you pick them, he said I will not
    pick, you go out into the universities and pick the best and
    the brightest that you think would be most responsive to an
    education in the United States. And I am sure he would like to
    be consulted so that he at least had some input, but he said, I
    will get out of the decision-making process, but this is what I
    need more than anything else out of USAID. And there was a
    sense of yeah, well, we could do that, but inevitably there is
    a bureaucratic reason why it never happens.
        I got the same thing in Russia, some folks saying what we
    need most is people who understand how the world really works
    in countries where it works. They only understand how it works
    here in a country that it does not work.
        Without getting into a long debate, let me just plant a
    seed in your head about the USAID and the way the money is
    used, rather than just the traditional kind of government to
    government sort of situation.
        Mr. Natsios. Well, about two thirds, Senator, of our total
    grants and contracts last year were committed to non-profit
    organizations. These include, among others, American NGOs,
    American colleges and universities and indigenous NGOs,
    locally-based NGOs. Some countries like Indonesia have
    thousands of local NGOs that are very very good. So 65 percent
    of our funding does not go through governments, it goes through
    universities, colleges, research stations, local NGOs,
    international NGOs, cooperatives. The Land of Lakes, for
    example, is a cooperative electric, or rural electric
    cooperative trade association in New England, and they do a lot
    of work in developing countries developing electrical
    cooperatives, and they are very successful in some countries.
    So we do that now.
        In terms of scholarships, USAID has been educating people
    for decades, ten of thousands of people in the developing world
    have degrees from American universities with USAID
    scholarships, so that is a good program. One of the problems,
    however, I have to tell you, as soon as a lot of people get
    their degrees, they leave, they come here.
        I don't know if you know this, Senator, but the best
    educated immigrant group to the United States right now are
    Africans. They have the highest number of Ph.D.'s of any
    immigrant group into the United States, and most of those
    Ph.D.'s were obtained at U.S. institutions and many with USAID
    scholarships.
        Now, it is nice to get degrees, but I have to tell you, it
    is not helping Africa very much if they come over here. So that
    is one of the problems.
        One of the things that we do though, right now, which is
    very successful, I had the minister of agriculture visiting me
    yesterday from Georgia, the country of Georgia, not the state.
        Senator Bennett. Stalin's Georgia.
        Mr. Natsios. Stalin's Georgia, exactly, the only place
    where they have not pulled down Stalin's statute because he is
    still remembered there, not because they agreed with him but
    because he was from the country. In any case, the minister was
    pleading with me to keep on a USAID advisor in agriculture.
        I think he is an agricultural economist, he is an American,
    but he has been on his staff for 4 months, he said I need him
    on the next 2 years to help me. They are restructuring their
    agricultural system and he said this man is honest. When we
    hire our technical people in the United States, obviously we
    are careful who we hire, but these people tend to be very
    idealistic, but also very practical. This guy has worked in the
    developing world before, he knows what the challenges are. He
    has become one of the most important advisors to this minister
    of agriculture. He does not go in and leave, he lives in the
    country. He is going to bring his family over and live there
    for a couple of years.
        So one way in which we answer the question that you were
    asked is, we do do the scholarships, we still do that, but
    there has been a problem with it. Once they are educated, they
    don't want to go back, or they go back and then the emigrate.
        But we send these advisors in there. We have a couple dozen
    advisors in Indonesia right now trying to help the government
    think through before it is too late, the economic reforms that
    are necessary to make that country's economy recover, which it
    has not yet, from the economic collapse of a few years ago.
        We have found in a number of countries that these advisors
    have made a profound difference by living in the country and
    working in the ministries, but we pay the--we choose the
    person, we pay the person, they are still our employee, but
    they work in the ministry itself on a daily basis.
        Senator Bennett. We can have this conversation later on and
    I think undoubtedly we will, because there are a number of
    roads that you have opened up that I would like to go down, but
    I would also like the adjourn the hearing and I am sure you
    would too.
        So let me just ask you one last question. How do you view
    the role of GasProm in Russia's economic situation?
        Mr. Natsios. I have to tell you, I am not an expert in the
    area. I should not speak about this. I am not sure of what I am
    going to say, and so I would rather not comment.
        Senator Bennett. Okay.
        Mr. Natsios. I can send you a response in writing if you
    wish, Senator.
        Senator Bennett. I think that would be useful. And again, I
    appreciate your willingness for government service and your
    willingness to testify, and the breath of fresh air you bring
    to this whole activity. And on behalf of Youssef Boutros'
    colleagues, take a look at more scholarships for Egypt, and
    maybe we do something like the service academies do, we will
    give you a free education at West Point, Colorado Springs or
    Annapolis, but you owe us at least four years, and maybe when
    AID gives a scholarship to somebody from Egypt it is with the
    understanding that you may really like it up in Cambridge, but
    you are going to have to go back to Cairo for at least four
    years before you apply for a job.
        Thank you very much.
        Mr. Natsios. Thank you, Senator.

                         Additional committee questions

        Senator Bennett. Thank you very much. There will be some
    additional questions which will be submitted for your response
    in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Agency for response subsequent to the
    hearing:]
                Questions Submitted by Senator Patrick J. Leahy
                                    earmarks
         Question. In your testimony two week ago before the Foreign
    Relations Committee, you said that Congressional earmarks make ``it
    very difficult for USAID to get its work done, show any creativity, or
    customize USAID programs in the field to the local situation.''
        I don't know how familiar you are with other appropriations bills
    but some are nothing but earmarks. Every dollar is earmarked. USAID's
    budget is actually relatively free of earmarks.
        What earmarks there are have various explanations. Some, like aid
    to Israel and Cyprus, are there for political reasons. And these
    earmarks reflect the Administration's budget request. Other earmarks
    are there because the Congress has tried every other way to convince
    UAID to do something without success. Let me give you an example:
        Three years ago, USAID spent about $2 million on tuberculosis
    programs worldwide. When I tried to convince USAID that was not a
    serious response to tuberculosis, all I got were excuses. Today USAID
    is spending $60 million on tuberculosis, because Congress felt it
    should be a priority.
        Having said that, Senator McConnell and I, and our colleagues in
    the House, try hard to discourage earmarks, and we succeed most of the
    time. I would like to see fewer earmarks, but USAID also needs to
    recognize that sometimes members of Congress have strong views about
    how to spend the funds we appropriate.
        What earmarks are you most concerned about?
        Answer. Senator Leahy, I first want to clarify that when I used the
    term earmarks I was generically using it to mean both earmarks and
    directives. I agree that the number of earmarks is not that great and
    that you and Senator McConnell, as well as members in the House, have
    been successful in limiting earmarks, but the number of directives has
    grown over the years. I also agree that there are times such as the
    example you used with TB, when the Congress has had to use its
    influence through earmarks and or directives to direct USAID towards a
    correct program path. However, that does not mean that Secretary Powell
    or I agree that every directive is the best way in which USAID funds
    can be used. Secretary Powell in his testimony before the Congress has
    indicated his strong concerns about the increasing number of directives
    that are being imposed on the foreign assistance accounts.
        In fiscal year 2001 there was a total of 247 directives and
    earmarks against USAID managed accounts from the House and Senate
    Appropriations Committees. While not all of those included funding
    levels many did, and I believe that this is not always the best use of
    our funds or the direction in which our programs should go. At the same
    time, we are always aware that if directives are not followed they can
    easily become earmarks the following year, and for that reason we try
    to be as responsive as possible.
        For many of the directives there are very good reasons for our
    opposition. For some the institutions/organizations in question have
    not responded to our requests for additional information or even
    submitted a proposal after being asked to do so. For others core
    funding has already been provided with the understanding that the
    organizations in question are already self-sustaining and additional
    funds are to come from sources other than USAID. In other examples
    funding may be redundant in that other organizations may have already
    been selected or involved or the work in question has been completed.
    For others we are being asked to implement a program where there is no
    USAID presence or management capacity to monitor or assess the progress
    and success of the activity.
        For the non-DA accounts we have an additional problem in that we
    are not able to unilaterally determine that funding directives which
    affect those accounts can be met without consultation and agreement
    with the State Department.
        Other examples are the funding floors imposed on us for our Africa
    and Latin America programs. Secretary Powell and I have made it clear
    that we believe assistance to the Africa region is of the up-most
    importance, but having a floor greatly reduces our flexibility in
    programming needed resources. I don't believe that our request for
    Africa in the current ``Budget Justification'' justifies a need for
    continuation of that floor nor does it for the Latin America region.
        One area of particular concern is the practice of targeting funds
    to specific universities. There are 75 directives targeted to specific
    universities and institutions of which 59 are against the Development
    Assistance and Child Survival and Diseases program accounts and the
    balance against the ESF, SEED and FSA accounts. In some cases USAID is
    already funding some of them so there is no issue. However, I strongly
    believe that the competitive process will most always result in a more
    successful and stronger program. There are 20 of these directives that
    we have identified as not meeting the requirements we deem necessary
    for funding.
        I ask that the Congress give us the flexibility to make choices and
    provide some relief from the increasing number of directives being
    imposed on our programs and accounts. If you or others in Congress have
    concerns I assure you they will be listened to and addressed in a
    positive way. Where we have differences we will work with you to iron
    those out where possible.
                                  microbicides
        Question. Both the House and Senate strongly support efforts to
    develop microbicides--a technology that aims to prevent HIV infection.
    They are particularly important for women, whose risk of HIV infection
    is high and whose control over other prevention options is low. This
    year, in response to pressure from Congress, USAID plans to spend $12
    million for microbicides development--another example of where Congress
    had to earmark funds to get results. I am confident that we will
    include at least that much in fiscal year 2002. I want to be sure USAID
    coordinates its microbicides activities with other federal agencies
    like National Institutes of Health and Centers for Disease Control.
        Can you tell me what USAID has identified as its best use of
    resources in this area?
        Answer. USAID has supported research to develop microbicides for
    more than five years with annual funding levels of about $2 million. In
    fiscal year 2001, USAID intends to commit about $12 million for this
    purpose. Promising microbicidal products have been identified as a
    result of research undertaken to date with USAID funding. Fiscal year
    2001 funds will be used to accelerate the completion of laboratory
    evaluation of these microbicidal products, initiate clinical testing to
    evaluate safety, effectiveness, and acceptability, and undertake a
    variety of support activities to ensure widespread availability and
    proper utilization once they are available for use. The support
    activities include the development of tools to predict the likelihood
    that a lead microbicidal candidate will result in a safe and effective
    product; strategies to minimize risky behaviors that may accompany the
    availability of a microbicide; and infrastructure and capacity
    strengthening to increase the number of countries, institutions, and
    communities that can perform microbicide trials.
        USAID coordinates its microbicide research and development efforts
    with other U.S. government agencies, NIH's Office of AIDS Research and
    CDC; private foundations such as Gates and Rockefeller; and non-
    governmental organizations to maximize the level and impact of
    resources as well as minimize duplication of effort.
                              infectious diseases
        Question. Four years ago, USAID launched its ``Infectious Disease
    Initiative,'' which since then has provided an additional quarter
    billion dollars in four priority areas: surveillance, anti-drug
    resistance, tuberculosis and malaria. This initiative has been, on the
    whole, a success. But it is only a start. The threats to Americans, and
    to people everywhere, from infectious diseases, requires a far more
    aggressive response.
        As we consider substantially increasing our support for HIV/AIDS
    programs, it seems to me that much the same case can be made for much
    larger investments to combat other infectious diseases. Do you agree?
        Answer. There is no question that the areas addressed by USAID's
    Infectious Disease Initiative are of critical and growing importance.
    The tuberculosis epidemic grows in concert with the HIV/AIDS pandemic
    and claims the lives of nearly 2 million people each year. Growing
    prevalence of drug resistant strains of tuberculosis, malaria and a
    host of other diseases (such as pneumonia and diarrhea) are not only
    deadly and often incurable killers in the developing world but also
    threaten the United States. The surveillance information we and our
    partners at the country and international levels rely on to make
    decisions and target resources is generally of very poor quality and
    needs to be dramatically improved.
        Confronting the spread of infectious diseases must take into
    account broader efforts such as our work in child and maternal health.
    Our maternal child health activities are helping to establish
    sustainable, functional health systems that will not only respond to
    the HIV/AIDS, TB and malaria epidemics, but also help save the millions
    of children and women whose lives are threatened each year from
    preventable diseases.
        USAID combats a myriad of problems in the health and other related
    sectors such as economic growth and education which impact on the
    spread of diseases. Our funding is limited. As a result, we cannot
    tackle all of the priorities with the preferred level of resources.
    Therefore, USAID will more aggressively identify and pursue
    partnerships with other donors, non-governmental organizations,
    foundations, and the private sector to mobilize more funding for
    countering the spread of infectious diseases.
                                family planning
        Question. Each year, we fight over the Mexico City policy, or the
    ``global gag rule'', as it has become known--a policy that would be
    unconstitutional in our own country. But separate and apart from that,
    USAID funds voluntary family planning programs in dozens of countries.
    Unfortunately, funding for these activities has not kept up with the
    need. This year, USAID will spend $425 million on family planning. That
    is $25 million less than it did in fiscal year 1995, the last year I
    chaired this subcommittee. For fiscal year 2002, the President has
    requested level funding. This is shortsighted. Making family planning
    services available is key to children's health, to women's health, to
    safeguarding the environment, to economic development, and above all,
    to reducing poverty.
        Where do you put family planning on your list of priorities?
        Answer. Family planning is one of a number of key health priorities
    for this Administration. USAID is allocating $425 million this year for
    family planning activities. This level is $40 million higher than
    appropriated levels in recent years. In the President's 2002 budget,
    this level has been maintained.
        USAID recognizes the importance of family planning and reproductive
    health. However, we also acknowledge that efforts to improve economic
    growth, basic education particularly for girls, and other health areas
    have a large impact on family planning practices. Thus, USAID balances
    a number of critical priorities with its limited overall funding
    levels.
        For that reason, I am pressing USAID staff to aggressively identify
    and pursue partnerships with other donors, non-governmental
    organizations, foundations and the private sector to mobilize more
    funding for tackling critical development issues like family planning.
                            clean energy technology
        Question. I think this Administration is being extremely
    shortsighted in its approach to energy in this country, not to mention
    globally. Anyone can see that we waste huge amounts of energy, yet
    [Vice President] Cheney denigrates conservation. We know from our own
    experience that nothing is more key to economic development than the
    availability of energy--cleaner energy. I have heard that USAID plans
    to sharply cut funding for renewable energy and clean energy
    technology.
        With so many opportunities to invest in infrastructure and energy
    technology in developing countries--which benefits U.S. companies, U.S.
    jobs, and the environment, why cut these programs? How much is USAID
    spending in fiscal year 2001, and what is USAID's fiscal year 2002
    budget request, for the development of U.S. clean energy technologies,
    and for the use of clean energy technologies in developing countries?
    What is the fiscal year 2001 budget for the Office of Energy and
    Environmental Technology, and what is the request for fiscal year 2002?
    I am told half would cut it. This office has strong, bipartisan support
    in Congress, and no decision like that should be made without first
    consulting with us.
        Answer. We agree that there are many opportunities to invest in
    infrastructure and energy technology in developing countries. However,
    the overall USAID budget is squeezed by earmarks, directives and
    Administration priorities, thus not all critical initiatives can
    receive the preferred level of funding.
        As a result, USAID's budget for energy, in general, and clean
    energy, in particular, is extremely limited. The Agency will spend in
    the neighborhood of $30 million for clean energy from development
    assistance resources in fiscal year 2001. Our funds are used for two
    primary purposes: (1) research and development to identify low-cost,
    efficient and environmentally sound energy innovations for the
    developing world; and (2) technical assistance and training to leverage
    the resources of international financial institutions and to improve
    the policy and regulatory environment for U.S. private sector
    investment.
        We cannot yet specify a target for fiscal year 2002. The budget for
    the Global Bureau's Office of Energy and Environmental Technology (G/
    ENV/EET) is $16 million in fiscal year 2001; our fiscal year 2002
    request for G/ENV/EET is about $13 million.
                                  biodiversity
        Question. One area that has suffered in recent years is funding for
    programs to protect biodiversity. With the world's population set to
    exceed nine billion by the middle of this century, and the number of
    automobiles skyrocketing, the pressures on the environment in
    developing countries are enormous. You can see this simply by traveling
    to Mexico today, a country that is literally littered with garbage,
    where protected areas are being destroyed, and where cities are
    becoming unlivable. This is the reality in many developing countries.
        What do you see as USAID's role in addressing these environmental
    problems? Where does it fit on your list of priorities? Do you agree
    that we should spend more on these programs in fiscal year 2002?
        For fiscal year 1995, the last year I chaired this subcommittee,
    USAID spent $106 million to protect biodiversity. In fiscal year 2001
    we will spend about $100 million. So in real terms we are spending less
    than we used to. Do you agree that we should spend more on these
    programs in fiscal year 2002?
        Answer. USAID promotes a holistic approach to addressing global
    environmental problems. Our programs promote the wise and sustainable
    use of the world's natural resources, clean energy technology and use
    of renewable energy resources, clean water and sustainable use of
    global water sources.
        Biodiversity conservation plays an important part in ensuring the
    continued use and providing opportunities for new uses of the world's
    ecosystems, including the maintenance of locally important watersheds.
    In this context, biodiversity conservation remains a high priority for
    USAID. The Agency is working collaboratively with its NGO partners,
    local governments, and local peoples to conserve biodiversity while
    improving the economic opportunities in rural areas. We will
    aggressively pursue partnerships with other donors, non-governmental
    organizations, foundations, universities and the private sector to
    leverage more funding to protect biodiversity. In this way, we view
    ourselves as an entity implementing solutions to biodiversity issues on
    a limited scale, while also being a catalyst for focused efforts to
    tackle the larger issues on a global scale.
        Although USAID would like to spend more to support biodiversity
    conservation programs in fiscal year 2002, other budgetary demands will
    make that unlikely. We do not yet have figures for biodiversity
    spending in fiscal year 2002. However, anticipated cuts in the overall
    environment budget will constrain spending on biodiversity programs.
    Through our current programs, our NGO partners are using USAID funds to
    leverage new and additional funding sources. We will identify and
    pursue additional leverage opportunities through our public and private
    partnerships that shall generate substantially more resources for these
    programs.
                              conflict prevention
        Question. I like your idea of doing more in conflict prevention. It
    does not need to cost a lot, but it can make a real difference. There
    are experienced negotiators whose skills are under utilized, who can
    propose creative solutions to diffuse tensions. Give me an example of
    what you have in mind?
        Answer. USAID will be exploring and possibly strengthening the role
    that international and indigenous NGOs, Foundations and other public
    and private sector organizations can play in contributing to the
    transformation of conflict to non-violent outcomes and peacebuilding.
    These grassroot level efforts (e.g. the Lileer reconciliation, along
    with the Wunlit reconciliation of 1999 in Sudan that helped in reducing
    tensions and conflict in Equatoria in Sudan) can be critical serving as
    catalysts for calming ethnic tensions. Locally initiated efforts at
    conflict resolution, when combined with parallel efforts in HIV/AIDS
    prevention programs, provide sound interventions with people level
    impact. USAID supports the African Centre for the Constructive
    Resolution of Disputes (ACCORD) in diffusing tensions on the ground
    through conflict training programs.
        Question. One thing that has strong congressional support are
    programs that bring together teenage youth from conflict zones, like
    the Middle East, Cyprus, the Balkans. There has even been talk of
    Kashmir and Central Africa. Would you include this type of thing?
        Answer. These important programs for adolescent girls and boys can
    have lasting impact at reducing the potential for future violent
    conflict. They need to be developed and incorporated into an integrated
    approach for peacebuilding and reconciliation that provides educational
    and employment opportunities and democratic values to support a new
    generation of youth with hope, not despair. Child soldiers, AIDS
    orphans, and victims of human trafficking lucky enough to survive, need
    opportunities to meet other youth in a safe way that allows for sharing
    of personal experiences.
             procurement, personnel, information management systems
        Question. I cannot agree with you more about the need to fix
    USAID's dysfunctional procurement, personnel and information management
    systems. You can have programs that look great on paper, but if it
    takes half a year to negotiate contracts, or to procure the necessary
    goods or services, or if you can't get quick and accurate information
    about what you are doing, you won't get good results. Can you describe
    what a reformed procurement system at USAID would look like it?
        Answer. It is very difficult to describe a reformed procurement
    system at USAID because what one group calls ``reform'' another group
    calls ``trouble.'' Let me give you an example. Many inside USAID argue
    for streamlining the procurement process, so we can award contracts
    faster, and the rules give us some flexibility to do that. We could
    reduce the time for advertising new procurements, or the time for
    preparing proposals. But that just gives contractors who have
    previously worked with USAID an additional advantage. The smaller firms
    that have such a hard time competing against the big contractors won't
    have a chance if they have even less time. I want to broaden the base
    of firms we use overseas, not reduce it.
        Nonetheless, I'm sure there are ways we can streamline our internal
    procurement process that would not put any organization at a
    disadvantage. We will soon ask a procurement expert to come inside
    USAID, review the way we conduct a sampling of procurement actions, and
    get some practical recommendations about steps we can cut or eliminate.
    We will also look for ways to improve procurement planning. If the
    procurement staff can be involved earlier in the process, issues can be
    addressed and the procurement action can begin at an earlier stage in
    activity development. This will help minimize delays in getting
    activities started.
                          global development alliance
        Question. You have proposed a ``Global Development Alliance'',
    which would set aside some amount of USAID resources from various
    accounts to leverage funds from private foundations and corporations,
    to be targeted at specific foreign aid goals.
        How can we be sure that if you withhold $x from, say environmental
    programs, that at least that much, when combined with private funds,
    will end up being provided for environmental programs? Or could that $x
    end up being used for something completely different, say democracy
    programs? If so, I think that would pose a problem for us. I see no
    reason why private funds could not be leveraged in support of the wide
    range of USAID activities, but I would not want to see funds intended
    for the environment, or some other activity, end up being used for
    something else. I think withholding funds to leverage private resources
    is fine, if it really does result in more resources for the purpose the
    appropriated funds were intended. Can you comment on this?
        Answer. Funding for the Global Development Alliance is intended as
    an incentive to encourage public-private alliances, which will leverage
    additional resources and new ideas to tackle critical development
    problems. This is a new initiative for fiscal year 2002, and one of
    USAID's four pillars.
        The funding requested for the Global Development Alliance for
    fiscal year 2002 comes from three accounts; Development Assistance
    ($110 million), Child Survival and Diseases Program ($25 million), and
    International Disaster Assistance ($25 million). Funds were not
    withheld from any particular sector, but rather taken off the top of
    these accounts. All resources that USAID programs for the Global
    Development Alliance will be used for activities consistent with the
    purposes of the accounts to which these resources were appropriated.
        It is our hope that all sectors will be able to benefit from an
    increase in total funding as alliances are formed with private
    companies, foundations and other groups. Until the alliances are
    actually developed and submitted for funding, it is impossible to know
    which sectors will receive what level of funding. It is also quite
    possible, and we believe desirable, that some alliances may work across
    sectors.
                              universiy directives
        Question. Each year, we receive more and more requests from Members
    of Congress to direct USAID to fund universities in the United States,
    to support their international studies, research, and exchange
    programs. I think these institutions have a lot to offer whether in
    agriculture research and marketing, natural resource conservation,
    telemedicine--the list is as limitless as a university professor's
    imagination. But I am also concerned about the process by which these
    proposals are funded. We can recommend that USAID consider these
    proposals, but I want to be sure that funding decisions are ultimately
    made on the merits, not on the basis of political pressure. Do you have
    an opinion on this?
        Answer. We prefer that U.S. colleges and universities channel their
    proposals through competitive procurement mechanisms rather than
    through legislative directives that require USAID to sign contracts and
    agreements with specific organizations to perform specific work in a
    sector. USAID considers the U.S. higher education community to be a
    national resource and a significant contributor to our programs. As a
    result, we have a variety of competitive programs and activities
    designed specifically for U.S. colleges and universities.
        Our competitive higher education partnership programs are open to
    all U.S. colleges and universities on an annual basis. Programs undergo
    a peer review process that recommends funding based on the technical
    merits of the proposal. These grant programs apply the knowledge,
    research, service, and technical expertise of U.S. colleges and
    universities, in partnership with developing country institutions of
    higher education, to national and regional development challenges.
        In addition to hundreds of other new competitive procurements each
    year in almost all development sectors for which U.S. higher education
    institutions can compete, we will be exploring additional ways to
    fashion relationships through the Global Development Alliance. We hope
    not only to build partnerships, but also to leverage more resources to
    confront critical development problems.
                                 blind children
        Question. We provided $1.2 million for programs for blind children
    in fiscal year 2001. This is a program we have funded for several
    years. It is my understanding that there is about that much funding in
    the pipeline that remains unspent. In other words, we are about a year
    behind in obligating these funds.
        It seems to me that it should not be difficult to make good use of
    these funds, for surgery that can cure some types of blindness and for
    other types of assistance for blind children. If there are questions
    about what activities the funds should be used for, I am sure we can
    answer them. Would you look into this and be sure that these funds are
    used for their intended purpose, or come back to me and explain why
    they can't be?
        Answer. Yes, the fiscal year 2000 funds were not obligated during
    fiscal year 2000. However, these funds are being added to fiscal year
    2001 (for a total of $2.197 million) and will be obligated during
    fiscal year 2001.
        The funds have been used for surgeries for blind children, as well
    as to train eye care specialists in target countries, to provide
    corrective services, and to support advocacy for integration of eye
    care services into national health systems. A new five-year program
    will address two of the major causes of childhood blindness, congenital
    cataract and significant refractive error, by developing a multi-
    country, integrated and comprehensive approach to tackle the blindness
    problem in Bangladesh, Mexico, Morocco, Nigeria and South Africa.
    Activities include increasing community awareness of preventable eye
    disease; training health workers; integrating Primary Eye Care into
    existing primary health care structures; and establishing centers of
    excellence for the provision of childhood cataract surgery and follow-
    up care, and for low vision and rehabilitation services.
                              disaster assistance
        Question. Disaster Assistance has strong support in Congress and
    among the American public--this is what people think of when they think
    of foreign aid. In your written testimony, you noted that ``demands on
    disaster assistance resources have increased for a number of years.''
    However, the budget for the Office of Foreign Disaster Assistance
    (OFDA) has not kept pace over time. Currently, the Disaster Assistance
    account is being called on to meet competing needs in Afghanistan, El
    Salvador, India, Sudan, and many other needy places. As the former head
    of OFDA, do you agree that funding for Disaster Assistance is
    inadequate?
        Answer. USAID's Office of Foreign Disaster Assistance (OFDA)
    generally obligates more than its annual New Obligating Authority.
    Additional needs have been covered through the recovery of prior years
    obligations, supplemental funding from Congress and by exercising the
    492(b) authority. Over the last five years, OFDA has responded to an
    average of 68 disasters annually. Most of the IDA account is spent on
    complex emergencies involving political turmoil and civil strife that
    threaten the stability of a region, such as is the case in Sudan. We
    have projected our funding requirements based on the current activities
    and I believe the funding level to be adequate.

        BHR/OFDA--NOA ANALYSIS AND OBLIGATIONS FOR FISCAL YEARS 1996-2000
    ------------------------------------------------------------------------
                                                   New obligating  Number of
             Fiscal year                Total         authority     declared
                                     obligations        (NOA)      disasters
    ------------------------------------------------------------------------
    2000.........................    $229,507,615    $152,706,257         74
    1999.........................     292,664,529     160,000,000         64
    1998.........................     186,358,181     160,000,000         86
    1997.........................     174,670,844     165,000,000         51
    1996.........................     156,605,467     155,951,000         65
    ------------------------------------------------------------------------

                                   east timor
        Question. I am sure you are aware of the destruction that took
    place in East Timor after the referendum in 1999. As East Timor now
    moves toward full independence, its need for international assistance
    remains great. From everything I hear, USAID's Office of Transition
    Initiatives has been doing a superb job there. What kind of U.S.
    support for East Timor--in terms of funding levels and priorities--do
    you envision after a formal declaration of independence?
        Answer. East Timor must take several steps to achieve full
    independence. Elections for East Timor's Constituent Assembly are
    scheduled for August 2001 (although they may be delayed). Following
    these elections, the new assembly will draft a constitution, with
    public participation through the formulation and functioning of
    Constitutional Commissions. The East Timorese people will elect their
    new president in early 2002. The formal declaration of independence
    will occur when the new president is installed. Given the complexity of
    these steps, full independence probably will not be achieved until June
    2002 or later.
        USAID will maintain programmatic flexibility within this extremely
    fluid political and social environment. We have developed a strategy
    based on a funding scenario of $25 million economic support fund (ESF)
    annually in fiscal years 2001-2003 (a total of $75 million).
        In fiscal year 2001, USAID anticipates using approximately $5
    million ESF for pre- and post-election activities. This includes
    assisting indigenous non-governmental organizations with election
    support; constitution and legislative drafting; citizen participation
    in local governance; rule of law; and media development. Our post-
    election priorities are to provide technical assistance and training to
    strengthen the new independent electoral commission in organizing and
    conducting future elections.
        USAID's ongoing economic development work spans both pre- and post-
    election periods. Approximately $4 million ESF will be used to
    accelerate economic revitalization by continuing to develop East
    Timor's main export commodity (coffee).
        The Office of Transition Initiatives will continue to work with
    USAID/Jakarta on community-level rehabilitation through its small
    grants program. We anticipate that approximately $9.5 million will be
    spent on community stabilization, assistance to independent media
    outlets, and support for the reintegration of ex-combatants.
                                     ______

                Question Submitted by Senator Richard J. Durbin
                          global development alliance
        Question. You have suggested a $160 million fund for public-private
    partnerships. While I welcome the flexibility that such a fund could
    offer USAID, I'd like you to outline where these funds are coming from
    in your budget to make up the $160 million fund? How will you be sure
    that the goals of the programs from which these funds are taken, such
    as renewable energy, biodiversity and other environmental projects, are
    met under the Global Development Alliance?
        Answer. Funding for the Global Development Alliance is intended as
    an incentive to encourage public-private alliances, which will leverage
    additional resources and new ideas to tackle critical development
    problems. This is a new initiative for fiscal year 2002, and one of
    USAID's four pillars.
        The funding requested for the Global Development Alliance for
    fiscal year 2002 comes from three accounts; Development Assistance
    ($110 million), Child Survival and Diseases Program ($25 million), and
    International Disaster Assistance ($25 million). Funds were not
    withheld from any particular sector, but rather taken off the top,
    since this is a new funding request.
        It is our hope that all sectors will be able to benefit from an
    increase in total funding as alliances are formed with private
    companies, foundations and other groups. Until the alliances are
    actually developed and submitted for funding, it is impossible to know
    which sectors will receive what level of funding. It is also quite
    possible, and we believe desirable, that some alliances may work across
    sectors.
                                     ______

             Questions Submitted by Senator Ben Nighthorse Campbell
                                  tuberculosis
        Question. Tuberculosis is an ancient disease, but due in part to
    apathy, it has made a dangerous comeback in recent years. Tuberculosis
    is highly infectious and spreads through the air from one person to
    another. Among infectious diseases, TB remains the second leading
    killer in the world (after AIDS), killing nearly 2 million people
    around the world each year. Tuberculosis rates are substantially higher
    for minorities in the United States. Native Americans, for example,
    have an incidence five times greater than that of Caucasians.
    Tuberculosis also has a sinister interaction with the HIV/AIDS
    epidemic-people co-infected with HIV and TB are up to 800 times more
    likely to develop active TB than people without HIV.
        Tuberculosis is the leading killer of people with AIDS and accounts
    for one third of all deaths in Sub-Saharan Africa. Due to its
    infectious nature, an important way to control TB here at home is to
    control it abroad. Congress has expanded investment for international
    tuberculosis control in recent years--in 2001 this Subcommittee
    provided $60 million for international TB control, up from a level of
    virtually zero in 1997.
        What are your views of the extent of the TB problem overseas? How
    will USAID address this growing problem in the coming years?
        Answer. The tuberculosis problem overseas continues to grow every
    day and is of increasing concern to USAID. Ninety-five percent of all
    TB cases and ninety-eight percent of the 2 million annual TB deaths
    occur in developing countries. Tuberculosis threatens the poorest and
    most marginalized members of a society and undermines economic
    development. As you accurately noted, TB is growing in concert with the
    HIV/AIDS pandemic. Because of this and because TB is highly contagious,
    the disease is clearly a threat not only to the developing world but to
    the United States as well.
        USAID is making a significant contribution to the global effort to
    prevent and control tuberculosis, leading to a reduction in the
    morbidity and mortality associated with the disease. USAID will work to
    build capacity in countries most affected to address tuberculosis;
    expand implementation of proven, cost-effective interventions for
    preventing the transmission of tuberculosis; and help strengthen policy
    commitment and surveillance. We also will help ensure an adequate
    supply of drugs by assisting countries to obtain reliable access to TB
    drugs through improved drug management and procurement practices. In
    addition, USAID will continue to invest in developing new tools to
    prevent, diagnose and treat tuberculosis, and invest in training an
    expanded cadre of TB experts. Finally, we are contributing
    significantly to the international Stop TB partnership, as well as
    fostering partnerships with other donors, non-governmental
    organizations, foundations and the private sector to mobilize more
    funding and attention to combating the spread of TB and other
    infectious diseases.
     corruption in the organization for security and cooperation in europe
                                 (osce) region
        Question. As Chairman of the Commission of Security and Co-
    Operation in Europe (OSCE), the Helsinki Commission, I am particularly
    concerned over the growing problem of corruption in the 55-nation OSCE
    region. I have worked to raise corruption-related issues within the
    OSCE framework, as there are obvious implications in the security,
    economic and human dimensions that impact U.S. interests in the region.
        What projects are currently being supported by USAID in the OSCE
    participating States to help promote transparency and the developments
    of related non-governmental organizations (NGOs)?
        Answer. USAID recognized the growing problem of corruption in the
    region back in 1997, when, together with the OECD, we inaugurated an
    Anti-Corruption Network for Transition States, including both Central
    European and the former Soviet Union. That network brings together
    host-country government officials, non-governmental organizations,
    foreign donors and anti-corruption practitioners and specialists in
    yearly meetings to promote best practices, such as procurement reform
    and aggressive freedom-of-information laws to protect journalists who
    report on corruption. We also launched an English-Russian anti-
    corruption website, www.nobribes.org, to detail many of these
    approaches and connect users in ways that truly facilitated
    information-sharing and open dialogue.
        In the countries of southeast Europe represented in the Stability
    Pact, USAID has pressed for non-governmental organization (NGO)
    participation and leadership in the transparency effort. We fund the
    Southeast Europe Legal Defense Initiative, an anti-corruption program
    not led by any foreign donor or development organization, but by
    Coalition 2000, an anti-corruption NGO in Bulgaria, to help other anti-
    corruption NGOs across eight countries to develop their own ability to
    monitor and fight corruption in their countries.
        In addition to these regional approaches, USAID also emphasizes
    bilateral efforts to combat corruption. In Slovakia, for example,
    before USAID's bilateral program ended, the entire program was devoted
    to the promotion of transparency and the fight against corruption. We
    worked very closely with the Government of Slovakia to publicize a
    detailed corruption strategy and ensure NGO participation in it. In
    Bulgaria, we continue to work with NGOs and the Government to promote
    accountability within the judiciary and customs, and we work closely
    with our colleagues from the Department of Justice in that effort. Our
    Croatia mission is moving cautiously forward with a program emphasizing
    transparency in the continued privatization process, participation by
    NGOs and labor unions in economic reform efforts, and civil society
    involvement in these questions at all levels.
        Throughout the region, USAID coordinates closely with anti-
    corruption programs implemented by other U.S. government agencies, such
    as the Departments of Justice, State, and the Treasury. USAID will
    continue to work with the OSCE, the World Bank, the OECD Development
    Assistance Committee and other regional development and security
    organizations in the region to aggressively promote transparency as a
    fundamental part of development work.
        Question. Given the implications for democracy, human rights and
    the rule of law, is USAID placing greater emphasis on activities that
    can help stem corruption in these countries?
        Answer. This year, USAID's Europe & Eurasia Bureau released an
    Anti-Corruption Strategic Framework, disseminating it widely through
    the U.S. government, to anti-corruption practitioners and others. At
    the heart of that strategy is a focus on our capacity to promote
    transparency and information-sharing. In countries where consolidating
    authoritarian regimes appear to be returning, we believe that a renewed
    focus on human rights and freedom for journalists and critics remains
    the most important contribution we can make to stemming the tide. In
    other countries whose overall direction is uncertain, we believe an
    approach combining ``good governance'' technical assistance and
    aggressive promotion of information-sharing is an effective tool to
    help reform-oriented groups within those countries consolidate their
    gains and prevent backsliding or erosion. In countries with clear
    commitments to democracy and the rule of law, we are attempting to make
    transparency the core of our economic and democratic assistance
    programs.
        We have examined the record of other countries that have mounted
    successful campaigns against corruption and noted the importance of
    these kind of practices, together with aggressive law enforcement
    technical assistance that our colleagues from Justice, State, Treasury
    and elsewhere are providing. All are necessary parts of a comprehensive
    package that new transition states can use to make inroads against
    corrupt practices.
        Question. Last week I chaired a Commission hearing on developments
    in Ukraine. I am particularly interested in USAID's ongoing activities
    in that country where corruption remains a major stumbling block to
    progress. Could you please provide your views in this area?
        Answer. Corruption is the misuse of public power for private
    profit. Not many would disagree that corruption in Ukraine today is
    systemic. However, it should be remembered that corruption was also
    systemic during the Soviet era. This partly explains the lack, or the
    lesser amount, of stigma associated with corrupt acts in Ukraine.
        Nevertheless, action is necessary because corruption has grown to
    such an extent that it now may constitute a threat to the state.
    Corruption promotes the unequal distribution of wealth, undermines
    public confidence in government, and discredits the concepts of the
    free market and rule of law.
        Obviously, enforcement strategies will remain a component of any
    anti-corruption program. But, their limited effectiveness to date
    strongly suggests the need to supplement them with initiatives to
    prevent corruption from arising. This so-called ``prevention'' strategy
    focuses on reducing the incentives and opportunities that lead to
    corruption. Unlike enforcement strategies that attack corruption
    directly, prevention strategies often do so indirectly by pursuing
    policies that have as one of their concomitant consequences a reduction
    in the incentives and opportunities for corruption.
        Since corruption in Ukraine affects many of the areas in which
    USAID is providing assistance, most, if not all, USAID assistance
    programs inevitably address corruption. The major focus of many of
    these programs has been to reduce opportunities for corruption by
    promoting reforms that increase transparency and accountability.
    Examples of anti-corruption activities in the current USAID portfolio
    include:
      --Regulatory reform to assist the Government of Ukraine (GOU) bring
            about a meaningful reduction in the overwhelming regulatory
            burden faced by enterprises in Ukraine, especially small- and
            medium-sized businesses whose survival and development are
            stifled by over-regulation.
      --Banking sector reform to foster more transparency by training
            Ukrainian bankers in western banking practices, training GOU
            bank regulators in on-site inspection, to elevate regulators'
            standards and professional knowledge, and to promote conversion
            of commercial banks to international accounting standards.
      --Enterprise accounting to reform the accounting system based on
            international accounting standards.
      --Enterprise development to provide entrepreneurs across Ukraine with
            access to existing laws, policies, and regulations governing
            their activities and to work with multiple branches and levels
            of the GOU to support deregulation of commercial activities and
            reduce the number of licenses, monitoring procedures, and other
            obstacles to efficient business development.
      --Independent media to provide special seminars and training
            exchanges, some in conjunction with the World Bank, in
            investigative reporting for reform-oriented journalists.
      --Justice sector reform to encourage courts to adopt more transparent
            procedures, including blind assignment of cases.
      --Legal reform to facilitate drafting of a new Ethics Code for
            government officials and legislation to cover the rights and
            obligations of administrative bodies, their relationship to
            other governmental organizations and the public.
      --Fiscal reform to encourage sounder budget and tax policies, better
            government financial management practices, greater transparency
            in city budgets and strategic plans, higher professional
            standards, and decentralization.
      --Local self-government development to help Ukrainian cities
            establish transparent procedures in budgeting, municipal land
            use and competitive contracting for public works.
                                    belarus
        Question. What is the current level of USAID assistance to Belarus?
        Answer. USAID's budget for fiscal year 2001 is $4 million.
    Including USAID, the overall U.S. Government assistance budget for
    Belarus is approximately $13 million. Approximately 80 percent of the
    USAID budget support democratic initiatives. The United States is the
    largest bilateral donor of foreign assistance to Belarus.
        Question. Are there plans to increase the level of assistance to
    devote to development of non-governmental organizations and the
    independent media in Belarus?
        Anwer. Both USAID and State Department assistance is already
    largely focused on development of non-governmental organizations (NGOs)
    and the independent media. Should additional pre-election requirements
    be identified, we will look at how we might accommodate them.
        Question. What programs are already in place to promote democracy,
    especially in the run-up to presidential elections expected later this
    year?
        Answer. USAID's activities in the current year include political
    process support, civil society and NGO strengthening, support for rule
    of law and legal defense, assistance to independent media and technical
    assistance to private enterprises, which are an important constituency
    for democratization.
        Question. According to the Spring issue of the Belarusian Review,
    Lukashenka has issued a decree banning the use of foreign aid for pro-
    democracy activities. Is USAID aware of this development and are your
    funded organizations doing pro-democracy work in Belarus now in
    jeopardy?
        Anwer. USAID is aware of President Lukashenka's Decree 8, which
    forbids ``gratuitous foreign assistance,'' particularly related to
    election assistance. However, the Ministry of Foreign Affairs has
    assured the U.S. Embassy that USAID grantees and contractors are exempt
    from Decree 8, which explicitly excludes those programs covered under
    international agreements approved by the Government of Belarus, such as
    our Bilateral Agreement. At the request of our grantees and
    contractors, USAID provided a sentence to be added to all their
    documents citing coverage under the Bilateral Agreement.
        Yet, despite these assurances, USAID grantees and contractors have
    been contacted by the Ministry of Foreign Affairs and Belarusian KGB
    with repeated requests for details of their programs. And, on several
    occasions, USAID's grantees and contractors have been harassed by
    telephone, by being followed, and by being photographed.
        The Government of Belarus continues its attack on the Organization
    for Security and Cooperation in Europe (OSCE) and its efforts to train
    election monitors for the presidential election, which have been
    scheduled for early September 2001.
                              international crime
        Question. The Federal Government considers international crime--a
    composite of many separate types of criminal activities, such as drug
    trafficking, money laundering, and public corruption--as a growing
    threat to the national security interest of the United States,
    designated as such by Presidential Decision Directive (PDD) 42 of
    October 1995. PDD-42 called for a sustained and focused federal effort
    to combat international crime. In 1998, the International Crime Control
    Strategy outlined the 8 goals and 30 implementing objectives of the
    federal response and identified a number of specific initiatives to
    achieve these goals and objectives. In addition, the strategy called
    for conducting assessments to gauge the threat posed by various types
    of international crime and implementing a performance measurement
    system to assess the effectiveness of the strategy's initiatives. Two
    threat assessments were subsequently conducted in 1999 and 2000; there
    was no action to establish an overall performance measurement system.
        What programs is USAID funding to support the Administration of
    Justice and Rule of Law? In which countries are these programs? Is
    USAID funding any specific initiatives to help address international
    crime? If so, how are these initiatives coordinated with other federal
    agencies also working in the international crime area?
        Answer. USAID's administration of justice and rule of law programs
    are part of our overall objective of strengthening democracy and good
    governance. Programs generally follow one of four basic approaches:
      --improving the legal framework;
      --improving justice sector institution performance;
      --increasing access to justice; and
      --generating popular demand for justice sector reform.
        Within these broad parameters, specific country programs vary
    significantly. Attached (on the following page) is a chart that
    illustrates USAID justice sector assistance programs by country and
    region.
        In general, USAID does not directly engage in activities to stop
    international criminals due to statutory restrictions and institutional
    capabilities. Our justice sector and other programs are focused on the
    long-term impact of strengthening host-country justice systems. A
    capable and fair judicial sector that is able to withstand significant
    corruption will have a key role in derailing international crime.
    Nevertheless, we do undertake efforts, which impact on international
    criminals' ability to operate. These include crop substitution in
    narcotic growing areas, anti-corruption measures in governmental
    institutions, and building awareness in the government and non-
    governmental community to stem the trafficking of people. We also
    directly provide resources to USG agencies such as the Departments of
    Justice and State, which work in partnership with law enforcement
    officials implementing measures to counteract international crime.
        The National Security Council is responsible for inter-agency
    coordination of international crime-related actions. All USAID-funded
    and implemented justice sector assistance programs emphasize
    coordination with other federal agencies. Joint assessments, funding
    transfers (when appropriate), and regular consultations with relevant
    agencies are among the prominent coordination modalities with other
    federal agencies. We have agreements in place with the Department of
    Justice and the Federal Judiciary for coordination on training of
    police, prosecutors, court administrators and judges. USAID routinely
    works on these issues with various State Department offices, including
    the Bureau for Democracy, Human Rights and Labor, the Bureau for
    International Narcotics and Law Enforcement, the Office of
    International War Crimes Issues, as well as regional bureaus.

                                        USAID JUSTICE SECTOR ASSISTANCE PROGRAMS
    ----------------------------------------------------------------------------------------------------------------
                Asia/Near East                      Africa              Europe/Eurasia                 LAC
    ----------------------------------------------------------------------------------------------------------------
    Bangladesh                              Angola                  Albania                 Bolivia
    Cambodia                                Burundi                 Armenia                 Colombia
    East Timor                              Congo                   Azerbaijan              Dom. Rep.
    Egypt                                   Ethiopia                Belarus                 Ecuador
    Indonesia                               Madagascar              Bosnia                  El Salvador
    Mongolia                                Malawi                  Bulgaria                Guatemala
    Morocco                                 Mozambique              Croatia                 Haiti
    Nepal                                   Nigeria                 Georgia                 Honduras
    Oman                                    Rwanda                  Kazakhstan              Mexico
    West Bank                               Sierra Leone            Kyrgyztan               Nicaragua
                                            South Africa            Kosovo                  Panama
                                            Tanzania                Macedonia               Paraguay
                                            Uganda                  Moldova                 Peru
                                            ......................  Montenegro              Venezuela
                                            ......................  Romania
                                            ......................  Russia
                                            ......................  Serbia                  ........................
                                            ......................  Slovakia                ........................
                                            ......................  Ukraine                 ........................
    ----------------------------------------------------------------------------------------------------------------

                              SUBCOMMITTEE RECESS

        Senator Bennett. Thank you very much, that concludes the
    hearing. The subcommittee will stand in recess until 9:30 a.m.,
    Tuesday, May 15, when we will meet in room SD-124 to hear from
    the Secretary of State, Hon. Colin Powell.
        [Whereupon, at 12:27 p.m., Tuesday, May 8, the subcommittee
    was recessed, to reconvene at 9:30 a.m., Tuesday, May 15.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2002

                                  ----------

                             TUESDAY, MAY 15, 2001

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:30 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Stevens, Specter, Bennett,
    Campbell, Leahy, Mikulski, Durbin, Johnson, and Landrieu.

                              DEPARTMENT OF STATE

                            Office of the Secretary

    STATEMENT OF HON. COLIN POWELL, SECRETARY OF STATE

                 OPENING STATEMENT OF SENATOR MITCH Mc CONNELL

        Senator McConnell. Good morning, Mr. Secretary. Welcome to
    the subcommittee. It has been our custom for the chairman and
    ranking member to make brief opening statements, then we will
    go to you for your statement. We appreciate very much your
    being here. Welcome back to the front lines of U.S. foreign
    policy. We had Andy Natsios here last week. He's a very
    impressive fellow, I might add, and we are looking forward to
    learning his reform plans for USAID. I know you have already
    wrestled with some of the earmarks, sanctions, and
    certifications requirements contained in last year's foreign
    operations bill. As someone who inserted a number of those, I
    can assure you they will not all go away, but we do not want to
    complicate your life and do want you to be a big success.
        Some of those earmarks reflected a lack of confidence by
    some of us in the previous administration. Some of it, frankly,
    I think was necessary and helpful to the previous
    administration. In the last 8 years I think we saw a crisis of
    confidence in Washington that was fueled by a number of
    missteps and mistakes across the globe. Your success in your
    new job will be measured in part by a decrease in some of these
    earmarks and mandates that we have a tendency to put in these
    bills.
        Your foreign policy mettle has already been tested by our
    confrontation with China over the EP-3 incident, the escalation
    of ethnic tensions in the Balkans, and continued violence in
    the Middle East against one of America's most important allies.
        While there have been successes and setbacks, our country's
    commitment to principles, constancy of purpose, and
    credibility, will ensure that U.S. national security interests
    are advanced and protected. There is a demand for American
    leadership in the world, whether it is seeking justice for war
    crimes in Serbia or maintaining sanctions against the
    oppressive military regime in Burma. I want to offer a few
    comments on the President's $15.2 billion request for foreign
    operations.
        While I have concerns with the 25-percent decrease in
    funding for the Export-Import Bank, I am pleased that the
    overall amount is a slight increase over the fiscal 2001 level.
    There will be some fine-tuning on our part, in line with the
    subcommittee's budget allocation and policy interest, as is our
    prerogative.
        Among other issues, I anticipate discussion and debate over
    the $731 million Andean counterdrug initiative, and the $369
    million request for HIV/AIDS programs. You should know that I
    do not view U.S. foreign assistance as an entitlement, and will
    be reviewing more closely country-specific aid packages under
    the economic support fund and other accounts.
        For example, what justification could be offered this year
    for the $75 million request for the West Bank and Gaza Strip,
    when no end to the violence seems to be in sight? Yasser Arafat
    walked away from the best deal the Palestinians will likely
    ever see. I am not sure there is anything more the Israelis
    could have offered than they did late last year. In Egypt,
    Government-sponsored newspapers praise Adolph Hitler and incite
    violence against Jews in Israel. I am wondering if this kind of
    behavior warrants a request of $2 billion.
        Let me close with a brief comment about the struggle for
    democracy in Asia. In the past, the State Department has been
    all talk and little action on this issue. I have had to battle
    for increased support and attention to Burma, Cambodia, East
    Timor, and Indonesia.

                               prepared statement

        I hope that at some point during this hearing you will
    affirm America's commitment to the cause of freedom in this
    region, particularly in Burma and Cambodia. As President Ronald
    Reagan stated in his speech before the British Parliament back
    in the early 1980s: We must be staunch in our conviction that
    freedom is not the sole prerogative of a lucky few, but the
    inalienable and universal right of all human beings.
        Again, Mr. Secretary, thank you for being here, and I will
    now defer to my colleague, Senator Leahy.
        [The statement follows:]
                 Prepared Statement of Senator Mitch McConnell
        Mr. Secretary, welcome back to the front lines of U.S. foreign
    policy. You and Andy Natsios, who appeared before this Subcommittee
    last week, have my support and encouragement for bringing about much
    needed change at State and the U.S. Agency for International
    Development.
        I know that you have already wrestled with the many earmarks,
    sanctions, and certification requirements contained in last year's
    foreign operations bill. More than anything, this is evidence of the
    little faith that the U.S. Congress had in the previous
    Administration's foreign policy skills and priorities. The past eight
    years saw a crisis of confidence in Washington that was fueled by
    missteps and mistakes across the globe. Your success in your new job
    will be measured, in part, by a decrease in Congressionally mandated
    actions.
        Your foreign policy mettle has already been tested by our
    confrontation with China over the EP-3 incident, the escalation of
    ethnic tensions in the Balkans, and continued violence in the Middle
    East against one of America's most important allies. While there have
    been successes and setbacks, our country's commitment to principles,
    constancy of purpose, and credibility will ensure that U.S. national
    security interests are advanced and protected. There is a demand for
    American leadership in the world, whether seeking justice for war
    crimes in Serbia or maintaining sanctions against the oppressive
    military regime in Burma.
        I want to offer a few comments on the President's $15.2 billion
    request for foreign operations. While I have concerns with the 25
    percent decrease in funding for the Export-Import Bank, I am pleased
    that the overall amount is a slight increase over the fiscal year 2001
    level. There will be some fine tuning on our part in line with the
    Subcommittee's budget allocation and policy interests, as is our
    prerogative. Among other issues, I anticipate discussion and debate
    over the $731 million Andean Counterdrug Initiative, and the $369
    million request for HIV/AIDS programs.
        You should know that I do not view U.S. foreign assistance as an
    entitlement, and will be reviewing more closely country-specific aid
    packages under the Economic Support Fund and other accounts. For
    example, what justification can you offer for the $75 million request
    for the West Bank and Gaza Strip when no end to the violence is in
    sight? Yasser Arafat walked away from the best deal the Palestinians
    will likely ever see; what more can Israel offer? In Egypt, government-
    sponsored newspapers praise Adolph Hitler and incite violence against
    Jews and Israel. Is this kind of relationship worth the request of $2
    billion?
        Let me close with a brief comment about the struggle for democracy
    in Asia. In the past, the State Department has been all talk and little
    action on this issue. I have had to battle for increased support and
    attention to Burma, Cambodia, East Timor, and Indonesia. I hope that at
    some point during this hearing, you will affirm America's commitment to
    the cause of freedom in this region, particularly in Burma and
    Cambodia. As President Ronald Reagan stated in his speech before the
    British Parliament in June 1982, ``We must be staunch in our conviction
    that freedom is not the sole prerogative of a lucky few, but the
    inalienable and universal right of all human beings.''

                 OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you, Mr. Chairman, and Mr. Secretary,
    it is always good to see you. I have said before publicly that
    I believe your appointment was one of the President's best and
    most important decisions so far, for our country, but also for
    the State Department, and I think that was shown by the very
    effective way you handled the situation with China when they
    held prisoner our reconnaissance aircraft crew.
        The public statements you have made for a more aggressive
    response to AIDS when you and I were at the White House last
    Friday, as you know, I have complimented you for that, and I do
    here publicly.
        I believe it is a critical time for our country. The peace
    and prosperity which many had hoped for after the cold war has
    not materialized in a lot of parts of the world, including
    parts of our country.
        The world today is increasingly divided between the extreme
    rich and the extreme poor, a situation that triggers vicious
    civil wars. These wars are also fueled by religious and ethnic
    hatred, when both sides kill in the name of their Creator,
    making everybody wonder just who has got that direct line to
    heaven as people die on both sides.
        Even the American people--we are blessed with wealth and
    opportunities beyond what most people could dream of, certainly
    far more than your parents or my parents could dream of--seem
    unsure of the role our country should play in the world.
    President Bush promised to act more humbly around the world,
    but we are increasingly accused by our friends and allies, as
    well as our detractors, of arrogance and bullying.
        The recent vote in the U.N. Human Rights Commission did not
    occur in a vacuum. It reflected deep resentment built up over
    years that we impose standards on the rest of the world that we
    do not always live up to ourselves. I hope we can get back on
    the commission. Withholding our U.N. dues may make us feel
    good, especially when we see a number of human rights violators
    who went on that commission. We see countries noted best for
    their pomposity and arrogance, like the French, a country that
    ignored the slaughter of children and others in their own
    former colonies, advising us on human rights, but withholding
    our dues, of course, could just make a bad situation even
    worse. We look forward to your advice on that.
        It is early, but I do not get the sense of how the
    administration plans to project American power and leadership
    in a way that builds better relations with our allies as well
    as our adversaries.
        This is nothing new. During the early years of the Clinton
    administration, our foreign policy lurched from crisis to
    crisis. An administration that believed very much in looking
    first and foremost at the economy, we had been through a number
    of recessions, it seemed like foreign policy was often a last-
    minute thought, and Congress did not help. We cut funding for
    foreign policy. We tied up billions of dollars over a dispute
    about family planning as populations exploded around the world.
        Charting a steady course in our foreign policy--one that
    reflects both the interests and the responsibilities of the
    wealthiest, most powerful Nation, is increasingly difficult in
    today's world. We ought to reaffirm the principles that guide
    us and adhere to them, whether it is in Colombia, the Middle
    East, or the Balkans, and when we set goals we should provide
    the resources to achieve them.
        Year after year, we sell ourselves and future generations
    short by underfunding foreign policy. No one questions the
    importance of military power, but security today has a lot less
    to do with military power than it did a quarter of a century
    ago. Certainly, if we can get countries to become more
    democratic, then we are better off, but that means you have to
    have a long-term vision, one that goes on from administration
    to administration, and it has to be backed by well-funded
    foreign assistance programs and effective diplomacy as well as
    military power, and we cannot cut any of those.
        I cannot think of anyone better suited to define our role
    in the world and to strengthen our policies and to carry out
    our policies to strengthen our security, broadly defined, than
    you, Mr. Secretary. You have the vision, common sense, and the
    firmness that are required. At the time you were appointed, we
    spoke very shortly after that. I did not know whether to offer
    you congratulations or condolences, and it took at least a week
    or so before I even broached the subject with Mrs. Powell, but
    I am glad you are there.

                               prepared statement

        It is not an easy job, but there are a lot of us up here in
    both parties who would like us to have a strong, consistent
    foreign policy, and one where we can anticipate and stop crises
    before they happen. We will work with you.
        Thank you, Mr. Chairman.
        [The statement follows:]
                 Prepared Statement of Senator Patrick J. Leahy
        Mr. Secretary, it is good to see you. I think your appointment was
    one of the President's best and most important decisions so far, both
    for our country and for the State Department.
        This has already been shown by the effective way the Administration
    handled the crisis with China over the detention of our reconnaissance
    aircraft crew, the public statements you have made for a more
    aggressive response to AIDS, and your work on other issues.
        This is a critical time for our country. The peace and prosperity
    which many hoped for after the cold war has not materialized. The world
    today is increasingly divided between the extreme rich and the extreme
    poor, and torn by vicious civil wars fueled by religious and ethnic
    hatred.
        Even the American people, blessed with wealth and opportunities
    beyond what most people could dream of, seem unsure of the role our
    country should play in the world.
        Despite President Bush's campaign promise to act more humbly, we
    are increasingly accused by our friends and allies, as well as our
    detractors, of arrogance and bullying.
        The recent vote in the U.N. Human Rights Commission did not occur
    in a vacuum. It reflected a deep resentment, built up over years, that
    we impose standards on the rest of the world that we do not always live
    up to ourselves. We need to get back on the Commission, but withholding
    our U.N. dues is the precisely the wrong way.
        It is early, but I have no sense that this Administration has a
    clear sense of how to project American power and leadership in a way
    that builds better relations with our allies as well as our
    adversaries.
        This is nothing new. During the early years of the Clinton
    administration our foreign policy lurched from crisis to crisis. No
    thanks to Congress, I might add, which cut funding for foreign policy
    and tied up billions of dollars over abortion.
        Charting a steady course in foreign policy that reflects both the
    interests and responsibilities of the wealthiest, most powerful nation,
    is increasingly difficult in today's world. We need to reaffirm the
    principles that guide us, and do a better job of adhering to them,
    whether in Colombia, the Middle East or the Balkans.
        When we set goals, we should provide the resources to achieve them.
    Year after year we sell ourselves--and future generations--short, by
    under-funding foreign policy.
        No one questions the importance of military power. But security
    today has a lot less to do with military power than it did a quarter
    century ago.
        It requires a long-term vision backed by well-funded foreign
    assistance programs, effective diplomacy, as well as military power. We
    cannot afford to cut corners on any of these.
        But again, it is early, and I cannot think of anyone better suited
    to define our role in the world, and to carry out policies to
    strengthen our security--broadly defined--than you Mr. Secretary. You
    have the vision, the common sense, the humility, and the firmness that
    are required.
        Thank you for agreeing to take on this responsibility.

        Senator McConnell. Thank you, Senator Leahy.

                     Summary statement of Hon. Colin Powell

        Mr. Secretary, we are looking forward to hearing from you.
    We will put your full statement in the record, and go right
    ahead.
        Secretary Powell. Thank you very much, Mr. Chairman, for
    your warm welcome, and I thank you for your opening statement,
    and Senator Leahy, I thank you for your opening remarks, and I
    look forward to hearing from the other members of the committee
    during the question and answer period. I want to let you know,
    Mr. Chairman and members of the committee, that I do look
    forward to working with the committee in the months ahead.
        I think it is an important part of my responsibilities to
    work closely with the Congress and all the various committees.
    This will be my eighth hearing in the 3-plus months that I have
    been Secretary of State, among other duties that I perform, but
    I view this kind of interchange with the Congress just as
    important as any other duty that I have, and so I appreciate
    your welcome, and I look forward to working with you in the
    future.
        Before getting into a shortened version of my prepared
    testimony, perhaps I will just touch briefly on some of the
    points, Mr. Chairman, you raised, and Senator Leahy raised.
        With respect to earmarks, directives, and restrictions. I
    understand the reality of such things, and I thank you for the
    opportunity to be graded on the basis of the declining number
    of earmarks and directives that you will find it necessary to
    impose upon me and the administration in the months and years
    ahead.
        I hope we can work together closely so that we can satisfy
    the concerns and needs of the Congress, and accommodate the
    imperatives of the Congress in a way that is faithful to what
    the Congress wishes to see happen but also gives the
    administration, gives the President the necessary flexibility,
    and his team the necessary flexibility to react to changing
    events without being overly constrained by provisions of law,
    earmarks, and restrictions.
        I look forward to having that relationship with you, Mr.
    Chairman, and the members of the committee, and other
    committees, towards that end, so that we do what is in the best
    interests of the Nation, as determined by the President and the
    Congress, in the name of the people, but do it in a way that
    gives the President maximum flexibility to conduct foreign
    policy.
        On the Eximbank, yes, there has been a decrease, but we
    think it is a reasonable decrease in light of the policy
    changes that accompany that decrease, and those policy changes
    include encouraging companies that have access to capital
    markets to go to the private capital markets rather than coming
    to the Government, and for those who do come to the Government,
    taking on a slightly higher level of risk as part of their
    business activity, thereby allowing us to reduce that account,
    and make it less of a drain against the American taxpayers. We
    will be looking at this very, very carefully to make sure that
    we have not done anything that is disruptive to the activities
    of the bank, or undercut the foreign policy goals that we have
    for the bank.
        With respect to the Andean Initiative and the counterdrug
    initiative within it, I think it is logical and comprehensive
    follow-on to Plan Colombia, where we are expanding our efforts
    throughout the whole region, and I will have a little bit to
    say about that in my statement, but I think we can make a case
    that this is a worthwhile investment in our overall drug
    strategy but also in our overall development strategy, not just
    going after drugs in those regions as sources of drugs that
    come to the United States, but also helping improve the lives
    of those people, help their democracy become stabilized, fight
    off the corrosive effect of narcotrafficking on their
    democracies, so in the programs we are going to be requesting
    and the money we are requesting for those programs in this
    fiscal year budget, you will see us talk about democracy
    building activities, alternative crops, things of that nature,
    as well as the more standard kinds of drug interdiction
    activities.
        Similarly, I will say a little bit more about AIDS in a
    moment, but it is a crisis not only in sub-Saharan Africa, it
    is a crisis in Russia about to happen, and it is a crisis in
    other parts of the world. It is not just a health care crisis,
    it is a destroyer of culture, a destroyer of families, a
    destroyer of economies, and it is something that we have to get
    a lot of attention to, and as Senator Leahy noted, the
    President has taken us to a new level of commitment to this war
    by participating in the global trust fund that is being
    created, and by committing $200 million to the global trust
    fund on top of the very significant contribution that the
    United States makes towards the war on HIV/AIDS already.
        Mr. Chairman, on your concern, with respect to the use of
    foreign assistance funds for the West Bank, Gaza, and Egypt, I
    think we have to look at these carefully. I think we have to be
    a responsible partner for the parties in the region at this
    time of high stress, at this time of high violence, in order to
    get them back to a situation we can pursue a negotiating track.
    I am sure we can talk about that more in the course of
    questions and answers, but I take your points with respect to
    those two particular accounts, the West Bank, Gaza, and then
    Egypt.
        With regard to Burma, Cambodia, East Timor, and Indonesia.
    Chairman McConnell, I can assure you that the administration,
    President Bush, me, and all the members of the administration,
    are committed to human rights everywhere throughout the world,
    as universal rights belonging to every child of God, whether
    that child is in the United States, or in Burma. You will see
    us aggressively pursue our human rights agenda at every
    opportunity.
        Some people suggest that one of the reasons we ran into
    some trouble on the Human Rights Committee vote was because we
    were too aggressive, and frankly, when we had the Geneva
    meetings a few weeks ago we were very aggressive. I was calling
    foreign ministers and presidents, the President was calling
    presidents, Dr. Rice was involved in it, we were pushing for
    the resolutions we thought were important, and we may have made
    a few people mad at us by the aggressive manner in which we
    pursue human rights issues.
        We probably made some more people mad at us when we
    released our human rights report that call things the way those
    things are around the world. If that is what made people mad,
    well, they are going to stay mad, because we are going to
    continue to point out human rights abuses. We are going to
    continue to work on this issue. I also believe that we will get
    back on that commission, if that is what we choose to do next
    year, and I think that is what we should do next year; subject
    to the President's final approval.
        I would encourage the Congress to be cautious with respect
    to punishing the United Nations for this particular problem. We
    lost a vote. It was a democratic vote. We do not like the
    outcome. We may not like the fact that people trade votes.
    Nevertheless, we lost the vote. We should take our hit and now
    look to build on the future, and not take actions which are
    punitive or suggest that you are not going to get the money we
    owe you unless you guarantee that we will win the next vote. We
    should win the next vote on our merit, and the case will make
    our next vote. Not because we are holding a financial hammer
    over the heads of the members of that committee that did not
    vote for us this time.
        So I think it is important for us to keep that loss in
    perspective, and recognize that we still have observer status
    on the commission, that we will be able to help others
    introduce resolutions. We will not be able to vote for that 1
    year that we are out, but we will still be able to communicate
    in a very, very powerful, clear voice, our concerns about human
    rights. Nothing associated with that vote should suggest to
    anybody that the United States or the Bush administration is
    going to hold back in speaking about human rights.
        With respect to Senator Leahy's comments about whether our
    foreign policy is well thought out, whether we say we are going
    to be humbled but act arrogantly, I think, over time, Senator
    Leahy, you will see that we do have a foreign policy that is
    well thought out, that begins here in the Western Hemisphere.
    The Summit of the Americas a few weeks ago was very, very
    successful, with a powerful commitment to democracy.
        We are working with our allies in Europe. We are working
    with nations that used to be enemies. My Russian colleague,
    Igor Ivanov, will be here this Friday for a full day's worth of
    discussions on every issue affecting our two nations, and so
    you will find us reach out increasingly.
        The President will be going to EU's summit meeting in
    Brussels, a summit meeting with his NATO allies, or
    ministerial, or presidential Chief of State meetings in June,
    and then we have G-8 coming up in July, and you will see us
    increasingly engaged in Europe.
        Once we get this incident of the airplane completely behind
    us, you will see us engage with China, and we still have strong
    allies in Japan and South Korea. We will be building on those
    alliances, and I think you will see, over time, emerge a
    foreign policy that is humble, not arrogant; that reflects the
    best values of the American people; and that reflects our
    position in the world as a powerful Nation that has to use that
    power, not be afraid to use it, but in using it, use it with
    humility, and use it to pursue well-thought-out policies and
    well-thought-out concepts of where we need to be going on the
    world stage. I hope we will be able to persuade you of that.
        For my brief opening statement, and I will summarize it
    very quickly, I would just like to mention to members of the
    committee that while, by law, I am the principal foreign policy
    advisor to the President, I am also, if not stated directly in
    the law, I am the leader and manager of the Department of
    State, the CEO, the Chief Operating Officer, the person who is
    responsible for motivating a superb workforce and taking care
    of them, making sure they have what they need to do their job
    well.
        As both the chairman and Senator Leahy mentioned, it is our
    obligation, once we have set goals for those diplomats of ours,
    to achieve, we have got to give them the resources they need to
    do the job, and this budget request that I am up here defending
    as the CEO of the State Department, I think does a good job of
    moving us in that direction. It represents an increase over the
    previous year budget. Of the overall $23.9 billion in the
    President's fiscal year budget request for the State
    Department, $15.2 billion is for foreign operations, about 2
    percent more than last year, with some puts and takes in that
    number.
        Let me give you a few highlights of the budget, and then go
    directly to your questions. You have already heard, as you
    indicated, Mr. Chairman, from USAID Administrator Andy Natsios,
    I think we are very, very fortunate in getting a man of his
    qualifications to lead USAID. He comes in with lots of new
    ideas, he knows the organization, he is going to challenge it,
    he is going to take it up to a new level, he is going to bring
    in some new ideas, and the idea that he discussed with you on
    global development alliances I think is an example of the kind
    of creative thinking that you will see coming out of USAID.
        USAID will be more closely aligned with the State
    Department than it has been in the past. I view myself as the
    owner of USAID, even though it is an independent agency. But
    the law says it is my responsibility to give them direction,
    give them policy direction and supervise them, and I can assure
    you I do that.
        Mr. Natsios is at my 8:30 staff meeting every single
    morning with every other principal leader in the Department of
    State. He is part of my team, and I am going to do everything I
    can to make sure that USAID is successful and that it uses the
    money given to it by the American people in the most effective
    way possible, and especially through this global development
    alliance idea that Mr. Natsios has discussed with you, to
    leverage some of the resources that USAID has to bring in other
    agencies, other activities, NGO's, the private sector, and
    figure out clever ways and creative ways to leverage up our
    Federal dollars into maximizing the opportunity to bring in
    private dollars and other means of investing in the development
    work that we will be doing all around the world. So I am very,
    very proud to say this about USAID, and also say that I think
    we have got a real winner in Mr. Natsios.
        We talked briefly--I touched briefly on the Andean Regional
    Initiative. Let me just say that in the over $800 million for
    this initiative, about half is for Colombia, half is for the
    other nations in the region. About half is for drug
    interdiction, the other half is for those other activities I
    mentioned of crop substitution, democracy-building, investment
    in the infrastructure, giving these populations the wherewithal
    to resist--resist the corruption and the corrosiveness that
    comes with the presence of narcotraffickers in the region, not
    just in Colombia, but throughout the whole region.
        Obviously, the ultimate solution to this problem is demand
    reduction. The ultimate solution to this problem is prevention
    and rehabilitation of people who have been drug-users through
    treatment, and the new czar, the new director of this program,
    Mr. Walters, has made a commitment, and the President has made
    a commitment to focus on demand reduction as well as supply
    reduction and interdiction efforts. But I think to keep going
    with the programs that we have now, I would ask the Congress to
    fully support the request that we have made for the Andean
    Regional Initiative.
        As you also know, $369 million is in our budget for HIV/
    AIDS. When you add what other Government agencies are doing,
    that number with respect to HIV/AIDS quickly goes over $500
    million and, of course, Secretary Thompson has a lot more money
    in his budget at HHS on research, looking for a cure,
    encouraging drug companies to move everything that is done at
    the National Institutes of Health through medicare and other
    programs, so that billions more, really, are involved in
    treating, preventing, and fighting AIDS.
        A lot more needs to be done. The $200-million program that
    the President seeded last week with Kofi Annan has to grow.
    Other nations have to get involved, nonprofit organizations,
    private citizens have to get involved. That fund needs a lot
    more money, and the President has committed to doing more for
    that fund, and I think that the administration should be
    congratulated for helping pull the fund together and for
    seeding it with that initial $200 million.
        As you may also have noted from that announcement,
    Secretary Tommy Thompson and I now cochair a task force on HIV/
    AIDS for the President, working closely with Mr. Scott Everts,
    the new AIDS policy director in the White House.
        There are many other items in the budget that could be
    highlighted, Mr. Chairman, but they are known to you; they are
    available to you in my prepared testimony, my longer testimony,
    so what I think I will do at this point is essentially close
    these few opening remarks and turn it over to questions, with
    one final observation, and that is, I cannot tell you how proud
    I am to be the Secretary of State, and for the opportunity to
    lead these wonderful men and women, members of the professional
    Foreign Service, members of the Civil Service, our Foreign
    Service nationals around the world.
        They are doing a great job for America on our first line of
    offense; carrying our values, carrying our moral model, our
    moral inspiration out to the world, and we have to make sure
    they are protected in good embassy buildings, we have to make
    sure they are well-compensated, well-rewarded, that their
    families are taken care of, and that is my obligation to them,
    and I will be fighting for what I believe they need to do their
    jobs for the American people with all of my energy and with all
    of my strength, just as I used to do when I was wearing a
    different kind of uniform.
        Thank you, Mr. Chairman.
        [The statement follows:]
                     Prepared Statement of Colin L. Powell
        Mr. Chairman, members of the subcommittee, I am pleased to appear
    before you for the first time as Secretary of State, and to testify in
    support of the President's International Affairs Budget for fiscal year
    2002.
        This Budget represents a needed increase in the Department's
    dollars for the upcoming fiscal year, and we are pleased with that.
    This is a good start.
        It is the first fiscal step in our efforts to align the conduct of
    America's foreign relations with the dictates of the 21st Century.
        As Secretary of State I wear two hats--one as CEO of the
    Department, the other as the President's principal foreign policy
    advisor.
        Since the primary interest of this subcommittee is in my role as
    foreign policy advisor to the President, I will wear that hat for this
    testimony.
        Of the $23.9 billion in the President's fiscal year 2002 budget
    request (a 5 percent increase over this year) there is $15.2 billion
    for foreign operations--or about 2 percent more than this year.
        Let me give you some of the highlights of that part of the budget
    request and let me begin with a significant change we are making in the
    way the U.S. Agency for International Development carries out its
    business.
                   u.s. agency for international development
        The President's fiscal year 2002 budget marks the beginning of a
    new strategic orientation for USAID. At the center of this strategic
    orientation is a new way of doing business to ensure that USAID's long-
    term development assistance and humanitarian/disaster relief programs
    better respond to U.S. national interests.
        Increasing levels of conflict, degraded economic performance, and
    widespread disease are causing regional instabilities, complex
    humanitarian emergencies and, in some cases, chaos. These conditions
    threaten the achievement of USAID's development objectives and broader
    U.S. foreign policy goals. The new Administration intends to address
    these particular conditions by concentrating USAID resources and
    capabilities for a more effective method of delivery.
        To improve USAID's effectiveness, several important changes are
    outlined in the budget:
      --Reorientation of USAID programs to focus on ``Four Pillars'' each
            of which supports achievement of USAID's objectives;
      --As the first pillar, introduction of the ``Global Development
            Alliance'' as USAID's new model for doing business;
      --The simplification, integration and reorientation of current
            programs and their alignment with three new program pillars:
            Economic Growth and Agriculture; Global Health; and Conflict
            Prevention and Developmental Relief;
      --Adjusting the Agency's budget priorities to target increased
            funding for agriculture, HIV/AIDS, basic education, and
            conflict prevention and resolution;
      --Directing senior management attention to the sweeping overhaul of
            the Agency's management, procurement, and operating systems.
                     the global development alliance pillar
        The Global Development Alliance (GDA) is USAID's business model for
    the 21st Century and is applicable to all USAID programs. As USAID's
    first pillar, the GDA is based on the Agency's recognition of
    significant changes in the economic development assistance environment.
    No longer are governments, international organizations and multilateral
    development banks the only assistance donors; nor is Official
    Development Assistance the only source of funding for international
    economic development. Rather, over the past 20 years a growing number
    of new actors have arrived on the scene: NGOs, Private Voluntary
    Organizations (PVOs), foundations, corporations, the higher education
    community and even individuals are now providing development
    assistance. As a result, the U.S. Government is not the only, or
    perhaps even the largest, source of American funding and human
    resources being applied to the development challenge.
        The GDA will be a fundamental reorientation in how USAID sees
    itself in the context of international development assistance, in how
    it relates to its traditional partners and in how it seeks out and
    develops alliances with new partners. USAID will use its resources and
    expertise to assist strategic partners in their investment decisions
    and will stimulate new investments by bringing new actors and ideas to
    the overseas development arena. USAID will look for opportunities where
    relatively small amounts of risk or start-up capital can prudently be
    invested to generate much larger benefits in the achievement of overall
    objectives. USAID will increasingly fill the role of a strategic
    alliance investor, a role akin to that of a venture capital partner, in
    the resolution of serious development issues. Unlike a venture capital
    fund, however, the Agency will not try to establish equity positions or
    seek early exits from the activities in which it invests. Sustained
    improvement over the long haul will remain a prime objective. Of
    course, the Agency will continue to deploy resources where private
    funding is not available and for activities where the governmental role
    is clear and pre-eminent to stimulate institutional and policy change.
        In order to launch the GDA, a special unit will be established to
    expand outreach into the private, for-profit and not-for-profit
    sectors. To stimulate movement towards the Global Development Alliance
    in its early years, USAID has identified $160 million in the fiscal
    year 2002 request to be used to initiate the new business model and to
    help fund alliances by Washington bureaus and/or field missions, with a
    view toward fully integrating GDA concept into the three program
    pillars not later than fiscal year 2004. GDA is not expected to become
    a separate funding account.
        The funds for initiating the GDA are proposed from the following
    appropriations accounts: $110 million in Development Assistance (DA);
    $25 million in the Child Survival and Disease Program Fund (CS/D); and
    $25 million in International Disaster Assistance (IDA). Uses will be
    consistent with the authorized intentions of these accounts.
                                program pillars
        The three program pillars are part of the justification for the
    proposed overall program level of $3.4 billion for USAID's directly-
    managed programs, including food aid and excluding USAID's
    administrative expense accounts and programs jointly managed with the
    State Department. Details on the three program pillars follow.
    The Economic Growth and Agriculture Pillar ($928 million)
        Assistance provided under this pillar will work to create economies
    that are viable over the long term. Special emphasis will be directed
    at integrating growth, agriculture and environmental objectives and
    concerns in a manner such that ``market forces'' play an increasingly
    important role in our strategic approach and in determining a program's
    long-term viability. Activities funded will assist: the productive
    sectors, especially agriculture; the environment and energy sectors;
    human capacity development (including basic education); micro-
    enterprises; and improvement of the business, trade, and investment
    climate. The interrelationship and interdependence of economic growth,
    environmental sustainability and the development of a country's human
    capital will be highlighted in this pillar.
      --The request for fiscal year 2002 is $928 million compared to an
            equivalent figure of $871 million in fiscal year 2001 (both
            including $28 million for the African and Inter-American
            Development Foundations).
      --Given the importance of agriculture and basic education (especially
            for girls and women) in most recipient countries, USAID plans
            to increase its emphasis in these sectors.
    The Global Health Pillar ($1.276 billion)
        Under this pillar, USAID will group its programs related to
    maternal and child health, nutrition, family planning and many of the
    related transnational issues confronting the world, such as HIV/AIDS
    and other infectious diseases. This budget includes a major initiative
    to combat HIV/AIDS and other infectious diseases--mainly malaria and
    tuberculosis--which have significant public health impact. Child
    survival interventions target the major childhood killers, including
    vaccine-preventable diseases (e.g., polio), diarrheal disease,
    malnutrition, acute respiratory infections, and malaria. USAID programs
    continue an aggressive effort to eliminate vitamin A and other
    micronutrient deficiencies. Maternal health activities aim to reduce
    maternal deaths and adverse outcomes as a result of pregnancy and
    childbirth. In family planning, USAID programs seek to promote family
    health and allow couples to achieve their desired family size. For HIV/
    AIDS and infectious diseases, USAID will aggressively promote public/
    private partnerships and provide technical leadership for programs at
    the national and grass-roots levels.
        The Global Health programs are funded from the CS/D account with
    the exception of family planning, which is currently financed from DA
    funds and other accounts. The fiscal year 2002 request for Global
    Health, $1.276 billion, compares to an equivalent figure of $1.259
    billion in fiscal year 2001 (both include $110 million in transfers to
    UNICEF).
      --The Global Health request for HIV/AIDS funding has increased from
            $299 million in fiscal year 2001 to $329 million to address
            more effectively this major public health issue. The total
            amount available for HIV/AIDS from all appropriated accounts,
            including ESF, is expected to be $369 million.
      --The remaining $947 million is proposed for child survival and other
            global health activities. These funds would support efforts to
            improve maternal and child health and nutrition; reduce infant
            and child mortality; support programs that promote family
            health, and allow couples to achieve their desired family size.
            The total amount available for family planning is $425 million,
            from all appropriated accounts.
    The Conflict Prevention and Developmental Relief Pillar ($1.217
            billion)
        Given the rising number of collapsed states and internal conflicts
    in the post-cold war period, some of which have become focal points of
    U.S. foreign policy, USAID will undertake a major new conflict
    prevention, management, and resolution initiative. This initiative will
    integrate the existing portfolio of USAID democracy programs with new
    approaches to anticipating crisis, conflict analysis, comprehensive
    assessment, and will provide new methodologies to assist conflicting
    parties resolve their issues peacefully. This initiative will also
    address on-going efforts to bridge and integrate foreign policy and
    foreign assistance in a way that accommodates both short-term
    operational and longer-term structural prevention needs.
        USAID continues to stand at the forefront of agencies around the
    world in its ability to respond to man-made and natural disasters. The
    budget request will enable USAID to maintain this capability (unique
    within the United States) to provide needed help rapidly when
    international emergencies occur.
      --The request for fiscal year 2002 is $1.217 billion compared to an
            equivalent figure of $1.181 billion in fiscal year 2001 (both
            include Public Law 480 Title II at $835 million).
      --International Disaster Assistance funding increases from $165
            million (excludes the fiscal year 2001 $135 million
            supplemental) to $200 million in recognition of the increased
            demands generated by complex emergencies and natural disasters.
      --The request includes Transition Initiative funding of $50 million
            to meet challenges in conflict-prone countries and those making
            the recovery from crisis.
      --Democracy and Local Governance funding continues at $132 million.
    USAID Budget Accounts
        While the three program pillars embodied in USAID's new strategic
    orientation are a valuable way to focus, manage, and report on
    activities, they do not correspond neatly to the five program accounts
    for which the agency is currently responsible.
        The three program pillars discussed above will be funded by the
    following five program accounts: Child Survival and Disease Programs
    Fund; Development Assistance; International Disaster Assistance;
    Transition Initiatives; and the Development Credit Program, which is
    funded mainly through transfers from the other accounts. In addition,
    USAID administers Public Law 480 Title II Food for Peace programs.
                Child Survival and Disease Programs Fund (CSD)
        The fiscal year 2002 request is $1.011 billion, compared to an
    equivalent figure of $961 million in fiscal year 2001 (both include
    $110 million for UNICEF).
        This account includes funding for infectious diseases at $110
    million; HIV/AIDS at $329 million; basic education at $110 million
    (with an additional $13 million from DA); and $454 million for child
    survival and other health activities.
                Development Assistance (DA)
        The Administration's fiscal year 2002 request is $1.325 billion,
    compared to an equivalent figure of $1.302 billion in fiscal year 2001
    (both years include $28 million for the Inter-American and African
    Development Foundations).
        This account includes funding for agriculture at about $210
    million; micro-enterprise and improvement in business trade and
    investment climate activities at $284 million; environment at $251
    million; human capacity development (non-basic education) at $52
    million and basic education at $13 million; and family planning at $425
    million, funded from DA and other appropriation accounts.
                International Disaster Assistance (IDA)
        The fiscal year 2002 request of $200 million supports emergency
    relief and transitional activities provided in response to natural and
    manmade disasters and other emergencies often accompanied by the
    displacement of large numbers of people.
                Transition Initiatives (TI)
        The fiscal year 2002 request of $50 million supports programs
    administered by USAID's Office of Transition Initiatives. This office
    addresses the opportunities and challenges facing conflict-prone
    countries and those making the transition from the initial crisis stage
    of a complex emergency to a more stable political and economic
    situation.
                Development Credit Program (DCP)
        For fiscal year 2002, the Administration is requesting transfer
    authority of up to $25 million from USAID program accounts for the
    newly consolidated Development Credit Authority. This brings together
    various separate Agency credit programs under one credit umbrella.
        The change will allow USAID to use credit as a flexible development
    tool for a wide range of development purposes and will increase the
    flow of funds to urban credit and micro and small enterprise
    development programs.
        In addition, $7.5 million is requested for administrative costs for
    the consolidated authority. It is envisioned that all future agency
    credit activities will be carried out under the reforms embodied in DCP
    regulations and the Federal Credit Reform Act of 1992. This program
    augments grant assistance by mobilizing private capital in developing
    countries for sustainable development projects. DCP is not intended for
    sovereign risk activities.
    USAID's Operating Expenses
        The fiscal year 2002 request of $549 million will provide resources
    needed to maintain current staffing levels associated with USAID's
    presence in key developing countries, continue to build the Agency's
    information technology and financial management capabilities, and
    strengthen staff capabilities through training.
        These funds cover the salaries, benefits, and other administrative
    costs associated with USAID programs worldwide, including those managed
    by USAID and financed through Development Assistance, the Child
    Survival and Disease Programs Fund, the Economic Support Fund, the
    Support for East European Democracy Act, the Freedom Support Act, and
    Public Law 480 Title II Food for Peace programs.
        The request includes $7.5 million for facility security where USAID
    is not co-located with embassies. There is also a request of $50
    million for co-located USAID facilities included in the State
    Department's Embassy Security, Construction, and Maintenance request.
        Let me move now to other bilateral economic assistance and discuss
    the Economic Support Fund (ESF), Assistance for East Europe and the
    Baltic States (SEED), and the FREEDOM Support Act.
    Economic Support Fund (ESF) (including International Fund for Ireland)
        The fiscal year 2002 ESF request of $2.289 billion supports the
    economic and political foreign policy interests of the United States.
    Highlights of the fiscal year 2002 request include:
        Near East.--$1.682 billion to continue restructuring assistance
    levels in the Middle East and promote regional stability and a
    comprehensive peace between Israel and her neighbors. Funding includes
    $720 million for Israel, $655 million for Egypt, $150 million for
    Jordan, and $75 million for the West Bank and Gaza. In addition, the
    fiscal year 2002 request provides funding for the Iraqi opposition and
    for programs that support U.S. efforts to strengthen regional
    cooperation, promote democracy and civil society, and encourage
    economic growth and integration through increased trade and market-
    oriented reforms.
        Europe.--$39.6 million, including $15 million for Cyprus and $19.6
    million for the International Fund for Ireland, as well as $5 million
    for the third and final year of a program to bring youths from Northern
    Ireland and designated disadvantaged areas to the United States as
    outlined in the Irish Peace Process Cultural and Training Program Act
    of 1998.
        Western Hemisphere.--$170.5 million, including $54.5 million for
    democratic institution building and economic growth programs in Peru,
    Ecuador, Bolivia, Venezuela, and Panama under an Andean regional
    initiative; $21 million for earthquake assistance in El Salvador; $5
    million for Cuban democracy programs; $11 million for Eastern Caribbean
    stabilization; $35 million for humanitarian NGOs in Haiti; $10 million
    for reform in Mexico; $10 million for Administration of Justice
    throughout the region; $15 million to support the Ecuador/Peru border
    and Guatemala peace processes; and $9 million for other regional
    democracy-building programs.
        Africa.--$105.5 million, including $25 million to assist Nigeria in
    rebuilding its democratic institutions; $20 million to support
    countries in transition, especially those countries emerging from
    conflict; $15 million to support the Education for Development and
    Democracy in Africa program, with an emphasis on girls' education; $15
    million for regional initiatives, including democracy programs; $10
    million for the Africa Great Lakes Initiative designed to build
    credible and impartial civilian and military justice systems in the
    region; $9 million for Sierra Leone to help fund a special court and
    rebuild infrastructure; $2.5 million for Ethiopia/Eritrea to assist in
    efforts to recover from the war; $2 million to strengthen civil society
    and lay the foundation for political institutions, democratic reform,
    and good government in Angola; and other programs designed to foster
    African integration into the global economy, enhance the safety and
    reliability of air transport on the continent, and support conflict
    management and prevention.
        East Asia.--$169.75 million, including $50 million to support
    democratic and economic strengthening in Indonesia; $25 million for
    East Timor's transition to independence; $25 million for humanitarian,
    justice, and democracy programs in Cambodia; $15 million for anti-
    corruption and peace-promoting programs in the Philippines; $14 million
    for South Pacific Fisheries Treaty commitments; $12 million for
    democracy and free market support in Mongolia; $5 million for Rule of
    Law programs in China; and other programs that support democracy
    promotion, regional environmental initiatives, regional women's issues,
    and economic technical assistance.
        South Asia.--$30 million, including $7 million to fund programs in
    India to promote judicial reform and rule of law and address the
    growing problem of trafficking and forced labor of women and children;
    $7 million in Pakistan to help restore democratic institutions and
    build civil society; $3 million each in Bangladesh, Sri Lanka, and
    Nepal to help combat child labor and violence against women and promote
    democracy and judicial reform, human rights commissions, and civil
    society participation in local and national government; and $7 million
    to fund programs to promote regional energy cooperation and use of
    clean energy technologies, help eliminate cross-border trafficking in
    women and children, and fund projects promoting cross-border
    confidence-building measures between the civil societies of India and
    Pakistan and among elements of societies struggling with strife in
    Afghanistan, Nepal, and Sri Lanka.
        Oceans, Environmental, and Science Initiative.--$4 million for
    environmental diplomacy activities. These funds will be used for
    targeted activities in support of ongoing international negotiations on
    global environmental issues including climate change; biodiversity; the
    production, use, and trade of hazardous chemicals; and numerous
    bilateral and regional fisheries and oceans negotiations. Funds will
    also be used to support regional cooperation efforts and respond to
    emerging environmental crises and priorities.
        Human Rights and Democracy Funds.--$13.5 million to respond to
    emergencies to prevent or forestall further human rights abuses; to
    exploit unanticipated opportunities to promote democracy; to help
    establish institutions that serve human rights and democracy efforts,
    especially those that address concerns raised in the Human Rights
    Reports; and to support multilateral initiatives that respond to human
    rights or democratization opportunities.
        Innovative Partnerships to Eliminate Sweatshops.--$5 million to
    continue funding for NGOs, labor unions, and corporate groups to
    support the promotion of core labor standards, model business
    principles, and monitoring of labor conditions. The program is targeted
    at eliminating sweatshop conditions in overseas factories that produce
    or sell consumer goods for the American market.
        Policy Initiatives.--$69 million designated for policy initiatives
    of the new Administration.
    Assistance for East Europe and the Baltic States (SEED)
        The Support for East European Democracy (SEED) Act is the
    foundation for U.S. assistance to Eastern Europe and the Baltic States.
    SEED is a transitional program designed to assist those countries
    through their difficult passage to democracy and a market economy. The
    fiscal year 2002 SEED request is $610 million.
        For fiscal year 2002, the SEED request includes $145 million for
    the Federal Republic of Yugoslavia. These funds will be used in both
    the Republics of Serbia and Montenegro to support economic reform and
    promote democracy and civil society by assisting judicial reform,
    independent media, NGOs, and local government. In Southern Serbia,
    continued support is needed for community development projects designed
    to reduce ethnic tensions.
        The request for Kosovo is $120 million. These funds will further
    implementation of UNSC 1244 by supporting security (including the U.S.
    contingent to UNMIK police), democratization, and respect for human
    rights and rule of law. The United States is completing its emergency
    assistance programs and is now focusing on longer-term development
    goals such as building transparent economic and political institutions
    and a strong private sector.
        The increase for Macedonia to $45 million will help the government
    move more rapidly in bringing the benefits of democracy to all of the
    country's citizens. Funds will target efforts to decentralize the
    government and allow a broader range of Macedonians to play a direct
    role in building their society. Economic programs will promote a
    strengthened private sector to extend prosperity to the wider populace.
    Finally, additional resources will support ongoing programs that
    promote inter-ethnic harmony and strengthen the fabric of civil
    society.
        Funding for the Bosnia-Herzegovina program is $65 million, down
    from $100 million in fiscal year 2000 and $79.8 million in fiscal year
    2001. This decrease reflects progress on the political commitments
    under the Dayton Peace Accords and the fact that Bosnians are taking on
    a greater role in managing their own affairs. The remaining
    reconstruction effort will focus on encouraging returns of dispersed
    minorities, which have increased in recent years.
        Eight of the 15 original SEED countries have graduated, and USAID
    missions there have been closed. Regional funding, at reduced levels,
    continues for Northern Tier countries to help ensure the success of
    their transitions and to meet limited special or emergency needs.
        In Southeast Europe, SEED-funded regional programs help build
    stability by fostering cooperation among neighboring countries in key
    areas such as good governance and anti-corruption, the fight against
    organized crime and smuggling, and developing cross-border solutions
    for energy, transportation, and pollution.
    Assistance for the Independent States of the Former Soviet Union
            (FREEDOM Support Act, or FSA)
        The fiscal year 2002 request for the FREEDOM Support Act (FSA) for
    the New Independent States (NIS) totals $808 million.
        This request sets aside funding in the regional account to support
    a settlement of the Nagorno-Karabakh conflict. These funds will enable
    the United States to contribute to post-settlement reconstruction in
    Azerbaijan and Armenia as part of a coordinated international donor
    effort.
        This budget directs a larger share of funds than last year towards
    promoting change at the grassroots of NIS societies, by supporting
    exchanges that bring NIS citizens--including large numbers of young
    people--to the United States for first-hand exposure to our system;
    strengthening NGOs; increasing Internet access; and aiding pro-reform
    regional and local governments. With freedom of the press under threat
    in most countries of the region, emphasis will be placed on programs
    that support the independence and viability of the media. Support will
    also be continued for law enforcement cooperation to combat organized
    crime and corruption.
        Several of the NIS are now experiencing economic growth for the
    first time. To help sustain this growth, FSA programs will support
    small and medium-sized private businesses through training, exchanges,
    and greater access to credit. Technical assistance to central
    governments will be limited, focusing on those countries that show the
    greatest commitment to economic reform. In Russia, Kazakhstan, and
    Ukraine, funds will support initiatives designed to facilitate growth
    in pro-reform regions. Programs will also support U.S. investment and
    trade throughout the NIS.
        FSA programs will address some of the most serious socio-economic
    problems in the NIS, particularly in the fields of health, nuclear
    safety, and the environment. Health programs will include hospital
    partnerships and efforts to combat infectious diseases and improve
    maternal health. Resources devoted to humanitarian assistance will help
    mitigate the suffering caused by poverty, natural disasters, and
    regional conflicts.
        The potential proliferation of weapons of mass destruction (WMD)
    remains a significant threat in the NIS. To address this threat, the
    request funds several programs aimed at channeling WMD expertise in the
    direction of civilian research and development of new technologies.
        The FSA-funded Export Control and Border Security Program will
    continue to strengthen the ability of NIS countries to prevent illegal
    cross-border movements of narcotics, arms, and WMD materials. This
    program also enhances regional stability by helping several countries
    in the region better maintain their territorial integrity in the face
    of terrorist threats and border zone conflicts. FSA funds will also
    facilitate the removal of Russian troops and military equipment from
    Moldova and Georgia.
    Debt Restructuring
        Let me turn briefly to a program that had broad congressional
    bipartisan support last year, debt restructuring:
      --For fiscal year 2002, the Administration is requesting $224 million
            for the Heavily Indebted Poor Countries (HIPC) Trust Fund to
            provide multilateral debt relief. This fund helps regional
            multilateral development banks, such as the African Development
            Bank and Inter-American Development Bank, meet their costs of
            HIPC debt reduction.
      --In 1999, the United States committed to a $600 million contribution
            to the HIPC Trust Fund. In fiscal year 2001, $360 million was
            appropriated for this purpose. The fiscal year 2002 request of
            $224 million, combined with $16 million in previously
            appropriated but unexpended debt account balances, will fulfill
            the U.S. commitment in full and leverage participation from
            others.
      --For fiscal year 2002, the Administration is not requesting any
            funding to provide bilateral debt relief under the Tropical
            Forest Conservation Act of 1998 (TFCA). However, the request
            does include authority to transfer up to $13 million from
            USAID's Development Assistance account for debt relief under
            this program. The Administration may also use carryover funds
            from the Debt Restructuring account for TFCA implementation.
    International Narcotics Control and Law Enforcement (INCLE)
        Mr. Chairman, we are profoundly concerned about the recent
    shootdown of a civilian aircraft by the Peruvian Air Force and the
    tragic deaths of an innocent woman and her child, as well as the injury
    of another civilian and the destruction of private property. A full
    investigation is underway. We will work with the countries in the area
    to do all that we can to prevent any such tragedy in the future.
    Meanwhile, however, our counter narcotics effort will remain robust:
      --The fiscal year 2002 request includes $217 million for base
            programs of the Bureau of International Narcotics and Law
            Enforcement (INL).
      --The request provides $162 million to support counter-narcotics
            programs outside of the Andean region. These INL programs will
            grow 30 percent worldwide. They include regional programs for
            Latin America, Asia, and the Middle East; participation in the
            U.N. Drug Control Program and other international
            organizations' counter-narcotics efforts; and increased support
            for drug awareness and demand reduction.
      --The request also provides $55 million for programs to counter
            transnational crime, including trafficking in women and
            children--an increase of 22 percent. These programs include
            establishing a center to counter international migrant
            smuggling/trafficking in persons; continuing support of a
            Civilian Police Contingent for deployment as part of
            international relief efforts in post-conflict situations; an
            African regional anti-crime program, focused particularly on
            Nigeria and South Africa; and support to five International Law
            Enforcement Academies.
    Andean Counterdrug Initiative (ACI)
        As part of an overall Andean regional initiative, the fiscal year
    2002 request includes $731 million for ACI, a multi-year counterdrug
    assistance effort designed to sustain and expand programs funded by the
    Plan Colombia emergency supplemental. ACI differs from Plan Colombia in
    several respects. ACI triples--to 45 percent--the share of counter-
    narcotics assistance going to countries other than Colombia. ACI
    increases to 40 percent the amount of INCLE funding going to social and
    economic programs, exclusive of other economic assistance accounts.
    Finally, ACI funding will be augmented from other accounts to support
    reforms directed toward strengthening democracy and economic growth.
        Fiscal year 2002 funding for ACI includes Colombia, Peru, Bolivia,
    Ecuador, Brazil, Venezuela, and Panama.
        Combined with Plan Colombia, ACI will make a significant, immediate
    impact on the flow of narcotics out of the Andes. The Administration's
    performance goals specifically include: (1) achieving a 30 percent
    reduction in Colombian coca production between CY 2000 and the end of
    CY 2002; and (2) eliminating all illicit coca production in Bolivia by
    the end of CY 2002.
        ACI will support Colombia's push into the former coca-growing
    sanctuaries in Putumayo by backing joint operations between the Amy's
    new, air mobile counter-narcotics (CN) brigade and the Colombian
    National Police's anti-narcotics unit (DIRAN). It will also support
    alternative development and assistance to internally displaced persons,
    maritime and aerial interdiction, the Colombian National Police's
    aerial eradication program with additional spray aircraft, and human
    rights and judicial reform in Colombia.
        Additional support for the Andean regional initiative is being
    provided through Economic Support Funds and Foreign Military Financing.
    Development Assistance and Child Survival and Diseases accounts will
    also support this initiative.
    Migration and Refugee Assistance (MRA)
        Mr. Chairman, the fiscal year 2002 request for MRA is $715 million,
    as follows:
      --The request includes $509 million for Overseas Assistance. This
            amount will support the protection of refugees and conflict
            victims, the provision of basic needs to sustain their life and
            health, and the resolution of refugee problems through durable
            solutions. It will also provide funding for the focused ``Up to
            Standards'' initiative targeted on health and health-related
            problems that appear to have the greatest impact on refugee
            mortality/morbidity rates.
      --The fiscal year 2002 request for Refugee Admissions is $130
            million. This $20 million increase over the fiscal year 2001
            level reflects a grant increase in the Reception and Placement
            program and the fact that $14.7 million appropriated in fiscal
            year 2000 was available for Admissions in fiscal year 2001.
      --The request for refugees to Israel is $60 million--the same amount
            appropriated in fiscal year 2002, prior to the rescission.
      --The request for Administrative Expenses is $16 million--an increase
            of $1.5 million from the fiscal year 2001 level. This level
            will support the full-year salaries and operating costs
            associated with a staff of 110 positions. The increase includes
            funds to cover full-year support costs of several refugee
            coordinator positions to be established at the end of fiscal
            year 2001.
        In addition to the MRA funding request, we are asking for $15
    million to replenish the U.S. Emergency Refugee and Migration
    Assistance Fund. This request will preserve the President's ability to
    respond to unforeseen and urgent refugee and migration needs worldwide.
    Nonproliferation, Anti-Terrorism, Demining, and Related Programs (NADR)
        The fiscal year 2002 NADR request includes a total of $332 million,
    broken out as follows:
      --$14 million for the Nonproliferation and Disarmament Fund (NDF), a
            contingency rapid-reaction fund which can meet unanticipated
            challenges and disperse funds quickly in support of urgent
            nonproliferation objectives.
      --$17 million for Export Control Assistance designed to provide
            training and equipment to establish or enhance export control
            systems. Funds support programs in Russia and the NIS, Central
            and Eastern Europe, and key transit states worldwide.
      --$37 million for the Science Centers to prevent former Soviet
            weapons experts in Russia, Ukraine, and the other NIS countries
            from emigrating to proliferant states by financing civilian
            research. It has redirected tens of thousands of NIS WMD/
            missile scientists to peaceful pursuits and remains a key
            component of U.S. nonproliferation policy.
      --$49 million for voluntary contributions to the International Atomic
            Energy Agency (IAEA) to support effective implementation of
            strengthened nuclear safeguards measures and growth in the area
            of nuclear inspections. The $2 million increase will fund
            safeguards technology development relevant to verifying North
            Korea's initial nuclear inventory.
      --$20 million for the Comprehensive Nuclear Test Ban Treaty (CTBT)
            Preparatory Commission to pay the U.S. share of costs for the
            ongoing work of the Provisional Technical Secretariat,
            including development and implementation of the international
            monitoring system (IMS) to detect nuclear explosions.
      --$95 million for the U.S. contribution to the Korean Peninsula
            Energy Development Organization (KEDO) for administrative costs
            and heavy fuel oil (HFO) purchases in fiscal year 2002. KEDO is
            responsible for implementing elements of the Agreed Framework
            between the United States and the Democratic People's Republic
            of Korea (DPRK) by financing and constructing light water
            reactors in North Korea and by providing annual shipments of
            heavy fuel oil to the DPRK until completion of the first light
            water reactor. The requested increase reflects a near doubling
            of the price of HFO on world markets.
      --$38 million for the Anti-Terrorism Assistance (ATA) program to meet
            the widening and continuing terrorist threat. Funds will
            support ongoing core ATA programs, develop new courses
            (including a new cyberterrorism course), increase training to
            select Balkan and Central Asian states, and initiate an energy
            security-related training program in the Caspian region. The
            request also includes $2 million to continue the Weapons of
            Mass Destruction (WMD) Preparedness Program, which is designed
            to help foreign government officials and ``first responders''
            manage terrorist incidents involving weapons of mass
            destruction. Funds will support policy workshops with senior
            host government officials and ``first responder'' training for
            hazardous material personnel, paramedics, and other security
            personnel who would be on the front lines dealing with an
            actual incident.
      --$4 million for the Terrorist Interdiction Program to support the
            third year of a multi-pronged border security program designed
            to assist selected vulnerable countries in stopping terrorists
            from crossing their borders or using their territory as transit
            points or staging areas for attacks. Funds will support
            installation of an integrated personal identification database
            system and associated training for about five countries in East
            Asia, Africa, Europe, and the Middle East. A small amount of
            funds will also help upgrade INTERPOL's communications system
            to complement the database network.
      --$16 million contribution toward the incremental cost of holding in
            the Netherlands the trial for the 1988 bombing of Pan Am Flight
            103 over Lockerbie, Scotland.
      --$40 million for the Humanitarian Demining program, which supports a
            wide range of humanitarian mine action initiatives in nearly 40
            countries around the globe. The program's emphasis is on mine
            clearance, surveys, and mine awareness, although some funds are
            provided for training and special projects that indirectly
            benefit mine-affected nations.
      --$2 million to support the second year of the Small Arms Destruction
            initiative, which is designed to eliminate stockpiles of excess
            small arms and light weapons left over from Cold War and post-
            Cold War conflicts, particularly in Eastern Europe, Central
            Asia, Latin America, and Sub-Saharan Africa.
    Military Assistance
        Mr. Chairman, the Military Assistance portion of the President's
    budget request includes IMET, FMF and PKO, as follows:
                International Military Education and Training (IMET)
        The Administration is requesting $65 million for IMET in fiscal
    year 2002.
        IMET encourages mutually beneficial relations and increased
    understanding between the United States and foreign militaries to help
    create a more stable and secure world community. Through more frequent
    and wide-ranging contacts, IMET promotes a shared set of values and a
    common approach to conflict resolution.
        The increase over the fiscal year 2001 level will allow additional
    personnel to enroll in courses offered on professional military
    education; military operations, with such subjects as tactics,
    strategy, and logistics; and technical training, such as aircraft
    maintenance. Approximately 2,000 courses are available for over 9,000
    students at 150 military schools and installations.
        In addition, special courses--known as Expanded IMET (E-IMET)--are
    designed to promote greater respect for and understanding of the
    principle of civilian control of the military, democratic values, and
    military justice systems that protect internationally recognized human
    rights.
                Foreign Military Financing (FMF)
        The Administration is requesting $3.674 billion for FMF in fiscal
    year 2002, including:
      --$3.4 billion for Israel, Egypt, and Jordan military assistance
            programs.
      --$39 million to support NATO's newest members--Poland, Hungary, and
            the Czech Republic--and $97.5 million to strengthen cooperation
            with Partnership for Peace (PfP) partners in Central Europe,
            the Baltics, and the New Independent States. Requested funds
            will help support new and ongoing programs to help meet
            Membership Action Plan goals and objectives and enhance
            interoperability with NATO.
      --$22 million for the East Asia and Pacific region. The majority of
            these funds will support a multi-year FMF program for the armed
            forces of the Philippines to sustain crucial military
            capabilities while promoting clear and positive action to
            correct significant budgetary and logistical deficiencies.
            Other funds for this region include continued funding to
            provide Mongolia robust communications equipment to help
            respond to security threats along its border and $1 million to
            help support a new East Timor Defense Force.
      --$18 million for countries in the Western Hemisphere to help support
            the capabilities of militaries engaged in drug interdiction,
            search and rescue, and anti-smuggling operations, and help
            sustain small professional forces essential to regional peace
            and security. Funds will also aid in increasing the
            capabilities of key countries that participate in worldwide
            peacekeeping operations such as Chile, Argentina, Bolivia, and
            Uruguay, and provide assistance to help Andean and Central
            American countries counter the ``spill-over'' security problems
            caused by the effective implementation of Plan Colombia.
      --$19 million for the Africa region. These funds will aid in the
            reform and modernization efforts of the Nigerian military,
            enhancing its role in Nigeria's transition to democracy and
            supporting participation in U.N. peacekeeping operations. Funds
            will also support South African airlift capabilities and
            military reform efforts. The Africa Regional Stability account
            consolidates regional African requirements that will permit
            greater flexibility to respond to developing situations in
            countries such as Ethiopia and Eritrea and selectively support
            militaries that are willing to support humanitarian and
            peacekeeping operations.
      --$8 million for the Enhanced International Peacekeeping Initiative
            to provide assistance to key countries to improve their
            peacekeeping capabilities with an emphasis on peacekeeping
            doctrine and education, training, and communications systems.
            This program will create a bigger pool of potential
            peacekeepers, thereby reducing dependence on U.S. forces.
      --$10 million designated for Policy Initiatives of the new
            Administration.
      --$35 million for Department of Defense (DOD) costs for the
            successful administration of global grant military assistance
            programs. The $2.2 million increase above the fiscal year 2001
            level is needed to cover costs in support of security
            assistance offices overseas.
                Peacekeeping Operations (PKO)
        The Administration is requesting $150 million for PKO in fiscal
    year 2002.
        PKO funds are designed to advance international support for
    voluntary multinational efforts in conflict resolution, including
    support for international missions in response to crises around the
    world. These funds promote involvement of regional organizations and
    help leverage support for multinational efforts where no formal cost-
    sharing mechanisms exist. The budget includes:
      --$20 million for the African Crisis Response Initiative, which
            represents final funding for this multi-year program.
      --$54.6 million for Organization for Security and Cooperation in
            Europe (OSCE) peacekeeping activities in the Balkans and OSCE
            preventive diplomacy missions elsewhere in Europe and the NIS.
      --$16.4 million to continue the Administration's commitment to the
            Multinational Force and Observers (MFO) in the Sinai.
      --$8 million to continue support for U.S. Civilian Police (CIVPOL)
            assigned to the U.N. Transitional Administration in East Timor
            (UNTAET) mission.
      --$51 million for Africa Regional Peacekeeping Operations, an account
            that consolidates numerous peacekeeping needs on the African
            continent. These include assisting the Economic Community of
            West African States (ECOWAS) and other African countries that
            are committed to providing peacekeeping troops in support of
            the United Nations Mission in Sierra Leone (UNAMSIL) and
            supporting the Joint Military Commission's (JMC) efforts in
            maintaining the peace in the Democratic Republic of the Congo
            and the Organization of African Unity's (OAU) efforts in
            support of military observers in Ethiopia and Eritrea.
    Multilateral Development Banks (MDBs) and International Organizations
            and Programs (IO&P)
        Mr. Chairman, the President is seeking the following funding for
    the multilateral development banks (MDBs):
      --The fiscal year 2002 request provides $1.210 billion for scheduled
            annual U.S. commitments to MDBs. The banks lend to and invest
            in developing economies and private sector enterprises in
            countries where risks are too high for private financing alone
            and where leverage is needed to spur private financing.
      --Bank policies and lending programs reflect U.S. priorities in
            promoting growth and poverty reduction in developing countries.
            These include financial sector reforms, anti-corruption
            measures, core labor standards practices, private sector
            development, and environmental management.
      --The Global Environment Facility provides grants and arranges
            financing for projects that address environmental management
            problems with global implications in developing countries.
      --MDBs support U.S. foreign policy initiatives in Eastern Europe and
            the former Soviet Union, Latin America, Asia, Africa, and the
            Middle East.
      --At the end of fiscal year 1997, U.S. arrears to the MDBs totaled
            $862 million. But by the end of fiscal year 1999, arrears were
            reduced to $335.3 million. Fiscal year 2000 and fiscal year
            2001 appropriations resulted in overall arrears increasing to
            their current level of $498.6 million. Since the Administration
            is not requesting any funding for arrears in fiscal year 2002,
            it is important that the regular commitment request be fully
            funded in order to avoid any further increases in arrears.
        And the following funding for IO&P:
      --The fiscal year 2002 request of $186 million provides U.S.
            voluntary contributions to international organizations and
            programs to help address global challenges through
            international cooperation.
      --The total includes funding for the U.N. Development Program that
            coordinates U.N. development assistance to build countries'
            indigenous capacities to achieve sustainable development ($87.1
            million); the U.N. Population Fund that provides critical
            population assistance to developing countries and countries
            with economies in transition ($25 million); and the World Trade
            Organization ($1 million), supporting technical assistance and
            capacity building related to the world trading system.
      --The request also includes $25 million for a contribution to the
            Montreal Protocol Multilateral Fund that helps developing
            countries use substitutes for ozone layer-depleting substances;
            $10.75 for the U.N. Environment Program (UNEP Fund/UNEP-
            related); and other contributions to international conservation
            programs addressing issues such as international forest loss
            and biological diversity.
      --Funds will be also be used to promote democracy and provide
            humanitarian assistance worldwide. Specifically, they will
            provide U.S. contributions to U.N. voluntary funds for torture
            victims and human rights; to the Organization of American
            States (OAS), supporting development assistance and efforts to
            strengthen democracy in the hemisphere; and to the World Food
            Program ($5.4 million).
        And now, Mr. Chairman, let me turn to export financing:
    Export-Import Bank
        The Administration is requesting $633 million for Export-Import
    Bank's loan and guarantee programs and $65 million for the bank's
    operations in fiscal year 2002.
        These funds will assist American businesses in sustaining U.S. jobs
    by increasing exports, thus stimulating economic growth and job
    creation in the United States.
        The fiscal year 2002 request proposes a 25 percent decrease in the
    bank's program resources, in part to reflect lower estimates of
    international lending risk. Within this level, Export-Import Bank will
    continue to serve exporters facing subsidized competition, as well as
    small and medium-sized enterprises.
        The increase for administrative expenses will, among other things,
    enable the bank to modernize its computer infrastructure to provide
    better service to the exporting community.
    Overseas Private Investment Corporation (OPIC)
        In fiscal year 2002, OPIC-generated revenue from its private sector
    users and other sources will allow OPIC to make a contribution of
    approximately $251 million in net negative budget authority to the
    International Affairs budget.
        The Administration is requesting the authority for OPIC to spend
    $38.6 million for administrative expenses. In keeping with OPIC's
    mandate to operate on a self-sustaining basis, this funding will come
    from OPIC user fees and earned income.
        The Administration is not requesting credit funding for OPIC in
    fiscal year 2002. OPIC anticipates that sufficient unobligated amounts
    from the corporation's fiscal year 2001 appropriation of two-year funds
    will remain available to support new direct loans and loan guarantees
    in fiscal year 2002.
        In fiscal year 2002, OPIC will continue to support the
    Administration's priorities for investment in such areas as Southeast
    Europe, Sub-Saharan Africa, Central America, the Caribbean, the Middle
    East, and the Caspian region. OPIC will continue also to emphasize
    activities and products that increase participation in its programs by
    American small businesses.
        Since 1971, OPIC has supported $138 billion worth of investments,
    generating over $63 billion in U.S. exports and creating or supporting
    nearly 250,000 American jobs.
    Trade and Development Agency (TDA)
        TDA assists in the creation of jobs for Americans by helping U.S.
    companies pursue overseas business opportunities. Through the funding
    of feasibility studies, orientation visits, specialized training
    grants, business workshops, and various forms of technical assistance,
    TDA helps American businesses compete for infrastructure and industrial
    projects in emerging markets.
        The fiscal year 2002 budget request of $50 million will enable TDA
    to continue to strengthen its core regional programs and help U.S.
    firms compete against heavily subsidized foreign competition. In
    particular, TDA has witnessed impressive growth in demand for its
    Asian, Eastern European, and African programs. While meeting this
    increased demand, TDA's fiscal year 2002 program priorities include
    expanding its High Tech Initiative in the areas of financial services
    technologies and emergency management.
        Every dollar TDA invests is associated with $40 in U.S. exports,
    estimated to total close to $17 billion since the agency was
    established in 1980.
        And finally, Mr. Chairman, the fiscal year 2002 budget request
    provides $275 million to permit the Peace Corps to continue its role as
    the leading international service organization engaged in grass-roots
    development. The increase of $10.6 million will enable the Peace Corps
    to continue support of its approximately 7,000 volunteers. This money
    will permit enhanced security measures for overseas staff and
    volunteers and will allow completion of information technology
    initiatives in support of volunteers.
        There are of course more details to the President's fiscal year
    2002 budget request for international affairs. I invite the members'
    attention to an excellent Department of State pamphlet entitled
    ``Summary and Highlights: International Affairs Function 150--Fiscal
    Year 2002.''

        Senator McConnell. Thank you, Mr. Secretary. The only
    exception the subcommittee makes to the opening statement rule
    is when the chairman of the full committee shows up. I do not
    know if Senator Stevens would have any observations. I would
    call on him before we go to the questions, which will be 5-
    minute rounds.

                    Opening Statement of Senator Ted Stevens

        Senator Stevens. Thank you very much, Mr. Chairman. I do
    appreciate the courtesy, because we do have three separate
    meetings this morning that I want to attend.
        Mr. Secretary, I am pleased to see you. I cannot tell you
    how proud we are you have agreed to be where you are. We look
    forward to working with you, and we hear you about the process
    of support, and I am sure that we all, knowing you as well as
    we do, we will rely upon your judgment and upon your guidance,
    and we look forward to working with you, and I have no
    questions this morning. It is good to be with you, Mr.
    Secretary.
        Senator McConnell. Thank you, Chairman Stevens.
        Mr. Secretary, in recent years in hearings with the
    Secretary of State I have not asked questions about the Middle
    East, because it seemed it was getting adequate attention and
    things seemed to be moving in the right direction. As we all
    know, toward the end of last year it was a very exasperating
    experience in which the previous Israeli administration offered
    everything there was to offer to the PLO, only to find that
    offer rebuffed, followd by a resumption of the violence that we
    saw a number of years back that continues up to this morning.
        We have accommodated the wishes of administrations of both
    parties with regard to financial assistance to that region for
    a long time, going back at least to the Camp David Accords. We
    have treated assistance to Israel and Egypt almost as an
    entitlement, with few questions asked, because we had a
    longstanding relationship with both those countries,
    particularly Israel.
        We, after the Oslo Accords, began an aid arrangement with
    the PLO and this year, as we approach these funding decisions,
    it seems to me appropriate to ask you, as a spokesman for a new
    administration: should we view our assistance package to the
    West Bank and Gaza as an entitlement? If you look at the PLO
    and as you look at our good friend Egypt, and their behavior
    over the last few years, it is hard for me to see how either
    has tried to move the process in the right direction.
        So as we make these rather significant funding decision in
    terms of the size of our package, and as we make these
    significant funding decisions this year, I am curious if you
    have an opinion as to whether or not we should continue to
    write the checks with little or no inquiry.
        Secretary Powell. Mr. Chairman, I believe that these are
    not entitlements. They were, nevertheless, commitments that
    have been made by the U.S. Government many years ago which come
    up for review every year. The commitments that were made and
    the yearly review combine to suggest that it remains in our
    national interest to fund these activities in these accounts
    for these countries.
        It is in our national interest to see that Israel, the
    democratic nation in the region, remains strong economically
    and militarily. It has long been U.S. policy, long-term U.S.
    policy, which I think still makes sense, to ensure that Egypt
    is provided with assistance, both economic assistance and
    military assistance to keep the balance in step, and also to be
    consistent with and faithful to the commitments which were made
    long ago at Camp David.
        I also believe that we have a very delicate situation right
    now, where negotiations took place at the tail end of the last
    administration that for a moment were breathtaking in their
    implications, if those negotiations could have gone to
    conclusion, but they did not, and they fell apart. The Intifada
    never did end while those negotiations were going on. The
    violence was continuing.
        With the end of those negotiations a new election took
    place in Israel, and Prime Minister Sharon has come in, and the
    terms of the negotiations are no longer where they might have
    been in January of this year. The violence has gotten worse.
    The United States has offered its assistance in trying to get
    security discussions going between the two sides to get the
    violence moving in the other direction.
        We have also been rather forthcoming in saying that once
    the violence starts moving in the other direction, we have got
    to see economic activity start up again, principally by
    allowing Palestinian workers to get to their jobs and releasing
    tax revenues that belong to the Palestinians that is being held
    by the Israeli Government. We firmly believe that there also
    has to be a negotiation at some point to start moving again in
    the right direction.
        This conflict cannot be solved by just violence, military
    activity on either side. It has to ultimately be solved at the
    negotiating table. What we have to do to get the violence down
    so that confidence can be built up between the two sides again,
    economic activity start, so that you do not have people who are
    not working who take their frustrations out into the streets,
    and at the same time get to a process of negotiation.
        Some new tools are now on the table with the Mitchell
    report and the very fine work that is being done by the
    Egyptians and the Jordanians on a paper that they have tabled.
    I think at this point we need to pursue the opportunities that
    are provided by the Mitchell report and the Egyptian-Jordanian
    initiative. I would not support cutting or reducing the funds
    at this time that we normally provide to these nations.
        Senator McConnell. So it is your view the Egyptians today
    are making at this point a constructive contribution to the
    process?
        Secretary Powell. They play an important role in the
    region. We speak out when they say things that we find are not
    appropriate, or when the newspapers say things that are quite
    inappropriate. I could show you an editorial they wrote about
    me not too long ago that was, I thought, quite inappropriate.
    We called it to the attention of the Egyptian Government and
    got something of an apology, and so they are sensitive to our
    concerns.
        Senator McConnell. My time is up, but, as you know,
    Egyptian news agencies funded by the Government are spewing
    anti-Semitic rhetoric at an all-time high, and it seems to me
    it is hard to conclude that that is very constructive. Maybe
    there are other things, as you indicated, that they are doing
    that is constructive.
        My time is up on this round. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        Mr. Secretary, you had mentioned the request for foreign
    operations, about 2 percent above the fiscal year 2001 level,
    but that assumes that a $230 million cut in the Eximbank goes
    through, and I doubt, and I suspect you doubt that a majority
    in Congress will support such a large cut, and so if we put
    that money back in we end up with a net cut.
        Senator McConnell and I have tried very hard to protect
    this budget. It is not the most popular budget on the Hill, and
    I would suggest that you look very hard at building support
    both at OMB and Congress for real funding, adequate funding in
    this area.
        One of the bits of advice that I have given many of your
    predecessors, most of whom quickly forgot it, is to spend more
    time with the Appropriations Committee. It is the
    Appropriations Committee, because for years and years and years
    we have not had an authorization bill on foreign aid, and I
    really would encourage you not to forget us, because we are
    facing in real terms a cut in foreign aid in this budget and
    there is more that could be done.
        I think of Plan Colombia, these programs that cost billions
    of dollars. I find it hard to see how they are going to succeed
    with the amount of drugs coming into the United States going
    up, not down. The price in the United States has actually gone
    down. We are not doing much to reduce the demand here, but we
    spend billions down there.
        We do not have an adequate amount of money for drug
    treatment. People are told yes, you do need treatment, we are
    going to put you on our priority list for 6 months from now.
        Maybe we are spending money in the wrong place. We have
    worked with people who have been involved in massive criminal
    activity in Peru. It is certainly not a mark of success to stop
    drugs by shooting a missionary and her baby, whether by mistake
    or stupidity.
        Frankly, I would hope you look closely at all of that.
    Aerial fumigation is supposed to be very safe, but the
    manufacturer says we recommend that grazing animals such as
    horses, goats, cattle, and sheep remain out of the treated area
    for 2 weeks and it should not be applied to bodies of water,
    people should stay out of a treated area until it is thoroughly
    dry.
        We are spending an awful lot of money with wonderful
    intentions, sometimes dealing with people that we can admire
    for their policies, like President Pastrana of Colombia, but
    the results are still, I believe, negligible.
        Let me ask you about Africa, a continent in crisis, and in
    many countries in Africa, AIDS threatened to wipe out all of
    the economic gains of the last quarter-century.
        There are half-a-dozen wars raging. There are millions of
    refugees and displaced persons, a third of the people are
    chronically undernourished, and that is twice as many as 30
    years ago, 2 million people--2 million people--have died in the
    Congo, mostly from disease and starvation. No one hardly knows
    it. That is four times the population of my State.
        Some have called for a Marshall Plan, or a Powell Plan for
    Africa, so my question is this. If you had the funds, say
    another billion dollars to support a Powell Plan, to support
    debt relief and expand trade and combat poverty in Africa, how
    would you spend it?
        Secretary Powell. Off the top of my head, I would put an
    additional chunk of it into HIV/AIDS work, with the focus not
    just on treatment, but on prevention. Ultimately, this crisis
    we solve through prevention, although treatment is important.
        I think debt relief for those countries deserving of debt
    relief, that have now put in place functioning democratic
    systems and economic systems that show some promise of future
    success.
        I would invest part of the money into education, and trying
    to get access to the Internet for young people of Africa to
    begin expanding their horizons and seeing what is out there,
    and being able to give them distance learning. You may have
    seen a wonderful article in the Washington Post a few days ago
    about what that is doing to a village in Cambodia, and what you
    can do through that transformation type of activity.
        I would make sure that the money was invested in those
    countries that have stepped away from old patterns of
    totalitarian behavior and State-controlled economies, so we are
    not just putting money down a rat hole.
        I would invest in those countries that truly have forsaken
    the past patterns of bad behavior, but HIV/AIDS, debt relief,
    education, Internet access, and other infectious diseases,
    malaria and tuberculosis, which increasingly are linked with
    AIDS, are the sorts of accounts I would put it into.
        Senator Leahy. I will have other questions for the record.
        Senator McConnell. We are going to have plenty of rounds.
        Senator Specter.
        Senator Specter. Mr. Secretary, I know that the
    administration is doing a great deal in the Mideast. In
    conversations with you and others upon my return from the
    Mideast last month, I wrote to the President, you, and National
    Security Advisor Rice urging that a Special Envoy be
    designated.
        I can understand the considerations in trying to keep the
    matters within the chain of command, but I believe that a
    Special Envoy would be very helpful, in keeping in the
    tradition since Henry Kissinger did the job for President Nixon
    many years ago, and that it would give reassurance to many
    people who do not know all that is going on.
        I had a chance to talk with the President yesterday. He was
    in Philadelphia, and we had a plane ride to discuss it. I would
    urge you to appoint a Special Envoy to give that kind of public
    confidence and also to undertake the kind of intense attention
    that no matter how attentive you are, and I know you are very
    attentive, that would be a positive step forward.
        Secretary Powell. Thank you, Senator Specter. I take the
    point. We have not ruled out having somebody pay attention to
    it on a full-time basis, but we do not think we are at a point
    yet where there is enough in the equation to justify that kind
    of attention.
        We have people in the region, an Ambassador and a Consul
    General who are deeply engaged and are now going back and forth
    between the two sides. If we can get the violence moving down,
    and if we can get the negotiations moving forward again, it may
    require that level of attention, and somebody, an Ambassador-
    at-Large or special Envoy. So we have not ruled it out, but we
    have not yet reached a point where we think it is timely for
    that kind of attention.
        Senator Specter. Mr. Secretary, I thank you and the
    President for carrying on a very strong policy of our special
    relationship with Israel. I think it is very important for the
    U.S. national interest, and for the strong ties we have to the
    only democracy in the region.
        The fighting there is extraordinarily difficult. The
    metaphor I used, I could not even find a tunnel, let alone a
    light at the end of the tunnel. I happened to be visiting with
    Chairman Arafat near midnight on April 16 when Israel was
    retaliating for mortar shells which had been fired from Gaza
    into Israel, and he made a statement about Israel's response
    being excessive and disproportionate. I know that the United
    States is frequently criticized for not being evenhanded.
        There are many factors at work, but the question that I
    have is that when mortar shells are being fired, and Arafat
    denies complicity, as he did to me, eyeball-to-eyeball, and I
    checked with our intelligence sources and it was conclusive
    that Arafat was behind the mortar attacks, and while Israel did
    respond very, very forcefully, Israel could have responded even
    much more forcefully,
        They are facing a situation where everybody is at wit's
    end. I believe that the calculation is that if they hit them
    hard enough, within reason, that the Palestinians perhaps will
    stop the terrorism, although that is very complicated, with
    Hamas an Islam Jihad and the others.
        But I would be interested in your response. In the region
    that comment was taken very badly by the Israelis, and taken
    with great jubilation by the Palestinians, because I saw their
    reaction. So it would be my request that, while the
    Palestinians are inciting the violence, that we be even more
    circumspect in what we say.
        Secretary Powell. I cannot talk to the specific incident,
    and Mr. Arafat's knowledge or wittingness, Senator Specter. We
    try to be evenhanded.
        The occasion you may be thinking of is when I made a public
    statement after Israel went into the Gaza Strip and one of the
    generals indicated they plan to stay there. That is when I was
    most outspoken. But it turned out they were already on their
    way out at the time I was issuing the statement, so by Israeli
    accounts the statement had nothing to do with their coming out.
    They were planning to come out anyway. But the statement got a
    lot of attention.
        I understand the inherent right of self-defense. I lived
    under those terms of engagement for many, many years, so there
    is an inherent right of self-defense. But in exercising that
    inherent right of self-defense, if you do not want to make the
    situation even worse, I think that the response has to be very
    carefully calibrated and proportionate. We have to make
    judgment calls from time to time as to whether we believe a
    particular response was proportionate and well-calibrated and
    therefore not creating an even more difficult situation,
    because right now we have a cycle where mortars are fired, and
    there is a very sharp response. I understand the need for a
    sharp response. But if you see in days after that mortars
    continue to be fired, and your sharp responses do not produce
    the desired result, it suggests to me that it is time for both
    sides to find ways to go back down the cycle of violence. And
    that is what we are desperately trying to find a way to do now.
    Only when we get moving in the other direction and stop this
    exchange, whether it is proportionate or disproportionate, will
    we be able to bring some stability to the region and get
    confidence-building measures created again, and then start a
    negotiation which will end the need for any kind of violence on
    anyone's part, proportionate or otherwise, right or wrong.
    Right or wrong, kids are dying.
        Senator Specter. Thank you for that response. I would just
    say that it looks very different on the spot there. I just
    happened to be there at the time. It looks very different as
    Israel is responding to those mortar shells, contrasted with
    the picture that we get here in Washington.
        Thank you.
        Senator McConnell. Thank you, Senator Specter.
        Senator Mikulski.

                Opening Statement of Senator Barbara A. Mikulski

        Senator Mikulski. Good morning, Mr. Secretary. Mr.
    Secretary, I know in your testimony, and even in my colleagues'
    questions, many compelling issues will be raised, ranging from
    conflict containment to conflict resolution dealing with the
    drug agencies, supporting our agency, and particularly the
    State of Israel, and I would hope we could advance on the
    Jordan free trade agreement, but Mr. Secretary, I would like to
    focus my questions on the impact that this foreign aid budget
    has on women and children around the world. I know an area in
    which you have expressed a longstanding commitment and
    sensitivity, and even in your chairmanship of the Joint Chiefs,
    it is really to defend the weak and the helpless.
        I am concerned about, first of all, the spartan funding for
    refugees, or the spartan increase. As you know, 95 percent of
    the refugees in the world are women and children. We have those
    that have been externally displaced to other countries, the
    internally displaced, like we see in the Congo, and I wonder
    what your reaction is to that, and do you think that we really
    do have the resources to meet really the sad and melancholy
    consequences of war, either external or internal, in which the
    victims are women and children?
        Secretary Powell. It is one of the great tragedies of our
    time, Senator Mikulski, as you noted, that the victims of most
    wars are not the soldiers that fight those wars but those who
    are displaced, and those who are displaced very often tend to
    be women and children. They become internally displaced within
    their own country.
        I would like to do more. I think we are doing a lot. I
    think our request for fiscal year 2002 shows our commitment to
    doing as much as we can, and I made a more personal and direct
    commitment to the Refugees International board of directors the
    other day, and with respect to trafficking in persons----
        Senator Mikulski. Yes, which is another issue, sir, that I
    raised in our State Department.
        Secretary Powell. Right, and as you know, we are in the
    process of--we have gotten the direction in the law we
    supported--the previous administration supported last year, and
    we will faithfully execute that law. We are looking at the
    placement of an office for that purpose now under new Under
    Secretary of State Paula Dobrianski, and she has been
    instructed by me to make sure it gets the highest priority.
        Senator Mikulski. Well, as you know, the issue of the
    trafficking of women has been bipartisan, Senator Kay Bailey
    Hutchison, as well as the men here, Senator Brownback. We look
    forward to meeting with her in advocating this issue.
        The other issue is a public health crisis that is facing
    the world. As I mentioned, Laurie Garrett has written a
    compelling book on this, and even in the transnational threats
    identified by George Tenet at CIA, they talked about the
    growing impact of malaria, tuberculosis, and AIDS, the pandemic
    nature of it.
        This then goes to the question of money and how we are
    going to address the issue. Jeffrey Sacks and his Harvard group
    says that we need between $8 to $12 billion alone to deal with
    AIDS, malaria, and TB in Africa. Could you comment on that,
    particularly in the area of not only let us all find a cure for
    AIDS, I think the whole world wants that, but in the area of
    prevention, and an integrated approach on this issue. We need
    money, we need a strategy. Who is in charge, and do you think
    we have enough, or how can we get to enough?
        Secretary Powell. I have seen Dr. Sacks' work, and that
    number, and Kofi Annan uses a number in that range, $7 billion
    a year. It is a huge bill, and a lot more can be done. The
    United States is at the moment contributing multiple times more
    than any other nation or group of nations on the face of the
    earth, and I think we should try to do more.
        It was for that reason that the President supported, last
    Friday, the global trust fund, which would draw not just from
    Federal funds but try to get private funds, corporate funds,
    lower drug prices, educational activities, youngsters doing
    walks for the cure and things of that nature, to make it a
    worldwide response to a worldwide crisis.
        I believe that the money we have requested in this budget,
    when you add up all the various accounts, as the President
    noted the other day, it comes to over $700 million, over $500
    million under my general supervision as Secretary of State,
    representing a 100-percent increase over the last 3 years and a
    10-percent increase from last year's accounts, so I think we
    are doing a lot.
        Should we be doing a lot more? Yes. Where should we be
    doing it? In my judgment, you have to deal with the prevention,
    treatment, and cure. Money is going to treatment. We need to
    put more money in. The real solution to this crisis ultimately
    has to be prevention, and those nations in Africa that are
    starting to do better on this and get their rates down have
    been focusing on prevention, to keep people from being infected
    in the first place.
        Senator Mikulski. Well, Mr. Secretary, I believe you and I
    are on the same broadband, to use a new vocabulary. Who in the
    administration or in your shop is really overseeing this issue?
        Secretary Powell. I oversee it as the Secretary, Deputy
    Secretary Armitage is following it, it is in the Africa Bureau
    is terribly interested in it, of course. The Global Bureau is
    interested in it. Secretary Thompson and I represent the
    President as a joint task force at Cabinet-level, and we are
    getting policy directions from Mr. Scott Everts, the new policy
    director for this account in the White House.
        Senator Mikulski. Mr. Secretary, I note my time is up. This
    issue, of course, has consequences both abroad as well as here.
    Senator Leahy has had a longstanding interest in infectious
    disease. Senator Frist intends to hold hearings on this, and I
    believe that there needs to be a one-stop shop at the State
    Department, and perhaps an interagency task force established
    on this public health crisis, then focusing on prevention,
    treatment that is appropriate to these countries, and I would
    like you really to consider that, and perhaps we could have
    further conversations about it.
        Secretary Powell. I look forward to it, because underneath
    Secretary Thompson and I we do have working groups, and we are
    forming an executive secretariat. In fact, Secretary Thompson
    and I cochaired our first interagency Cabinet-level meeting on
    this last week.

                               prepared statement

        Senator Mikulski. Well, we look forward to more. Thank you
    very much.
        [The statement follows:]
               Prepared Statement of Senator Barbara A. Mikulski
        Mr. Secretary, let me join in welcoming you to the Foreign Ops
    Subcommittee. I've had the pleasure of hearing from you every week--two
    weeks ago on the State Department budget at CJS and last week at the
    CJS hearings on terrorism. I look forward to working with you closely.
        I am proud to carry on a tradition of bipartisanship in foreign
    affairs and cooperation between the Administration and Congress. I hope
    President Bush and you will work to achieve consensus in foreign policy
    so our foreign policy reflects the values and interests of the American
    people as a whole.
        Today, I want to focus on issues of global public health. You and I
    are far more likely to die from infectious disease than from a missile
    attack or a space-based weapon.
        Let me start with some chilling facts a brilliant author named
    Laurie Garett presented to the Democratic Caucus at our recent retreat
    that I find deeply troubling. If you've never talked with Laurie
    Garett, I suggest you or your senior staff do so.
        Malaria killed more than a million and a half people in 2000. This
    is more malaria deaths in one year than ever before in history, and
    we're seeing malaria return to the United States. Tuberculosis also set
    a one-year record in 2000, killing more than 2 million people
    worldwide, with more than 8.5 million active cases. What's even scarier
    is that multi-drug resistant TB is spreading rapidly, now accounting
    for nearly half the TB cases in India and nearly six percent of U.S.
    cases. We're letting tuberculosis turn into an infectious disease that
    we cannot control through over-use and mis-use of anti-biotics. I won't
    go into the statistics on HIV/AIDS, except to say that within a few
    years it will have killed more people than the Black Death. And the
    worst is yet to come because the experts don't expect to find a cure or
    a vaccine any time soon.
        The World Health Organization estimates that 600,000 women die
    every year from complications related to pregnancy or childbirth--more
    than one woman every minute of every day. The vulnerability of most of
    the world's population to disease is a direct result of poverty, the
    lack of clean water and proper sanitation and poor nutrition. The kind
    of outbreaks that we see in scary movies--like ebola--happen because
    people are vulnerable to disease. Underfunded public health resources
    can actually spread disease through re-use of needles or lack of
    protective equipment or sterilization.
        Do you find these facts scary, Mr. Secretary? I sure do. But here's
    the kicker: This isn't just a problem in Africa or Russia. This isn't a
    foreign problem. Over the last 20 years, from 1980 to 2000, the number
    of Americans who died of infectious diseases doubled to more than
    170,000 a year.
        Globalization means a health problem anywhere is a health problem
    here in America. As soon as an infected person or animal or even food
    gets on an airplane or a ship, s/he or it becomes a vector bringing
    disease to our shores. We must protect our people, Mr. Secretary. We
    cannot throw up our hands and say this problem is too big to deal with
    because it will only get bigger and more expensive to deal with. We
    cannot just point to incremental increases in our spending to make it
    sound like a lot of money when it's clearly inadequate to the task.
        I believe there are solutions, Mr. Secretary, and I look forward to
    working with you and with Chairman McConnell and Senator Leahy, who has
    been such a strong advocate on public health, to change the way we
    approach this issue.
        First, we need a global public health approach--not just disease
    treatment programs, but programs to help provide: clean water; better
    nutrition, including providing micro-nutrient supplements; better
    sanitation; and single-use needles for every vaccination and drug that
    is administered.
        Second, we need to strengthen our voluntary family planning
    programs--not weaken them with the so-called Mexico City policy to
    appease a small constituency. I was outraged when I heard the Bush
    Administration reinstated the global gag rule, gutting our commitment
    to international family planning programs and ducking from our
    responsibility to the world's poorest women. Women should have the
    ability to decide whether and when to have children. International
    family planning programs mean healthier babies, stronger families, and
    fewer abortions.
        Third, we need to strengthen prevention programs which are far more
    cost-effective than treatment and ultimately far more humane.
        Fourth, we need sensible, integrated treatment programs like the
    DOTS program (Directly Observed Treatment, Short-course) for TB to
    ensure we're strengthening the patients, not the diseases.
        Finally, Mr. Secretary, we need to put money into this effort now.
    Jeffrey Sachs and his group at Harvard suggested we need $8 to $12
    billion a year for treatment and prevention of AIDS, malaria and TB in
    Africa alone. The more realistic estimates for dealing with the big
    three--TB, malaria, and HIV--are probably the higher estimates of $20
    billion per year.
        A few weeks ago, United Nations Secretary-General Kofi Annan called
    for the establishment of an international fund to address HIV/AIDS,
    malaria and tuberculosis. I applaud President Bush for making the
    United States the first country to pledge a contribution to this
    effort. With U.N. Secretary-General Annan and Nigerian President
    Obsanjo at his side, he announced a ``founding contribution'' of $200
    million to this global fund ``with more to follow as we learn where our
    support can be most effective.''
        However, the announced contribution pales in comparison with real
    needs. U.N. Secretary General Annan called for a $7 to $10 billion
    fund. As OxFam reportedly put it, President Bush left off a zero. As
    details come out, it seems the funds will come in part from monies
    already intended for public health at home and abroad--so some of it
    isn't really additional money at all.
        Mr. Secretary, Mr. Chairman, Senator Leahy--I ask you to join me
    today to commit ourselves to addressing global public health needs on a
    scale not contemplated by the President's budget, beyond the framework
    of the Budget Resolution's limited funding for International Affairs,
    before it is too late. We must do this because it is the right thing to
    do--to help the people of Africa, the people of Russia, the people of
    India and so many others--and to protect the American people.

        Senator McConnell. Senator Campbell.

              Opening Statement of Senator Ben Nighthorse Campbell

        Senator Campbell. Thank you, Mr. Chairman. Secretary
    Powell, we wish you well. I think it was advisable for the
    President to name you Secretary of State. I have many
    questions, probably many more than I can get through in one
    round, but I was particularly interested in a number of your
    comments dealing with human rights. We, all of us in the
    Senate, wear more than one hat, just as you do, and have more
    than one duty, and one of my duties is the chairman of the
    OSCE.
        If I mention OSCE anywhere in Europe when we travel over
    there, most people know what it is and what it does, but I
    would guess that most Americans never heard of it, and if I
    asked this audience what it meant, probably half of them would
    not have a clue about what the OSCE does, but I happen to think
    it is a very, very important group, as do the other 16
    commissioners that are made up of House and Senate Members as
    well as I, that serve as the commissioners.
        Much attention has been focused, as you mentioned, to the
    ouster of the United States from the Human Rights Commission,
    U.N. Human Rights Commission. It seems to me that even makes
    the OSCE all the more important. Let me ask you, how much
    importance does the Department attach to periodic review and
    implementation of the OSCE commitments and mission?
        Secretary Powell. It is an important organization. There
    are a lot of similar organizations within the international
    community that we work with, and we do attach importance to it.
    How often we review it and on what basis, I would like to
    provide that for the record.
        Senator Campbell. If you could, I would appreciate that.
        [The information follows:]

        The Department places great importance on reviewing implementation
    of OSCE commitments. At the weekly Permanent Council meetings as well
    as the annual Human Dimension Implementation Meetings, the Department
    raises its concerns about how other OSCE participating States are
    meeting their OSCE commitments on religious freedom, media freedom,
    prevention of torture, freedom of movement, rule of law, trafficking in
    human beings and other human dimension areas.
        This process of having OSCE member states remind each other of
    their commitments, complemented by recommendations for improvements, is
    essential to building a more democratic, prosperous and secure future
    for the OSCE region. It is a form of conflict prevention in practice.
        The Department works very closely with the U.S. Commission on
    Security and Cooperation in Europe on OSCE issues, including the
    Implementation Meetings. As a measure of the importance the United
    States places on the role of the Implementation Meetings in advancing
    the Helsinki process, the Department sent to the last Implementation
    Meeting in Warsaw a U.S. delegation that included 40 members.

        Senator Campbell. I have several questions. I am sure some
    of these are tough, and I will submit some of them in writing.
    In 1998, the international crime control strategy outlined
    eight goals and 30 implementing objectives. I mention this
    because you talked about narcotics, and Senator Mikulski also
    mentioned the trafficking of women and children that seems to
    be all on the rise in international crime.
        The goals, there was a number of specific initiatives under
    that 1998 strategy, but it is my understanding that there have
    been two threat assessments that were subsequently conducted in
    1999 and 2000, but there has been no action to establish any
    performance measurement system. Do you know of any new steps
    the State Department will take to improve the response to
    international crime?
        Secretary Powell. International crime is a major challenge,
    especially in the area of globalization, where money and people
    can flow around the world so easily. That includes criminals
    and dirty money.
        On these two specific assessments you made, and the goals
    to achieve the purposes that flow from that, I would like to
    give that to you for the record as well, Mr. Campbell.
        Senator Campbell. That will be fine. That is 1999 and 2000,
    those two assessments.
        [The information follows:]

        The Bureau of International Narcotics and Law Enforcement Affairs
    (INL) is working with other bureaus in the Department and with U.S. law
    enforcement and other U.S. Government agencies to develop a longer-
    term, more coordinated approach toward providing international crime
    control assistance. Annual completion by each embassy's country team of
    the Mission Performance Plan (MPP) that identifies the United States'
    highest priority strategic goals in the host country, is the first
    step. An MPP, however, is not always as comprehensive as we would like.
    INL has therefore recently asked all posts that have significant and
    sustained narcotics and crime control programs to prepare law
    enforcement assistance coordination plans that look out over the next 3
    years. The objective is to encourage posts to take a more comprehensive
    and balanced view about what needs to be done to develop more reliable
    international drug and crime control partners.
        INL has led a small State/Justice/Treasury interagency team to look
    preliminarily into how some posts are structured to undertake this mid-
    term planning and coordination. Once the reports are in, INL will
    organize a broader group to provide feedback to posts and work with
    local experts and embassy officials when posts want help in developing
    comprehensive, coordinated judicial assistance plans.
        To address shorter term needs, we have instituted a new ``project-
    based approach'' to make better decisions about how to allocate our
    training and program funds among competing U.S. Government agencies and
    assistance requests from posts. Posts initiate the process by
    describing and requesting comprehensive law enforcement assistance
    ``projects,'' not just a list of disjointed training courses that often
    characterized past assistance requests. Typically a project--such as
    enhanced border control--will include a sequence of training courses
    that may be team-taught by various U.S. law enforcement agencies, as
    well as technical and material assistance. An Assistant Secretary-
    directed State/Justice/Treasury working group that then reviews, ranks,
    and eventually approves these requests ensures interagency consensus.

        Senator Campbell. We have been trying, as commissioners,
    when we got to these international meetings, to raise the
    awareness with some of our colleagues. There was originally 54
    member nations under the original Helsinki Accord. There is
    about 10 that are observer nations now, so it is quite a big
    group, and when we were in St. Petersburg last year we did have
    a resolution passed dealing with transparency in Government and
    international crime.
        In the Istanbul summit, and the upcoming summit in
    Bucharest, which is a ministerial meeting, we hope to have that
    awareness raised again, and that will deal primarily with drugs
    and trafficking in women and children, and so I would hope that
    you would keep track of what we are doing, and help us as much
    as you can in that.
        Let me ask just a couple more. How does the State
    Department propose to coordinate responses to international
    crime with other Federal agencies to ensure the response is
    focused? When we were in St. Petersburg, in fact, one of the
    things we did was visit with the Russian Police Academy which
    has just one academy for the whole country. They do not have
    different departments in different cities, one academy, and the
    police go all over the nation.
        They provided us with all of their texts on police training
    in Russia, which we in turn brought back and disseminated to a
    number of agencies in America for translation, but that is kind
    of the last I heard about it. Is there a focus now with State
    Department and Treasury and Justice as well to try to get some
    cohesive direction?
        Secretary Powell. Those parts of the Department that work
    with international crime and trafficking, things of that
    nature, whether it is the International Narcotics and Law
    Enforcement Bureau and others, work closely with the FBI, meet
    with the FBI Director on a regular basis. Frankly, I was quite
    astonished at how aggressive the FBI has become overseas,
    working with our embassies. So I think there is a good
    relationship with the FBI and the other agencies that are
    involved in international criminal activity, whether it is
    trafficking, money laundering, and the like.
        Senator Campbell. I have about a half-dozen more questions,
    but my time is just about up, so I will go ahead and stop while
    I am still on the yellow, Mr. Chairman.
        Senator McConnell. Thank you, Senator Campbell.
        Senator Landrieu.

                 Opening Statement of senator Mary L. Landrieu

        Senator Landrieu. Thank you, Mr. Chairman. Let me begin by
    saying what a pleasure it is for me to join you all on this
    committee, and I really appreciate the opportunity to serve,
    and look forward to working with you and our Ranking Member,
    Senator Leahy. Let me also congratulate you, Mr. Secretary, on
    your appointment and say how pleased I am to be working with
    you, and how much I respect you personally and the job that you
    are doing.
        Secretary Powell. Thank you, Senator.
        Senator Landrieu. I am very, very happy with your
    appointment. Let me begin by just associating myself with the
    remarks of my ranking member, Senator Leahy, having read and
    reviewed his brief but, I think, profound opening statement,
    and I just want to reiterate for the record that as a member of
    the Armed Services Committee I have been a very strong
    supporter of a robust, effective, strong military.
        I believe that we are in definitely a period of transition
    that is going to be challenging, but this Congress is up to
    that task. I believe that our military has to be very strong to
    provide security for our Nation and our allies around the
    world, and promote, but I also believe that it is so important,
    as Senator Leahy points out, that we also have a balance of a
    well-funded foreign assistance program and effective diplomacy
    to match our strong military power, and one without the other
    is really, in some ways, a waste of time and resources. We must
    have both.
        So I will look forward to working with you through this
    committee to make sure that this budget is as fully funded as
    possible to match and provide the necessary balance that is
    very important as we begin this century, so that our military
    can be very effective when called on, but we can have the kind
    of offensive, effective diplomacy that is required through this
    foreign operations budget.
        In that line, I want to just reiterate also something that
    Senator Specter said about the Mideast envoy, and how important
    it would be for my mind to try to revisit that issue, to urge
    the administration to continue to make sure that the world is
    very clear that we think that this is one of the most important
    areas of the world. I know that every area claims to be, but
    clearly history will show that this is a place where all of us
    need to give some time and attention to try to bring peace.
        So I want to add my voice to urge you to think about that
    Special Envoy, to also call to the attention of this record for
    this hearing the letter that was signed by, I think, Mr.
    Chairman, over 60 Members of the Senate, urging the
    administration to rethink our strategy in the Mideast, given
    not only the level of violence, but, Mr. Secretary, with all
    due respect to what you said in your testimony, there is a
    difference in my mind between terrorism and self-defense, and I
    think we have got proven now a tremendous amount of terrorist
    activity that is going on.
        I know that we have been somewhat hesitant, because we were
    I think feeling encouraged by the peace process and what we saw
    going on, but that has really come to an unfortunate, abrupt
    end, and I think, as this letter states, it is time for us to
    reassess our position to close the daylight between our
    position and the position of Israel, and in effect to try to
    bring an end to the violence, to say how strongly we support
    Israel.
        I know that we want to try to be fair-handed, and I believe
    we most certainly have, but we cannot in any way at any time
    defend or cover terrorism, and I want to urge you in this time
    to think that, and I know it is very sensitive, but to call
    your attention to this letter that was sent.
        Moving on to another point, the restructuring of USAID, I
    want to commend you for and encourage you--you would be
    familiar with the term called a force multiplier, and I think
    that USAID could be so much more of a force multiplier than it
    is. My experience is somewhat limited to Romania and to
    Southeast Asia--I mean, Southeast Europe, and working with
    USAID, but I want to encourage you to continue to think about
    ways that we can restructure USAID to be a force-multiplier,
    sort of like the loaves and the fishes, if you will, realizing
    that no matter how large that budget could be, we can never
    accomplish all the goals, so to be facilitating and encouraging
    and building private sources of revenue, to do all the good
    things we need to do I think is very smart, and I want to work
    with you on that.
        Finally, just really a comment and a question about our
    position and policy in Central America, another very important
    area of the world. There are 450 million people south of our
    border, developing those democracies in that part of the world,
    and trade opportunities I think could be very important to the
    United States as we look into the next decade or so for
    economic trade and development.
        Just give me one or two of your special focuses, what you
    think could be done, what Congress should do to help support
    you in that particular area that we should be more focused on
    than others.
        Secretary Powell. Well, thank you, Senator. First let me
    thank you for that expression of support for what our Foreign
    Service and Civil Service and Foreign Service national
    employees are doing overseas. They are our first line of
    offense, working with our colleagues in military uniform.
        I saw something in the press this morning that I have to
    research to make sure it is accurate, but they said more
    Ambassadors have been killed since the end of World War II than
    Generals. So we are out there putting our people on the line,
    and thank you for that expression of support. I will very
    carefully look at the letter which you made reference to. I do
    not think I have seen it yet, but I look forward to examining
    it very carefully.
        Thank you for your words on USAID. We do intend for the
    global development alliance to be a force multiplier. Thank you
    for your reference to all of the military terms I use to use
    with more regularity than I do now, but it fits perfectly.
        Finally, on Central and Latin America, I certainly share
    your view of its importance, and I think one of the things
    Congress can do to help us the most is, as we bring it up here,
    the free trade alliance, free trade agreement of the Americas
    is going to be very, very important for economic development
    throughout the region. In due course the Chilean-United States
    free trade agreement, giving us trade preference authority,
    fast track, so that we can conclude deals not only in our
    hemisphere but elsewhere in the world that will encourage free
    trade, remove trade barriers.
        At the end of the day, what the people in these fledgling
    democracies are looking for is a better life. That better life,
    we believe, comes from economic freedom; the kind that is
    encouraged by these sorts of agreements.
        Senator McConnell. Thank you, Senator Landrieu. Senator
    Bennett.

                 Opening Statement of Senator Robert F. Bennett

        Senator Bennett. Thank you. Mr. Secretary, I know it is
    redundant, but I must join with my colleagues in welcoming you
    to this position and telling you how reassuring it is to have
    you there. The President did not consult me. If he had, I would
    have suggested that he take a look at you as possibly Secretary
    of Education because of your commitment in that area as well,
    but I am delighted to have you where you are, and join with my
    colleagues in making that expression. Just because it is tardy
    does not mean it is not well-intentioned.
        Secretary Powell. Thank you, Senator.
        Senator Bennett. I have got a chart that I am going to put
    up for the audience. You have a copy in front of you. The
    Russian Statistics Committee has made some grim predictions
    included in this quote. I will just highlight a few of them.
    These were brought to my attention when I was attending a
    conference last summer, where a group of academic experts on
    Russia went through this same litany of woe, and I had not
    realized how much trouble Russia is really in.
        From this quote, Russia's population will drop at least 7.2
    percent by 2016, which means a loss of 10 million people. The
    death to birth rate is 1.6 to 1, half the Russian population
    could have AIDS within the next 10 years, and this has resulted
    in widespread alcoholism, drug abuse, in an attempt to escape
    the difficulties of their lives in ordinary Russian terms.
        The group of experts that spoke to the Congressmen and
    Senators that were gathered at the conference to which I
    referred were very outspoken in their statement that the amount
    of money that the western world had put into Russia had not
    helped. Indeed, they went so far as to say that the IMF and
    other aid that had been provided by the United States had
    exacerbated the problems rather than helped the problems
    because of the way in which it was handled.
        I remember Congressman Waxman, who is on the other side of
    the political spectrum from me in most cases, asking the very
    anguished question, ``What can we do?'' and being told, at
    least by those experts, as far as governmental concerns, or
    governmental channels are concerned, no more money. Money just
    makes things worse, and the strong recommendation was effort by
    more NGO's.
        You have talked about the seed money that this
    administration has put into an attack on AIDS, and said you
    want that to reach out to NGO's and to others that could step
    in and help with this. We, as the committee, have to face this
    question of money and we are finding the public health problems
    in Russia to be so intractable and, indeed, ultimately
    threatening the stability of the regime and maybe the stability
    of that whole part of the world. I would like you to respond to
    whatever you want to here, and then whatever comments you might
    want to share with us later as to the issue of how the West
    really can deal with what appears to be an intractable problem
    in a country that in terms of its natural resources, the
    inventiveness and energy of its people and so on, should be one
    of the world's success stories but instead is one of the
    world's greatest basket cases. Particularly with the spread of
    AIDS and tuberculosis it becomes very, very troubling.
        Secretary Powell. These statistics are devastating. When
    you have a death rate that exceeds your birth rate by these
    standards, with the accompanying health problems that are also
    noted by this quote. That society cannot sustain itself over
    time. You must have a positive birth rate or immigration of
    some kind to keep your population growth up. Just as we benefit
    from immigration, but people are emigrating, not immigrating,
    with respect to Russia.
        Money alone will not do it, whether the money comes from
    the U.S. Treasury or from loans, or even from nonprofit
    ventures or private investment. What really has to happen in
    Russia, in my judgment, is, they have got to put in place a
    functioning economic system that is grounded on the rule of
    law. Where the law of contract is sacrosanct, where money that
    goes inside of Russia stays inside of Russia, and circulates
    and does good works, and does not go inside and circulate once
    and go outside to bank accounts in other countries, where one
    or two people are enriched, but not the people.
        So I think a lot more has to be done by Russia to create a
    safe environment for money. A safe environment for investment.
    A safe environment for loans and other kinds of financial
    assistance. I think they will still need financial assistance,
    but a great burden is placed upon them to eliminate corruption.
    Eliminate some of the terrible things that have happened within
    their society over the last 10 years which makes it hard for
    people to have confidence in investing in that kind of society.
    These are issues we should talk candidly and plainly to the
    Russians about.
        I am not dismissing Russia. Russia is a proud nation with a
    long history. It has an educated population. It has enormous
    natural resources. It has scientists. It has all sorts of
    people who could take it into a brighter future. If they can
    get themselves properly organized in a democratic way with a
    sound economic system resting on the rule of law, I think that
    Russia can yet take advantage of its human and natural
    potential to be a contributing member of the international
    community.
        Senator Bennett. Thank you very much.
        Senator McConnell. Senator Johnson.

                    Opening Statement of Senator Tim Johnson

        Senator Johnson. Thank you, Mr. Chairman, and welcome to
    Secretary Powell, and my commendation to you for your continued
    public service and your choice to do that.
        Secretary Powell, one of the flashpoints in the world that
    concerns me a great deal has to do with the continuing
    conflicts between India and Pakistan, particularly related to
    Kashmir. This is a potential source of nuclear conflict, and
    certainly destabilizing to all of South Asia and perhaps the
    world.
        I was pleased last year when President Clinton was the
    first President in over a quarter of a century to visit both
    India and Pakistan, but I would be interested in any
    observations you might have about what is the role of the
    United States? What can we do more constructively than we have
    up till now?
        Obviously, there is no United States--there is no
    possibility to impose our solution on two sovereign nations,
    but nonetheless I would hope there would be an increasingly
    constructive role that the United States might play in this
    particular conflict, and I would appreciate any comments that
    you might have.
        Secretary Powell. I think there are roles we can play. I
    think the progress we have seen over the last several years in
    the relations between the United States and India, especially
    give us a new entree, a new opportunity to encourage the sides
    to find a peaceful and just solution to the problem of Kashmir.
    But as you know, Senator, it is a very difficult issue.
        We plan to build on the relationship. The Indian foreign
    minister has been to see me, and I have assured him that we
    will build on what was achieved in the previous administration.
    I am looking forward to visiting India at some point and
    looking forward to exchanges at all levels--economic, trade,
    and other levels.
        For most of my military career, especially in my senior
    years as the chairman of the Joint Chiefs of Staff, and at that
    level, India was just over there. It was sort of connected to
    the Soviet Union, and we did not pay a lot of attention to it.
    Our focus was really on Pakistan.
        Now, our focus is on both of them, and I think we can be
    helpful to both of them, and we really have to make sure that
    this nuclear genie does not get any further out of the bottle
    than it is already. On a regular basis, we consult with them.
    We make sure they understand the seriousness with which we view
    the potential for something getting out of control in the
    region, and I think we do have a helpful role to play because
    of the relationship we have with India.
        Senator Johnson. Let me just ask you quickly, in the short
    amount of time I have here, with the reimposition of the Mexico
    City policy, and a flat line budget on international family
    planning, one of my concerns is, what is the United States
    role? It seems to me tragic that this policy, I believe, leads
    to more unwanted pregnancies and then, in turn, more abortions
    throughout the world.
        It seems to me the United States needs to play a more
    constructive role in terms of international family planning and
    seeing to it that certainly not on our own, but in conjunction
    with other western democracies, that we contribute to providing
    more options to more women, particularly low income women
    throughout the world, and I wonder if you would have any
    comments about where do we go from here now.
        Secretary Powell. With the Mexico City policy we still--we
    have over $400 million going to family planning activities
    around the world. Several of them have been caught by the
    Mexico City policy, but we are reasonably confident that they
    have been able to find alternative sources of funding, and it
    is a very small number, and it shows no diminution of our
    interest in family planning activities, but not those specific
    ones that advocate or educate or provide alternatives founded
    on abortion as a family planning practice.

                               prepared statement

        Senator Johnson. Thank you, Secretary Powell. I would yield
    back.
        [The statement follows:]
                   Prepared Statement of Senator Tim Johnson
        Mr. Chairman, I'd like to thank you and Ranking Member Leahy for
    holding today's hearing to take testimony from Secretary of State Colin
    Powell. I respect the leadership Chairman McConnell and Ranking Member
    Leahy have shown on foreign assistance appropriations issues over the
    years, and as a new member to this subcommittee, I look forward to
    learning from them and working with them on these important issues.
        First, I'd like to congratulate Secretary Powell on the unanimous
    support his nomination received in the Foreign Relations Committee and
    on the Senate floor earlier this year. Secretary Powell brings to his
    position as the President's principle foreign policy advisor years of
    experience in dealing with multinational issues and a high level of
    respect within the international community.
        The international challenges facing our country are considerable.
    In his own testimony, Secretary Powell noted that ``increasing levels
    of conflict, degraded economic performance, and widespread disease are
    causing regional instabilities, complex humanitarian emergencies and,
    in some cases, chaos.'' Andrew Natsios, Director of USAID, recently
    appeared before this subcommittee and noted that nearly two-thirds of
    the countries with USAID field missions have been ravaged by civil
    conflict over the past five years. Additionally, 75 percent of the
    world's poor live in rural areas at a time when many areas of the globe
    are experiencing historic and sustained droughts. The HIV/AIDS epidemic
    is on the brink of destabilizing an entire continent, Africa, and the
    disease's impact continues to be felt around the world.
        The challenges facing Secretary Powell, Director Natsios, and our
    country are considerable, but they are not insurmountable. Our history
    has shown that the relatively small investment the government makes in
    the Foreign Assistance budget--approximately one penny of every dollar
    the government spends--has paid dividends in peace and stability.
    Investments made over the years in fragile democracies in the former
    Soviet Union, Central Europe, the Middle East, Latin America, Africa,
    and South Asia have resulted in stable governments growing into global
    trading partners, solidifying our national security. Director Natsios
    gave the Senate Foreign Relations Committee a sobering example of the
    consequences of ignoring our nation's investment in the developing
    world: Bosnia. The Carnegie Commission for Preventing Deadly Conflict
    reported that total NATO peacekeeping and humanitarian aid efforts in
    Bosnia cost $53 billion. I share the belief among many in Congress that
    it is better to prevent disasters, as much as possible, than to cope
    with their aftermath.
        In addition to protecting our national security, our small
    investment in foreign assistance creates opportunities for American
    workers. By promoting American exports and developing international
    markets through the Export-Import Bank, the Overseas Private Investment
    Corporation, and others, the international affairs budget is
    responsible for 1 out of every 7 American jobs. In my state of South
    Dakota, that means additional markets for grains and meat grown and
    raised on family farms and ranches.
        I appreciate Secretary Powell's detailed testimony for this
    subcommittee and his foreign operations budget justifications for the
    fiscal year 2002. I would like to briefly highlight some areas of
    interest in this budget proposal.
                        economic growth and agriculture
        In an attempt to concentrate USAID resources and capabilities,
    Secretary Powell and Director Natsios have emphasized the importance of
    economic growth and agriculture to create economies that are viable
    over the long term. I am pleased that the Secretary's request for
    fiscal year 2002 is an increase from last year's funding levels given
    the importance of agriculture and basic education--especially for girls
    and women--in most of USAID's recipient countries.
    Dairy directive
        I encourage the Secretary and USAID to continue to utilize
    successful programs like the dairy directive that assists producers,
    small dairies, and cooperatives in developing and transitioning
    economies to increase household incomes and nutrition. Linking economic
    development programs with increased exports of U.S. dairy products is
    mutually beneficial to American farmers and is sound foreign policy.
    Credit unions and cooperatives
        Also within the area of economic growth and agriculture, I
    encourage the Secretary and USAID to consider expanding rural credit
    unions, rural utilities, and value-added cooperatives to strengthen
    agriculture systems and help small farmers in developing countries. For
    a number of years, people in rural America have benefitted from credit
    unions and cooperatives. More recently, we have seen that credit unions
    and cooperatives are critical grassroots, democratic institutions that
    enable rural and urban communities in developing countries to become
    selfsufficient. Credit unions and cooperatives can also play an
    important role in stabilizing communities impacted by HIV/AIDS through
    childcare cooperatives, pre-paid health programs, and cooperative
    pharmacies.
    International Arid Lands Consortium--South Dakota State University
        South Dakota is home to two international programs which emphasize
    the role of agriculture in economic development and health. First,
    South Dakota State University has been a longstanding partner in the
    International Arid Lands Consortium--a group that conducts research,
    education, and technical assistance programs in the United States and
    with partners in the Middle East addressing water, land, and management
    issues. The International Arid Lands Consortium provides for unique
    collaboration between American, Jordanian, Israeli, and Egyptian
    researchers and scientists. Approximately 40 percent of the world's
    land is arid or semiarid, and the International Arid Lands Consortium
    is making great strides in helping to transform this terrain for
    agriculture and habitation while also addressing the negative impact of
    urbanization and desertification. The International Arid Lands
    Consortium receives funding through the USDA Forest Service. However, I
    am aware of interest in the Consortium of working with USAID, and I
    encourage increased communication between the Secretary, USAID, and
    representatives of the International Arid Lands Consortium.
    George McGovern Global Hunger Project--Dakota Wesleyan University
        The second project involves fellow-South Dakotan, Ambassador George
    McGovern's campaign to end global hunger. Established by Dakota
    Wesleyan University, the George McGovern Center for Public Hunger
    Project will be an extension of George McGovern's lifelong work to
    eradicate poverty and hunger. As you know, Ambassador McGovern was
    instrumental in creating programs to alleviate hunger including Food
    for Peace, school lunches, and food stamps and also advanced federal
    efforts to deal with poverty and hunger worldwide. Since 1998 he has
    served as the U.S. Ambassador to the United Nations Food and
    Agricultural Organization. In this role, he has successfully promoted
    an international program to provide school lunches throughout the third
    world. His lifelong dream is to fully banish hunger from the earth by
    2030. I encourage Secretary Powell and USAID to work with Ambassador
    McGovern to incorporate the mission of the McGovern Center into the
    work of the State Department and USAID.
        I'd now like to turn to areas of the world receiving much-needed
    foreign assistance and diplomatic attention.
                                    pakistan
        I'm pleased that Secretary Powell has requested funding to help
    restore democratic institutions and build civil society in Pakistan and
    fund projects promoting cross-border confidence-building measures
    between the civil societies of India and Pakistan. Staying engaged with
    Pakistan through its interim government is the best way to encourage
    renewal of democracy and pro-Western attitudes and policies. All of us
    wish that Pakistan had a strong, stable democracy, but it never has.
    The interim Chief Executive, General Pervez Musharraf, has given
    assurances of his commitment to combating corruption and renewing civil
    institutions so that Pakistan can attain an authentic, functional
    democracy in the future. The Administration should engage closely with
    the people of Pakistan in helping to make this promise a reality.
        In addition, I encourage Secretary Powell and the Administration to
    offer United States mediation toward peace in Kashmir. Kashmir is the
    world's most dangerous nuclear flashpoint, and it is in the United
    States' and the world's best interest to attempt to bring Pakistan and
    India closer together and change the dangerous dynamic in South Asia.
    Rising fundamentalism and terrorism are threatening stability in South
    Asia and around the world. I have called on the Musharraf government to
    illustrate more progress in condemning terrorism, returning to a
    democratic government, addressing economic reform, and improving human
    rights, especially for women and children. This is a critical time for
    Pakistan and the region, and it is critical for the United States to
    stay actively engaged.
                                    armenia
        I applaud Secretary Powell and the Administration for its efforts
    earlier this year in bringing together Armenia and Azerbaijan in Key
    West, Florida, to discuss a peaceful end to the Nagorno Karabagh
    conflict. As Secretary Powell noted in his budget justifications,
    ``achieving a durable and mutually acceptable resolution to Armenia's
    conflict with Azerbaijan over Nagorno Karabagh is key to several U.S.
    interests.'' In addition to helping to restore stability in the
    Caucasus region, a lasting peace agreement would allow Armenia to
    improve its relations with Turkey and focus much of its economic
    resources on internal development and social improvements.
        While I am pleased that Secretary Powell's budget request sets
    aside funding in the regional account to support a settlement of the
    Nagorno Karabagh conflict, I am disappointed that this funding level
    falls short of last year's levels. These funds are critical to the
    peace process and to post-settlement reconstruction in Azerbaijan and
    Armenia as part of a coordinated international donor effort.
                                     israel
        Both moral and strategic imperatives require strong bonds and a
    close relationship between the United States and Israel. Israel is both
    the only democracy in the Middle East and this country's only stable
    ally in that vital region. For these reasons, the United States must
    continue to aid Israel in military, diplomatic, and economic spheres.
    Israel is a friend and should be treated by our government as a valued
    ally.
        I am pleased the Administration's fiscal year 2002 budget request
    illustrates a continued commitment to Israel's security through
    economic and military assistance. I support the Administration's
    request for $720 million in Economic Support Funding (ESF) and $2.04
    billion in Foreign Military Financing (FMF). I also urge the
    Administration to support early disbursal of both ESF and FMF funding
    in full for Israel, along with the ability for Israel to receive a cash
    transfer of the ESF funds.
        In an attempt to break the generational cycle of violence in the
    Middle East, Seeds of Peace brings together Arab and Israeli teenagers
    and youth for unique conflict resolution programs. I support the very
    limited amount our government contributes to this worthwhile program
    and encourage Secretary Powell to continue our involvement in conflict
    resolution programs like Seeds of Peace.
        The State Department and USAID play a critical role in our
    country's national security while maintaining our commitment to
    humanitarian principles through development assistance. Secretary
    Powell, I look forward to working with you in helping to make
    investments in international peace, security, and prosperity.

        Senator McConnell. Mr. Secretary, with the breakup of the
    Soviet Union and the discovery of even greater oil reserves
    than we had thought previously existed in the Caspian Sea,
    Americans have rediscovered the Caucasus. The Russians declared
    early in the nineties, somewhat similar to the Monroe Doctrine
    here a couple of centuries ago, that that was their near-
    abroad. It used to be part of the Soviet Union. Basically, it
    was our turf.
        As you know, in the aftermath of the breakup of the Soviet
    Union there was a war between Armenia and Azerbaijan, lots of
    refugees on both sides still there, disputed territory in
    Nagorno-Karabahk. What was established to try to work out an
    agreement was something called the Minsk Group, which had at
    the table the Russians and ourselves.
        You could not say what I am about to say, but it is my view
    that the Russians are not interested in solving this dispute,
    the French are rarely helpful on anything, and that leaves us.
    I am somewhat skeptical as to whether the Minsk Group is a
    format for resolution that can work, so my questions to you are
    twofold.
        First, do you think that is a format that can work? I
    gather they are meeting again in June.
        Second, just how big an interest will this administration
    take in the issue? Strobe Talbott was the assigned point person
    on this issue in the previous administration. I do not think he
    would admit this publicly, but it was not a high priority for
    him. I think our mind set was that this was so far away and so
    close to Russia that we could not play much of a role in it.
        How important is this to the new administration? Can the
    Minsk Group function with those players, and will it be a
    priority for you and, if not, who will handle it?
        Secretary Powell. It is a priority. The Minsk Group I think
    has done good work, and the two Presidents of Armenia and
    Azerbaijan have acknowledged the good work that has been done
    by the Minsk Group. Not too long ago we brought the two
    presidents to Key West, as you may be aware, Senator, and with
    other cochairs present, the Russians and the French, playing a
    very constructive and helpful role, we moved the process along
    in Key West.
        One of the reasons Key West was possible was because
    President Chirac and President Putin took a personal interest
    in it and moved the two presidents, Kocharian and Aliyev, moved
    them in this direction.
        We had a good outcome from the Key West meeting. The issues
    are very difficult and complex. Both leaders have gone back to
    reflect on the ideas that the Minsk Group put to them and to
    get ready to take the next step, which is the meeting you made
    reference to, I hope in June.
        There are some tough issues yet to be resolved, but the
    French, the Russians, and the United States are working very
    closely, and I think in a very, very constructive and positive
    way. We have seen progress over the past year, but we are not
    there yet. In due course, it will be the Minsk Group that will
    present the proposal to the two sides and to the international
    community for consideration.
        Senator McConnell. Well, that is encouraging. Essentially,
    not much happened for a long time, and I did hear reports that
    the Miami meeting was constructive.
        Secretary Powell. I flew down to preside at the meeting.
        Senator McConnell. Should I take it to mean that this will
    be something that you will have a personal interest in?
        Secretary Powell. After spending a whole day at Key West,
    yes, sir.
        Senator McConnell. Good. I am glad to hear that. I think
    dealing with that at the highest level is in the best interest.
        Secretary Powell. We also have a superb Ambassador as our
    cochair, Ambassador Cavanaugh, and he keeps me very closely
    informed as to what is going on directly.
        Senator McConnell. Shifting to another part of the world,
    Carla Del Ponte was in town. I think you met with her, and I
    did as well. We talked earlier about how congressional earmarks
    and stipulations are sometimes not helpful to administrations,
    but in the case of section 594, which Senator Leahy and I
    inserted into the bill last year requiring you to certify that
    there was a good-faith effort to turn Milosevic over to The
    Hague, it actually may have been helpful to you in that regard,
    even though you were able to certify this year.
        What prospects do you think there are, if any, that
    Milosevic will, in fact, be turned over to The Hague, and I
    would be interested in just your general observations about the
    status of that issue at this time.
        Secretary Powell. I would be delighted to respond. I saw
    Ms. Del Ponte when she was here, and I also saw President
    Kostenica when he was here. I did review with the president and
    Ms. Del Ponte the law that I am obliged and anxious to comply
    with, and that the certification I made at the end of March was
    a conditional certification, made easier that weekend because
    they did arrest Mr. Milosevic.
        It would have been a much harder certification to make in
    the absence of that. But the condition that I used to make the
    certification at that time, and I recall speaking to both of
    you at the time, was that more had to be done before we could
    go to the donors' conference that was called for. I made that
    point to President Kostenica and also discussed it with my
    European colleagues that I need to see more.
        The president has responded, since his visit, that he is
    going to try to do more with respect to putting in place the
    necessary legal basis. I cannot tell you when Mr. Milosevic
    will be subject to the court and will have to face the court in
    The Hague. I do not have a date for that. Belgrade has not
    given us a date for that. I am hopeful that they will take
    actions between now and the time that a decision has to be made
    on attendance at the donors conference that will allow me to
    remove the condition, or satisfy the condition, because they
    have done a lot more.
        I would hope that a lot more includes something about Mr.
    Milosevic, but I think that is unlikely from this standpoint.
    But, I certainly encourage them to understand, without any
    question about it, that we will not be satisfied until
    ultimately he stands before The Hague and they really have to
    put that on their radar screen. Hopefully in the short range
    and not the long range, so there is no misunderstanding about
    the intent of the law and the nature of our expectations.
        Senator McConnell. Thank you, Mr. Secretary.
        Senator Leahy.
        Senator Leahy. I will follow up on that, because Senator
    McConnell and I worked very closely on this and yes, you and I
    did discuss it, and I appreciate that discussion, but I am just
    wondering, is the administration willing to sit out the donors'
    conference and see the Europeans go ahead whether Kostenica is
    cooperating with The Hague or not?
        Secretary Powell. My best sensing right now is that they
    are reluctant to go ahead with the donors' conference without
    us. At the same time, Belgrade needs help in order to keep the
    success that we have seen in the last 7 or 8 months going. So
    we have two objectives here, one to use the promise of
    attendance at a donors' conference to satisfy the International
    Criminal Tribunal. But at the same time we also have to be
    sensitive to the fact that this donors' conference is very,
    very helpful in helping the Government to move forward in a
    positive direction. I will weigh all of those circumstances and
    what has happened between now and the time I have to make that
    decision, when I make my notice to the Congress as to the
    certification of the condition.
        Senator Leahy. I also look at the war criminals in the
    Rpublika Srbska, but SFOR has not apprehended them. I do not
    think the Serbs would have done anything if the chairman and I
    had not had the restriction in, and had not made some very
    strong statements that we did not intend, at least at the
    congressional level, to give in.
        So it relates back to other places like Colombia. We
    included human rights conditions on the aid to the Colombian
    military, who had a poor human rights record. The House added a
    waiver. President Clinton used the waiver. Since then, the
    paramilitaries have doubled in size, the number of massacres
    has increased, the paramilitaries a week or so ago mutilated
    people with a chain saw.
        The paramilitaries have close links with the Army. A year
    has passed. I think we need to continue the conditions on
    Colombia, but is it going to be the policy to just waive the
    human rights conditions again if we leave the waiver in there?
        Secretary Powell. I think what we have to do when the time
    comes to make that decision, take a complete look at what has
    transpired since they left.
        Senator Leahy. I understand that, but what I am saying is
    this. There is a bipartisan concern up here, and none of us
    want to see our country hit with drugs, but I worry about this
    drug war becoming something similar to what we saw during the
    cold war.
        Many times with administrations of both parties, if you
    have the country where they have the worst abuses of human
    rights, you might have a dictator, you might have all these
    other problems, but they said, by gosh, we are anti-Soviet
    Union, we are anticommunist, would you please send us some aid.
    We shoveled it in, and we closed our eyes to some problems that
    were far greater than anything we might have faced at that time
    from the Soviet Union, and I wish we would look at what is
    happening down in Colombia, where we give more aid to the
    military, they give more aid to the paramilitaries, the
    paramilitaries are involved with atrocities, the guerrillas are
    too, the drug lords seem to flourish, but the paramilitaries
    are now working as sort of semi-drug lords, too.
        And then we do other things. We spray glyphosate down
    there, and as the manufacturer says people should stay out of
    the treated area until it is thoroughly dry. You should keep
    animals out, for 2 weeks out of the area. In Mississippi they
    cut back on the use of it. We are finally looking at the health
    effects in Colombia. The Colombian officials and environmental
    groups, including the World Wildlife Fund, have called for a
    halt to the spraying, at least until we find out the results of
    the study. Should we at least take that step?
        Secretary Powell. I think the manufacturers' cautions are
    well-grounded, but I have seen no evidence so far that
    illnesses or problems of the kind suggested have broken out, or
    been a problem as a result of the spraying.
        With respect to the paramilitaries, of course, we do not
    support them. And we speak candidly to the Colombian
    Government. In my conversations with my Colombian colleagues, I
    make the point that human rights are an essential part of our
    strategy. And if they really want to be successful at the end
    of the day, in defeating not only the insurgencies, but the
    narcotraffickers. They have to show to their population a
    commitment to human rights and democracy.
        The problem Colombia has is, their democracy is being put
    at serious risk by these people, so they are in a war.
        Senator McConnell. Thank you, Senator Leahy.
        Senator Campbell, and let me just say that the Secretary
    has to leave at 11:30, but I think with these 5-minute rounds
    we are going to all be in good shape. Senator Campbell.
        Senator Campbell. Well, with that, Mr. Chairman, I have
    several other questions dealing with the OSCE and law
    enforcement that I will submit in writing to the Secretary, but
    there is a last couple of questions. I would like to change
    gears just a little bit.
        Just as you had a former life, I had a former life, too,
    when my wife looks at my waistline she can hardly believe I was
    once an Olympic athlete, but I have got the old pictures to
    prove it, but I would like to ask you a couple of questions
    dealing with the Games that will be coming up in Greece.
        Some months ago, Senators Stevens, Roberts, Warner, and I
    visited Athens, where the next Olympic Games are going to be.
    As you probably know in this year's budget we will be
    appropriating something like $92 million that will go toward
    security for the Salt Lake Games in Senator Bennett's State.
    Most will come through Treasury and CJS, by the way, so we are
    taking precautions here.
        When we were over there, we asked some of the Greek
    officials about it, and they got a little bit defensive, but
    the reason I ask is because there have been some people on the
    U.S. Olympic Committee who have suggested that if we get
    American kids over there and they get hurt, and you know as
    well as I do, these big international events have become
    spectacular.
        Any wacko that wants to make a statement can certainly get
    the press, but if we get an American kid hurt, they are not
    going to sue Greece, they are going to sue the U.S. Olympic
    Team, and so there are some questions about whether the U.S.
    Olympic Team should participate. I think they are going to, and
    I certainly support that, and I hope they will, but I am
    concerned.
        When we were in Athens, there were some reports about a
    group called 17 November that I am sure you are aware of. It is
    a terrorist group. They have not made any specific threats
    towards Americans, but in June 2000 they did kill the British
    defense attache, who was murdered.
        When we were there, we were told by the Ambassador that our
    officials are, I mean, in and out of high alert regularly
    because of threats. In fact, while we were there, there was a
    threat made at the hotel while we were there, and we had to
    leave the hotel until the dogs were brought in and all the
    sophisticated equipment was brought in, too.
        The question I had was, has the State Department raised any
    security concerns with the Government of Greece in anticipation
    of the upcoming games?
        Secretary Powell. I do not know that we have made formal
    comments or requests, or expressed formal concerns to the Greek
    Government, but I can check on that. I know there has been a
    general area of concern, because there is a potential for these
    kinds of activities just about anywhere in the world, but
    Greece and the 17 November Group is troublesome.
        [The information follows:]

        The Department has been working closely with the Greek government
    on the issue of Olympics Security. At the request of the Greek
    government, we and other concerned members of the international
    community--the UK, Spain, Australia, France, and Israel--have formed an
    Olympic Security Advisory Group (OSAG), which has met several times in
    Athens since December 2000. Through OSAG, we are working to help the
    Greeks identify unmet security needs and offering advice on how they
    can meet those needs. In addition, Greek law enforcement experts have
    visited the United States and participated in security training
    exercises for the 2002 Salt Lake City Winter Olympics. From our
    perspective, the OSAG process has been highly productive. I would add
    that we are posting a special Diplomatic Security Olympics Coordinator
    in Athens this summer, as we did for the Sydney Games, to manage the
    U.S. effort.
        As we know from experience, preparing for the Olympics is a
    momentous challenge regardless of the venue, and one that requires an
    extraordinarily high degree of international cooperation. The USG will
    continue to support Greek efforts toward a safe, terrorism-free
    Olympics. Clearly, much work remains to be done. I am confident that
    the Greek government will do everything possible to ensure the safety
    of the Games, and we will assist them in any way that we can.
        On the specific issue of terrorism, we have made our bottom line--
    the need for results--well known to the Greek government, including
    during Foreign Minister Papandreou's very successful recent visit (May
    20-24) to the United States. The Greek government has become more
    determined in the fight against terrorism since the murder of UK
    Military Attache Stephen Saunders in Athens last year. The Greeks have
    taken a number of important steps, including publicizing a reward for
    information, bolstering police capabilities, and drafting new
    legislation on organized crime and terrorism with important new tools
    like witness protection. However, the bottom line is that the ``17
    November'' terrorists who planned and carried out the murder of five
    members of the U.S. Mission in Greece, wounded dozens more Americans,
    and killed an even larger number of Greeks must be brought to justice.
        We cooperate closely with the Greek government and the Greek police
    to support their counter-terrorism efforts, while fully respecting
    Greek sovereignty and authority. This cooperation has improved since
    last year. The Anti-Terrorism Assistance program and the FBI--working
    through our Embassy in Athens in close cooperation with the British
    Embassy and Scotland Yard--provide training to develop the police
    counterterrorism unit's professionalism. We are providing assistance
    where we can, but ultimately the deadly violence of ``17 November'' and
    other terrorist organizations is a Greek problem to be solved by
    Greeks.

        Senator Campbell. Well, if I might recommend----
        Secretary Powell. We also--you know, I do not want to
    misstate this, because I also have confidence in the Greek
    authorities, and I know that they are committed to having safe
    games, but we certainly should monitor their preparations to
    make sure that our youngsters are not being put in conditions
    of danger. But, I have confidence that the Greek authorities
    know how to deal with this kind of thing, and any concerns we
    do have we should present to them.
        Senator Campbell. Well, they did tell us that they have an
    international group. There are some Americans involved, some
    British people involved, some Germans and so on, that form sort
    of an international group to advise them on security, and I
    certainly appreciate that, but would also recommend that you
    monitor that through the State Department and keep those
    concerns at the forefront when you are dealing with them. We
    can almost predict that somebody is going to try something.
    Ever since 1972 with the Munich games, in which the Jewish
    wrestling team was murdered, it has become almost a planned
    thing.
        Well, in any event, enough said.
        Secretary Powell. That is not endemic to Greece. We had our
    own home-grown wacko, whoever it was who set a bomb off in
    Atlanta.
        Senator Campbell. Thank you, Mr. Chairman. I will submit
    the rest of my questions.
        Senator McConnell. Thank you. Senator Durbin.
        Senator Durbin. Thank you, Mr. Chairman.
        Secretary Powell, thank you for joining us today, and thank
    you for your continuing service to the country. I note that you
    are leaving soon to Africa to visit there, and I am heartened
    by that visit as well as your expressed interest in the AIDS
    epidemic and other problems affecting that continent. I visited
    there a little over a year ago, and it had a profound impact on
    me personally.
        I would like to ask you to consider as part of the package
    of our response two things. First is the microcredit initiative
    that we have supported around the world. If these 12 million
    orphans in Africa have a chance, it will be with extended
    families. Those extended families will not have a chance unless
    they have some source of income to sustain them. Microcredit
    has been a success, and I hope we will dedicate more effort
    toward it. I think it is a practical, hands-on thing that can
    be of benefit.
        Second, I think food can play a very important role here,
    and I have joined with former Senators George McGovern and Bob
    Dole in an initiative that was announced a little over a year
    ago and was implemented partially by the Clinton
    administration, and one that I hope you will embrace as well,
    to take the largesse of America's bounty and to share it with
    children in schools in third world countries.
        I believe we can engage the other civilized, industrialized
    countries in this world that see a similar need, and I do not
    know if you have an opinion on the McGovern-Dole approach in
    the school feeding program, and I hope that if you do, that it
    is positive. Have you had a chance to look at this?
        Secretary Powell. Yes, sir. First, on microcredits, I
    certainly agree with you. I have seen in third world countries
    what microcredits can do. I was in India a couple of years ago
    and visited with some ladies who had access to microcredits,
    and you should have seen the pride on their face and smiles on
    their face as they were able to provide for their children. I
    think that is an excellent way to go with microcredits for
    developed nations.
        On the worldwide school lunch program, I am very familiar
    with it. I heard about it early on, during the transition
    period, and Senator McGovern was in to see me about 10 days
    ago. We had a chance to talk about it again, and it is still
    getting up and running, and it is a great idea. It essentially
    takes the old American school lunch program and passes it all
    over the world to kids everywhere.
        Senator Durbin. The benefit I have found in third world
    countries is, you can usually measure their chances for social
    progress by really assessing the role of women in their
    societies, and those countries that have involved women in
    decisionmaking and giving them more responsibility have a
    better chance of coping with major social problems, but what I
    like about the McGovern-Dole approach is, it will attract young
    girls to schools, and in school with an education they are more
    likely to make the right decisions in life.
        Can I switch to another topic that occupied a lot of your
    thinking a little over 10 years ago, and that was the situation
    involving Desert Storm, and what happened in the aftermath. A
    decision was reached that the Iraqis would pay some $320
    billion for damages that they created with their invasion of
    Kuwait, and the United Nations Commission was put together to
    try to achieve that.
        To date, I believe about $32 billion has been paid. It
    appears now that it is really slowing down to a trickle in
    terms of compensation. What do you think we can do proactively
    to make certain that justice is done, that those who are
    entitled to compensation from the Iraqis for their aggression
    in Kuwait are adequately paid?
        Secretary Powell. We are doing everything we can to
    encourage that program to continue and to move at a faster
    rate. There have been some problems within the past year with
    some of our friends who have tried to slow down and frustrate
    the effort. We are making clear to them we do not find that to
    be an acceptable situation, and we ought to do more to
    compensate or to pay off these just claims against that
    account.
        Senator Durbin. I think that is an important role for us to
    play, to make sure that there is just compensation here, and I
    hope that we can find ways to deal with that effectively and to
    move that on a faster timetable.
        Might I ask you as well, on Export-Import Bank funding,
    there is a pretty substantial cut in your budget, about $300
    million, if I am not mistaken, in export-import financing. Now,
    I have been a critic of this agency. I do not agree with a lot
    of their policies, but I do think they provide a tool to
    American exporters, which need to be competitive on a worldwide
    basis.
        There is supposed to be an assessment of the Eximbank
    before its reauthorization in September. The administration has
    decided to make a rather substantial cut in funding to this
    agency even before that assessment. Can you tell me what your
    view is about the role of the bank, and what this cutback will
    mean in terms of American companies trying to compete against
    others in the world who have similar support from their
    governments?
        Secretary Powell. The bank continues to do superb work and
    enjoys the support of the administration. At the same time, in
    reviewing the work of the bank and the activities of the bank
    and the kind of lending that the bank does, it seemed to be
    prudent in a way to save taxpayers' dollars by asking some of
    the borrowers coming to the bank to pick up a higher level of
    the risk. And for some of those borrowers who are large enough
    and have the capacity to obtain funds in the private equity and
    bond market to go there as their first choice, rather than
    coming to the bank, and in that way able to reduce the amount
    of taxpayer money needed for the bank.
        Now, it is controversial and, of course, the administration
    receives some comment and criticism on this approach, but I
    think it is worth a try. We will see what happens in the year
    that this unfolds as to whether or not we really have hurt
    business bad, or whether we have made it a more healthy
    situation.
        Senator Durbin. Mr. Secretary, I will just close by
    thanking you for your testimony and say I am also working on
    legislation on clean diamonds, the problem with Sierra Leone,
    and working with Congressman Hull and Senator Feingold. I think
    you understand that, and understand the illicit diamond trade
    is financing terrorism and terrible hardship on people in that
    region in Africa.
        Thank you very much.
        Senator McConnell. Thank you, Senator Durbin.
        Senator Bennett.
        Senator Bennett. Thank you, Mr. Chairman. Mr. Secretary,
    the U.N. sanctions on Iraq expire at the beginning of June. We
    have had bombs dropped. We have had threats made. We have had
    all kinds of activity vis-a-vis Iraq in the previous
    administration. Now we are coming to the end. What is our level
    of concern about the progress of Saddam Hussein's chemical and
    biological weapons program?
        Secretary Powell. The sanctions, as they are called, have
    succeeded over the last 10 years not in deterring him from
    moving in that direction, but from actually being able to move
    in that direction.
        The Iraqi regime militarily remains fairly weak. It does
    not have the capacity it had 10 or 12 years ago. It has been
    contained, and even though we have no doubt in our mind that
    the Iraqi regime is pursuing programs to develop weapons of
    mass destruction, chemical, biological, and nuclear, I think
    the best intelligence estimate suggests that they have not been
    terribly successful.
        There is no question that they have some stockpiles of some
    of these sorts of weapons still under their control. But they
    have not been able to break out, they have not been able to
    come out with a capacity to deliver these kinds of systems, or
    to actually have these kinds of systems. That is much beyond
    where they were 10 years ago. So containment using this arms
    control sanctions regime I think has been reasonably
    successful.
        We have not been able to get the inspectors back in,
    though, to verify that, and we have not been able to get the
    inspectors in to pull up anything that might be left there, so
    we have to continue to view this regime with the greatest
    suspicion, attribute to them the most negative motives, which
    is quite well-deserved with this particular regime, and roll
    the sanctions over, and roll them over in a way where the arms
    control sanctions really go after their intended targets,
    weapons of mass destruction, and not go after civilian goods or
    civilian commodities that we really should not be going after.
    Let that go to the Iraqi people. That was not the purpose for
    the oil for food program, and by reconfiguring them in that way
    I think we can gain support for this regime once again.
        When we came into office on 20 January, the whole sanctions
    regime was collapsing in front of our eyes. Nations were
    bailing out on it. We lost the consensus for this kind of
    regime, because the Iraqi regime had successfully painted us as
    the ones causing the suffering of the Iraqi people, when it was
    the regime that was causing the suffering. They had more than
    enough money. They just were not spending it in the proper way,
    and we were getting the blame for it, so reconfiguring the
    sanctions I think helps us, and continues to contain the Iraqi
    regime.
        Senator Bennett. Thank you.
        Going to a completely separate question, but I cannot
    resist, there is a page 1 story in this morning's paper saying
    that the Chinese military has achieved something of an
    intelligence windfall from the Navy plane. Now, I know you
    cannot comment on intelligence assessments, but can you at
    least tell us where we are with respect to negotiations to get
    the plane back, and is it worth getting back?
        Interestingly enough, this is the No. 1 foreign policy
    question I am asked on the street as I walk around Salt Lake
    City, are we going to get our airplane back? I tell them no,
    but I do not really know, and you probably do.
        Secretary Powell. Well, we are in day-to-day negotiations
    and discussions with the Chinese Government, and I think we
    will get our plane back.
        Senator Bennett. Is it worth getting back, other than the
    symbolism of it?
        Secretary Powell. My military colleagues are very anxious
    to get their plane back. What has been lost or not lost, the
    crew was able to do quite a bit as it was descending to Hainan
    Island, but I do not know enough about what they were able to
    do, and what intelligence value the plane might or might not be
    to the Chinese Government to answer any more directly than
    that, and even if I did know, I would not answer.
        Senator Bennett. I understand. Thank you very much. Thank
    you, Mr. Chairman.
        Senator McConnell. Mr. Secretary, we could wrap up in three
    Southeast Asian countries. I want to start with Burma, one of
    the last and truly pariah regimes in the world. Fortunately,
    there are not as many of those as there used to be.
        I have had a particular interest in that country for a long
    time. The previous Secretary of State did as well, and I think
    she was certainly frustrated that none of her efforts to get
    the ASEAN countries more interested in trying to do something
    from the outside to impact that regime was ever agreed to. Our
    charge in Rangoon, Priscilla Klapp, stated last month that,
    quote, rays of hope, end quote, exist.
        I am having a hard time seeing any rays of hope there. The
    talks between Daw Aung San Snu Kyi and the regime have gone
    nowhere. I am just curious if, Mr. Secretary, you see any ray
    of hope in Burma. Any thoughts on this country?
        Secretary Powell. Barely a ray of hope. Aung San Suukyi has
    been in discussions and that in and of itself is some
    improvement over the situation of a while ago. Mr. Resolvi is
    planning to get involved, so there are a few rays of hope, but
    they are a few, and they are dim.
        We do need to do a better job at mobilizing comprehensive
    approach to this problem with our friends in the region, and I
    will take that up when I visit Asia later this spring and into
    the summer, when I have other meetings in Asia as to what more
    we can do in concert with the Southeast Asian nations.
        Senator McConnell. Secretary Albright, to her credit,
    always brought this issue up at the meetings in that region,
    and I hope you will continue that. She would be the first one
    to say that it did not seem to generate much response from the
    others, many of whom are doing business there and obviously do
    not want to do anything to upset their investments. But this is
    truly an outrageous, outrageous regime, and I think American
    leadership ought to be continued and, if there is a way to do
    it, to step it up.
        Secretary Powell. As you know, we are keeping in place the
    executive sanctions that were imposed, and the Japanese are
    making an investment in hydroelectric plant that we have
    suggested to them is not a proper investment to be making at
    this time with this regime.
        Senator McConnell. Let me shift to Cambodia, one of the
    most depressing places I have been because of the aftermath and
    the human toll of the events there of some 20 years ago. As you
    know, Mr. Secretary, the country courts and judges are almost
    under the total control of a former Khmer Rouge guerrilla who
    is currently the prime minister and it seems to me and other
    observers of that country that prospects for any kind of
    justice is very slim.
        Does the new administration tend to support a domestic
    tribunal of some sort, to give it at least some chance of
    justice finally being done for all the atrocities committed
    some 20, 25 years ago?
        Secretary Powell. Yes, and I would like to give you a more
    fulsome answer for the record.
        Senator McConnell. That is fine.
        [The information follows:]

        The United States is a strong supporter of efforts to bring to
    justice leaders of the Khmer Rouge who bear responsibility for
    atrocities committed between 1975 and 1979. This administration will
    continue to support these efforts. It is important that there be
    accountability in Cambodia in order to promote the rule of law and
    develop democracy. As currently envisioned, the Extraordinary Chambers
    will take place as a special session of the domestic Cambodian court
    system with substantial international participation.
        We have always insisted that the Extraordinary Chambers to try
    former senior Khmer Rouge leaders must proceed in an open, transparent
    manner, in full view of Cambodian society and the international
    community so as to severely limit anyone's ability to manipulate the
    process. We will watch closely to see if the government of Cambodia
    fulfills this obligation.

        Senator McConnell. Finally, Indonesia, one of the most
    populated and potentially important countries in the world. The
    president of Indonesia may or may not be in that role much
    longer. Many of us have had a chance to meet with the vice
    president. We are watching the pulls and tugs in the
    archipelago. We saw East Timor break away, at least in a
    democratic referendum, but there are other parts of the
    archipelago that seemed to want to break off.
        What is your assessment of Indonesia today, and do you have
    an early indication of what this administration's policies
    towards Indonesia are likely to be?
        Secretary Powell. It is a very troubled nation. We are
    waiting to see what happens in the capital and the leadership
    of the country.
        I will be meeting with people from East Timor later this
    week. We have cautioned the Government that in their effort to
    keep the country together and not let it fly apart into its
    many potential constituent parts they have to be very sensitive
    to how they use their military force, especially to make sure
    that whatever has to be done to maintain the cohesiveness in
    the country is done in a way that does not violate human
    rights, and does not use repressive or excessive use of force.
        We suggested to them that, with respect to what happened in
    East Timor, that those who should be brought to account for
    their actions, their human rights abuses, should be brought to
    account, and we are following the situation closely. I have had
    delegations come from Indonesia to talk to me at senior
    Government levels, and we will be encouraging them to use
    democratic processes to figure out where they want to go in the
    future with respect to their leadership to maintain an
    adherence to a high standard of human rights, and we recognize
    the importance of that very, very large country, and the
    important role, especially, that it plays in the region.
        Senator McConnell. Well, Mr. Secretary, Senator Leahy had
    to go to another committee meeting, and extended his apologies.
    We are so grateful for your willingness to come today.
        We have received the prepared statement of Senator Tom
    Harkin which will be made part of the record at this point.
        [The statement follows:]
                    Prepared Statement of Senator Tom Harkin
        Mr. Secretary, it is a pleasure to welcome you before this
    Subcommittee. I also want you to know that I sleep better at night
    these days knowing that you are at the helm at the State Department and
    that you function daily as a steady, calming, mature influence in the
    crafting of the Bush Administration's foreign policy.
        Let me also commend what you have done since taking office to lift
    morale within the ranks of the U.S. Foreign Service and to return our
    professional diplomats to their rightful standing at the center of
    formulation and implementation of our nation's foreign policy.
        Having paid you those compliments, let me also say that I'm not at
    all certain that the increases you have proposed in U.S. foreign
    assistance programs for fiscal year 2002 can be made when President
    Bush has proposed such substantial cuts in our Nation's agriculture and
    transportation programs to cite just a couple of pressing domestic
    priorities.

                         Additional committee questions

        Senator McConnell. Thank you very much. There will be some
    additional questions which will be submitted for your response
    in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Questions Submitted by Senator Mitch McConnell
        Question. Since certifying Serbia last month under Section 594, do
    you see any evidence of further cooperation with the Hague? What
    benchmarks is State using to measure the level of cooperation?
        Answer. We are in the process of reviewing the FRY's record of
    cooperation with the Tribunal. We are considering the full range of
    actions that constitute cooperation, including responding to the
    Tribunal's requests for assistance, as well as putting in place
    procedures for the transfer of indictees.
        Question. Should the establishment of a time frame for the handover
    of Milosevic to the Hague be a requirement for future United States aid
    to Serbia?
        Answer. We would welcome a clear statement from the Yugoslav
    Government that they recognize the Tribunal's authority to try
    Milosevic for international crimes and a general time frame for his
    transfer to The Hague. The Yugoslav Government must move expeditiously
    and in good faith to transfer Milosevic and other indictees. We plan to
    monitor doing so closely, but do imposition of a deadline is and
    evaluate their good faith in not believe that the mechanical helpful or
    appropriate.
        Question. Would you support Congressional efforts to further
    increase funding to HIVAIDS programs, above the President's request?
        Answer. I fully support the President's fiscal year 2002 budget
    request, which represents an eight percent increase for international
    HIV/AIDS programs from fiscal year 2001 and a 113 percent increase over
    fiscal year 2000. I believe this trend reflects both the urgency of
    this issue as well as our shared commitment to combat the global HIV/
    AIDS pandemic. I expect this upward trend to continue in future budget
    requests.
        Question. Where is American investment in the fight against HIV/
    AIDS most effective--prevention, care, or treatment?
        Answer. The Administration firmly believes that an integrated
    approach addressing prevention, training, care and treatment is
    essential to successfully fighting HIV/AIDS. Within that program, we
    believe that we must continue our focus on prevention--the most proven
    and cost effective way to save lives and reduce suffering.
                           promoting peaceful change
        Question. Understanding that current tensions between the United
    States and China may limit program opportunities, what more do you
    believe the United States can do to promote peaceful changes within
    China that are in our national security interests?
        Answer. Our challenge is to expose China to the powerful forces of
    a free enterprise system, democratic values and the rule of law. The
    more we can do to promote a greater voice for the Chinese people, the
    greater will be their ability to decide for themselves their own
    future. It is important that we continue to pursue these long-term
    interests while simultaneously addressing short-term tensions or
    disagreements.
                              prc regional efforts
        Question. There have been four senior level Chinese visits to
    Cambodia in the past six months. How effective are the efforts of the
    Chinese to expand their political and economic influence regionally?
        Answer. China is working hard to improve its relations with its
    neighbors in the region. They are expanding trade and resolving
    outstanding issues. We continue to have strong bilateral ties in the
    region and our alliances are in good shape, but we need to devote time,
    attention, and resources to Asia. We have important interests there and
    it is necessary for us to pursue them effectively and vigorously.
        Question. What are your thoughts about the way in which our
    national leaders should view global poverty and inequality and what
    immediate steps can be taken in the private sphere or through
    government action to address these problems posed by the lack of
    economic development and effective social programs in so many
    countries?
        Answer. The issue of global poverty alleviation should be viewed
    within the framework of a comprehensive strategy. There is,
    unfortunately, no simple remedy. we know that the poor are better off
    in resilient, peaceful societies with freedom and opportunity for all;
    governed by democratic institutions that are strong, accountable, and
    honest; with growing, open, and inclusive economies; with social
    investments leading to increased productivity; and a dynamic private
    sector.
        Through bilateral and multilateral programs, we are working with
    governments to find ways to expand the access of the poor to knowledge,
    freedom, rule of law, sound institutions, secure food supplies, more
    open markets, and solutions to infectious diseases.
        We must remember, however, that experience has repeatedly
    demonstrated that economic development and significant lasting poverty
    reduction can not be bestowed from the outside. The essential
    ingredient is that developing country governments themselves undertake
    improvements in governance, rule of law, anti-corruption measures,
    sound economic policy, expanded political participation, respect for
    human rights, and investments in people. These create the necessary
    climate for a thriving private sector, which is the primary engine of
    poverty reduction the world over.
        Question. Is the Administration presently considering funding
    programs inside Burma?
        Answer. Only a small portion of the $6.5 million in ESF and DA
    assistance for Burma administered by the State Department and USAID is
    spent inside Burma. None of the money goes to the Burmese regime, and
    all decisions on funding inside Burma are made in close coordination
    with the democratic opposition. All future programming decisions will
    follow these same guidelines.
        Question. Japan's recent approval of a $29 million grant to Burma
    for a hydroelectric facility is reprehensible. How forcefully has the
    United States engaged Japan on this issue, and what action is being
    considered to counter a request by the junta for a resumption of
    assistance from the Asia Development Bank?
        Answer. The United States has repeatedly advised senior Japanese
    officials, and senior officials of other allies, that we consider
    assistance such as Japan's hydroelectric project to be premature and
    not warranted until we see concrete, measurable progress toward human
    rights and democracy. In partial recognition of our views, Japan has
    announced that its assistance to the dam project will be phased and
    linked to progress in the dialogue between the regime and Aung San Suu
    Kyi.
        We are not aware that the Asia Development Bank is considering a
    positive response to Burma's request for assistance; were that to
    happen, the U.S. Executive Director at the ADB would strongly oppose
    such assistance.
        Question. Further sanctions on Burma may be warranted, including a
    ban on textile imports to America. Would this Administration support
    such a ban?
        Answer. The United States has the strongest set of sanctions in
    place against Burma of any country in the world, including a ban on new
    United States investment, a ban on assistance to the Burma regime,
    denial of OPIC and GSP benefits, and a visa ban on senior Burmese
    officials. The United States also strongly supports the International
    Labor Organization's call for member states to review their economic
    relations with Burma because of the regime's poor record on forced
    labor. The Administration is closely monitoring developments in the
    ongoing dialogue between Aung San Suu Kyi and the Burmese Government.
    We have not ruled out any options at this time.
        Question. Does the Administration intend to support a Khmer Rouge
    tribunal that relies upon Cambodia's notoriously corrupt courts?
        Answer. The United States is a strong supporter of efforts to bring
    to justice leaders of the Khmer Rouge who bear responsibility for
    atrocities committed between 1975 and 1979. This Administration will
    continue to support these efforts. It is important that there be
    accountability in Cambodia in order to promote the rule of law and
    develop democracy. We have always insisted that the Extraordinary
    Chambers must proceed in an open, transparent manner, in full view of
    Cambodian society and the international community so as to severely
    limit anyone's ability to manipulate the process. We will watch closely
    to see if the government of Cambodia fulfills this obligation.
        Question. What programs are being implemented to assist the
    democratic opposition in the run up to commune elections scheduled for
    early next year?
        Answer. In Cambodia, we support the development of transparent
    democratic institutions together with other elements of civil society.
    While it is inappropriate for us to take sides in Cambodia's upcoming,
    first-ever local elections, we plan to provide training to candidates,
    including opposition candidates, funding these programs through
    organizations such as the International Republican Institute, and the
    Asia Foundation.
        We also plan to fund a nationwide voter education campaign to
    inform voters of the role and responsibilities of commune-level
    officials. United States-funded programs will also support accurate,
    unbiased media coverage and encourage higher levels of participation by
    Cambodian women, both as voters and as candidates. Another United
    States-funded program will support the activities of local elections-
    monitoring organizations during the campaign and voting period.
        Question. What steps can the United States take to increase the
    percentage back to 30 percent, or at least ensure that this rate is not
    further reduced?
        Answer. The December 2000 Oil-for-Food Rollover Resolution (UNSCR
    1330) provided for a six-month reduction of the percentage of Iraqi oil
    revenues allocated to the United Nations Compensation Commission
    (``UNCC'') from 30 percent to 25 percent. The U.S. Government agreed to
    this temporary reduction at the time as an accommodation to those
    States that argued that the humanitarian situation in Iraq required
    that additional funds be made available for a period of time for
    humanitarian purposes. By doing so, we assured that the Governing
    Council of the UNCC could proceed on a consensus basis to approve a
    proposed award of almost $16 billion in favor of the Kuwait Petroleum
    Corporation (``KPC'') for losses sustained by it during the Gulf War.
    Obstruction of this award could have caused permanent damage to the
    UNCC which has, from its inception, made its decisions by consensus.
    Such a result would not have been in the best interests of the American
    claimants, Kuwait or others of our friends who have suffered
    substantial losses as a, result of Iraq's aggression and await
    recompense. We believe that if the new control regime for Iraq that the
    United Kingdom and we have proposed becomes a real-ity, this temporary
    reduction should no longer be necessary, as civilian goods will be
    allowed to flow freely into Iraq, thereby alleviating the plight of its
    people. The majority of the Council wants to make the reduced
    allocation permanent, citing continued humanitarian issues in Iraq. We
    will work within the Security Council to support the continued ability
    of the UNCC to carry our its functions and will support a reversion of
    the UNCC allocation back to 30 percent.
        Question. What steps can the United States take to ensure that Iraq
    fully compensates all victims of its 1990 invasion of Kuwait?
        Answer. The best thing that the United States can do to ensure that
    Iraq's victims are fully compensated is to continue working to make
    available the largest pot of money possible for this purpose. That is
    why we will ensure that the UNCC has access to Iraqi oil revenues
    sufficient to carry out its task. The majority of the Security Council
    would prefer to cut the UNCC allocation. We support a reversion to 30
    percent as we negotiate to revise the international community's entire
    approach to Iraq. In addition, the United States will continue its
    vigilance to ensure that there are no setbacks to the UNCC's current
    Work Program' which calls for all claims to be processed in the next
    few years.
        Question. Could a portion of the $167 million request for Russia
    under the FREEDOM Support Act be better spent in former Soviet
    republics that are worried about expanding Russian influence, such as
    Georgia and Ukraine?
        Answer. Our assistance to all the former Soviet republics is
    intended to support United States national interests in that region.
    The United States has a fundamental interest in ensuring the
    independence and sovereignty of the former Soviet states, as well as an
    interest in facilitating their transition to democracy and market-based
    economies. These two interests are mutually reinforcing: success in
    establishing free and open market economies and democratic political
    systems rooted in the rule of law should lead to broad-based economic
    growth and more stable political development, which in turn wili
    enhance these states' ability to resist encroachments on their
    sovereignty.
        Our requests for Georgia and Ukraine in the President's fiscal year
    2002 budget would allow us to maintain our current robust assistance
    effort in both countries. We plan to continue programs aimed at
    promoting economic and democratic reforms in these and other former
    Soviet republics; we will also continue specific activities targeted at
    improving these countries' ability to secure their borders.
        Our assistance programs in Russia are currently undergoing a
    detailed review, expected to be completed by the end of June. This
    review will likely result in changes aimed at ensuring our assistance
    is directly supporting United States interests. But it should be noted
    that United States assistance to Russia is already, and will continue
    to be, aimed primarily at the ``grassroots'' level NGOs, independent
    media, small business, progressive regional and local governments--and
    is intended to promote the kinds of long-term change that will improve
    Russia's relations with its neighbors.
        Question. What are your views on Russia's current actions in
    Chechnya?
        Answer. Our policy on Chechnya comprises four elements: (1) the
    need for a political settlement; (2) an end to ongoing humanitarian
    abuses and atrocities and full accountability for past violations; (3)
    humanitarian access and assistance; and (4) return of the OSCE
    Assistance Group to Chechnya and visits to the region by the relevant
    U.N. special mechanisms.
        Chechnya is fundamentally a question of values: Can we have
    constructive and productive relations with a government that is
    prepared to wage a brutal and seemingly endless war against its own
    people on its own territory? Ultimately, it will be our insistence in
    making this point--supported and amplified by other voices in the West
    that Russia cares about, as well as by Russia's own citizens--that
    holds the best hope for influencing a change in Moscow's policies away
    from violence toward dialogue and reconstruction. Efforts like the
    joint United States-EU Chechnya resolution in the UNCHR and frank
    discussion of Chechnya in the Russia-EU Summit are part of making this
    point. The international pressure has had some effect, especially in
    winning some access to detention camps by the ICRC and access by
    international humanitarian groups to Chechnya. But clearly we need to
    keep the pressure up.
        The Russians have given me positive indications about arranging the
    return of the OSCE Assistance Group in the near future. Its return
    would send a strong signal.
        Ultimately, we would like to see the OSCE presence on the ground
    help promote the start of a dialogue between Chechen and Russian
    officials. But as we continue to make clear to both sides, to pave the
    way to the start of a political dialogue everyone needs to see
    accountability for the many abuses and atrocities that have been well
    documented by the international human rights community. Moreover,
    Russia must take serious and visible steps toward addressing the socio-
    economic roots of the conflict, whose neglect after the 1994-1996 war
    planted the seeds of the current conflict.
        Question. According to Colombia estimates, right-wing
    paramilitaries control 40 percent of the country's total cocaine
    exports. Given ties between the paramilitaries and the Colombian
    military, is United States counternarcotics intelligence being
    compromised? Does this relationship undermine Plan Colombia?
        Answer. Intelligence personnel working with the Joint Task Force
    South, which manages the bulk of our counternarcotics intelligence
    under Plan Colombia, are carefully vetted to ensure they have no ties
    to paramilitary organizations. Consequently, there is no evidence that
    counternarcotics intelligence is being compromised by any possible ties
    to the paramilitaries. In fact, since Plan Colombia related operations
    began in December, we have witnessed a dramatic increase in Colombian
    actions against the paramilitaries, with 401 arrests through May 29,
    according to the Ministry of Defense.
        Question. Can alternative crop development activities be conducted
    in areas that are not under military and civilian control of the
    Colombian Government, such as the coca-rich growing region of Putumayo?
        Answer. Projects are looked at individually, and security for
    workers is a key consideration. This does not mean that areas must be
    under complete control of the Colombian Government but, rather, that
    the security needs of assistance workers are paramount and must be
    fully addressed.
        Question. Which bureau will be responsible for the day-to-day
    oversight of State and USAID democracy programs?
        Answer. Day-to-day management and oversight of democracy programs
    is diffuse, depending on whether the programs are country-specific or
    regional in nature, and on the source of fund In the State Department,
    the Bureau of Democracy, Human Rights and Labor (DRL) is responsible
    for helping to formulate and coordinate democracy policy and resources
    in the Department and across agency lines, fulfilling the bureau's
    legislative mandate to integrate democracy into USG foreign policy and
    managing the bureau's Human Rights and Democracy Fund (HRDF). HRDF is a
    fund designed to exploit unanticipated opportunities to promote
    democracy and to help establish institutions that serve democracy
    efforts. DRL also consults with the State regional bureaus on
    programming decisions for the Regional Democracy Funds, which are
    funded by Economic Support Funds (ESF). Generally daily management of
    these Funds is done either directly through USAID missions in the
    field, or the Washington-based USAID DG Center. In addition, some ESF-
    funded projects are programmed through multilateral organizations, such
    as the organization of Security and Cooperation in Europe (OSCE). In
    those instances the relevant bureaus at the State Department, in
    conjunction with the Embassies are responsible for oversight. Finally
    some democracy projects, such as those with the National Endowment for
    Democracy (NED), are directly managed by the State Department, in which
    case, oversight is coordinated between with the Washington bureau and
    the relevant U.S. embassy. Democracy projects in Eastern Europe and the
    New Independent States are coordinated by the special coordinators'
    offices.
        USAID field missions are responsible for daily management bilateral
    democracy projects that are funded with Development Assistance (DA),
    Economic Support Funds (ESF), Support for East European Democracy
    (SEED), and Freedom Support Act (FSA). USAID's Center for Democracy and
    Governance (DG), soon to be combined with the Office of Transition
    Initiatives (OTI), manages those democracy programs that are not part
    of ongoing bilateral programs or where USAID missions are not present.
        Question. Is there any consideration of creating a fifth program
    pillar--that of ``Democracy and Governance?''
        Answer. The Administration has already confirmed the crucial role
    of democracy in achieving all other foreign policy objectives.
    Secretary Powell has stated that a guiding principle of the
    Administration's foreign policy will be that the United States stands
    ready to help any country wishing to join the democratic world.
    Democracy is pivotal for achieving sustainable peace, national
    security, and economic development over the long-term only through good
    governance and rule of law, participatory government, and vibrant civil
    societies.
        In terms of USAID aggregating its activities into specific spheres
    of emphasis, no final decision has been made on what the spheres should
    be. The USAID Administrator is currently consulting with individuals
    and organizations both inside and outside the government to seek their
    opinions on this question. Once finished, Congress will certainly be
    consulted for their views on this streamlining process.
        Question. Did the Administration use foreign assistance as leverage
    against Montenegrin independence in the run up to the parliamentary
    elections last month, as reported in the press?
        Answer. No. The Administration supports a dialogue between Belgrade
    and Podgorica according to democratic principles and in a way that will
    ensure stability in the region. We support a democratic Montenegro
    within a democratic Federal Republic of Yugoslavia. United States
    assistance programs support Montenegro's efforts to implement
    democratic and market reforms and the rule of law. They were not used
    to leverage a particular outcome in the parliamentary elections. To
    date, we have notified to Congress almost $60 million of the $89
    million in assistance available for Montenegro in fiscal year 2001. We
    are proceeding with efforts to obligate and disburse these funds.and
    will consult with Congress on use of the remaining funds available for
    Montenegro.
        Question. Why is the Administration withholding assistance to
    Montenegro, and are there differences in the economic conditions
    imposed on assistance provided to Montenegro and Serbia?
        Answer. The Administration is proceeding with assistance to
    Montenegro. We recently notified another $5 million in SEED funds,
    bringing the total notified to Congress for Montenegro to almost $60
    million in fiscal year 2001. We are working to obligate and disburse
    these funds in a manner with prudent,management and sound financial In
    that connection, we have discussed with the Government of Montenegro
    economic conditions that should be attached to future disbursements of
    SEED funds for budgetary support. While we have agreed on the principle
    of economic conditionality, we have not yet reached final agreement on
    the precise conditions to be established on our budget support. We have
    not provided this kind of flexible budgetary support for Serbia. We
    have not attached conditions to assistance other than budget support
    for either Montenegro or Serbia.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy
        Question. It appears that serious miscalculations in procedure and
    international diplomacy were made recently, resulting in the United
    States losing our seat on the U.N. Commission on Human Rights. How
    could this have happened and how can we recoup our standing in both the
    near-term and the long-run?
        Answer. Elections for the Human Rights Commission were held on May
    3 by secret ballot cast by the 54 members of the U.N. Economic and
    Social Council in New York. Although we had 43 promises from member
    states, only 28 other countries delivered their votes to us. (The
    United States received 29 votes including one of our own.)
        We campaigned strongly in New York, Washington and Geneva, as well
    as making one or more demarche in virtually every capital of ECOSOC
    members. The only exceptions were states like Iran, Cuba, and Sudan. If
    we did not get a commitment of support, one (or more) follow-up
    demarches were made in capitals, in New York or to embassies in
    Washington. Our Ambassadors in New York met with almost every ECOSOC
    member. We also urged the EU to agree to a single slate. Since it is a
    secret ballot, we recognized that not all members would fulfill their
    promises. We continued to campaign-until the last day to nail down
    every possible vote.
        Our commitment to human rights is unaffected by this setback. We
    have many tools available to pursue our human rights objectives on a
    bilateral and regional basis. We will remain active in other U.N. fora
    where human rights work is carried out, such as the U.N. General
    Assembly, the Security Council and the International Labor
    Organization. Although we will not be a voting member of the CHR after
    December 31, 2001, we can co-sponsor and manage resolutions, and remain
    active in negotiations, debates and all matters before the CHR. Our
    commitment to human rights, including within the U.N. system, remains
    unwavering and strong.
        Question. Will you guarantee that the U.S. Delegation to the United
    Nations will vigorously support the inclusion of substantial provisions
    against abusive child labor within the basic mandate for this Special
    Session, the related text, and corresponding action plan, starting with
    the ``PrepCom'' meetings to be held in June and thereafter?
        Answer. Ending exploitative child labor worldwide is a high
    priority for the Administration. The draft text being considered in
    preparation for September's Special Session on the Status of the
    World's Children contains a number of substantive provisions against
    the ``worst forms of child labor,'' the term used in ILO Convention
    182, which the United States ratified in 1999. The U.S. Delegation will
    ensure that the outcome document has strong provisions to protect
    children against abusive labor practices.
        Question. Do you support abolishing this new child labor-related
    program to provide access to basic education for a fraction of the more
    than 250 million child laborers in the world?
        Answer. I support the concept that the problem of child labor is
    best addressed through comprehensive interventions rather than
    segmented approaches. When designing and implementing programs intended
    to eradicate child labor, it is critical to recognize that access to
    basic education is but one part of the necessary response. Funding
    earmarked programs to address only one aspect of the solution, such as
    the program your question references, does not offer the best
    likelihood of success. USAID's budget request for child survival, basic
    education, and labor programs when taken together with the U.S.
    Department of Labor's request for $30 million for child labor programs
    (International Program on the Elimination of Child Labor (IPEC)) allows
    the United States to continue its leadership role in the international
    donor community.
        The U.S. Government has a long and distinguished track record of
    supporting basic education throughout the developing world, and this
    Administration is committed to continuing that tradition. In fact, the
    President's request for fiscal year 2002 includes $123 million for
    basic education programs implemented through the U.S. Agency for
    International Development which represents a $20 million increase over
    the fiscal year 2001 level.
        Question. Wouldn't you agree that all of these proposed cuts in
    international child labor funding are ill-advised and that such
    programs are probably among the least controversial and most broadly-
    supported by the American people of all U.S. foreign aid programs?
        Answer. The United States remains the world leader in fighting
    child labor, particularly the worst forms of child labor. We are
    addressing a wide range of factors that tackle the availability and use
    of child labor. USAID programs, for example, provide economic
    opportunities for parents, improve health services delivery and prevent
    diseases thus enabling parents to continue to work. They also
    strengthen the judicial systems to enforce child labor laws, and
    improve the quality of basic education, thereby reducing the demand and
    supply for child labor. Additionally, the United States is the number
    one donor to the International Labor Organization's International
    Program on the Elimination of Child Labor, was instrumental in the
    virtual elimination of child labor in the Bangladesh garment industry,
    and has provided substantial financial support for voluntary codes of
    conduct in the apparel and footwear industry that include child labor
    provisions. These programs and others like them have received
    tremendous support from the American people, and we have every
    intention of continuing them.
        Question. Does the Bush Administration support Senate ratification
    this year of the pending U.N. Protocols on Child Soldiers and the Sale
    of Children, Child Prostitution, and Child Pornography, which the
    United States signed last year?
        Answer. The protection of children and families is a key priority
    for the Administration. I am particularly concerned about the growing
    problems of the use of child soldiers in combat, trafficking in
    children, sale of children, child pornography, and child prostitution.
    We will aggressively pursue measures to combat these problems.
        The Administration is currently reviewing its policy regarding the
    Optional Protocols on Child Soldiers and the Sale of Children, Child
    Prostitution, and Child Pornography.
        Question. Mr. Secretary, this week I will be introducing bipartisan
    legislation to ban imports from Burma, the vast majority of which are
    skyrocketing sales of designer label apparel and textile products. I do
    so because the International Labor Organization (ILO) last year invoked
    for the first time in its 82-year history a constitutional provision
    calling upon the brutal Burmese military junta to immediately stop the
    systematic use of forced labor in that country. Will you support this
    legislation?
        Answer. The United States strongly supports the ILO's call for
    member states to review their economic relations with Burma because of
    the regime's poor record on forced labor. We have the strongest set of
    sanctions in place against.Burma of any country in the world, including
    a ban on new United States investment, a ban on assistance to the Burma
    regime, denial of OPIC and GSP benefits, and a visa ban on senior
    Burmese officials. We will closely monitor developments in the ongoing
    dialogue between Aung San Suu Kyi and the Burmese Government. We have
    not ruled out any options at this time.
        Question. What is your current assessment of progress toward
    political independence for East Timor by next year as well as the
    viability and sustainability of the local economy in East Timor?
        Answer. We anticipate elections for a Constituent Assembly to take
    place on schedule August 30 and for East Timor to achieve independence
    toward the end-of 2001 or early in 2002. East Timor will undoubtedly
    continue to need international support after independence, since its
    infrastructure, economy and education are still inadequate. However,
    United States assistance mechanisms will change when East Timor moves
    to nationhood. After independence, the United States will be able to
    use a variety of bilateral and multilateral assistance funds now
    unavailable. We are encouraged that significant resources for the
    development of East Timor would also become available once Australia
    and East Timor successfully conclude discussions on the distribution of
    revenue from planned commercial development of the Timor Gap gas
    deposits.
        Question. A growing number of Americans are concerned that current
    U.S. sanctions on Iraq are causing the deaths of many Iraqi children
    and otherwise causing much suffering and hardship on the Iraqi civilian
    population. Mr. Secretary, when you took office, you called for a
    thorough review of current U.S. sanctions policy toward Iraq.
        What is the status of that review and will you share its results
    with me and other concerned members of Congress when it is complete
    hopefully in the near future? Do you anticipate that review will
    pinpoint viable options for minimizing, if not eliminating any adverse
    impacts that the current sanctions are having upon the innocent
    civilian population inside Iraq, while at the same time tightening and
    maximizing the impact of sanctions upon Saddam Hussein's ruthless and
    dangerous military regime?
        Answer. The unanimous adoption of UN Security Council Resolution
    1352 reflects the Administration's determination to re-focus the
    international community's controls on the items that would enable the
    Iraqi regime to further threaten international peace and security. We
    are working to increase international support for this goal and to
    improve the situation of the Iraqi people by opening up civilian trade.
    The Security Council has now accepted this approach. We are now working
    with the other permanent members of the Council and others to develop a
    system to allow all civilian trade items to enter Iraq, subject only to
    a review of a specific list.of goods that could be useful to Iraqi re-
    armament efforts percent That list, called th Goods Review List, is
    currently under negotiation.
        A key issue in our work with other governments include ensuring
    that Iraq's oil revenues are used by the UN for the benefit of the
    Iraqi people, and not by the Iraqi regime to further its own ambitions.
        Resolution 1352 expires on July 3. By that date, we hope to pass a
    resolution that will begin to implement the new system we have
    proposed.
        Department officers have and will continue to brief interested
    Congressional staff on our new approach. I look forward to additional
    discussions with you concerning our Iraq policy.
        Question. Would you support a statutory requirement that the State
    Department notify the appropriate committees of the Congress for each
    hold that is placed by the United States Government upon a contract for
    goods or services to be delivered to Iraq?
        Answer. We have approved 91 percent of contracts submitted to the
    United Nations for export to Iraq under the Oil-for-Food Program. Of
    those currently on hold, about 90 percent are the result of the
    contractor's either not submitting information sufficient to permit an
    adequate technical review or including items that we prohibit for
    export to Iraq in the absence of weapons inspectors. Our decisions to
    hold are based on technical evaluations by U.S. Government experts in
    fields such as biological weapons and missile technology. Our practices
    in reviewing these contracts are watched closely by UN Security Council
    members and other interested nations. Ensuring that the process remains
    essentially technical and not political is important to our credibility
    on this issue, and so I would not support a statutory requirement as
    described.
        In the new proposed approach to contracts that we hope the Security
    Council will approve before July 3, the current system of placing
    ``holds'' on contracts would be eliminated. The Council would authorize
    fast-track approval of a larger share of contracts than is the case
    today. It would also apply a more rigorous screen to determine whether
    sufficient technical information is contained in the contract. Those
    not fast tracked or returned for additional information would be sent
    to the 661 Committee for approval, denial or, if information is still
    insufficient, return to the supplier for correction and resubmission.
        Question. Many of my constituents have traveled to El Salvador to
    help that small, impoverished country recover and re-build after two
    major earthquakes earlier this year. How much U.S. aid has already been
    provided and from what accounts? What types of aid and in what amounts
    and what accounts are you seeking in fiscal year 2002?
        Answer. Reconstruction costs for the two earthquakes in El Salvador
    are estimated as high as $2 billion. The $110 million pledge for
    earthquake assistance made at the Madrid Consultative Group meeting was
    developed in response to the damage inflicted by the first earthquake.
    To meet this pledge, $52 million is being provided in fiscal year 2001
    and the remaining $58 million in fiscal year 2002.
        The fiscal year 2001 funding includes $37 million in Development
    Assistance and Economic Support Funds, $10 million from USDA food
    relief programs, $3 million in International Disaster Assistance, and
    $2 million in Transition Initiatives funds.
        In the immediate aftermath of the earthquake, OFDA and DOD provided
    emergency assistance valued at approximately $27 million. on the
    reconstruction side, Project Concern International, with a USAID grant
    of about $2 million, is already at work on rehabilitating potable water
    systems and wells in the earthquake zone. USAID recently signed grants
    of $7.5 million with three United States private voluntary
    organizations (CARE, Cooperative Housing Foundation, and Samaritan's
    Purse) for permanent housing and an agreement for another $19 million
    with the Government of El Salvador for housing, other infrastructure
    (health, education, water), and economic reactivation.
        Our current plan for the $58 million in fiscal year 2002 is to
    provide approximately $30 million in Development Assistance and
    Economic Support Funds and up to $10 million in USDA food relief
    programs. We are still studying possible sources for the balance.
        Question. Mr. Secretary, based upon the cooperation between the
    Colombian military units and paramilitary groups and, in many cases,
    their closely associated or even common leadership, what specific
    assurances can you provide me that American-made weapons or technology
    have not and are not being used in human rights violations committed by
    the paramilitary groups closely associated with Colombian military
    units receiving United States funding?
        Answer. We are prohibited from providing funds under the Foreign
    Operations Appropriations Act, 2001, Public Law 106-429, to any unit of
    a foreign country's security forces where the State Department has
    credible evidence that such unit has committed gross human rights
    violations, unless the government of that country is taking effective
    measures to bring the responsible unit members to justice. Related to
    this, representatives of U.S. Government agencies providing assistance
    conduct ``end-use monitoring'' and provide reports for all
    counternarcotics and military assistance, as required by law. We have
    procedures in place to help ensure compliance with relevant legislation
    and are not aware of any evidence or credible allegations of
    cooperation between paramilitary groups and any Colombian unit
    currently eligible to receive USG assistance.
        In addition, the government of Colombia has its own elaborate
    system of controls that should keep resources from being improperly
    diverted. The system includes a Comptroller General empowered to
    conduct audits, an Attorney General who serves as a government-wide
    inspector general and can remove government officials from office, and
    a powerful and independent prosecutor. These institutions have offices
    at both the national and local levels.
        Question. During last year's campaign, President Bush stressed the
    importance of having a clear exit strategy, indicating benchmarks and
    deadlines for engagement of all kinds. Given that the reduction of coca
    production in one region often leads to a rise in other regions, what
    is the exit strategy and what are the benchmarks we should be
    monitoring?
        Answer. The success of counternarcotics programs is monitored on a
    regular basis. Reports on aerial eradication efforts are provided from
    the field on a weekly basis and the effectiveness of the campaign is
    verified annually by United States and Colombian scientists through
    actual visits to sprayed fields. The overall effectiveness of
    counternarcotics efforts can also be measured through the annual
    analyses of crop yield and drug production prepared by United States
    and Colombian agencies.
        That said, the specific benchmarks and exit strategy established
    last year are currently subject to a broader policy review by the
    Administration.
        Question. Could you please provide a report to the Committee on the
    steps the State Department has taken to implement the Baumel Law
    (Public Law 106-89) since its enactment?
        Answer. The Department reported to the Congress on its efforts in
    connection with this law in May 2000. Zachary Baumel and two other
    Israeli soldiers remain missing.
        Since the time of the Department's report, we have continued to
    raise this matter with regional governments and have encouraged those
    with influence in the region to take steps to resolve this matter.
        The Department continues to regard ascertaining the fate of Zachary
    Baumel, Yehuda Katz, and Zvi Feldman as an important humanitarian goal.
    The Department is determined to pursue every concrete lead to ascertain
    the fate of the three missing soldiers and continues to urge all
    individuals and governments that may have information about them to
    provide it to the appropriate authorities. The Department of State will
    continue to raise this issue whenever and wherever doing so will
    contribute to achieving that goal.
        Question. If they [FRY/Serbia] continue to insist on such a [ICTY
    cooperation] law, it is important that it be written so it is
    acceptable to the war crimes prosecutor, and is not used to obstruct
    extradition. Did Kostunica tell you that Yugoslavia will surrender
    indictees to The Hague, once the law is passed?
        Answer. In our discussions with President Kostunica and Serbian
    officials, we have repeatedly stated that there must be cooperation
    with the ICTY and that cooperation includes the transfer of indictees.
        President Kostunica has told us that in order to have meaningful
    cooperation, he must have a law in place enabling the government to
    cooperate with the Tribunal. We will continue to hold the FRY to their
    promises of cooperation.
        Question. Turning over indictees is what we mean by
    ``cooperation.'' We need to make clear that without this cooperation
    the United States will not support additional assistance. Can you
    assure us that you will convey this message to President Kostunica?
        Answer. We will continue to make clear that the transfer of
    indictees goes to the heart of cooperation, and that our aid is linked
    to progress on cooperation. President Bush and Secretary Powell
    reminded President Kostunica of this during the FRY President's May
    visit to Washington, and our mission in Belgrade continues to reiterate
    this message.
        Question. I am told that plans are moving forward for a donors
    conference for Serbia in late June. The World Bank is apparently
    pushing hard for this. We want to help Serbia, but not unless we see
    real cooperation with The Hague. Is the Administration prepared to sit
    out a donors conference if we do not see that cooperation? Are the
    Europeans prepared to go ahead even without further cooperation with
    The Hague, and without the participation of the United States?
        Answer. We are prepared not to attend a donors conference unless we
    are convinced that the Yugoslav Government is serious about complying
    with its international obligation to full cooperation with the
    Tribunal. Our information suggests that the Europeans will proceed with
    the conference whether the United States participates or not.
        Question. What about Mladic and Karadzic, the two most notorious
    war criminals who carried out Milosevic's policies, who are in
    Republika Srpska. Why hasn't SFOR apprehended them? Will you urge them
    to?
        Answer. We believe Karadzic and Mladic should be brought into
    custody, either voluntarily or otherwise, as soon as possible.
        The governments in the region have the primary duty to secure the
    apprehension or voluntary surrender of all persons on their territory
    indicted by the Tribunal, including Karadzic and Mladic.
        When United States forces entered Bosnia in early 1996, only one
    indictee had been taken into custody in The Hague. Since then, 53
    indictees have been taken into custody, 23 of whom were forcibly
    detained, including 18 by SFOR in Bosnia. We continue to work with our
    allies to seek the detention of the indictees who remain at large.
        Question. Don't you think the best strategy is to remain a
    signatory [to the ICC treaty]--to maintain our leverage in the
    negotiations and allow our representatives to get more protections for
    Americans?
        Answer. The Administration's primary objective in its ICC review is
    to find avenues to protect United States officials and service
    personnel from politically motivated prosecutions by the International
    Criminal Court. That review is currently underway.
        Question. Does the Administration's policy on the ICC include
    ``unsigning'' the treaty or actively pressuring our friend and allies
    not to ratify it?
        Answer. As you know the Administrative has no intention to submit
    the ICC treaty to Senate for advice and consent to ratification. The
    Administration has currently underway a review of the ICC and is
    seeking to develop a strategy that best protects the interests of the
    United States.
        Question. Given the harm this legislation could cause--both to
    relations with our friends and allies as well as the Administration's
    ability to conduct foreign policy--do you support the American
    Servicemembers' Protection Act?
        Answer. I am not in favor of the adoption of this particular piece
    of legislation at this time. As you know, the Administration has
    underway a review of the ICC and is seeking to develop a legislative
    and diplomatic strategy that best protects the interests of the United
    States.
        United States interests could be better served by awaiting the
    result of that review, a full exchange of views with Congress
    concerning what legislation would best fit into our overall strategy.
        I would note that several provisions of the proposed Act are
    particularly troublesome. The Act would effectively preclude the United
    States from providing assistance to the ICC in connection with the
    prosecution of certain foreign individual, for example a future Saddam
    Hussein. Because the United States provides military assistance only
    when it is in our national interest to do so, I would not favor an
    automatic cut-off of such assistance. Further, a provision limiting the
    authority of the President as Commander-in-Chief to participate in
    peacekeeping operations would raise serious Constitutional concerns.
        Question. In the past 6 months, 18 Peruvian generals are among the
    more than 70 high ranking military and intelligence officials against
    whom charges have been brought. Has any investigation been done into
    whether United States officials knew they were working with Peruvian
    officials who may have committed crimes?
        Answer. The ongoing corruption scandal has resulted in charges
    against high-ranking military and civilian Peruvian officials. The
    Department of State is closely following these proceedings.
        United States officials have worked with many of the Peruvian
    officials who have been charged, in their official capacity. At the
    time we worked with them, no charges were filed against these officers
    nor were they under investigation, and we have no reason to believe
    that Embassy officials were aware of any alleged criminal activities.
        Question. Have there been any consequences for any of the United
    States officials who were working with Peruvian officials and either
    turned a blind eye to what was happening under their noses or were not
    asking the right questions?
        Answer. The Department of State has no reason to believe that
    United States officials were aware of the alleged criminal activities
    of Peruvian officials.
        Question. I have heard different State Department officials call
    the counter-drug program in Peru a ``success.'' And Bolivia too. May
    [sic] they were, for those countries. But it all depends on how you
    define success. Did those programs, which cost billions of U.S.
    dollars, results in any decrease in the amount of drugs coming into the
    United States?
        Answer. Our counternarcotics programs in Bolivia and Peru have
    resulted in a dramatic reduction in the amount of drugs coming into the
    United States from those countries. Over the past five years, our $611
    million in total counternarcotics funding of an integrated strategy
    that combines eradication of illegal drug crops with provision of
    alternative economic development opportunities and a strong law
    enforcement interdiction program, resulted in a 70 percent reduction in
    coca cultivation in those two nations. In Peru, this translated to a
    potential of 290 metric tons of cocaine not being produced, and in
    Bolivia, a potential 172 metric tons of cocaine was not produced.
    However, those decreases have been nearly offset by increases in
    Colombian cultivation.
        Question. Now we are in Colombia, and getting in deeper. $1.3
    billion last year. Another $882 million this year for Colombia and the
    region. I'm sure we will be asked for another half billion to a billion
    dollars next year, and the year after that, and the year after that.
    How much will it cost before we expect to see a significant decrease in
    the amount of cocaine and heroin coming here from South America? What
    can we expect, or is it just a guess?
        Answer. The stated goal, which is attainable, is to reduce
    Colombian cocaine production by 30 percent by the end of 2002. If that
    is achieved without the displacement of coca crops to other countries
    in the area, it would result in a very significant decrease in cocaine
    supplies.
        Colombia has also stated its intent to eliminate all opium poppy
    cultivation within its borders. We support them in that effort and are
    also working with Peru to counter the emergence of a heroin industry
    there. Candidly, however, the heroin industry is such that the total
    eradication of all heroin production in the hemisphere would have
    little effect on world supply.
        Question. Given the sharp increase in atrocities by paramilitaries,
    it seems to me we should include conditions on the aid, at least that
    the army sever its links with the paramilitaries. Do you agree that,
    like our experience with Serbia, this is needed in order to get real
    results? Would it be your policy to waive the human rights conditions?
        Answer. We take very seriously the need for the Government of
    Colombia to take effective steps to sever links between the military
    and the paramilitaries, and have made this clear at all levels of the
    Colombian Government and military. We have made the point repeatedly
    that collusion with the paramilitaries is unacceptable, that it must
    end, and that anyone found to be engaged in it be held accountable.
        We welcome congressional interest in, and oversight of, our
    Colombia policy. We will continue to work with Congress on a bipartisan
    basis as we implement a policy that best advances human rights in
    Colombia, supports the peace process and continues to reduce
    aggressively coca production and the drug trade. Conditionality of our
    assistance would impair our ability to support an imperfect, but
    democratically elected and embattled ally.
        Clearly, the Colombian Government must do more. President Pastrana
    himself recognizes this. I would note that President Pastrana's
    administration has achieved some recent, significant successes against
    the paramilitaries, including in military encounters on the battlefield
    between security forces and the United Self Defense Forces of Colombia
    (AUC). Colombian forces in recent months have arrested numerous
    paramilitary members--including some leaders--and seized important
    financial records from paramilitary supporters.
        Question. The paramilitaries admit that they are involved in drug
    trafficking. How can Plan Colombia succeed if the Colombian army
    continues to support them with weapons and intelligence?
        Answer. The Colombian Government is making clear efforts to end
    military tolerance of and collaboration with illegal self-defense
    groups, which are commonly referred to as paramilitaries. Moreover, we
    have seen increasing signs that the Colombian military is coming to the
    conclusion that these groups represent a real and growing threat to the
    Colombian state. What ties remain do not appear to be having a negative
    impact on the effectiveness of Plan Colombia-related operations. In
    fact, since Plan Colombia-related operations began in December, we have
    witnessed a dramatic increase in Colombian actions against the
    paramilitaries, with 401 arrests between January 2001 and the end of
    May, according to the Ministry of Defense. Furthermore, we are
    prohibited from providing assistance to units credibly alleged to have
    committed gross human rights violations. Any unit with ties to
    paramilitary groups like those described would clearly meet those
    criteria and thus be proscribed from receiving any USG assistance as a
    matter of law and Administration policy.
        Question. I am told that two bills have been introduced in the
    House to end the use of private contractors in Colombia, who are flying
    the aircraft used to spray the herbicide. The sponsors of those bills
    want the Colombians to fly these missions. Are we training Colombians
    to do this? If not, why not? Would that not make more sense, since it
    is their country, and cost a lot less?
        Answer. The phasing out of contractors is a planned part of the
    program and always has been for exactly the reasons cited in your
    question.
        Question. If this is accurate--and all indications are that it is--
    the CIA got it right, and we are being drawn deeper and deeper into
    Colombia's civil war. Would you agree?
        Answer. I disagree. Our policy toward Colombia is to assist a
    democratically elected ally that is under attack from domestic
    terrorist groups that enjoy almost no popular support. These groups
    finance much of their subversive activity through kidnapping for ransom
    and involvement in narcotics.
        The sharing of United States intelligence with the Colombian
    security forces is carefully controlled and is done only according to
    strict guidelines.
        But I wish to be clear: as President Bush said during President
    Pastrana's February visit to Washington: it is Colombia's fight.
        Question. Can I assume that any change in our policy toward
    Indonesia, which the Congress has a strong interest in, will be worked
    out with the Congress?
        Answer. The Administration is aware of Congress' on-going strong
    interest in Indonesia. United States policy toward Indonesia is
    designed to foster long-term United States interests and, therefore,
    will not undergo rapid change. The Administration agrees that it is
    important to consult with Congress about Indonesia as our policy
    evolves, both to learn the Members' views and to share administration
    thinking.
        Question. Earlier this month, Indonesia sentenced six men charged
    with the brutal murder of three UNHCR workers in East Timor to
    sentences of a mere 10-20 months. What was the U.S. response? Isn't it
    clear by now that an international tribunal is needed for those
    responsible for the mayhem in East Timor?
        Answer. We have publicly expressed our extreme disappointment with
    the light sentences imposed in this case and have urged the Indonesian
    Government to appeal them. Given the defendants' admitted participation
    in this brutal slaying of unarmed humanitarian workers, including
    American citizen Carlos Caceres, these sentences are outrageous and
    call into question both Indonesia's commitment to the principle of
    accountability and its commitment to the international community to
    bring to justice the perpetrators of this and other crimes in East and
    West Timor. We will continue to monitor closely the progress of the
    separate Indonesian and UNTAET investigations into human rights abuses
    in East Timor. If these processes both fail, we will consider other
    options to ensure that justice and accountability are achieved.
                            congressional commission
        Question. Last year, when the Congress approved PNTR for China, it
    also established a Helsinki-type commission to monitor human rights in
    China. When does the Administration plan to select the Executive Branch
    members of the Commission?
        Answer. The Administration looks forward to cooperating closely
    with the Congressional-Executive Commission on China. The President is
    considering now whom he will appoint from the Administration to serve
    on the Commission.
        Question. Do you support ratification of the Optional Protocol on
    the Involvement of Children in Armed Conflict?
        Answer. The protection of children is a key priority for the
    Administration. I am particularly concerned about the growing problem
    of the recruitment and use of child soldiers in some of the world's
    most brutal conflicts. We will aggressively pursue measures to combat
    this problem.
        The Administration is currently reviewing its policy regarding the
    Optional Protocol on the Involvement of Children in Armed Conflict.
        Question. Do you agree that a war crimes tribunal should have
    authority to prosecute people--including senior Liberian officials--who
    are responsible for the atrocities committed in Sierra Leone?
        Answer. Let me assure you that accountability is an important
    element of our foreign policy regarding the atrocities committed in
    Sierra Leone. The United States supports the establishment of the
    Special Court, believing that it is one of several essential components
    necessary to restoring peace and stability to Sierra Leone and the
    region. As mandated by the U.N. Security Council, the Special Court
    will have jurisdiction over those who bear the greatest responsibility
    for crimes against humanity, war crimes and violations of relevant
    Sierra Leone law. The prosecutor and the Special Court will make
    specific decisions about the particular individuals to be prosecuted.
                                     ______

                  Question Submitted by Senator Arlen Specter
                              rule of law funding
        Question. In light of the fact that your fiscal year 2002 budget
    request contains a request for $5 million towards China Rule of Law do
    you plan to release the fiscal year 2001 money recommended in the
    Foreign Operations Appropriations bill and continue forward with this
    important program?
        Answer. I appreciate the work of many Members of Congress on behalf
    of a strong China rule of law program. We do intend to obligate fiscal
    year 2001 money in the coming months and to work with Congress to
    expand programs that will promote the rule of law in China.
                                     ______

                   Questions Submitted by Senator Tim Johnson
        Question. As you know, former President Clinton was the first
    American President in almost a quarter century to visit Pakistan and
    India when he traveled to the region last year. Given the increased
    tensions in the region and both countries, nuclear capabilities, please
    outline briefly the Administration's plans for actively promoting peace
    in the region.
        Answer. This Administration has demonstrated its intention to give
    high priority to United States' relations with South Asia. Active
    involvement and better relations with India and Pakistan will give us
    the standing to urge dialogue between both countries and a resolution
    of their differences. It will also improve our ability to encourage
    them to refrain from a costly and destabilizing nuclear arms and
    missile race. In the early months of this Administration, the President
    and I have met the Indian Foreign Minister and Deputy Secretary of
    State Armitage has traveled to India. The Pakistan Foreign Minister
    will be in Washington in June for broad consultations throughout our
    government. We have used and will use these meetings to stress to both
    countries the importance we attach to a peaceful and stable South Asia.
    We have welcomed the upcoming visit of General Musharraf to India.
    India and Pakistan must find their own solutions. We have played a
    helpful role and will continue to do so.
        Question. Please comment briefly on your impression from the
    meetings in Key West and the prospects for peace?
        Answer. Presidents Aliyev and Kocharian made significant progress
    at the April 3-6 Key West Peace Talks.
        We knew in Key West that the two presidents would need time to
    review what had been achieved and to discuss the peace proposals
    further within their governments and with their people. These are very
    difficult issues.
        During a May 18-21 shuttle to the region, the Minsk Group Co-Chairs
    identified a particular need for all sides to better prepare their
    public for the compromises necessary to achieve peace.
        The Co-Chairs and the Presidents are committed to advancing peace
    as quickly as possible. The next round of talks will be scheduled as
    soon as conditions are right.
        Question. What role will United States assistance play in
    implementing a settlement to the Nagorno-Karabagh conflict?
        Answer. Any peace agreement reached by the two parties will require
    compromise and therefore will be sustainable only if accompanied by
    substantial assistance flows that allow IDPs to return to their homes
    and that demonstrate to the broader population the benefits of a
    peaceful Caucasus.
        In the event of a settlement, United States bilateral funding would
    play a key role in signaling to the international community the high
    priority the United States places on achieving peace. While the
    majority of funding for reconstruction and resettlement will come from
    multilateral institutions, a substantial United States commitment would
    be key to attracting funds and resources from other donors.
        United States funding would be available for immediate needs such
    as demining and longer term needs, including economic development. We
    expect that United States assistance would allow for noticeable
    improvement in the economic position of ordinary Armenian and
    Azerbaijani citizens, improvements that should result from regional
    integration, improved communications and increased foreign investment.
        Question. Would regional security be enhanced and United States
    interests be furthered if Turkey lifted its blockade of Armenia? What
    can the United States do to ensure Turkey lifts its blockade of
    Armenia?
        Answer. The border between Armenia and Turkey has been closed since
    April 1993. The United States strongly supports efforts by both
    countries to improve their bilateral relations since peace and
    stability in the region is one of our foreign policy objectives. Turkey
    has indicated a desire to open its border with Armenia but sees
    progress toward resolving the Nagoi-no-Karabakh conflict as a necessary
    first step. The United States, as a co-chair of the Minsk Group Process
    along with France and Russia, supports efforts by Armenia and
    Azerbaijan to resolve the conflict over Nagorno-Karabakh. Regional
    security will be enhanced, and, thus, United States interests
    furthered, once Turkey and Armenia normalize relations, which would
    include reopening the border.
        Question. Dakota Wesleyan University in my State of South Dakota is
    not only the Alma Mater of former Senator and Ambassador George
    McGovern, but also it is the home of the Hunger Project at the McGovern
    Center for Public Service. Throughout his career, George McGovern has
    championed the rights of the hungry, focusing primarily on the youngest
    of the world's population. Dakota Wesleyan University has made a
    commitment to build the McGovern Center for Public Service and develop
    a program that is focused on understanding and alleviating hunger
    throughout the world.
        Would the State Department and USAID be willing to work with me and
    Dakota Wesleyan University to insure that there is strong cooperation
    and coordination with U.S. programs reflected in the Hunger Center's
    curriculum?
        Answer. We are constantly seeking ways to broaden the number of
    partners to engage in development assistance and humanitarian issues.
    Thus, both the State Department and USAID would be happy to see the
    Hunger Center involve themselves in international deliberations.
    Ultimately, this participation will influence the Center's curriculum.
    Both the Department of State and USAID are working closely with
    Ambassador McGovern on the preparations for the World Food Summit five-
    year anniversary that will also be celebrated at its conference. Part
    of the preparation for the Summit involves establishing U.S. positions,
    including participation by a wide range of institutions and individuals
    outside of the U.S. Government. In this process, through the U.S. Food
    Security Advisory Committee, we involve universities, non-governmental
    organizations, and private businesses with a concern about world
    hunger. This Summit presents an appropriate opportunity for the Hunger
    Center to engage in a dialogue with a broad spectrum of groups focused
    on eradicating hunger in the world. Such participation could also
    provide a case study for the Hunger Center to use in its curriculum.
    Similarly, the Board for International Food and Agricultural
    Development (BIFAD), an advisory board mandated under the recently
    amended and rewritten Famine Prevention and Freedom from Hunger Act, is
    another forum where the Hunger Center could both make contributions,
    and gather operational ideas for its curriculum.
        Question. Given the reinstatement of the so-called ``Mexico City
    Policy'' and the flat-lined request for the United Nations Population
    Fund for fiscal year 2002, please explain how the Administration plans
    to promote access to affordable contraception in poor nations around
    the world, reduce the number of unwanted pregnancies, and enhance
    adoption and foster care options?
        Answer. The best way to reduce unplanned pregnancies is to expand
    access to quality voluntary family planning services. That is why the
    President's fiscal year 2002 budget requests $25 million for the U.N.
    Population Fund (UNFPA) and $425 million for USAID's international
    family planning and related activities in poor nations around the
    world--the same levels as fiscal year 2001 and the highest since 1995.
    USAID's family planning assistance will be made broadly available
    through the hundreds of foreign NGOs that operate consistent with the
    Mexico City Policy.
        Population-directed funds are not used to support adoption or
    foster care. However, through USAID's HIV/AIDS activities, we are
    supporting efforts to mobilize and empower families and communities to
    provide care and support for orphans and other vulnerable children in
    AIDS-affected areas.
        Question. How do you assess the situation in Ukraine and the United
    States approach to that country amid the current political turmoil? How
    does the current reality affect the direction of United States
    assistance to Ukraine?
        Answer. The recent political turmoil does not alter Ukraine's
    importance to the United States or our strategic goals in Ukraine.
    Ukraine's independence, sovereignty and territorial integrity are a
    fundamental strategic American interest because they are paramount to
    security and stability in Europe. We can accomplish our strategic
    objectives in Ukraine only if it becomes a democratic, market-oriented
    state. This requires United States engagement in the form of assistance
    and support for policies that advance Ukraine's democratic and free
    market transition. It also involves making clear to Ukraine when its
    actions and policies are inconsistent with its aspirations for
    integration into the Euro-Atlantic community.
        The recent political turmoil highlighted shortcomings in Ukraine's
    democratic transition, including in respect for the rule of law,
    freedom of the press and freedom of assembly. We were pleased by recent
    cooperation with the FBI in identifying Gongadze's corpse, but overall,
    the Ukrainian authorities, handling of the Gongadze investigation is a
    source of concern. The fall of former Prime Minister Yushchenko's
    Government also raises questions about Ukraine's commitment to
    continuing much needed structural economic reform.
        We are urging Ukraine to address our concerns by conducting a full
    and transparent investigation of the Gongadze case. We are also
    reviewing with Ukraine specific, concrete steps it can take on economic
    reform over the next several months. We continue to focus our
    assistance program to Ukraine on the best way to accomplish our
    strategic objective in Ukraine: supporting its successful transition to
    a democratic, free market society.
                                     ______

             Questions Submitted by Senator Ben Nighthorse Campbell
        Question. What types of international crime are of principal
    concern to the State Department, and what is the basis for that
    concern?
        Answer. The Department of State relies on assessments from country
    teams at posts, and the intelligence and law enforcement communities to
    target those international crimes that potentially cause the greatest
    threat to us domestically, and threaten both our safety overseas and
    our objectives of building stable democracies and free market economies
    abroad. Accordingly, international terrorism, narcotics trafficking,
    passport and visa fraud, illegal alien smuggling, trafficking in
    persons, money laundering, financial fraud, firearms trafficking,
    stolen automobiles, and intellectual property piracy have been among
    our top concerns.
        We direct our anti-crime programs, however, at a broader focus than
    just a set of discrete crimes. We want to build strong and effective
    law enforcement institutions around the world that respect the rule of
    law. Accordingly, we support anti-corruption, border control, and other
    measures that, while not aimed at any particular type of crime, are
    essential for boosting a country's capacity to address and Cooperate
    with us against all forms of transnational crime.
        Question. What new steps will the State Department take to improve
    the Federal Government's response to international crime? How does the
    State Department propose to coordinate its response to international
    crime with the efforts of other federal agencies--such as the
    Departments of Justice and the Treasury--to ensure that the response is
    focused and the potential for bureaucratic overlap is reduced?
        Answer. The Bureau of International Narcotics and Law Enforcement
    Affairs (INL) is working with other bureaus in the Department and with
    U.S. law enforcement and other U.S. Government agencies to develop a
    longer-term, more coordinated approach toward providing international
    crime control assistance. Annual completion by each embassy's country
    team of the Mission Performance Plan (MPP) that identifies the U.S.'s
    highest priority strategic goals in the host country, is the first
    step. An MPP, however, is not always as comprehensive as we would like.
    INL has therefore recently asked all posts that have significant and
    sustained narcotics and crime control programs to prepare law
    enforcement assistance coordination plans that look out over the next
    three years. The objective is to encourage posts to take a more
    comprehensive and balanced view about what needs to be done to develop
    more reliable international drug and crime control partners.
        INL has led a small State/Justice/Treasury interagency team to look
    preliminarily into how some posts are structured to undertake this mid-
    term planning and coordination. Once the reports are in, INL will
    organize a broader group to provide feedback to posts and work with
    local experts and embassy officials when posts want help in developing
    comprehensive, coordinated judicial assistance plans.
        To address shorter term needs, we have instituted a new ``project-
    based approach'' to make better decisions about how to allocate our
    training and program funds among competing U.S. Government agencies and
    assistance requests from posts. Posts initiate the process by
    describing and requesting comprehensive law enforcement assistance
    ``projects,'' not just a list of disjointed training courses that often
    characterized past assistance requests. Typically a project--such as
    enhanced border control--will include a sequence of training courses
    that may be team-taught by various U.S. law enforcement agencies, as
    well as technical and material assistance. An Assistant Secretary-
    directed State/Justice/Treasury working group that then reviews, ranks,
    and eventually approve's these requests ensures interagency consensus.
        Question. Also, recognizing that considerable law enforcement
    activity to counter international crime occurs in foreign countries,
    how does the State Department propose to coordinate its efforts with
    its foreign counterparts?
        Answer. The State Department coordinates international crime
    control efforts with its foreign counterparts on a number of levels. At
    the broadest level, we work to create internationally-accepted norms
    through the United Nations or regional bodies that help define the
    criminal activity and lay the foundation for creating laws,
    institutions, and means to combat it. A recent example the negotiation
    of the December 2000 U.N. Convention Against Transnational Organized
    Crime.
        With such norms in place, we can then work to develop and implement
    bilateral assistance programs. We work closely with host nation
    institutions to design these programs to ensure their commitment and
    cooperation. Project details-including timelines and expected outcomes,
    and our end-use monitoring and evaluation requirements--are outlined in
    Letters of Agreement that both parties must sign before we allocate
    project funds. We will terminate projects and reprogram funds if the
    project is failing or if the host government loses interest or
    commitment.
        Question. Would the Department be prepared to work together to make
    combating corruption a central theme of the OSCE Ministerial Meeting?
        Answer. As you pointed out in your background section, we were
    successful in highlighting in the Istanbul Summit documents the threat
    posed by corruption to the security and stability of OSCE members. The
    Department followed up on our Istanbul efforts by working closely with
    your staff in shaping the Chairman-in-Office's 2000 Vienna Ministerial
    report on OSCE Contributions to International Efforts to Combat
    Corruption. We also successfully negotiated a Good Governance/
    Anticorruption theme for the three 2001 Economic Dimension preparatory
    seminars and Prague Economic Forum, and welcomed the active
    participation of Helsinki Commission staff in all of these events.
        We have complemented our ongoing efforts to raise the corruption
    issue at OSCE fora with $150,000 in fiscal year 2001 funding for
    specific activities undertaken by OSCE field missions and NGOS. These
    have included anticorruption roundtables in Armenia and Macedonia and a
    budget transparency program in Russia. We will continue to work to
    ensure that anticorruption activities remain an integral part of the
    OSCE's ongoing activities. We look forward to continuing our close
    working relationship with Helsinki Commission staff on this issue.
        Question. Please describe some of the Department's ongoing work
    within the SECI framework and the potential benefits derived from U.S.
    participation.
        Answer. Not an assistance program, SECI is self-help program, and
    the modest level of U.S. assistance (approximately $3 million/year,
    since fiscal year 1999) reflects this. Department efforts focus on SECI
    trade facilitation, crime fighting and customs reform. The goals are
    increased regional stability and prosperity via improved economic
    integration and containing and fighting international organized crime
    The SECI Participating States are: Albania, Bosnia-Herzegovina,
    Bulgaria, Croatia, Greece, Hungary, Moldova, Romania, Slovenia, FYR
    Macedonia, Turkey, and now, Serbia.
        The Department is working with numerous U.S. Federal Law
    Enforcement Agencies, specifically the DEA, FBI, INS, and USCS, to
    provide technical assistance to eligible SECI states on anti-crime
    initiatives and (in cooperation with the World Bank) customs/border
    reform. This assistance has included advice on the development of
    specialized task forces to operate nationally and cooperate regionally
    (via the SECI Anti-Crime Center) to combat the trafficking in human
    beings, narcotics, and commercial fraud. Also, the Department will be
    looking to increased integration with the Stability Pact Organized
    Crime (SPOC) Initiative to better facilitate Euro-Atlantic cooperation
    in these areas, and best utilize limited resources to avoid
    duplication.
        Already, formal and informal cooperation via the SECI Anti-Crime
    Center in Bucharest has resulted in a small number of successful cross-
    border law enforcement actions. In April, a joint Turkish-Romanian
    operation resulted in the simultaneous arrests of 33 organized crime
    suspects in both countries. Earlier this year, 500 kilograms of heroin
    were seized through the cooperation of 3 SECI states; sources at DEA
    report that partnerships forged thru SECI were crucial to facilitating
    this working level cooperation. SECI is not going to improve the region
    overnight, but seems to be forging links for institutionalizing
    regional cooperation on a number of crime and trade facilitation
    issues.
        Question. Instead of having members of the Armed Forces performing
    (police) duties, shouldn't we place greater effort in training
    civilians for police service (citing the OSCE police training academy
    as an example)?
        Answer. Training and development of the new Kosovo Police Service
    (KPS) has been a top priority since the start of the U.N. peacekeeping
    mission in Kosovo. Since military forces are generally ill-equipped for
    law enforcement duties and not trained to be police, once the military
    situation was stabilized, deployment of international civilian police
    (CIVPOL) was begun, along with development of the KPS.
        Today in Kosovo, CIVPOL has primary responsibility for law
    enforcement, with approximately 4,400 CIVPOL deployed throughout the
    region. Also, nearly 2,400 members of the KPS, all trained at the
    Organization for Security and Cooperation in Europe (OSCE) police
    school in Kosovo, are independently carrying out police duties under
    CIVPOL supervision. Training of KPS officers continues, with an
    additional 1,200 expected to be ready by next July.
        Question. Is the Department working toward the timely closure of
    OSCE missions?
        Answer. The Department has taken the lead within the OSCE in moving
    toward closure of the Missions in Latvia and Estonia. In late 2000 we
    assisted the Austrian CiO in developing specific closure guidelines to
    allow these two missions to close. We are currently working with the
    Governments of Latvia and Estonia to ensure that they meet the
    requirements for closure. Our current goal is missions to shut down in
    December 2001.
        We are also beginning the process of identifying closure guidelines
    for the Croatia Mission. The mission has drawn down its international
    staff level from 250 in mid-2000 to 120 today. The consolidation of
    mission staff and exploration of closure guidelines has come in
    response to the positive actions undertaken by the current government.
    We want to ensure a continued focus by the OSCE on refugee returns,
    local/regional government development and property reparations as the
    Croatia Mission begins to explore closure options. We have also seen a
    37 percent decrease in the fiscal year 2001 budget of the Bosnia
    Mission as responsibility for organizing and conducting elections was
    turned over to the host government. These examples underline the OSCE's
    commitment to continuously evaluate progress in meeting the mandated
    goals of field missions, and moving to closure of missions once those
    goals are met.
        Question. How much importance does the Department attach to
    periodic review of implementation of OSCE commitments by the countries
    that have signed the Helsinki Final Act?
        Answer. The Department places great importance on reviewing
    implementation of OSCE commitments. At the weekly Permanent Council
    meetings as well as the annual Human Dimension Implementation Meetings,
    the Department raises its concerns about how other OSCE participating
    States are meeting their OSCE commitments on religious freedom, media
    freedom, prevention of torture, freedom of movement, rule of law,
    trafficking in human beings and other human dimension areas.
        This process of having OSCE member states remind each other of
    their commitments, complemented by recommendations for improvements, is
    essential to building a more democratic, prosperous and secure future
    for the OSCE region. It is a form of conflict prevention in practice.
    The Department works very closely with the United States Commission on
    Security and Cooperation in Europe on OSCE issues, including the
    Implementation Meetings. As a measure of the importance the United
    States. places on the role of the Implementation Meetings in advancing
    the Helsinki process, the Department sent to the last Implementation
    Meeting in Warsaw a United States delegation that included 40 members.
        Question. In your testimony you mention the fact the freedom of the
    press is under threat in most of the Independent States of the Former
    Soviet Union. I understand that you will be meeting with the Russian
    Foreign Minister later this week.
        Will you raise related concerns during the course of that meeting?
        Answer. We have stressed to the highest levels of the Russian
    Government the importance of press freedom for the development of
    democracy in Russia. We will continue to do so at every opportunity.
        I raised the question of press freedom in Russia during my meeting
    with the Russian Foreign Minister on May 18. The U.S. Government has
    consistently expressed its concern over the state of press freedom in
    general and the specific case of Vladimir Gusinskiy's Media Most
    company. We are gravely concerned by the recent takeover of Gusinskiy's
    NTV, the only independent national television station, by the state-
    owned oil company Gazprom, acting as a surrogate for the Kremlin.
        Question. The United States-based Committee to Protect Journalists
    (CPJ) recently issued its listing of the Ten Worst Enemies of the Press
    for 2001, among them Russia and Ukraine. CPJ alleges that ``President
    Putin pays lip service to press freedom in Russia, but then maneuvers
    in the shadows to centralize control of the media, stifle criticism,
    and destroy the independent press.''
        Do you agree with this general assessment? What can be done to
    promote greater respect for freedom on media in Russia?
        Answer. It is our strong belief that Russia's success as a free
    market economy and democratic society can only be complete if the media
    is fully independent. Unfortunately, financial and legal pressure by
    local governments and now increasingly by the central government has
    undermined media independence. Some journalists have been arrested or
    beaten for reporting on controversial topics; many also face crippling
    libellawsuits. Beyond that, it is extremely difficult for Russian media
    outlets to operate on a commercially viable basis, especially when
    advertisers are discouraged against advertising in private media by
    government officials, or to compete against state-subsidized media.
        On the diplomatic level, we are maintaining pressure on the Russian
    Government to protect media freedom. Support for independent media is
    also one of our highest assistance priorities. We are currently
    providing assistance to both print and broadcast media through
    consulting and training to promote their economic viability, support to
    enable them to become more effective advocates for journalistic
    freedom, and grants to encourage independent reporting.
        In the context of the Administration's overall review of our
    Russian assistance programs, expected to be completed by the end of
    June, we are looking at ways to enhance current efforts. Ideas being
    considered include more support for legal defense of journalists and
    media outlets, support for media watchdog and advocacy groups, and a
    solid monitoring effort to track and highlight regional and national
    attempts to suppress news. We are also consulting with other donors to
    develop a joint response to the immediate crisis and to help prevent
    other outlets from meeting the same fate as NTV, Itogi and Segodnya by
    providing more direct assistance.
                        belarus: u.s. policy and russia
        Question. Is the United States committed to support the democratic
    movement in Belarus over the long haul? Will you raise the troubling
    developments in Belarus in your discussions with your Russian
    counterpart?
        Answer. We have a long-term commitment to democracy in Belarus, as
    shown by the fact that United States policy toward Belarus has not
    changed with the change of Administrations. Our main goal remains the
    restoration of democracy in an independent Belarus. To this end, we
    strongly support the work of Belarusian democrats, including civil
    society and independent media, to bring their country back into the
    Euro-Atlantic community of democracies. In addition to political and
    moral support, we are providing $12 million in democracy programs in
    fiscal year 2001, and we are supporting the work of the OSCE in
    Belarus.
        Russia's position on Belarus is troubling. On one hand, relations
    between President Putin and Aleksandr Lukashenko are clearly strained.
    On the other, Russia continues to give political and economic support
    to Lukashenko's authoritarian policies. The Russian Government may be
    beginning to understand in the West about Russia's general commitment
    to supporting democracy in other countries. I discussed Belarus with FM
    Ivanov during his visit to Washington in mid-May and will raise United
    States concerns over Belarus in future meetings with him.
        Question. Is the Department committed to working with the OSCE
    countries to improve the situation faced by the Roma, including through
    adoption of anti-discrimination laws?
        Answer. The Department is committed to protecting and promoting the
    human rights of Roma in OSCE countries, both within a bilateral context
    and also through OSCE institutions, such as the Office for Democratic
    Institutions and Human Rights (which has Contact Point on Roma/Sinti
    issues) and the High Commissioner on National Minorities. As we have
    made clear in bilateral engagements, at the OSCE, and in public
    statements, the Department calls on all governments to respect the
    rights of Roma. We continue to urge OSCE participating States to honor
    their commitment, made at the 1999 Istanbul Summit, to ensure that laws
    and policies fully respect the rights of Roma and, where necessary, to
    promote comprehensive anti-discrimination legislation.
        Question. Has the Department raised security concerns with the
    Government of Greece in anticipation of the upcoming Olympic Games? Has
    Athens shown greater willingness to cooperate in efforts to root out
    domestic terrorist groups like 17 November?
        Answer. The Department has been working closely with the Greek
    Government on the issue of Olympics Security. At the request of the
    Greek Government, we and other concerned members of the international
    community--the UK, Spain, Australia, France, and Israel--have formed an
    Olympic Security Advisory Group (OSAG), which has met several times in
    Athens since December 2000. Through OSAG, we are working to help the
    Greeks identify unmet security needs and offering advice on how they
    can meet those needs. In addition, Greek law enforcement experts have
    visited the United States and participated in security training
    exercises for the 2002 Salt Lake City Winter Olympics. From our
    perspective, the OSAG process has been highly productive. I would add
    that we are posting a special Diplomatic Security Olympics Coordinator
    in Athens this summer, as we did for the Sydney Games, to manage the
    United States effort.
        As we know from experience, preparing for the Olympics is a
    momentous challenge regardless of the venue, and one that requires an
    extraordinarily high degree of international cooperation. The USG will
    continue to support Greek efforts toward a safe, terrorism-free
    Olympics. Clearly, much work remains to be done. I am confident that
    the Greek Government will do everything possible to ensure the safety
    of the Games, and we will assist them in any way that we can.
        On the specific issue of terrorism, we have made our bottom line--
    the need for results--well known to the Greek Government, including
    during Foreign Minister Papandreou's very succe ssful recent visit (May
    20-24) to the United States. The Greek Government has become more
    determined in the fight against terrorism since the murder of UK
    Military Attache Stephen Saunders in Athens last year. The Greeks have
    taken a number of important steps, including publicizing a reward for
    information, bolstering police capabilities, and drafting new
    legislation on organized crime and terrorism with important new tools
    like witness protection. However, the bottom line is that the ``17
    November'' terrorists who planned and carried out the murder of five
    members of the United States Mission in Greece, wounded dozens more
    Americans, and killed an even larger number of Greeks must be brought
    to justice.
        We cooperate closely with the Greek Government and the Greek police
    to support their counter-terrorism efforts, while fully respecting
    Greek sovereignty and authority. This cooperation has improved since
    last year. The Anti-Terrorism Assistance program and the FBI--working
    through our Embassy in Athens in close cooperation with the British
    Embassy and Scotland Yard--provide training to develop the police
    counterterrorism unit's professionalism. We are providing assistance
    where we can, but ultimately the deadly violence of ``17 November'' and
    other terrorist organizations is a Greek problem to be solved by
    Greeks.
        Question. What is your initial assessment on the role the OSCE is
    playing and could play in Europe? What are your views of President
    Putin's call to expand the scope of activities of the OSCE in the
    security arena?
        Answer. The OSCE is an institution where all the countries of
    Europe have an equal voice, and all have agreed to uphold a common set
    of principles. It is a valuable forum for engaging positively with the
    Russians and developing and advancing common policies with our allies
    and friends. OSCE cooperates with other institutions to address common
    challenges.
        The OSCE has played an active and evolving role in assisting
    countries making the transition to democracy and in addressing
    transnational threats to stability. OSCE missions have helped to
    diffuse inter-ethnic and inter-regional tensions. It has played an
    important role in facilitating implementation of international
    agreements. The OSCE is actively engaged in post-conflict
    rehabilitation in the Balkans.
        Russia is free to raise concerns or make proposals in the OSCE
    context. I would note, though, that the organization operates on the
    basis of consensus. No one country can advance an agenda that is not
    supported by other states. Further, we do not support any hierarchy
    among European or Trans-Atlantic institutions.
        The OSCE can make its greatest contribution to security by a
    continued focus on intra-state threats to democracy and transnational
    issues that undermine stability. OSCE should implement activities
    designed to create a stable democratic political process and respect
    for the rule of law and human rights, counter corruption and trans-
    border crime, improve economic and environmental conditions, and
    implement certain arms control agreements and confidence building
    measures.

                              SUBCOMMITTEE RECESS

        Senator McConnell. Thank you very much, that concludes the
    hearing. The subcommittee will stand in recess until 10:30
    a.m., Wednesday, July 11, when we will meet in room SD-192 to
    hear from the Assistant Secretary of State Rand Beers.
        [Whereupon, at 11:25 p.m., Tuesday, May 15, the
    subcommittee was recessed, to reconvene at 10:30 a.m.,
    Wednesday, July 11.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2002

                                  ----------

                            WEDNESDAY, JULY 11, 2001

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:38 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Patrick J. Leahy (chairman)
    presiding.
        Present: Senators Leahy, McConnell, Specter, and Campbell.

                              DEPARTMENT OF STATE

    STATEMENT OF RAND BEERS, ASSISTANT SECRETARY OF STATE,
                BUREAU OF INTERNATIONAL NARCOTICS AND LAW
                ENFORCEMENT AFFAIRS

                 OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Good morning.
        I understand Mr. Deal is here. Feel free to take your seat,
    Mr. Deal. I understand Mr. Beers is on his way, is that
    correct? He is here, okay.
        The purpose of this hearing is to review the status of
    United States support for Plan Colombia and to get an
    explanation of the President's budget request for an additional
    $731 million in fiscal year 2002 foreign operations funds for
    the now renamed Andean Counterdrug Initiative. Our first panel
    consists of Rand Beers, who is the Assistant Secretary of State
    for International Narcotics and Law Enforcement and Michael
    Deal, who is USAID Senior Deputy Assistant Administrator for
    Latin America and the Caribbean.
        Both witnesses deserve a great deal of credit for managing
    what is unquestionably one of the most complex, controversial,
    costly, and risky foreign assistance programs the United States
    is currently undertaking.
        Our second panel, of one, will be Jose Miguel Vivanco, the
    Executive Director of the Americas Division of Human Rights
    Watch. He is widely respected for his extensive knowledge and
    balanced analysis of the human rights situation in Colombia and
    throughout Latin America.
        Now, there is no doubt that the enormous flow of illegal
    drugs into the United States from Latin America poses a serious
    threat to the health and safety of the American people. There
    is also little doubt in my mind that the administration's
    Andean Counterdrug Initiative, however well intentioned, will
    not appreciably reduce that flow of drugs, whether this year or
    in the future, and as most know who deal with this, even if it
    did it would not appreciably reduce the amount of drug usage in
    the United States.
        As General Pace and Secretary Rumsfeld have said, like
    practically every other administration official who has
    commented on the subject, we are not going to deal effectively
    with the drug problem in this country until we reduce the
    demand for drugs here at home. No matter how many billions of
    dollars we spend, no matter who we support around the world to
    stop the flow of drugs, they are going to come in here, until
    the wealthiest Nation on Earth stops paying whatever is
    necessary to get drugs.
        While everybody who has testified for the administration
    knows this, every parent knows this instinctively, virtually
    every Member of Congress knows this, President Bush's budget
    would cut funding for programs to reduce the demand for drugs
    by America's youth by some $74 million. That is a mistake. If
    you do not reduce the demand for the drugs, the drugs are going
    to come in, whether they come from Colombia or from Southeast
    Asia or anywhere else. They are going to come in until we stop
    using them.
        We have been down this road so many times before, and yet
    we continue to repeat our mistakes.
        I agree with those who believe that the United States
    should help Colombia. I have great admiration for President
    Pastrana. He has risked his reputation. He has also risked his
    personal safety for the cause of peace. He has some very
    capable people under him, including the minister of defense and
    the chief of the armed forces. Colombia's Ambassador Moreno is
    one of the finest foreign diplomats in this town, also one of
    the hardest working people I know.
        These are people who are trying to do what is best for
    their country. They deserve our support. The Colombian
    Government has every right to defend itself against a guerrilla
    insurgency financed by revenues from protecting drug
    traffickers whose ranks include child soldiers, that use
    murder, kidnapping, and other brutal tactics to achieve its
    goals. Of course the Colombian government has a right to defend
    against that.
        But the Colombian armed forces also have a responsibility
    to aggressively combat the paramilitaries, whose numbers have
    doubled in the past 2 years and whose gruesome tactics mirror
    those of the Guatemalan army and the Salvadoran death squads in
    the 1980's, groups, incidentally, directly or indirectly aided
    by the United States.
        The State Department and respected human rights
    organizations report that the Colombian military continues to
    provide tacit as well as tangible support to the
    paramilitaries. In the midst of this widening civil war, United
    States policy purports to be limited to counternarcotics. That
    is an admirable goal that bears decreasing resemblance to
    reality.
        Last year Senator McConnell and I increased funding to
    strengthen the justice system in Colombia and to reform its
    weak and corrupt institutions. This is key to the success of
    everything else we hope to achieve in Colombia. I am concerned
    about the slow progress of judicial and democratic reform.

                               prepared statement

        As our witnesses clarify the goals and expected results of
    this initiative, I hope they will also directly address the
    concerns that I and others have raised about the long-term
    financial costs, the risks to American personnel, including
    private contractors, and the danger that the United States will
    become increasingly enmeshed in a civil war where innocent
    people are often the targets.
        I would yield to the distinguished ranking member of this
    subcommittee, the former chairman and one who has spent an
    enormous amount of time on this subject.
        [The statement follows:]
                 Prepared Statement of Senator Patrick J. Leahy
        The purpose of this hearing is to review the status of United
    States support for Plan Colombia, and to explain the President's budget
    request for an additional $731 million in fiscal year 2002 Foreign
    Operations funds for the renamed ``Andean Counterdrug Initiative.''
        Our first panel consists of Rand Beers, Assistant Secretary of
    State for International Narcotics and Law Enforcement--with able back-
    up from Deputy Assistant Secretary William Brownfield, and from Michael
    Deal, USAID Senior Deputy Assistant Administrator for Latin America and
    the Caribbean.
        Both witnesses, and Secretary Brownfield, deserve a great deal of
    credit for managing what is unquestionably one of the most complex,
    controversial, costly and risky foreign assistance programs the United
    States is currently undertaking.
        Our second panel of one will be Jose Migel Vivanco, Executive
    Director of the Americas Division of Human Rights Watch, who is widely
    respected for his extensive knowledge and balanced analysis of the
    human rights situation in Colombia and throughout Latin America.
        There is no doubt that the enormous flow of illegal drugs into the
    United States from Latin America poses a serious threat to the health
    and safety of the American people.
        There is also little doubt in my mind that the Administration's
    ``Andean Counterdrug Initiative,'' however well intentioned, will not
    appreciably reduce that flow of drugs, whether this year or in the
    future.
        As General Pace and Secretary Rumsfeld have said--like practically
    every other Administration official who has commented on the subject,
    we are not going to deal effectively with the drug problem in this
    country until we reduce the demand for drugs here at home.
        Yet, President Bush's budget would cut funding for programs to
    reduce the demand for drugs by America's youth, by some $74 million.
    That is a mistake. We have been down this road time and time again, and
    yet we continue to repeat our mistakes.
        I agree with those who believe that the United States should help
    Colombia. I have great admiration for President Pastrana, who has
    risked his reputation and his personal safety for the cause of peace.
        He also has some very capable people under him, including the
    Minister of Defense and the Chief of the Armed Forces, and Colombia's
    Ambassador Moreno, who is one of the finest foreign diplomats in this
    town.
        These are people who are trying to do what is best for their
    country, and who deserve our support.
        The Colombian Government has every right to defend itself against a
    guerrilla insurgency, financed by revenues from protecting drug
    traffickers, whose ranks include child soldiers, that uses murder,
    kidnaping and other brutal tactics to achieve its goals.
        But, the Colombian Armed Forces also has a responsibility to
    aggressively combat the paramilitaries, whose numbers have doubled in
    the past two years and whose gruesome tactics mirror those of the
    Guatemalan Army and the Salvadoran death squads in the 1980s.
        The State Department and respected human rights organizations
    report that the Colombian military continues to provide tacit, as well
    as tangible support to the paramilitaries.
        In the midst of this widening civil war, United States policy
    purports to be limited to counter-narcotics. That is an admirable goal
    that bears a decreasing resemblance to reality.
        Last year, Senator McConnell and I increased funding to strengthen
    the justice system in Colombia and to reform its weak and corrupt
    institutions. This is key to the success of everything else we hope to
    achieve in Colombia, and I am concerned about the slow progress of
    judicial and democratic reform.
        As our witnesses clarify the goals and expected results of this
    initiative, I hope they will also directly address the concerns that I
    and others have raised about the long term financial cost, the risks to
    American personnel--including private contractors, and the danger that
    the United States will become increasingly enmeshed in a civil war
    where innocent people are often the targets.

                 Opening statement of Senator Mitch Mc Connell

        Senator McConnell. I thank my friend Senator Leahy for his
    leadership both as chairman and as ranking member over the
    years. We have worked together for a long time now and have
    enjoyed mutual confidence. I enjoy our association and
    appreciate his having the hearing today.
        Today's subcommittee hearing on the fiscal year 2002
    funding request for the $882 million Andean Regional Initiative
    is timely and serves as an appropriate follow-up to last year's
    joint hearing on Plan Colombia.
        Senator Leahy. Before you continue, I should point out that
    the President was just on the Hill. He was probably meeting
    with you for all I know, Senator McConnell. I understand that
    Mr. Beers may have been caught in the lockdown of the traffic
    when that happens.
        Mr. Beers. Yes, sir.
        Senator Leahy. It happens to all of us. Go ahead.
        Senator McConnell. As I was saying, this is an appropriate
    follow-up to last year's joint hearing on Plan Colombia. As we
    have the most to gain from questioning witnesses, my opening
    comments will be brief. Let me just make four points.
        First, the illegal growth, manufacturing and trafficking of
    coca is a shared problem between North, Central, and South
    America, and Europe for that matter. Demand on American streets
    is met by a steady supply of illegal drugs manufactured in
    laboratories on rivers and in the hills of Colombia and
    elsewhere in the region.
        How bad is it? By some estimates, Colombia alone produces
    580 metric tons of cocaine, which is 235 metric tons more than
    needed to meet America's unfortunate cocaine habit.
        Shared problems call for shared solutions, which brings me
    to my second point: The need for a coordinated counterdrug
    strategy. The development of any plan to stem this threat that
    is not integrated and regional in nature will be an expensive
    mistake in terms of taxpayer funds and human lives. I made my
    concerns with the shortsighted strategy to counterdrug efforts
    very clear during last year's hearing on the $1.3 billion
    supplemental request for Plan Colombia. My views remain largely
    unchanged. The law of supply and demand dictates that narcotics
    interdiction, law enforcement, drug abuse treatment, crop
    eradication, and political, economic, and social development
    all have to go hand in hand, no matter where the problem
    arises.
        While the Andean Initiative addresses the spillover of the
    drug trade from Colombia to neighboring countries, much more
    must be done to promote regional consultations, coordination of
    law enforcement activities, and intelligence and expertise
    sharing.
        Bolivia, for example, has enjoyed success in eradicating
    coca and promoting alternate development activities, and other
    countries can and should learn from the Bolivian experience. At
    the same time, political leaders in La Paz have no choice but
    to remain vigilant to ensure that spillover from Colombia does
    not undermine their substantial achievements. Like a chronic
    disease, the threat from narcotics trade never dissipates and
    must be constantly monitored and managed.
        Third, the rule of law, democratic governance, and respect
    for human rights are essential foundations for any long-term
    counterdrug effort. Endemic corruption, political instability
    and impunity serve to undermine the multi-billion dollar
    investment the United States has already made in Colombia and
    the Andean region.
        What will be the most telling of Plan Colombia and the
    Andean Regional Initiative is not the dollar amounts associated
    with legal, political, and human rights programs, but concrete
    results achieved through U.S.-funded activities.
        Finally, the administration has a responsibility to keep
    the American people fully informed of all facets of our efforts
    in the Andean region, from environmental concerns arising from
    aerial spraying to the collusion of some in the Colombian
    military with paramilitary groups to obstacles in implementing
    necessary political and legal reforms. Anything less than the
    truth will erode public support and confidence in counterdrug
    programs and activities conducted abroad.
        Thank you very much, Mr. Chairman, for the opportunity to
    make opening statements. I, too, look forward to hearing from
    the witnesses.
        Senator Leahy. Senator Campbell, did you have anything you
    wanted to add?

              Opening statement of Senator Ben Nighthorse Campbell

        Senator Campbell. Well, thanks, Mr. Chairman. Just let me
    make a couple of observations, and I want to certainly
    associate my comments with yours when we talk about education.
    You know, I guess it is pretty common for elected officials
    when they talk about crime and fighting the drug war to speak
    very heavily in favor of more incarceration and being tougher
    and locking them up and making them bust rocks for life and
    that kind of stuff.
        The bottom line is, if you track our prison population,
    which is going up, I mean, from roughly half a million to a 1.2
    or 1.3 million in the last 10 years, and about 70 percent of it
    being related to drugs, anybody in their right mind knows we
    have got a big problem. I believe, as you do, that as long as
    the world operates on the theory of supply and demand, I do not
    care how much money we put into the Andean Initiative or any
    other initiative; until we convince people that they do not
    need it, we are not going to win that war.
        As the former chairman for the last 6 years of the Treasury
    Subcommittee, which supplies the money for the drug czar and
    the DEA, we have had Senator Kohl first and Senator Dorgan now
    and I have had a great deal of input on trying to provide money
    for education. In fact, we put over $500 million of taxpayers'
    money into a drug czar program under General McCaffrey to
    television and ads on radios and magazine ads and so on to try
    to encourage youngsters, particularly teenagers, to leave it
    alone.
        We have been able to track over the last 6 years if we have
    had any effect and in fact, if you look at the statistics, the
    drug use for that age group has gone down. We think we had
    something to do with that by providing enough money to
    encourage youngsters not to do it.
        However, the drug use has gone up in other areas, as you
    know, particularly with adults. But I do not know how you tell
    kids to leave it alone when their parents are using it. But the
    bottom line is that we have to, as Senator McConnell said, we
    have to attack it on literally all phases, whether it is in
    Bolivia or Colombia or here or wherever the problem is.
        But I am convinced, after the years of being a former
    prison counselor and having a number of other experiences in
    what I call my real life, that the drug war is just unwinnable
    until we get to the youngsters and convince them that somehow
    they do not need it. That is the first thing.
        Of course, the second thing is that farmers that are
    raising coca crops, and until we find markets for something
    they can raise, whether it is wheat or barley or hay or
    something else, and they can make a living on that, they are
    going to keep producing the cash crop that brings in the most
    money and that obviously is coca for them.
        So I look forward to the hearing. I have read part of the
    testimony already and would like to ask a few questions if I
    have the time.
        Thank you, Mr. Chairman.
        Senator Leahy. Thank you, Senator Campbell. You, like I,
    have also spent some time in law enforcement and we know that
    these are not things that law enforcement is going to handle by
    itself by any means.
        I am going to recognize Assistant Secretary Beers first and
    then go to Mr. Deal. We will put their full statements in the
    record. I would ask that you try to limit your time to 5
    minutes because I know we are going to be going back into
    session. We had to cancel this hearing yesterday because of the
    votes. We are going to be back in that same situation and
    Senators are going to want to ask questions.
        So Secretary Beers, good to have you here, sir, and please
    go ahead.

                      Summary Statement of Hon. Rand Beers

        Mr. Beers. Thank you very much, sir. Thank you for the
    acknowledgment of the difficulty of getting here. Sorry I was
    late.
        Senator Leahy. I realized afterward I had heard a lot of
    commotion, seen a lot of the extra police around, and thought
    that was probably what it was. You are an extraordinarily hard-
    working, extraordinarily punctual person, and I now put that on
    the record for everybody to hear.
        Go ahead.
        Mr. Beers. Thank you, sir.
        Thank you for this opportunity and this hearing to appear
    before you and your distinguished colleagues. Before embarking
    on my oral remarks, let me respond to the comments which you
    and Senator Campbell both made. There is no disagreement on
    this side either that demand reduction is an essential element
    of dealing with the drug problem. But just as supply reduction
    by itself cannot succeed, neither do we believe can demand
    reduction.
        While my job focuses on supply reduction, I come before you
    to talk about that particular aspect. We do have a small demand
    reduction program, about $8 million across our entire budget,
    but it is a small program.
        The Andean Counterdrug Initiative, or the Andean Regional
    Initiative, for us represents a comprehensive and integrated
    response to the complex and interrelated issues of drugs,
    development, and democracy in the Andean region. We have
    requested $882 million in funding for this initiative and
    enactment of an extension of the Andean Trade Preference Act.
    This is done in support of the foundation laid by Plan
    Colombia, which all recognized was not a 1-year funding
    initiative, but it also recognizes that Plan Colombia was only
    a partial as well as initial response.
        It is absolutely essential to build strong democracies,
    strong economies, and strong institutions that will work to
    dismantle and prevent a resurgence of the drug trade, not just
    in Colombia but in the region as a whole. Whereas Plan Colombia
    was highly focused on Colombia itself, the Andean Regional
    Initiative directs over 50 percent of the funds to the six
    other countries--Peru, Bolivia, Ecuador, Venezuela, Brazil, and
    Panama.
        Whereas Plan Colombia was highly focused on enforcement and
    security, the Andean Regional Initiative requests over 50
    percent of the funds for alternative development, democracy,
    institution building, health, education, and general
    development.
        We have also made an attempt to coordinate with the
    countries in the region before making this presentation and to
    consult with other donors around the world to talk about how we
    might work together to deal with this problem.
        Mr. Deal will focus on the development issues. I will leave
    the rest of my remarks to focus on the enforcement and security
    side.
        Colombia remains the major focus of this program: $399
    million total, of which $252 million are for enforcement and
    security. The funds in this area will go primarily to continue
    the support for programs that were already funded in the Plan
    Colombia initiative: fuel, spare parts, facilities, and
    training. There will be no major acquisitions in the Colombian
    portion of this program. It will support both the military and
    the police. It will focus on southern Colombia, but it will not
    be limited to southern Colombia.
        Peru and Bolivia are also significant programs and we have
    requested $206 million and $143.5 million for those two
    programs, of which $77 million and $54 million will be for
    enforcement and security. Again, these programs will support
    existing programs where we have had major successes in reducing
    coca cultivation. We cannot afford to have a resurgence in
    these particular areas. So we will focus on eradication and
    alternative development. There will be some procurement in
    association with this. We are planning on refurbishing the
    helicopters for the Peruvian National Police and taking them
    from UH-1H's to Huey II's.
        In Ecuador we have a large program beginning this year of
    $76.5 million, with $19 million for enforcement and security.
    It will focus on northern border control plus maritime and
    airport control.
        In Brazil, a $26 million program will have $15 million for
    enforcement and security. We will support the counternarcotics
    operation Cobra along the Colombian border. This is the second
    largest user of cocaine in the world.
        Venezuela, a $10 million program for enforcement and
    security to support the counternarcotics operations that have
    been very successfully prosecuted there.
        In Panama, $11 million out of $20 million to support police
    operations, with limited support for maritime and air efforts
    and a minimal border control effort in Darien.
        Let me speak briefly now to the issue of aerial eradication
    because it has been a concern of a number of people. We believe
    that aerial eradication is absolutely essential. By itself it
    is not sufficient. It needs to be done in conjunction with
    alternative development, a carrot and stick operation which
    will allow us to put at risk the efforts of farmers who have to
    invest in fertilizers and precursors and their own sweat in
    order to produce coca for high dollars. We have to reduce their
    return on that effort and that is what the aerial eradication
    effort is about.
        For the first year, we will be spraying throughout the
    country. For the first year, we will have recurrent operations
    throughout the country. But, that said, this must be a fair
    process. It must spray coca and opium poppy and not legal
    crops, and we have taken every effort to do that. There have
    been reports that we have sprayed crops and we have where they
    are in coca fields, but we have not and we have no record of
    verifiable spraying of crops other than crops in coca fields.
        Second, there has been a health risk issue. We have tested
    this in the United States, we have tested it in Colombia. It
    has been under way since 1994 in Colombia. In the proper dose,
    it will kill coca and opium poppy, but not rain forest, not
    animals, and not persons. It biodegrades quickly in the soil.
        There are reports of health hazards to individuals. We have
    gone in one instance to Noringo and looked at the individuals
    with skin problems and found no record of association, no
    record of association between spraying and the skin conditions
    of the youngsters who were reported in a sensationalist article
    in the Dutch press. We have conducted a similar review in
    Putamayo. While that review is not entirely finished, we have
    not found an association with the spraying there, either.
        We are conducting, nonetheless, a long-term review of this
    issue where we will do before and after samples in areas where
    we intend to spray in the future in order to be able to
    scientifically determine whether or not there is a particular
    problem.
        But let me say it is important to remember that cutting
    rain forest, using fertilizers and herbicides like Paraquat and
    precursor chemicals like acetone, potassium permanganate, and
    sulfuric acid do far more to damage the environment than aerial
    eradication, and it is narcotrafficker dollars that create the
    crop demand, not aerial eradication.

                               prepared statement

        Finally, on the human rights issue in Colombia and in the
    region, it remains a top item in our agenda of cooperation,
    especially in Colombia. Programs have made progress. Trials and
    convictions of Colombian military guilty of human rights
    abuses, operational excesses in capturing paramilitary members,
    leaders and financial supporters are all to the credit of the
    government of Colombia, but we and they know more is necessary.
    We have programs and we hope to work with you, sir, to do that.
        Thank you very much.
        [The statement follows:]
                        Prepared Statement of Rand Beers
        Good afternoon, Mr. Chairman, Members of the Committee. I am
    pleased to be here today to discuss with you the Department of State's
    programs envisioned under the Administration's proposed Andean Regional
    Initiative, or ARI.
        First, I'd like to provide you background on the origin of the
    President's Initiative. In July 2000, Congress approved a $1.3 billion
    supplemental appropriation to carry out enhanced counternarcotics
    activities in the Andean region. Of that amount, approximately $1
    billion in Function 150 funding through the State Department was the
    U.S. contribution to what has become known as Plan Colombia, a
    comprehensive, integrated, Colombian action plan to address Colombia's
    complex and interrelated problems. The initial two-year phase of Plan
    Colombia focused on the southern part of the country. It began with an
    intensive counternarcotics push into southern Colombia, along with the
    expansion of programs aimed at social action and institutional
    strengthening, and alternative development. Plan Colombia is now well
    underway and showing good early results. In addition to stemming the
    flow of narcotics entering the U.S., our assistance is intended to
    support institutional and judicial reform, as well as economic
    advancement, in one of this hemisphere's oldest democracies.
        Members of Congress, the NGO community, and other interested
    observers had previously expressed concerns regarding aspects of U.S.
    Government support to Plan Colombia. Those concerns focused
    particularly on three areas: that we did not consult widely enough in
    putting together our support package; that we focused too much on
    security and law enforcement, and not enough on development and
    institutional reform; and that our assistance was too heavily oriented
    toward Colombia as compared to the rest of the region.
        The Administration has taken to heart those concerns in formulating
    the President's proposed Andean Regional Initiative (ARI). ARI is the
    product of consultations with the staffs of committees and Members of
    Congress, with the governments of the region, and with other potential
    donor countries and international financial institutions. ARI addresses
    the three issues that lie at the heart of the challenges facing the
    region: democracy, development, and drugs. ARI balances the need to
    address the continuing challenges in Colombia with the competing
    priority of working with the rest of the region to prevent a further
    spreading of Colombia's problems or backsliding in areas where progress
    already has been made.
        The President has proposed $882 million in Function 150 programs
    for the ARI. $731 million of the $882 million in ARI is for the
    Department's Bureau for International Narcotics and Law Enforcement
    Affairs (INL) funding of the Andean Counterdrug Initiative (ACI). The
    ARI also includes funding for relevant Economic Support Funds (ESF),
    Developmental Assistance (DA), and Child Survival and Disease (CSD)
    programs, plus a small amount of Foreign Military Financing (FMF). The
    ARI covers programs in Bolivia, Colombia, Ecuador, Peru, and Venezuela,
    and those areas and programs in Panama and Brazil most affected by the
    region's problems and those where our assistance can best make a
    difference. In addition to being balanced geographically, our budget
    will likewise be balanced programmatically. About 50 percent of the ARI
    budget will be devoted to programs focused on development and support
    for democratic institutions. Integral to ARI as well are the economic
    development and job creation afforded by expanded trade opportunities.
    The Free Trade Area of the Americas (FTAA) can help the entire region
    through increased investment and job creation. More immediately,
    renewal and enhancement of the Andean Trade Preferences Act (ATPA) can
    provide real alternatives to drug production and trafficking for
    farmers and workers desperate for the means to support their families.
        Our support to Plan Colombia was the first step in responding to
    the crisis underway in Colombia. The Andean Regional Initiative is the
    next stage of a long-term effort to address the threat of narcotics and
    the underlying causes of the narcotics industry and violence in
    Colombia, while assisting Colombia's neighbors to ward off those same
    dangers in their own countries. Their success is vital to our own
    national interests in promoting the spread of strong democratic
    institutions, the enhancement of trade and investment opportunities for
    U.S. businesses and workers, and the reduction of narcotics production
    and trafficking that threaten our society.
        My USAID colleague will describe in detail the status of our
    alternative development projects. However, I want to point out that
    alternative development is an integral part of our plan for weeding out
    illicit coca and poppy cultivation in the Andes. We have had large
    alternative development programs in Bolivia and Peru for many years,
    and they have been quite successful, combining with aggressive
    eradication and interdiction programs to produce significant declines
    in the coca crops of those countries. Colombia is trying to replicate
    that success in Plan Colombia, combining a substantially expanded
    alternative development program with aerial eradication and
    interdiction activities in southern Colombia, currently the largest
    concentration of coca cultivation in the world.
        I am pleased to report that the Department is moving quickly to
    implement our support to Plan Colombia. Below, I will discuss delivery
    of helicopters, aerial spray aircraft, and other equipment which is
    proceeding smoothly. I will also describe our support for the Colombian
    Government's aerial spraying program.
        I'd then like to discuss the proposal we have submitted in our
    fiscal year 2002 budget request for INL's $731 million Andean
    Counterdrug Initiative (ACI), as part of the larger $882 million ARI.
    This initiative addresses holistically--providing assistance for social
    and economic development as well as for counternarcotics and security
    efforts--the narcotics scourge throughout the Andean region. We are
    hopeful that this macro-approach will eliminate the ``balloon effect''
    which we observe when programs are developed country by country.
        Finally, I will note our support for the ATPA.
                      status of spending on plan colombia
        In less than one year, the Department has ``committed''
    approximately 75 percent of the $1.018 billion two-year Plan Colombia
    Supplemental. By ``committed,'' we mean that we have contracted for
    equipment or services, signed reimbursable agreements with other
    agencies or bureaus within the Department, and contributed to the UN.
    Taken together, these ``commitments'' total more than $760 million of
    the Supplemental.
                         status of equipment deliveries
        Turning now to our equipment deliveries, I can say that they have
    proceeded smoothly, generally adhering to the anticipated schedules.
    Some have even been accelerated from their original estimates. As of
    July 10, 2001, the status of UH-60, UH-1N, Huey-II and spray planes is
    as follows:
        COLAR and CNP Black Hawks.--A contract was signed with Sikorsky on
    December 15th for 14 Black Hawks for the Colombian Army (COLAR) and two
    helicopters for the Colombian National Police (CNP). Specifications for
    the aircraft configuration were based on SOUTHCOM recommendations with
    input from respective Colombian organizations. Arrangements are being
    made for delivery by the end of this month of the two CNP aircraft and
    the first COLAR aircraft. Remaining deliveries will be made in
    increments through December of this year. The contract includes one
    year of contractor logistics support (CLS). We expect to extend this
    contract pending availability of fiscal year 2002 funding.
        COLAR UH-1Ns.--The UH-1Ns supplied to Colombia earlier continue to
    provide air mobility support to the troops of the Counterdrug Brigade.
        CNP Huey-IIs.--INL and the CNP agreed to use the $20.6 million CNP
    Huey-II and $5 million CNP aircraft upgrade budget lines from the
    Supplemental to modify nine additional aircraft to desired
    specifications and retrofit 22 of the earlier produced Huey-IIs to
    include additional options, such as floor armor and passive infrared
    (IR) countermeasures. A delivery order has been issued for four
    modifications to be accomplished by U.S. Helicopter (completion
    expected approximately August/September), and the other five
    modifications will be done by CNP in-country with kits furnished by
    INL. (Note: 25 Huey-II helicopters have been delivered to the CNP from
    previous fiscal year 1998 and fiscal year 1999 funding.)
        Colar Huey-IIs.--SOUTHCOM presented their recommendations on the
    configuration of the Colar Huey-IIs on February 22nd. An interagency
    team then selected a configuration that includes a passive IR engine
    exhaust system, floor armor, M60D door guns, secure radios, and a radar
    altimeter, along with other standard equipment. We estimate that 25
    Huey-IIs modified to this standard, along with individual crew
    equipment (NVGs, survival vests, helmets, etc.) and some spares will be
    possible within the $60 million line item of the Supplemental
    Appropriation. We have established a contract delivery order for the
    accomplishment of the initial 20 modifications, with options for
    additional aircraft. Work is in progress on these aircraft and we
    believe that aircraft deliveries to Colombia can begin by approximately
    January 2002.
        Additional OV-10D Spray Planes.--Three aircraft are currently
    undergoing refurbishment/modification at Patrick Air Force Base and are
    expected to be completed in August of this year.
        Additional Ayres Turbo-Thrush Spray Planes.--A contract is in place
    for nine additional agricultural spray planes. The first aircraft
    should be delivered in August, with the balance phased in through
    February 2002.
                                aerial spraying
        Plan Colombia-related aerial spray operations began on December 19,
    2000, in the southern department of Caqueta and moved into neighboring
    Putumayo on December 22. Operations later shifted to the northern and
    eastern parts of the country.
        Some allege that the glyphosate used in the spray program results
    in health side-effects to exposed populations. First, let me stress
    that glyphosate is one of the least harmful herbicides available on the
    world market. Glyphosate has been the subject of an exhaustive body of
    scientific literature which has shown that it is not a health risk to
    humans. It is used throughout the United States and over 100 other
    countries and has been rigorously tested for safety for animals and
    humans. Nonetheless, we feel compelled to probe assertions that it is
    making people sick. The Narcotics Affairs Section (NAS), with
    assistance from our regional EPA representative in Embassy Lima, is
    sponsoring a study on the issue. A NAS-contracted physician--Colombia's
    leading toxicologist--completed evaluation and treatment of several
    hundred individuals in Putumayo on June 20. His report is not complete,
    since the evaluations were so recently done. However, the same
    physician completed a similar study in Narino Department in May,
    concerning the same types of health problems as alleged in Putumayo,
    and found the several cases that he reviewed to be inconsistent with
    glyphosate exposure. He also discovered that, in fact, many of the
    cases were reported well before any aerial spraying was conducted in
    the area.
        The timing of spray operations in Putumayo was based on a number of
    factors. Some were operational concerns, such as seasonal weather
    conditions. The timing of operations was also meant to discourage the
    return of an itinerant labor pool (coca leaf pickers or
    ``raspachines'') who generally spend the December holidays at their
    homes in other parts of the country. Importantly, the timing also
    corresponded with efforts to recruit communities to enroll in
    development programs. While the intent of the Colombian Government to
    conduct eradication in southern Colombia was well publicized, coca
    growing communities in the region initially showed little interest in
    participating in development programs, preferring instead to continue
    their illicit activity. Only after those initial spray efforts in
    Putumayo, which demonstrated the Government of Colombia's resolve to
    address the growing problem of coca cultivation in the region, did
    these communities express real interest in abandoning their illegal
    activities in exchange for assistance. Funding was already in place for
    these programs at the time spray operations began and, as each
    community signed up for the program, the process began to tailor
    community-specific assistance packages.
        Many safeguards are built into the selection of spray targets and
    further improvements are constantly being made to the system. And while
    the Department of State does not select the spray locations, (those
    decisions are made by the Government of Colombia), the Department,
    through the Narcotics Affairs Section (NAS) of U.S. Embassy Bogota,
    does consult on the selection and supports the Colombian National
    Police (CNP) efforts.
        According to Colombian law, an Inter-Institutional Technical
    Committee (ITC) of Colombian Government officials determines what areas
    of the country may or may not be sprayed. The CNP generates quarterly
    estimates of the illicit coca crop by flying over coca growing regions
    on at least a quarterly basis to search for new growth and to generate
    an estimate of the illicit coca crop. This information is reviewed for
    accuracy by technical/environmental auditors and is passed on to the
    ITC. The Directorate of Dangerous Drugs (DNE) chairs the ITC, which
    includes representatives from the Anti-Narcotics Police, Ministry of
    the Environment, the National Institute of Health, the National
    Institute of Agriculture, the National Plan for Alternative Development
    (PLANTE), regional environmental agencies, and technical/environmental
    auditors. The CNP notifies the NAS Aviation Office of all decisions as
    to which areas may not be sprayed. Spray operations are then
    coordinated and conducted in approved areas only.
        Generally, reconnaissance flights are conducted over areas
    identified by the CNP in their quarterly coca crop estimates. With the
    use of SATLOC, an aircraft-mounted global positioning system, these
    flights identify the precise geographical coordinates where coca is
    being grown. Areas with large concentrations of coca are then plotted,
    and a computer program sets up precise flight lines, calibrated for the
    width of the spray swath of the spray plane to be used. Once the
    Government of Colombia has approved spraying in a given area, spray
    pilots then fly down those prescribed flight lines and spray the coca
    located there.
        Also, every effort is made to protect legitimate farming operations
    from possible damage from the aerial spray program. The spray aircraft
    apply glyphosate at low altitude against predetermined fields,
    identified by earlier reconnaissance. The planes carry computerized GPS
    monitoring equipment that records their position and the use of the
    spray equipment. This system serves to verify that glyphosate is being
    accurately applied to intended areas. After spraying, combined U.S.-
    Colombian teams also visit randomly chosen fields, security permitting,
    to verify that the treated plants were indeed coca. To further aid in
    the identification of fields not subject to aerial eradication, the
    government of Colombia is currently working to produce a comprehensive
    digitized map indicating exempted areas.
        Furthermore, the Government of Colombia maintains a system to
    compensate farmers for damages caused by the program. Over the past few
    months, we have encouraged the Colombian Government to streamline the
    process and efforts have begun to better educate the public about that
    option.
        Recent field visits encountered evidence that coca growers in
    southern Colombia are using dangerous chemicals, such as paraquat. That
    is a concern to us as it presents a very real risk to the people of the
    region. The traffickers' utter disregard for human health and
    environmental security that pervades the illegal drug industry goes
    beyond the obvious examples of poisoning millions of drug consumers
    with their illegal products. It includes the clear cutting of rain
    forest; the contamination of soil and watersheds with acids and
    chemical salts; and the exposure of their workers and themselves to
    potentially deadly chemicals--all in the name of profit.
        For example, the expansion of coca cultivation, production, and
    trafficking in Peru, Bolivia, and Colombia has resulted in the
    destruction of, at an absolute minimum, 2.4 million hectares of the
    fragile tropical forest in the Andean region over the last 20 years. In
    addition, the very act of refining raw coca leaves into finished
    cocaine creates significant environmental damage because of the
    irresponsible disposal of large amounts of toxic chemicals used in the
    process. A study conducted by the U.S. Drug Enforcement Administration
    (DEA) in 1993 of cocaine production in the Chapare region of Bolivia
    showed that production of one kilo of cocaine base required the use of
    three liters of concentrated sulfuric acid, ten kilos of lime, 60 to 80
    liters of kerosene, 200 grams of potassium permanganate, and one liter
    of concentrated ammonia. Processors discard these poisonous waste
    products indiscriminately, often dumping them into the nearest
    waterway, where the extent of damage is greatly increased. They also
    may dump these chemicals on the ground, where as point sources, they
    may infiltrate through the soil to groundwater. A report from the
    National Agrarian University in Lima, Peru estimated that as much as
    600 million liters of so-called precursor chemicals are used annually
    in South America for cocaine production. This translates to more than
    two metric tons of chemical waste generated for each hectare of coca
    processed to produce cocaine.
        These environmental concerns are another reason why we must
    continue in our efforts to help the governments of the Andean region in
    their ongoing struggle against the narcotics industry.
                             human rights progress
        The Government of Colombia's inability to prevent violence by the
    three illegal armed groups (the FARC, ELN, and the paramilitary AUC) is
    at the root of Colombia's human rights woes. Despite continuing
    institutional weakness, the Pastrana Administration has made a far
    greater effort than previous governments to improve the state's human
    rights performance. The Government of Colombia has instituted greater
    human rights accountability for human rights crimes committed by
    military personnel. It has tackled the challenge of severing covert
    links between security force personnel and paramilitaries. Recently,
    Colombian security forces have scored significant successes against
    paramilitaries, shattering armed columns, arresting key leaders, and
    targeting major AUC financial backers for investigation. Indeed, these
    Colombian successes may have provoked recent AUC internal discord
    between those factions advocating retaliation against the Government of
    Colombia, and those which prefer to continue the AUC's general practice
    of not targeting Colombian troops, police, or officials. AUC leader
    Carlos Castano resigned from overall military command of the AUC to
    become the co-leader of its political arm, possibly hoping to distance
    himself from continuing atrocities by AUC elements.
        In spite of some significant recent successes against the
    paramilitaries, continued engagement with the Government of Colombia on
    paramilitary impunity and other human rights issues is necessary.
    Pastrana's appointment of Vice President Gustavo Bell to serve
    concurrently as Defense Minister received plaudits from many, including
    the U.S. due to Bell's vice presidential experience coordinating
    Colombian human rights policy. Still, given his relative inexperience
    with military matters, Bell's overall effectiveness remains to be seen.
               inl's proposed andean counterdrug initiative (aci)
        The Andean region represents a significant challenge and
    opportunity for U.S. foreign policy in the next few years. Important
    U.S. national interests are at stake. Democracy is under pressure in
    all of the countries of the Andes. Economic development is slow and
    progress towards liberalization is inconsistent. The Andes produces
    virtually all of the world's cocaine, and an increasing amount of
    heroin; thus representing a direct threat to our public health and
    national security. All of these problems are inter-related. Sluggish
    economies produce political unrest that threatens democracy and
    provides ready manpower for narcotics traffickers and illegal armed
    groups. Weak democratic institutions, corruption and political
    instability discourage investment, contribute to slow economic growth
    and provide fertile ground for drug traffickers and other outlaw groups
    to flourish. The drug trade has a corrupting influence that undermines
    democratic institutions, fuels illegal armed groups and distorts the
    economy, discouraging legitimate investment. None of the region's
    problems can be addressed in isolation.
        Of the $882 million Andean Regional Initiative (ARI) request, $731
    million is for INL's Andean Counterdrug Initiative (ACI). Our goals in
    the Andes are to:
      --Promote and support democracy and democratic institutions
      --Foster sustainable economic development and trade liberalization
      --Significantly reduce the supply of illegal drugs to the U.S. at the
            source
        Just as Plan Colombia represented an improved approach by
    considering drug trafficking as part of Colombia's larger crisis, the
    Andean Counterdrug Initiative benefits from its appreciation of the
    illegal drug industry as part of something bigger. Drug trafficking is
    a problem that does not respect national borders and that both feeds
    and feeds upon the other social and economic difficulties with which
    the Andean region is struggling.
        No nation in the region is free of trafficking or the attendant
    ills of other crime forms and corruption. To combat these ills, we
    propose a regional versus Colombia-centric policy and a comprehensive
    and integrated package that brings together democracy and development
    as well as drug initiatives.
        For this reason, we plan to allocate almost one-half of the
    requested $731 million for this initiative to countries other than
    Colombia. In so doing, we intend to bolster the successful efforts and
    tremendous progress we have made in counternarcotics in countries such
    as Peru and Bolivia, while preventing the further expansion of the drug
    trafficking problem into other countries of the region, such as Brazil,
    Panama, Venezuela, and Ecuador.
        In addition to ensuring regional balance, the ACI also spans all
    three of our stated goals--counternarcotics, economic development, and
    support for democratic institutions. The full ARI budget of $882
    million breaks into an approximately 50/50 split between
    counternarcotics and alternative development/institution-building
    programs. Its ACI component ($731 million) breaks into a 60/40
    (counternarcotics vs. development/democracy) split. $293 million of the
    ACI budget will be devoted to programs focused on alternative
    development and support for democratic institutions.
        All of Colombia's neighbors are worried about the possibility of
    ``spillover,'' specifically that the pressure applied by the Government
    of Colombia (GOC) in southern Colombia will result in the flight of
    refugees, guerrillas, paramilitaries, and/or narcotics traffickers
    across porous borders into other countries. We will work with the
    countries of the region to strengthen their capacity to cope with
    potential outflows. In Peru and Bolivia, we will work with those
    governments to continue their reductions in coca through a combination
    of eradication, interdiction, and alternative development. In all
    countries, we will work to strengthen democracy and local institutions
    in order to attack trafficking networks which move precursors, money,
    fraudulent documents, and people.
        Since we believe Plan Colombia will result in major disruption of
    the cocaine industry, ACI's regional approach becomes even more of an
    imperative. Traffickers will undoubtedly try to relocate as their
    operations in southern Colombia are disrupted. We believe they will
    first try to migrate to other areas inside Colombia, then try to return
    to traditional growing areas in Peru and Bolivia. But if those options
    are forestalled, they may well seek to move more cultivation,
    processing and/or trafficking routes into other countries such as
    Ecuador, Brazil, or Venezuela.
        The nations of the region are already heavily committed in all
    three of the major areas of concern: democratization, economic
    development, and counternarcotics. All devote significant percentages
    of their annual budgets to these areas and are willing to work with us
    in the design and integration of successful programs. Exact figures are
    impossible to come by, but the nations of the region in total are
    committing billions of dollars to economic development, democratization
    and counternarcotics efforts. For example, Ecuador has established a
    Northern Border Initiative to promote better security and development
    in the region bordering Colombia. Brazil has launched Operation Cobra,
    a law enforcement effort concentrated in the Dog's Head region
    bordering Colombia. Bolivia has been attacking drug production through
    its Dignity Plan and is developing a comprehensive poverty reduction
    strategy. Colombia continues to pursue its commitments under Plan
    Colombia. Panama has taken concrete steps to improve security and
    development in the Darien region. The new Peruvian Government has made
    reform of democratic institutions a national priority, and continues to
    pursue aggressively the counternarcotics missions. In Venezuela, local
    authorities have cooperated admirably on drug interdiction, exemplified
    by last year's record multi-ton seizure during Operation Orinoco.
        Programs to provide humanitarian relief for displaced persons, to
    help small farmers and low-level coca workers find legitimate
    alternatives to the drug trade, and to strengthen governance, the rule
    of law, and human rights will also be incorporated into the ACI.
                                  atpa renewal
        Renewal of the Andean Trade Preferences Act (ATPA) is perhaps the
    single largest short-term contribution to economic growth and
    prosperity in the Andes. By renewing the Act and expanding its
    benefits, we can continue to provide economic alternatives to narcotics
    trafficking in Bolivia, Peru, Ecuador, and Colombia. The Act has
    already succeeded in doing so without adverse economic impact for the
    United States. The original justification for the legislation still
    stands, but it expires at the end of the year, and should clearly be
    renewed at the earliest possible date. ATPA renewal would serve to
    strengthen the credibility of democratically-elected governments in the
    region and provide them with a clear demonstration of the benefits of
    continuing to cooperate on counternarcotics. It would also halt a
    potentially crippling exodus of U.S. industries that relocated to the
    region when ATPA was established.
        I appreciate the opportunity you have given me to speak to you
    today, and I look forward to responding to questions which Members of
    the Committee may have.

        Senator Leahy. We will go specifically into that. I also
    want to ask you about the spraying, about the Colombian system
    for compensating people whose crops have been destroyed,
    legitimate ones. We will go into that.
        But first, if we could hear from Mr. Deal, and then we will
    open up to questions. Mr. Deal.
    STATEMENT OF MICHAEL DEAL, ACTING SENIOR DEPUTY
                ASSISTANT ADMINISTRATOR, BUREAU FOR LATIN
                AMERICA AND THE CARIBBEAN, U.S. AGENCY FOR
                INTERNATIONAL DEVELOPMENT
        Mr. Deal. Thank you, Mr. Chairman, members of the
    subcommittee. I am pleased to be here to briefly summarize the
    U.S. Agency for International Development's role in the Andean
    Regional Initiative and progress to date in implementing Plan
    Colombia.
        USAID's program directly supports a comprehensive
    integrated approach to our Andean counterdrug strategy by
    balancing the interdiction and eradication efforts of other
    agencies with social and economic development assistance. Our
    experience demonstrates that no single facet of our counterdrug
    program can be successful without the other two being
    effectively applied.
        The Andean Regional Initiative, like our support for Plan
    Colombia, maintains a belief that the problem of drugs and
    violence will not be solved in any sustained way unless the
    fundamental causes of these problems are also addressed.
    Democracy institutions must become stronger, more responsive,
    more inclusive, and more transparent. The presence of
    government in rural areas must increase and provide better
    services to the rural poor and give them a stake in the future
    and improve the quality of life.
        The justice system must be more accessible and efficient,
    must reduce impunity, and the human rights environment must
    improve. Unless the problem of widespread corruption is solved
    and legal employment opportunities are created to absorb the
    high number of unemployed, these fundamental causes and their
    effects on the region and on America's national interests will
    be with us for a long time to come.
        But addressing these tough issues is going to take time.
    They will require a sustained commitment and interest on the
    part of the U.S. Government.
        The Andean Regional Initiative proposes that USAID manage
    $390 million in fiscal year 2002 funds. This initiative expands
    many of our existing programs in response to the changing
    circumstances in the region. USAID assistance will be directed
    to three main areas: first, strengthening democracy; second,
    economic growth through trade enhancement and poverty
    reduction; and third, alternative development.
        In order to strengthen democracy in the region, we propose
    to commit $59 million in fiscal year 2002. USAID will assist in
    court administration and training of judges, institutionalizing
    the public defender system, and working with NGO's and other
    interested groups to provide greater oversight and
    participation in judicial reform.
        We are helping human rights groups increase their capacity
    to document abuses and monitor individual cases. In Colombia,
    our activities are designed to help prevent massacres with the
    development of an early warning system. We also have programs
    directly aimed at the protection of human rights workers and
    union leaders. A $2.5 million program for ex-combatant children
    strengthens Colombian initiatives to clarify the legal status
    of these children, extend them appropriate treatment, and
    provide support for their re-integration into society.
        We are and will continue to strengthen local governments by
    training mayors and council members. We are working to
    strengthen the ability to expose corrupt practices and
    investigate and prosecute corrupt officials and, very
    importantly, make citizens realize they have the right to
    demand accountability from their governments.
        The second major area of emphasis for USAID assistance will
    be economic growth, trade enhancement, and poverty reduction,
    for which we propose $123 million. All of the economies in the
    region have struggled over the last few years and continue to
    be vulnerable to setbacks. USAID assistance will directly
    support the countries' poverty reduction strategies, including
    macroeconomic policy and banking reform, employment generation,
    support for microenterprise, and trade capacity development.
        We will also continue health programs in Peru and Bolivia
    and will pay specific attention to education, including an
    Andean regional center for excellence for teacher training, as
    announced by the President in Quebec at the summit of the
    Americas. Protection of their natural resources and helping
    rehabilitate environmental damage from coca cultivation will
    also receive attention.
        Our third and largest area of attention is expanding our
    work in alternative development, for which we are proposing
    $207 million. After a decade of work in Bolivia and Peru, we
    know that alternative development works. In Colombia we are
    seeing that the risk of illegal coca production is credible, as
    evidenced by the fact that over 24,000 farmers have lined up to
    sign coca crop eradication agreements in just the last 3
    months.
        In Peru and Bolivia, we are concentrating on sustaining the
    dramatic advances made in these countries in coca eradication.
    We want to help these governments and these farmers withstand
    the temptation to slide back into the shadow of narcotics
    production.
        In Ecuador, USAID will expand two key initiatives along the
    northern border with Colombia.

                               prepared statement

        Let me conclude by saying that the Andean Regional
    Initiative should be viewed as the national program in each of
    the affected countries, responding to their priorities and
    problems. They are the ones that are going to have to make this
    work. Our role is one of facilitating the process and we will
    be working along with them over the next several years in this
    effort.
        Thank you for giving me this opportunity to outline our
    programs. I would be pleased to respond to any of your
    questions.
        [The statement follows:]
                       Prepared Statement of Michael Deal
        Mr. Chairman, Members of the Subcommittee, I am pleased to be here
    to speak about the U.S. Agency for International Development's (USAID)
    role in the Administration's proposed Andean Regional Initiative and
    progress to date in implementing Plan Colombia.
        USAID's program directly supports a comprehensive, integrated
    approach to our Andean counter drug strategy by balancing the
    interdiction and eradication efforts of other agencies with social and
    economic development assistance. Our experience demonstrates that no
    single facet of our counter drug program can be successful without the
    other two also being effectively applied.
        The Andean Region faces a wide range of challenges. There are
    growing doubts among significant numbers of the region's populations
    whether democratic government can deliver essential services and a
    better life. Sluggish economies produce political unrest that threatens
    democracy and, in turn, weak democratic institutions; corruption and
    political instability discourages investment, and contributes to slow
    economic growth. This vicious cycle provides fertile ground for drug
    traffickers and other illegal groups to flourish, and forces large
    segments of the population to rely on crime, insurgency and the drug
    economy to survive.
        The Andean Regional Initiative, like our support for Plan Colombia,
    maintains a belief that the problems of drugs and violence in the
    Andean region will not be solved in any sustained way unless the
    fundamental causes of these problems are also addressed. Democratic
    institutions in the region must become stronger, more responsive, more
    inclusive and more transparent. The presence of governments (both
    national and local) in rural areas must increase and provide better
    services to the rural poor, and give them a stake in the future, and
    improve the quality of life. The justice system must be more accessible
    and efficient, must reduce impunity, and the human rights environment
    must improve. Unless the problem of widespread corruption is solved,
    and legal employment opportunities are created to absorb the high
    number of unemployed, these fundamental causes and their effects on the
    region and on America's national interests will be with us for a long
    time to come.
        Helping address these tough social and economic issues is going to
    take time. They will require a sustained commitment and interest on the
    part of the U.S. Government. The Andean Regional Initiative, which
    builds upon the fiscal year 2000 supplemental funding for Plan
    Colombia, proposes that USAID manage $390 million in fiscal year 2002
    funds. This initiative expands many of our existing programs in
    response to the changing circumstances in the region. USAID assistance
    will be directed in three main areas: first, strengthening democracy;
    second, economic growth through trade enhancement and poverty
    reduction; and third, alternative development.
                            strengthening democracy
        In order to strengthen democracy in the region, we propose to
    commit $59.3 million in fiscal year 2002. This assistance will help
    address the problems of fledgling institutions, political instability
    and corruption which lessen popular support for democracy at a time
    when most economies are under-performing.
        USAID will assist in improving the administration of justice by
    helping to make justice systems work, make them more modern and
    efficient, more transparent, and more accessible. An independent and
    vigorous judicial system is vital to the observance of human rights,
    the defeat of narcotics trafficking, and the decrease of white collar
    and street crime. Working with the U.S. Department of Justice in
    Colombia, for example, we are helping move from an inquisitorial to a
    more open, accusatorial judicial process. We are strengthening court
    administration and training of judges, institutionalizing the public
    defender system, and working with NGOs and other interested groups to
    provide greater oversight and participation in judicial reform. Part of
    that program provides access to justice for the poor through one stop
    legal offices called ``Casas de Justicia'' (Houses of Justice), in the
    poorer neighborhoods of major cities. We are doing this now in Colombia
    and Peru with very good results. In Colombia, 18 ``Casas de Justicia''
    have been established thus far, each hearing 150 cases per day and
    using alternative dispute resolution techniques to resolve problems.
        We also have a program that is designed to help improve the
    observance of human rights which will continue. We are strengthening
    human rights institutions and groups, increasing their capacity to
    document human rights abuses and monitor individual cases. In Colombia,
    our activities are designed to help prevent killings with the
    development of an early warning system that works with the human rights
    ombudsman and channels information up the line to law enforcement and
    the military. We also have programs directly aimed at the protection of
    human rights workers and union leaders. In Peru, we will continue to
    promote increased observance of human rights through informal
    mechanisms for the resolution of disputes, with support to legal
    clinics and conciliation centers, which provided assistance for 145,000
    cases in 2000.
        We are and will continue to strengthen local governments in rural
    areas of Peru, Ecuador, Bolivia, Colombia, and Panama where the lack of
    basic institutional and social services has marginalized rural
    populations. Where the state is present, it is in the form of an overly
    centralized, unresponsive bureaucracy that does not necessarily work or
    understand the local interests of a community. Thus, we are training
    mayors and council members in identifying and monitoring projects,
    setting priorities, and handling financial resources in a more
    accountable, transparent way. It is a very important part of bringing
    democracy to rural areas. And it is an indispensable part of any
    program where local empowerment and ownership of national goals--such
    as the war against drug cultivation--will be required to assure the
    continued enforcement of agreed upon eradication agreements.
        With USAID assistance and through policy dialogue, the
    decentralization process in Bolivia helps targeted municipal
    governments to develop and carry out action plans in a participatory
    fashion, engaging civil society at the local and regional level in the
    process. As a result, citizen participation in government has
    increased, and municipalities have organized themselves into a
    nationwide Federation, with departmental associations and an
    association of women council members.
        Corruption is another very serious problem. The ongoing corruption
    scandal from the Fujimori era in Peru has shaken public confidence in
    the government institutions of the country. We will work closely with
    the incoming administration to strengthen democratic institutions and
    promote good government. Similar problems are being encountered
    throughout the region, where we are working to strengthen the ability
    to expose corrupt practices and investigate and prosecute corrupt
    officials and very importantly, make citizens realize they have the
    right to demand accountability from their governments.
                        social and economic development
        The second major area of emphasis for USAID assistance will be
    economic growth, trade enhancement and poverty reduction, for which we
    propose $123 million in fiscal year 2002 funding. All of the economies
    in the region have struggled over the last few years, and continue to
    be vulnerable to setbacks. Each of the Andean countries has a large
    divide between a small wealthy elite and a large impoverished class,
    frequently indigenous in origin. Some lack the mix of policies
    necessary to promote growth. Others have constructive policies, but
    lack the popular support necessary to sustain them over the long run.
        USAID assistance will directly support the poverty reduction
    strategies of Ecuador and Bolivia, and will also address macroeconomic
    policy and banking reform in Ecuador. After an intense economic crisis
    in 1999, recent increases in oil prices have helped Ecuador's economy
    and contributed to a successful dollarization that has restored
    confidence in the economy. However, important and necessary structural
    reforms are still pending, particularly in the banking sector, for a
    sustainable recovery. In both countries, our assistance will promote
    employment generation and access to private lending capital through
    support to microenterprise.
        Support for trade capacity development will be strengthened to help
    these countries develop WTO consistent trade regimes. The
    Administration has endorsed an extension of the Andean Trade Preference
    Act and a desire to move aggressively toward creation of a Free Trade
    Area for the Americas by January 2005. USAID Administrator Natsios has
    consulted with Trade Representative Zoellick as to how we can advance
    these trade liberalization measures. Early in June, my staff presented
    a range of options for promoting free trade to our Andean country
    Mission Directors. We look forward to helping our cooperating
    governments analyze their existing trade regimes and prepare themselves
    for discussion of competition policy and other issues. We will also
    assist cooperating governments in bringing civil society into the
    process to ensure, not only that there are economic and social
    development benefits from globalization, but that there is also a
    broader understanding of those benefits.
        We will also continue health programs in Peru and Bolivia, and we
    will pay specific attention to education, including an Andean regional
    Center for Excellence for teacher training as announced by the
    President in Quebec at the Summit of the Americas.
        Protection of their natural resources, preserving their unique
    ecological diversity, and helping rehabilitate environmental damage
    from the use of harsh and persistent chemicals for producing illicit
    drugs will also receive attention. Cultivation of illicit crops has a
    devastating effect on the environment, both in the high mountains where
    poppy is grown and in the lower altitudes where coca is produced. In
    both cases, delicate forests are cleared and their fragile soils
    degraded by the illegal crop. Even after the coca or poppy is
    eliminated, the land remains exposed and environmentally sound
    production systems must be adopted for sustainable conversion to
    pasture or agriculture. As part of our commitment to the Amazon, we
    have encouraged the Government of Colombia's decision to support sound
    livestock production systems within alternative development areas. Our
    Parks in Peril program extends from Mexico through Colombia, Ecuador,
    Peru, and Bolivia, providing practical assistance in protected area
    management. Also, we continue to manage local funds created under the
    America's Fund and the Tropical Forestry Conservation Act that
    underwrite the programs of local environmental NGOs.
                            alternative development
        Our third and largest area of attention is expanding our work in
    alternative development for which we are proposing $207.5 million for
    fiscal year 2002. We know that alternative development works. After a
    decade of work in Bolivia and in Peru, we have seen conclusively that a
    three-pronged strategy of eradication, interdiction, and alternative
    development has dramatically reduced coca cultivation in both of those
    countries. There is nothing as economically profitable as coca. The
    incentive to get out of coca on a voluntary basis is not economic.
    Rather, it is the threat of involuntary eradication or interdiction
    because drug production is illegal. There has to be a credible threat
    and a risk of continuing to stay in coca in order for our alternative
    development approach to work.
        In Colombia, we are seeing that the risk of illegal coca production
    is credible, as evidenced by the fact that over 24,000 farmers have
    lined up to sign coca crop eradication agreements in just the last
    three months. But this is not the only ingredient. Once eradicated,
    production has to cease. It cannot be allowed to grow back and farmers
    cannot move down the road to replant the same crop. To make elimination
    sustainable, farmers have to have credible alternatives and local
    governments and organizations have to apply pressure and provide
    incentives for the entire community to stay out of illicit production.
        Our alternative development approach is basically the same in all
    of the Andean countries. Groups of small farmers, communities, or
    farmer associations sign agreements with the government, agreeing to
    voluntarily reduce their coca crop in exchange for a package of
    benefits both at the farmer level and at the community level. At the
    farmer level, the benefits help get them involved in legal income-
    producing alternatives, and at the community level, the Government
    agrees to provide basic infrastructure such as schools, health clinics,
    public water systems, and rural roads.
        Last year USAID set a target in Colombia for voluntary eradication
    of 30,000 hectares of coca and 3,000 hectares of opium poppy within
    five years. We have started in the Department of Putumayo, which
    presents a particularly challenging situation. Compared to the coca
    areas in Peru and Bolivia, the climate is harsher, the soils are
    poorer, the access to markets is more difficult, the infrastructure is
    not as good, and of course the security situation presents an
    additional complication for legitimate agricultural activity. Despite
    these challenges, the turnout of farmers who are voluntarily agreeing
    to sign these pacts and eradicate coca has been quite promising. Our
    pre-Plan Colombia opium poppy eradication program has already
    eliminated 675 hectares of poppy and produced 600 hectares of
    productive, licit crops benefiting 770 families in the highlands of
    Tolima, Huila and Cauca.
        In Peru, where coca production has dropped from a high of 129,000
    hectares to just over 38,000, we will concentrate our efforts in the
    Huallaga valley. Here we intend to put into practice our beliefs that
    local ownership of the coca eradication goals and local empowerment to
    make decisions regarding the economic and social life of the region
    will create the environment to deter a minority from going into, or
    back into, coca production. In coca producing valleys, more than 27,000
    hectares of crops such as coffee, cacao, palm heart and pineapple have
    generated around 10,000 full time jobs. Niche industries and global
    link-ups with international groups have been promoted in the chocolate
    and specialty coffee areas.
        In Bolivia, coca cultivation in the once notorious region of the
    Chapare has all but been eliminated. Where once over 44,000 hectares of
    coca grew, there are now over 114,000 hectares of licit crops and
    pastureland. Last year alone the value of licit crops in this region
    exceeded $49 million. Our agricultural programs have enabled Bolivian
    products such as bananas, canned palm hearts and dried fruit to enter
    the highest quality markets, such as Germany, Switzerland and Chile.
    Last year, Chapare exports represented $5.7 million, an increase of 68
    percent over the previous year. We intend to consolidate these
    successes by providing agricultural services used for coca growers to
    other farmers who have not yet benefited from the program but who are
    susceptible to offers from drug networks.
        In Ecuador, USAID will continue two key border initiatives begun
    with Plan Colombia supplemental funding and expand the northern
    initiative along the Colombian border. Support will be provided to
    community organizations working on land-titling, social and
    infrastructure services, income earning activities, integrated farming
    activities for indigenous populations, irrigation, potable water and
    sanitation projects. Recognizing that support for local initiatives and
    institutions can help extend the presence of the state and its
    accountability to citizens, we will introduce activities to strengthen
    the capacity of local governments both on the southern border, as well
    as throughout the country.
        Since beginning work in January, Plan Colombia has already began
    implementation of 23 projects valued at $5.0 million and benefiting
    117,000 people. They include potable water systems, sewers, bridges,
    roads, land titling, income generation, and human rights. We have
    special programs with indigenous communities in Carchi province and an
    innovative approach to assisting the 24,000 Afro-Ecuadorans who live in
    northwestern Esmereldas province.
    Status of Plan Colombia Implementation
        Mr. Chairman and Members of the Subcommittee: I would also like to
    take a moment to review, specifically, some of our progress in
    Colombia. While the task is complex, and even dangerous, and requires
    extraordinary coordination among many actors, we are pleased with our
    start-up activities and the progress we have made to date.
        Because of our close collaboration with international organizations
    and NGOs prior to receiving Plan Colombia funds, we were able to sign
    $25 million of our displaced person monies almost immediately upon
    receiving the funds. By renegotiating certain contracts funded prior to
    Plan Colombia, we were able to ``jump start'' the important southern
    Colombia elements of the program. Because of the size of other aspects
    of the program and the interest of the U.S. private sector, it took
    several months to compete and sign our initial contracts. All USAID
    commitments to contractors and subcontractors for reintegrating and
    resettling internally displaced persons have been made, and to date,
    all contractors have mobilized in the field. These efforts have
    resulted in tangible successes on the ground
        I have already mentioned our successes in opium poppy eradication.
    In the Plan Colombia phase of our program, I can report that, as of
    June 11th of this year, 29 coca elimination pacts have been signed.
    Those pacts are pledges to the Colombian Government by small farm
    families to eradicate coca in exchange for short and long term
    assistance in substitute production, and these 29 pacts represent
    promises to eradicate over 29,000 hectares of illicit coca crops by the
    end of next year.
        Supporting the program has been our local governance strengthening
    effort in southern Colombia. USAID and the 13 municipal mayors of
    Putumayo are building schools and laying pipes for potable water. These
    social infrastructure activities engage scores of small farmers in
    their villages in Southern Colombia, providing many of them with the
    first tangible evidence of government concern regarding their economic
    and social development. The Government of Colombia is also investing in
    Putumayo, paving roads, stringing electric wires, and refurbishing
    schools. The Colombian Government has delivered food assistance since
    December to 9,800 families in Putumayo.
        In democracy strengthening, 6 of 12 planned pilot courtrooms have
    been established to demonstrate the efficiency and fairness of oral
    trials in helping to move Colombia from an inquisitorial to an
    accusatorial judicial system. USAID has supported institutional
    development of the national Judicial School, which has trained 3,400
    judges in oral advocacy, legal evidence gathering, and courtroom
    management procedures. USAID has also worked with NGOs and other civil
    society actors to analyze remaining needed reforms, increase coalition
    building and support full implementation of the modernization process
    in the justice sector.
        In our highly successful effort to promote justice through
    alternative dispute resolution, 18 of a targeted 40 casas de justicia
    or houses of justice have been established. These ``casas'' are
    neighborhood judicial centers in underserved communities which bring
    together a variety of services in one location, giving residents ``one
    stop'' access to legal services.
        Protection of human rights workers remains a major concern. In
    addition to having selected a long term local contractor to help design
    and implement a management information system for the Ministry of the
    Interior to monitor abuses and progress, to date 197 individuals have
    received some sort of protection from the program. We are pleased to
    say that 38 individuals received needed relocation assistance within
    Colombia and two were relocated internationally under the program.
        We have also made grants to seven human rights NGOs in Colombia
    totaling over $575,000 to help improve delivery of human rights
    services.
        Concerning our efforts to respond to the needs of displaced
    persons, we can report that over 176,000 individuals have received or
    are receiving direct USAID assistance in the areas of housing,
    employment generation, health-care or education. This figure exceeds by
    about 70 percent our target of 100,000 individual recipients by this
    time--which was considered to be very optimistic during our planning of
    this vitally important activity.
        USAID also supports a $2.5 million program for Ex-Combatant
    Children which strengthens Colombian initiatives in clarifying the
    legal status of these children, extend them appropriate treatment and
    provides concrete and durable reintegration solutions. In preparation
    for a large-scale release of child soldiers by an illegal armed group,
    USAID is preparing a network of decentralized organizations to respond
    to such a release, as well as to assist individual cases where children
    must be rehabilitated after exposure to combat conditions. The Program
    aims to benefit directly 800 ex-combatant children through January
    2003.
        It is important to underscore the enormous commitment that the
    Colombians have shown in the various efforts we are supporting. Our
    efforts are complemented by $62 million that the Colombian Government
    has contributed this year through the sale of government ``peace
    bonds'' and an additional ``peace tax''. Major roads within Putamayo
    and connecting southern Colombia to national and international markets
    are already underway, as are smaller social and infrastructure
    projects, such as the Casas de Justicia, health clinics and schools.
    There have been problems at times given the need for coordination with
    the large number of agencies involved, and the Government of Colombia's
    complex procurement procedures, but these were not unexpected and have
    not been serious obstacles. When issues have surfaced, we have worked
    with the Colombians to improve the process.
        I should note the special dedication of the people such as the
    Ombudsman's office representatives in the field, who face serious risks
    to their own personal safety as well. Their efforts are also supported
    by other members of the international community. European donors have
    pledged over $300 million to assist Colombia's effort, and the Japanese
    have offered $175 million. The World Bank has offered $1.4 billion and
    the Interamerican Development Bank has offered $1.7 billion in loans.
        Let me conclude by saying that just as in Colombia, the Andean
    Regional Initiative should be viewed as the national program in each of
    the affected countries, responding to their priorities and problems.
    They are the ones that are going to have to make this work. Our role is
    one of facilitating the process, and we will be working along with them
    over the next several years in this effort.

        Senator Leahy. Thank you very much.
        Let me begin with a few questions. I am trying to make sure
    we have time for everybody. I should also note, normal
    procedure, the record will stay open just in case other
    Senators have questions for the record. Also, after you see the
    transcript of your own responses if you realize there are
    things you left out or want to add to, you can certainly feel
    free to do it.
        Secretary Beers, you have had the assignment of looking
    into the April 20 shootdown of the missionaries' plane in Peru.
    That was the one, you know of course, but others will recall,
    where a mother and a young child, wife of a missionary, were
    killed. Now, the Peruvian officials said in their comments that
    procedures were followed, as they said, ``to the letter'' by
    the pilot.
        If the procedures were followed to the letter, certainly as
    a layman I look at that and wonder what in heaven's name those
    procedures are. Were the procedures adequate or did they not
    follow adequate procedures? Is it true that the Peruvian pilot
    strafed the survivors when they were clinging to the burning
    wreckage? Obviously they are not going to go anywhere. The
    plane has crashed, it is burning, it is in the Amazon River.
    Are the reports true that the Peruvians then came down and
    strafed the people on the ground?
        Mr. Beers. Sir, with respect to the second question, no,
    that is not true. There was a mistaken report that came out
    that there was strafing by the Peruvians after the plane was in
    the water burning. That did not happen.
        With respect to the larger issue which you ask regarding
    this very, very horrible tragedy, I am currently under an
    injunction not to disclose the results of our investigation
    pending the completion of the full review which is currently
    under way within the administration.
        Senator Leahy. When do you think that will be completed?
        Mr. Beers. In talking with the individual who is managing
    the remainder of the review, his intention is to complete it by
    the end, by the latter half of this month and have it go to
    senior levels of the U.S. government for final decision as to
    whether or not the programs with appropriate safeguards in both
    Peru and Colombia ought to be re-initiated or not.
        The report on what happened in this particular incident is
    a central element of that particular study and that is why I
    have been asked to remain silent.
        Senator Leahy. You understand this committee will request
    the report when it is completed?
        Mr. Beers. Sir, we will brief you as quickly as we possibly
    can. I have made that pledge to your staff and other committee
    staffs in other committees. We intend to fully brief that.
        Senator Leahy. I understand the injunction you are under
    and I respect it, but just so everybody understands, once it is
    completed we will be asking the questions.
        Last year we appropriated $19.5 million for support of the
    Colombia air interdiction program. Could I ask you this. Are
    the procedures in Colombia different from the aerial
    interdiction procedures in Peru?
        Mr. Beers. That is another element of this report, which I
    myself did not do. I can say as a general proposition they are
    similar, but they are not the same. That is the heart of the
    larger investigation, which is to look at both Colombian
    procedures and Peruvian procedures to ensure whether or not
    they are adequate and whether the risk of proceeding with them
    is sufficiently small that this government and those
    governments are ready to proceed.
        Senator Leahy. Do you know how much of that $19.5 million
    has been spent?
        Mr. Beers. No, sir, I do not have that figure, but I can
    get that for the record.
        [The information follows:]

        In less than one year, the Department has ``committed''
    approximately 75 percent of the $1.018 billion two-year Plan Colombia
    Supplemental. By ``committed,'' we mean that we have contracted for
    equipment or services, signed reimbursable agreements with other
    agencies or bureaus within the Department, and contributed to the U.N.
    Taken together, these ``commitments'' total more than $760M of the
    Supplemental.
        $12,494,949 of the $19.5M appropriated for support of the Colombia
    Air Interdiction program has been committed. This includes purchase
    orders and contracts for FLIRs for Schweizers and C-26's; maintenance
    and spares for aircraft; upgrades of 13 Colombian Air Force
    helicopters; and other air maintenance support and spares.
        In addition:
      --$59,700,000 of the $81M appropriated for ``Support for Alternative
            and Economic Development in Colombia,'' has been committed.
      --INL transferred all of the $30M appropriated for ``Voluntary
            Eradication Programs'' to USAID.
      --INL transferred $19.5M of the $22.5M appropriated for ``Assistance
            for Internally Displaced Persons'' to USAID. INL provided the
            remaining $3M to the Bureau of Population, Refugees and
            Migration.
      --$111,583,882 of the $122M appropriated for ``Support for Human
            Rights and Judicial Reform in Colombia'' has been committed.
      --$108,548,715 of the $180M appropriated for ``Regional Programs''
            has been committed.

                                                   AS OF JUNE 15, 2001
    ----------------------------------------------------------------------------------------------------------------
                                                                       Appropriated      Committed      Uncommitted
    ----------------------------------------------------------------------------------------------------------------
    Push into Southern Colombia.....................................    $390,500,000    $343,539,363     $46,960,637
    Interdiction Efforts............................................     129,400,000      64,742,698      64,657,302
    Colombian National Police.......................................     115,600,000      74,290,061      41,309,939
    Alternative & Economic Development..............................      81,000,000      59,700,000      21,300,000
    Human Rights & Judicial Reform..................................     122,000,000     111,583,882      10,416,118
    Regional........................................................     180,000,000     108,548,715      71,451,285
                                                                     -----------------------------------------------
          Total.....................................................   1,018,500,000     762,404,719     256,095,281
                                                                     ===============================================
    Percent.........................................................  ..............            74.9  ..............
    ----------------------------------------------------------------------------------------------------------------

        Senator Leahy. Thank you.
        Last year we appropriated $390 million for the push into
    southern Colombia. $208 million of that was for Blackhawk
    helicopters. How much of that $390 million has been disbursed?
        Mr. Beers. In terms of disbursal, I will have to get you
    the precise amount of that figure, sir. The money has been
    obligated, but not all of it has been disbursed.
        [The information follows:]

        $343,539,363 of the $390.5M appropriated for the ``Push into
    Southern Colombia'' has been committed. The entire $208M appropriated
    for UH-60 Black Hawks has been committed and put into contracts by DOD
    for the purchase of the Black Hawks. All money has been committed, but
    not all has been disbursed.

        Senator Leahy. We appropriated $129 million for support for
    interdiction efforts, with $68 million to upgrade U.S. Customs
    Service P-3 aircraft radar systems. Do you know how much of
    that $129 million has been disbursed?
        Mr. Beers. No, I will have to get you that figure also,
    sir.
        [The information follows:]

         $64,742,698 of the $129.4M appropriated for ``Interdiction
    Efforts'' has been committed.
        As of March 31, $17.3M of the $68M to upgrade U.S. Customs Service
    P-3 aircraft radar systems has been committed.

        Senator Leahy. We appropriated $115.6 million for support
    for the Colombian National Police, of which $20.6 million is to
    upgrade 12 UH-1H helicopters. Do you know how much of that
    $115.6 million has been disbursed?
        Mr. Beers. I will have to submit that for the record also,
    sir.
        [The information follows:]

        $74,290,061 of the $115.6M appropriated for ``Support for Colombian
    National Police'' has been committed.
        The entire $26M appropriated for CNP Black Hawk Procurement and
    Support has been committed and put into contracts by DOD for the
    purchase of the Black Hawks. All money has been committed, but not all
    has been disbursed.
        $17,339,140 of the $20.6M appropriated for ``Upgrade to Huey II
    Configuration'' for the CNP has been committed and disbursed.

        Senator Leahy. Of the entire $1.3 billion that we
    appropriated last year, only $81 million of that was for
    alternative and economic development. Of that $81 million, $30
    million was for voluntary eradication programs to assist coca
    farmers who voluntarily destroy their coca plants. Do you know
    how many coca farmers have volunteered for this program?
        Mr. Beers. It is my understanding at this point in time
    29,000 farm families have volunteered for this program.
        Senator Leahy. How many families have actually benefited
    from it?
        Mr. Beers. Mike? I do not know the answer to that.
        Mr. Deal. To this date, of those families that have signed
    the pacts, approximately 1800 families have begun to receive
    the assistance, including tools and seeds and farm animals.
    Another 10,000 families in Putamayo have received emergency
    food assistance.
        Senator Leahy. Well, Mr. Deal, how much of the $30 million
    has been spent?
        Mr. Deal. I will have to provide that for the record as
    well. Our data is good as of March 31. We are trying to get
    June 30 data for you.
        [The information follows:]

       PLAN COLOMBIA SUPPLEMENTAL APPROPRIATION, ALTERNATIVE DEVELOPMENT,
                  CUMULATIVE EXPENDITURES THROUGH JUNE 30, 2001
    ------------------------------------------------------------------------
                                                 Obligated       Expended
    ------------------------------------------------------------------------
    Licit Economic Production...............     $40,000,000  ..............
    Environmental Management................       2,500,000  ..............
                                             -------------------------------
          Total.............................      42,500,000        $249,808
    ------------------------------------------------------------------------

        Senator Leahy. Only a small amount actually seems to be
    directly to help the people, the farmers and others. $22.5
    million was appropriated for assistance to internally displaced
    persons. How many people are internally displaced?
        Mr. Deal. Our assistance has gone to help approximately
    176,000 internally displaced persons thus far. Our target under
    assistance is to reach 250,000 people altogether.
        Senator Leahy. Mr. Vivanco's written testimony says 319,000
    have been displaced. Does that figure seem accurate to you?
        Mr. Deal. I cannot----
        Senator Leahy. Well, check it for the record and get back
    to us on that.
        [The information follows:]
                          Internally Displaced Persons
        There is no reliable official estimate, but it is generally
    accepted that at least 1.2 million persons have become internally
    displaced due to violence since 1991. In 2000, approximately 225,000
    persons, mostly from rural areas, are estimated to have left their
    homes seeking safer conditions.

        Senator Leahy. Do you know how much of the $22 million for
    internally displaced persons has been spent?
        Mr. Deal. We signed up five grants back in September. I am
    sorry, I do not have a specific figure as to what has been
    spent to date. We are ahead of our schedule. We are about 60
    percent ahead of where we expected to be in assistance for
    internally displaced persons at this point.
        Senator Leahy. Does that include the $10 million
    appropriated for community level alternative development?
        Mr. Deal. No, it does not.
        Senator Leahy. Will you give me figures on that, how much
    of that has been spent and on whom it has been spent?
        Mr. Deal. Yes, we will.
        [The information follows:]
                   Internally Displaced Persons Expenditures
        USAID states for the record that an agreement has been reached with
    the organizations that have received funds under the Plan Colombia
    supplemental, that the names of the organizations will not be used in
    public. This agreement reflects the difficult security conditions under
    which the organizations carry out their work.

    Plan Colombia Supplemental Appropriation, Internally Displaced Persons,
    Cumulative Expenditures through June 30, 2001

    Total grant.............................................     $30,000,000
    Expenditures............................................       6,468,284

        Senator Leahy. Thank you.
        Senator McConnell.
        Senator McConnell. Thank you, Mr. Chairman.
        I want to ask some questions about DynCorp, which has been
    awarded the contract for aerial spraying in Colombia. As you
    know, aircraft used in spraying operations have been shot at
    and hit by guerrillas guarding their coca fields. American
    pilots are flying some of these missions.
        First, in what danger is DynCorp placing its contractors
    and is it conceivable that an American pilot may be shot down
    and captured by narcotraffickers or insurgents?
        Mr. Beers. Sir, with respect to the aerial eradication
    effort, there is without question the risk. There have been
    planes which have been hit. Fortunately, we have not yet had a
    plane which has been shot down.
        In order to ameliorate that risk both for the DynCorp
    employees and the Colombian National Police employees what fly
    these aircraft, we undertake a survey of the areas that we
    intend to spray. We overlay those areas against known
    concentrations of insurgent activity. We plan those missions so
    that the pilots know where they are going on any given day. We
    do not go back to the same area on a given day. In fact, we
    generally wait at least a week before we go back even into the
    vicinity of where we have sprayed before.
        Our patterns of aerial eradication are designed in a
    relatively random fashion in order that they are not
    predictable. That obviously does not remove the risk, but we
    have found that it substantially reduces the risk.
        With respect to flying in the hot zone, if you want to call
    it that, in Putamayo, in addition to all of this planning, the
    Colombian military has put forces on the ground in the vicinity
    where those operations were to be conducted and during that
    particular phase there were no aircraft that were shot at when
    there were Colombian ground troops in the area.
        Senator McConnell. What would be the administration's
    response to a shootdown involving a U.S. citizen?
        Mr. Beers. Involving a U.S. citizen? The first thing we
    would do if a U.S. citizen were shot down is what anyone would
    do, which is to go in and recover the individuals that were
    involved, if they were in need of medical assistance to provide
    that, if they were killed to remove the bodies and get them
    back to the families.
        Senator McConnell. Let me ask you, what do you consider
    acceptable risks for Americans on the front lines of Plan
    Colombia, whether they are contractor pilots or U.S. soldiers
    training counterdrug battalions?
        Mr. Beers. Sir, with respect to acceptable risk, it is our
    policy to have as little risk as possible and to do everything
    possible to prevent any risk. But I cannot in any way tell you
    that there is no risk. There is a risk in the air and there is
    a risk on the ground. There is a risk for any U.S. officials
    anywhere in Colombia and we cannot deny that.
        Senator McConnell. What is the status of the DynCorp
    training program for Colombian pilots and when do you expect
    Colombian pilots to be in the cockpits of all spraying
    aircraft?
        Mr. Beers. We have currently under contract a significant
    increase in the number of spray aircraft that will be available
    for use in Colombia, moving from 11 to 23 by the beginning of
    the next calendar year. Our first objective is that there will
    be only Colombian pilots in all of the new cockpits that are
    provided.
        Senator McConnell. By when?
        Mr. Beers. As they come on line. That is, we will not add
    U.S. pilots to the cockpits of the new spray aircraft that are
    coming on line. So our first objective is to put Colombian
    pilots in the new aircraft, and we will then go back and
    replace----
        Senator McConnell. Let me try again. At what point in the
    future do you expect only Colombian pilots to be making these
    flights?
        Mr. Beers. At this particular point in time, sir, it is
    some time around the end of calendar year 2002.
        Senator McConnell. A May 29 Washington Post article
    detailed abuses by DynCorp contractors in the International
    Police Task Force program in Bosnia. What steps are being taken
    to prevent similar abuses by DynCorp contractors in Colombia?
        Mr. Beers. The program of work with DynCorp has very strict
    guidelines about misconduct and it is the policy of this aspect
    of the DynCorp contract, as in Bosnia, to upon substantiation
    of the allegations of misconduct to remove the individuals from
    the program and from the country.
        Senator McConnell. I am not going to ask you to list them
    today, but I would like to know all the contracts that were
    awarded to DynCorp by the Bureau of International Narcotics and
    Law Enforcement Affairs. Please submit that list for the
    record.
        Mr. Beers. Yes, sir.
        [The information follows:]

        INL has three contracts with DynCorp as follows:
        1. For support services of pilots, mechanics and administrative
    support personnel for the Colombian National Police. Base year contract
    with two option years. Base year was $4.5M. First option year which
    began on July 1, 2001 is estimated at $6.7M. Second option year is
    estimated at $7M.
        2. Air Wing contract with DynCorp provides aviation support
    services for INL's Office of Aviation in support of counternarcotics
    programs. These services are in association with aerial eradication,
    training, interdiction support, aircraft maintenance, logistics and
    other activities occurring in Bolivia, Colombia, Peru, other temporary
    deployment sites, and a supporting main base at Patrick AFB, Florida.
    The value of the contract for the current contract year is $53.99M.
        3. CivPol contract with DynCorp funds recruitment, training,
    equipment, salaries, and field support for American police
    participation in civilian police components of international
    peacekeeping missions, and support for local police development, in
    Bosnia, Kosovo, and East Timor. The estimated annual cost for these
    activities at current levels, including approximately 850 police, is
    $95M.

        Senator McConnell. Let me go back to the hypothetical I was
    raising again about the possibility of a U.S. citizen being
    captured. Who would go to the rescue if an American citizen
    were captured?
        Mr. Beers. Sir, I am not in a position to tell you who
    would go to the rescue of a U.S. citizen. At that time we would
    have to make that decision based on the knowledge of what is at
    that particular time.
        Senator McConnell. And if the FARC were to take a U.S.
    pilot prisoner, how would we respond?
        Mr. Beers. That same condition would prevail in that
    situation, sir, just as we have tried to defend American
    citizens who have been kidnapped by the FARC as a general
    proposition, whether they are government or nongovernmental
    individuals.
        Senator McConnell. At the rate we are going, I think I
    heard you say a minute ago we will not have 100 percent
    Colombian pilots until the end of next year.
        Mr. Beers. That is correct. But if I could clarify that for
    just a minute. When we talk about the number of U.S. pilots in
    cockpits that are flying in Colombia as a proportion of the
    aircraft which we are providing to the government of Colombia,
    we are talking at this particular point in time of a fleet of
    six OV-10 aircraft out of currently 11 spray planes and 33 UH-1
    helicopters in the military and over 50 helicopters in the
    Colombian National Police, as well as fixed wing aircraft, all
    of which we support, all of which we help them maintain and
    fly.
        So while I do not mean to diminish the risk to Americans
    and our effort to remove Americans from that risk, it is not a
    large proportion of the program.
        Senator McConnell. Well, I see my time in this round is up.
    I thank you, Mr. Chairman.
        Senator Leahy. Thank you.
        Senator Campbell.
        Senator Campbell. Thanks, Mr. Chairman.
        I will just maybe proceed with additional questions along
    the line that Senator McConnell was asking. You said this
    aircraft, of the planes that we provided--these are all unarmed
    airplanes?
        Mr. Beers. No, sir. They are armed with defensive armaments
    in the case of the helicopters. The spray aircraft are not
    armed, sir.
        Senator Campbell. I am not a scientist and I do not know
    much about some of the stuff that is sprayed, but I read your
    testimony, Mr. Deal's testimony and yours too, Mr. Beers. This
    chemical called glyphosate----
        Mr. Beers. Yes, sir.
        Senator Campbell [continuing]. Your statement said is not
    harmful to humans. Maybe it is not. I do not know anything
    about this stuff. But I can remember for 20 years the military
    said the same thing about Agent Orange in Vietnam until some
    undeniable studies were done, independent studies that proved
    in fact it was harmful.
        How does this stuff differ and what does it do? Does it
    just defoliate?
        Mr. Beers. Yes, sir. Glyphosate is an herbicide which is
    commonly used in the United States and a number of countries
    around the world, including Colombia. It has been tested in
    this country and certified by EPA twice, once in the seventies
    and once in the nineties. It has been tested in Colombia and
    used there since 1994.
        What it does in the dosage in which it is delivered--and it
    is essential to deliver it in an appropriate dosage. Obviously,
    as a material, if you were handling the raw substance in
    concentrated form it would be harmful and people who do that
    wear gloves and coveralls and things like that in order to
    protect themselves.
        But it is then put in terms of a solution into a larger
    amount of water, and there are some other additives which help
    stabilize and disperse it within that. So that on an acre of
    land we are probably distributing about three and a quarter
    gallons. On a square meter of land, in terms of the herbicide
    itself it is probably about a milliliter of that.
        Senator Campbell. Does it kill everything else, too?
        Mr. Beers. It will kill plants of the coca bush variety or
    less substantial plants. It will not--it will defoliate, but it
    will not kill rain forest. The rain forest root systems are
    substantial enough that by and large those plants, if there is
    an overspray, will refoliate.
        In terms of what happens to it when it hits, it takes about
    24 hours without being washed off for the defoliant to in fact
    affect the root system and begin to kill the plant. you can
    replant in that field in about 48 hours after the spray in
    terms of coming forth with another kind of crop if that is what
    you wish to do. So it biodegrades in the soil fairly quickly.
        That said, with all of these tests, we are committed to
    continuing to test the safety of this product within Colombia,
    within this program. But interestingly enough, 90 percent of
    the glyphosate used in Colombia is used in commercial
    agriculture.
        Senator Campbell. Thanks. Let me move on to a couple of
    others before my time runs out.
        What other countries are making either material or
    financial contributions to the Andean initiative?
        Mr. Beers. In terms of----
        Senator Campbell. Colombia is and Bolivia is in their own
    countries.
        Mr. Beers. Yes, sir.
        Senator Campbell. But are there other?
        Mr. Beers. Internationally, outside of the region? The
    Inter-American Development Bank, the European Union, the U.K.,
    Spain, and there are some smaller amounts from other countries.
    In terms of the total amount, I will submit for the record the
    current up to date list of what we believe those contributions
    are.
        [The information follows:]

        Total EU, European bilateral, Canadian and Japanese programs, and
    UN support, totals $550-600M. Over half comes from just the EU, Spain
    and Japan. While some programs are underway or nearly so, the majority
    of EU and bilateral programs are still in the planning stages. The
    following list is our best compilation, taken from all available
    sources, including the EU, IDB, local embassies, the Government of
    Colombia and post reporting.
                       international support for colombia
        $175.0M--Japan.--($100M in soft loans and credits for small banks
    to support crop substitution, not yet drawn down; $70M in yen loans for
    an irrigation project which is underway; and $5M grant to international
    organizations involved in humanitarian relief and economic development)
        $131.0M--United Nations.--(The U.N. counts its normal operating
    budget for 17 agencies carrying out programs in Colombia)
        $100.0M--Spain.--(mixed credit and grant 70/30, planning for $10M
    of this for small business loans already advanced)
        $95.0M--European Union.--(E105M, for programs 2001-2006; EU has
    sent study teams to Colombia to determine spending. Another $9M
    possibly available under ECHO program for humanitarian aid)
        $40.0M--Canada.--(Our records show $10.0M, GOC says $40M grant from
    Bogota conference but no further info)
        $25.5M--Sweden.--(grant, IDB reports $9.5M; Stockholm says $6M for
    human rights, civil society, and peace negotiations. Washington embassy
    says $20M for 2001-2003 and willing to increase to $30M if conditions
    warrant; GOC counts $25.5M)
        $24.0M--Netherlands.--(grant 3 years)
        $20.0M--Norway.--(grant, 2000-2002)
        $18.0M--France.--(E20M to be disbursed on a project by project
    basis; three-fourths education, cultural and one-fourth on crop
    substitution, rule of law)
        $18.0M--Germany.--(grant)
        $15.0M--Italy.--($5M grant, $10M loan)
        $12.0M--Switzerland.--(grant, peace process, humanitarian aid over
    next 3 years)
        $1.8M--UK.--(grant, does not include projections of $5.9M for
    bilateral programs, $1.65M to EU programs and expected $570,000 per
    year to NGOs. Not clear what IDB figure of $1.8M represents)
        $9.0M--Belgium.--(E10M, all channeled to NGOs)
        $4.0M--Finland.--(grants)
        $0.66M--Austria.--(Brussels, grant, not confirmed)
        $0.45M--Ireland.--(grant)
        $.25M--Portugal.--(grant)
        $6.5B--International Financial Institutions.--$2.7B from the IMF;
    $1.7B from the IDB; $1.4B from the World Bank and $700M from the Andean
    Development Corporation
        Of these funds, the GOC intends to allocate $900M to Plan Colombia
    programs for social development projects such as employment creation,
    support for poor families and youth job training. Reportedly,
    agreements have already been signed for over $550M. (Note that the
    Colombians count this as part of their contribution. In order to avoid
    double counting, we acknowledge IFI programs, but include it below as
    part of the GOC contribution.)
                      government of colombia contributions
        The $4.5B Colombia input consists of three elements:
      --approximately $3 billion from the GOC's normal revenues, i.e.
            income tax, value added tax, customs duties, etc.
      --$900M in new loans from international financial institutions
            (IFI's).
      --$600M from mandatory internal ``Peace Bonds''.

        Senator Campbell. I would like to see that. Mr. Chairman,
    just by chance we just returned the day before yesterday, 16
    House Members and 3 of us from the Senate side, from the OSCE
    in France. One of the big things that generated a lot of
    resolutions this year, it is the Helsinki Commission, was based
    on international crime which was related to the drug flow, and
    a lot of that drug flow in Europe originates in Colombia and
    Bolivia, too.
        I would be interested in knowing that, what contributions
    they make, too.
        Mr. Beers. Yes, sir.
        Senator Campbell. Maybe a last question, too. Mr. Deal, in
    your comments you talked about the number of farmers that have
    lined up to sign these coca crop eradication agreements and
    that we give them some benefits. Do the benefits provided mean
    we are helping them with alternative crops? I did notice later
    in your comments you talked about bananas and coffee and
    pineapple and some other things that are being planted.
        Mr. Deal. That is correct.
        Senator Campbell. We provide the expertise, the seed, the
    whatever?
        Mr. Deal. Yes, we provide assistance in alternative crops,
    also in marketing assistance. For example, there has been a
    heart of palm plant that was recently opened with our support.
        Senator Campbell. Well, I guess that is what I was getting
    to, that if you do provide that what do they do with it after
    they grow it, if you were providing some mechanism in which
    they could market. But that is all part of the deal?
        Mr. Deal. That is correct.
        Senator Campbell. Do you do that through coops or
    individually help with the farmers, or how?
        Mr. Deal. Yes, we do that through both mechanisms, working
    with the communities. To the extent that coops can be formed,
    that will certainly be one of the mechanisms. At this time
    there are very few coops in that region, but that is envisioned
    as one of the options to improve their marketing.
        Also, the government of Colombia is working to improve the
    road system, to improve the marketing ability of products from
    that region.
        Senator Campbell. You also in your comments mention the
    number of hectares that have been taken out of production. I do
    not suppose you have any way of knowing how many new hectares
    have been put into production someplace else?
        Mr. Deal. No, I am sorry, I do not have that information.
        Mr. Beers. Sir, we normally get that information at the end
    of the calendar--well, in the first quarter of the next
    calendar year for the preceding calendar year. That is, new
    cultivation versus cultivation taken out of production.
        Senator Campbell. When you get that could you provide that
    for the committee?
        Mr. Beers. Yes, sir.
        Senator Campbell. Thank you, Mr. Chairman. I have no
    further questions.
        Senator Leahy. Thank you.
        Senator Campbell, you raised a very good point on the
    discussion with the Europeans. I understand the EU has made a
    lot of pledges on helping Plan Colombia, but have they actually
    contributed anything?
        Mr. Beers. No, sir.
        Senator Leahy. Or is this a case of the check is in the
    mail or something?
        Mr. Beers. Yes, sir.
        Senator Leahy. I thought so.
        Senator Campbell. What is new.
        Senator Leahy. Mr. Deal, last year we appropriated $122
    million, I believe it was, for human rights and judicial reform
    programs in Colombia. Now, $4 million of that was for the
    protection of human rights workers. Another $10 million was for
    the security of witnesses and judges in human rights cases. How
    much has been spent and have any of the people responsible for
    ordering the killings of human rights workers been prosecuted?
        Mr. Deal. I do not have information on the second question.
    With respect to the first, I do not have a specific figure of
    what has been spent. We have provided grants to seven human
    rights NGOs for a total of approximately $575,000. The
    witnesses and judge protection program that you mentioned is a
    program managed by the Department of Justice.
        [The information follows:]

      HUMAN RIGHTS EXPENDITURES--PLAN COLOMBIA SUPPLEMENTAL APPROPRIATION--
                                    DEMOCRACY
                 [Cumulative expenditures through June 30, 2001]
    ------------------------------------------------------------------------
                                                Total grant    Expenditures
    ------------------------------------------------------------------------
    Administration of Justice...............      $8,000,000  ..............
    Anticorruption..........................       3,000,000  ..............
    Human rights--Protection of Human Rights       4,000,000  ..............
     Workers................................
    NGO Support--Early Warning System.......      11,000,000  ..............
    Local Government Strengthening..........      22,000,000  ..............
    Conflict Management.....................       3,000,000  ..............
                                             -------------------------------
          Total.............................      47,000,000      $1,534,693
    ------------------------------------------------------------------------

        Senator Leahy. Let us see if we can get some figures on
    that. We provided $7 million to strengthen human rights
    institutions. Mr. Vivanco's written testimony says the only
    U.S. assistance the attorney general's human rights unit has
    received so far was to send prosecutors to the United States to
    learn about our justice system. Is that correct?
        Mr. Beers. No, sir. That is an accurate reflection of one
    of the instances of training, but in terms of the overall
    training program we have begun training a series of satellite
    human rights units which involve both investigators and
    fiscales around the country. Cali, Naeva, Villa Vicenzio were
    three of the first four that were trained.
        We have also been training instructors for a larger
    training program.
        Senator Leahy. These are under the attorney general's
    office in Colombia?
        Mr. Beers. These are in combination between the ministry of
    justice and the fiscale general there. There is also a
    forensics, a series of forensics courses that have had at least
    two different training courses; and we are now in the process
    of setting up those four satellite offices in each of the
    locations that they will be set up in.
        Senator Leahy. So how many units are presently set up? Are
    any human rights units presently set up or is it these four
    that are going to be set up?
        Mr. Beers. Delivery is expected on 18 July to the two units
    that are in Cali and on 25 July to the two units in Via
    Vicenzia and Naeva. The units are there. The office equipment
    and support is on the way.
        Senator Leahy. Do they have some way of getting to the--I
    understand that these atrocities that happen are often in rural
    areas. Sometimes the only way of getting there with any kind of
    speed is by helicopters. Do they have any ability to call on
    that kind of help?
        Mr. Beers. They have the ability----
        Senator Leahy. I am talking about getting there before all
    the evidence is gone.
        Mr. Beers. I understand, sir. There are normally fiscales
    accompanying--not necessarily from this unit--accompanying
    operations, both counternarcotics and military operations, if
    there is evidence to be taken. What we have not succeeded in
    finalizing yet is a specific arrangement that would also ensure
    that these human rights advocates are able to move as freely in
    the country.
        I know it is a concern of yours and we are trying to
    finalize that arrangement with the military and the police to
    ensure that they can go anywhere they need to go in a timely
    fashion.
        Senator Leahy. As kind of a side note, is the U.S.
    Government paying a Washington, D.C., public relations firm to
    advise the Colombian ministry of defense or any U.S. public
    relations firm to advise them? Do either of you two gentlemen
    know?
        Mr. Beers. I know of that contract relationship. To the
    best of my knowledge, the U.S. Government is not paying that
    contract relationship.
        Senator Leahy. So it is not coming either directly----
        Mr. Beers. It is not coming out of our money, not coming
    out.
        Senator Leahy. It is not coming out of this AID money, Mr.
    Deal?
        Mr. Deal. No, it is not.
        Mr. Beers. No, it is not our money.
        Senator Leahy. Is there one being paid by somebody?
        Mr. Beers. Sir, I do not want to label anybody as
    responsible, but, as you know, we are not the only pot of money
    that is going to Colombia. There are other agencies.
        Senator Leahy. It is quite a big pot. That is why I am
    asking some of the specifics about where the money is going,
    and I am hoping I can get some of the answers back, because I
    suspect that it has at least freed up enough money so that some
    money can go to pay a public relations firm.
        Mr. Beers. Sir, I cannot argue with your point that at some
    level there is a fungibility issue here. May I comment
    specifically on what that firm is doing, however?
        Senator Leahy. Sure.
        Mr. Beers. The intent of that firm, at least the contract
    that I am aware of is for the purpose of advising the ministry
    of defense with how to deal with issues concerning human rights
    in the public affairs arena, not to cover over them, but to get
    information out in a timely and transparent fashion.
        Senator Leahy. Let me talk to you a little bit about that,
    then, because I have, along with a lot of others here,
    discussed the paramilitary problems with President Pastrana and
    the Colombian foreign minister, Army General Tapias, and a
    number of others down there. But yet we find the number of the
    paramilitaries has doubled in the past couple of years, the
    number of atrocities have exceeded any previous year. The State
    Department reports the paramilitaries have a ready support base
    within the military and the police.
        Now, I am told that everybody wants to make it better, but
    it seems to keep getting worse. We are told that the Pastrana
    administration has not moved aggressively to acknowledge
    military-paramilitary collaboration. Last year the
    administration, the previous administration, supported waiving
    the human rights conditions on Plan Colombia.
        I wonder, do you really think if we have less pressure from
    the U.S. Congress on human rights that we are going to have an
    improvement in the paramilitary situation? It seems that we
    bring pressure, people say all the right things, some of them
    maybe through this PR company, but the paramilitaries increase,
    the atrocities increase, we waive the human rights conditions
    on Plan Colombia, nothing gets better.
        Why should we, in this new legislation, why should we
    remove those conditions?
        Mr. Beers. Sir, as a general matter this administration and
    I believe previous administrations which I have also
    represented are generally opposed to conditions on assistance.
    Having said that, we are certainly prepared to work with you in
    the Congress in order to produce an effective and forceful
    human rights program, to make clear to the government of
    Colombia, to the Colombian military, that we are serious about
    these issues, and that progress in these areas is absolutely
    essential to the continuation of our public and financial
    support for their efforts.
        I am not attempting to apologize for the Colombian military
    and your remarks about the paramilitaries are certainly true in
    terms of their increases. But I think it is also fair to say
    that over the course of the last several months the efforts on
    the part of the Colombian military and police to go after the
    paramilitaries have increased and that something is going on
    within the paramilitaries that has caused the split between the
    former head, Carlos Castana, and the rest of his organization,
    that has caused him to stand down and move off into another
    area within that organization as opposed to being the leader.
        I am not in any way attempting to claim victory, but I am,
    I think, saying that we see some progress and we want to
    continue to work with a solid engagement with the government of
    Colombia to move this issue forward favorably.
        Senator Leahy. My time has expired. I am going to follow up
    on this, as you can well imagine.
        Senator Specter.

                   Opening statement of Senator Arlen Specter

        Senator Specter. Thank you very much, Mr. Chairman.
        Mr. Beers, when the $1.3 billion package was before the
    subcommittee last year and then the full committee and the
    Senate, I opposed it because of my concerns that,
    notwithstanding all of the money we have put into Colombia,
    that we have not seen tangible results.
        I admire what President Pastrana is trying to do. I have
    made many trips to Colombia and the neighboring countries,
    going back 15 years into the mid-1980's. I sponsored the first
    legislation on use of military for interdiction. But when we
    have an imbalance of about $2 for enforcement for the so-called
    supply side to try to discourage production of drugs, stop the
    importation into the United States, for every $1 on
    rehabilitation and education, it would seem to me that we have
    not been getting the value for the dollar.
        My question to you is what evidence is there of value to
    the United States in ameliorating our drug problem with the
    $1.3 billion we appropriated last year?
        Mr. Beers. Sir, first let me say, as I said to Senator
    Leahy at the beginning, I think everybody who sits on this side
    of a Congressional hearing who speaks on the drug issue is in
    full agreement that we also need to support the demand
    reduction program. I only speak for the supply side.
        Senator Specter. But how about a better proportion? I have
    been fighting for two decades for a 50-50 split, which I think
    would be minimal, since rehabilitation and education has held
    some real promise, whereas the efforts to reduce the supply
    side--I think we have to maintain drug enforcement on the
    streets. I did that as Philadelphia's DA.
        But come to the question of what have we gotten for our
    $1.3 billion.
        Mr. Beers. Sir, with respect to that, in terms of the
    activities to date, we have conducted spray operations in
    Colombia which have sprayed approximately 50,000 hectares. This
    is well in advance of any previous year's effort. We will,
    however, only in the second half of this calendar year begin to
    receive the bulk of the resources delivered into Colombia, as
    opposed to acquired, and be able to put them to use.
        We will double the number of spray aircraft from 11 to 23
    by the beginning of next calendar year.
        Senator Specter. Do you think that will stop the supply of
    drugs coming into the United States?
        Mr. Beers. I think it represents----
        Senator Specter. Or reduce it?
        Mr. Beers. I think as a matter of program that, together
    with the mobility forces for the Colombian military and police
    to allow them to move out aggressively in the field to protect
    the spray effort and to protect the companion alternative
    development effort, represent the real heart of this program.
    As we have said publicly, it is our objective by the end of
    this calendar year to cap the growth of coca cultivation in
    Colombia and by the end of next calendar year to have a 30
    percent reduction in coca cultivation in Colombia.
        Senator Specter. Let me shift to a related area, and that
    is the efforts which have been made to get Castro's cooperation
    in Cuba. I made a trip to Havana 2 years ago and had extensive
    discussions with Castro about a number of subjects--human
    rights, the missile crisis, Oswald and the possible
    implications of Cuba's involvement there, and what they are
    doing in medical research.
        On the issue of drug interdiction, Castro was willing to
    cooperate with the United States on overflights and help on
    drug interdiction. But we have steadfastly not developed that
    kind of a relationship because of our general hostility toward
    Castro in an earlier day when there was a real problem about
    Castro destabilizing Latin America with the spread of communism
    and when he was entertaining the Soviets with Soviet missiles.
    This goes back 39 years.
        What efforts are being made in your department,
    international narcotics and law enforcement to utilize Castro's
    willingness to cooperate in drug interdiction as it goes into
    the Cuban area?
        Mr. Beers. About 2 years ago, sir, there was an agreement
    between Cuba and ourselves to add a drug liaison office, a
    Coast Guard officer, to the U.S. interest section in Cuba in
    order that we would be able to pass verbally rather than by fax
    information regarding flights or boats that were flying over or
    seeking to sail around Cuba in order that Cuban forces might on
    their own be able to undertake activities against those drug
    trafficking efforts.
        Senator Specter. You are saying a single liaison officer?
        Mr. Beers. Yes, sir, having available information that our
    enforcement and intelligence community might be able to
    provide.
        But I would add, sir, to that that in terms of the patterns
    of drug flows to the United States that either overfly or sail
    around Cuba, at the present time they are minuscule to
    nonexistent. It is true 2, more importantly 3 and 4, years ago
    we observed a large number of overflights and boats going
    around. But traffickers adjust to----
        Senator Specter. Let me interrupt you because my yellow
    light is on and I want to ask you a couple more questions which
    I would like you to submit for the record. I would like an
    evaluation from your Department as to what more could be done
    with Castro's cooperation beyond the single individual whom you
    have referred to.
        I would like for the record, because my time has expired,
    what the spraying will cost. You referred to spraying. Out of
    the $1.3 billion, how much will that cost? What do you expect
    it to produce, and is there any reason to believe that if you
    eradicate those crops in Colombia that they will not spring up
    in Bolivia or Peru or some adjacent fields?
        Thank you, Mr. Chairman.
        [The information follows:]
                          The Cost of Spray Operations
        For the most recently completed contract year (1 Feb. 2000 through
    31 Jan. 2001), cost of spray operations totaled $11.7M. This figure
    includes material costs (such as repair parts), as well as fuel,
    herbicide and pilot salaries related to spray aircraft.
        There are also security and other related costs associated with
    these spray flights. If we include all eradication related costs
    (escort aircraft, all labor categories, travel, facilities, insurance,
    overheads & fees, etc.) the estimated cost of spray operations in
    Colombia for the most recently completed contract year (1 Feb. 2000
    through 31 Jan. 2001) is $26.5M (inclusive of the $11.7M mentioned
    above).
                              anticipated results
        The goal is to achieve, through a combination of aerial and
    voluntary eradication, a 30 percent reduction in illegal drug
    cultivation in Colombia by the end of calendar year 2002. In Putumayo,
    the area of most concentrated cultivation, we hope to achieve a 50
    percent reduction in illegal drug cultivation during the same period.
                  movement of coca cultivation to other areas
        Since we believe Plan Colombia will result in major disruption of
    the cocaine industry, the Andean Counterdrug Initiative's (ACI)
    regional approach becomes even more of an imperative. Traffickers will
    undoubtedly try to relocate as their operations in southern Colombia
    are disrupted. We believe they will first try to migrate to other areas
    inside Colombia, then try to return to traditional growing areas in
    Peru and Bolivia. But if those options are forestalled, they may well
    seek to move more cultivation, processing and/or trafficking routes
    into other countries such as Ecuador, Brazil, or Venezuela.
        For this reason, we plan to allocate almost one-half of the
    requested $731M for this initiative to countries other than Colombia.
    In so doing, we intend to bolster the successful efforts and tremendous
    progress we have made in counternarcotics in countries such as Peru and
    Bolivia, while preventing the further expansion of the drug trafficking
    problem into other countries of the region, such as Brazil, Panama,
    Venezuela and Ecuador.

        Senator Leahy. Excellent questions. I will be anxious to
    see the answers.
        Senator McConnell.
        Senator McConnell. Unlike Senator Specter, I have not been
    to Colombia frequently. I did go once about 3 years ago. I had
    the lasting impression that this whole problem is never going
    to be solved as long as the insurgency was as strong as it was.
    I would like for you, Mr. Beers, to give me an update on where
    you think the current negotiations between the Pastrana
    Government and the FARC stand. Is there any ray of hope that
    you can point to that there might be some kind of settlement in
    the future?
        Mr. Beers. The ray of hope, and that is all it is, is the
    recent prisoner exchange in terms of first wounded and then
    other prisoners held by the FARC and the government. I cannot
    give you any sense that there will be any larger agreement
    between the government of Colombia and the FARC in the near
    future. The FARC seem unwilling to participate in a peace
    process leading to real goals and objectives.
        Senator McConnell. To what extent does that compound all of
    these other efforts; compound the problem in all these other
    ways that we have been discussing here this morning?
        Mr. Beers. As long as the FARC remains in the field active
    in the drug trade, our counternarcotics effort will be more
    difficult than it is, for example, in a country like Bolivia,
    where, while there is campesino resistance, but not an
    organized insurgency, or in Peru, where the same is also true.
        Senator McConnell. Well, I thank you.
        Mr. Chairman, I have a number of other questions which I
    would like to submit in writing, in the hopes that the
    witnesses could respond to them, and I thank you for my
    opportunity to have a turn.
        Senator Leahy. Thank you very much.
        I, speaking of FARC, am just beginning to read through the
    Human Rights Watch report on FARC that was just released, and I
    am sure you are, too. It is extremely critical of FARC and
    appears to well substantiate the criticism. If you would like,
    after you or your office has looked at that, if you would like
    to give me your views in a letter or further material----
        Mr. Beers. Yes, sir, we would like to submit that for the
    record.
        Senator Leahy. It is both too new and too detailed. It
    would not be fair to ask you to go into it today. But I would
    like the have your feelings on that. We will go into that with
    Mr. Vivanco.
        [The information follows:]

        The Human Rights Watch report reflects many aspects of the human
    rights problems in Colombia of which we have been aware and on which
    the State Department has reported.
        The State Department's 2000 Human Rights Report on Colombia noted
    that, ``(i)n the absence of both a state presence and international
    verification (in the demilitarized zone), FARC human rights abuses
    inside the zone, as well as outside of it, continued.''
        It is gratifying that an international organization with the
    stature and credibility of Human Rights Watch has come to a similar
    conclusion as the United States--that FARC is guilty of widespread
    human rights abuse in areas where it exercise de facto quasi-
    governmental authority.
        We have worked diligently with the Government of Colombia to assist
    it in overcoming some human rights problems of the past. The U.S.
    Government has no official contacts with FARC, but we have repeatedly
    urged that it cease its terror campaigns against civilians.
        Perhaps, with the publishing of the Human Rights Watch letter,
    those in the international community who might be sympathetic toward
    FARC's political agenda will urge FARC put its own house in order with
    regards to human rights violations. Since a resolution of Colombia's
    long-running civil conflict is the only long-term solution to human
    rights problems in Colombia, we would hope that the Human Rights Watch
    letter to FARC commander Marulanda will cause a re-assessment of the
    cost of the conflict and persuade the FARC to engage in a genuine
    dialogue with the Government of Colombia on a viable peace.
        Until a peace accord can be reached, however, we would join with
    Human Rights Watch in urging FARC to:
      --cease extrajudicial killing;
      --release, unconditionally, all hostages;
      --cease recruiting and utilizing child soldiers, while demobilizing
            current child soldiers;
      --cease holding trials;
      --treat captured soldiers in accordance with internationally
            recognized rules for the treatment of POWs;
      --cease the use of indiscriminate terror weapons; and
      --cease attacks on non-combatants, including aid workers.

        Senator Leahy. But let me ask you, Mr. Secretary. To follow
    up on what we were saying before, the Colombian Government
    dismissed 388 soldiers and we are told that this shows they are
    dealing with the human rights problems. I then asked the
    Colombian government what offenses these individuals were
    dismissed for, whether they were human rights violations as
    opposed to getting drunk on duty or getting in a fight or
    something like that. They have refused to say.
        I understand the State Department has also tried without
    success to get this information. Do you know, of these 388
    people dismissed, were any of them involved in human rights
    violations?
        Mr. Beers. Sir, I cannot tell you with any credible
    information yes or no to that question because, as you, we also
    have been unable to obtain that information, regrettably.
        Senator Leahy. Do we know if any of them have been
    prosecuted for anything?
        Mr. Beers. It is my understanding that there have been
    some, but I would have to get you for the record any more
    detail than that, sir.
        [The information follows:]

        The U.S. Embassy in Bogota has requested information about the 388,
    but Ministry of Defense officials continue to argue that to release any
    information at all would open the way to potential lawsuits by
    discharged service members.
        Press reports, which the Embassy has been unable to confirm,
    indicated that as many as 40 of these 388 may have been discharged for
    human rights-related crimes.

        Senator Leahy. We do not know, we do not know whether any
    of them went back in the military or joined the paramilitaries?
    By the same reason, we would not have any way of knowing that?
        Mr. Beers. Right. I mean, there have certainly been reports
    in the media that that is the case, at least with respect to
    going into the paramilitaries. But I cannot tell you
    specifically.
        Senator Leahy. Here is something that you may want to get
    back to me on, and we will give you a copy of this letter. Let
    me just read it to you. I received it from a Colombian woman
    named Maria Vilez, whose husband was killed, she believes, by
    the 14th Brigade of the Colombian Army. This is not an
    untypical letter, and you can understand why a number of us get
    very disturbed. It says:

        Dear Senator Leahy: This letter is to inform you about my
    situation. My husband, Mr. Carlos Ramirez, was dedicated to his work in
    agriculture, cattle, and lumber. On February 15, troops of the Poligua
    battalion of the 14th Brigade were in our home. They destroyed our
    personal belongings and wrote on our walls saying they were going to
    kill my husband, that they were going to saw him with a chain saw.
        On March 19 my husband went to buy some sugar cane and did not come
    back. On April 1st some campesinos found where the army had left my
    husband's body. They had cut his legs off and killed him.
        My husband had been in the region for 30 years, working in the
    countryside. He was neither a guerrilla nor a guerrilla collaborator. I
    ask your help that justice may be done. The attorney general's office
    in Bogota has exhumed the body and the police have opened an
    investigation.
                Sincerely,
                                                           Maria Vilez.

        Will you get that letter and there might be those from your
    office what are in contact with them; ask them what has
    happened.
        Mr. Beers. We would be happy to do that, sir.
        [The information follows:]

        I believe that this question refers to the case of Carlos Ramirez,
    a ``campesino'' allegedly killed in March by members of the Palagua
    batallion of the army's 14th brigade.
        The U.S. Embassy has not received a letter from Mr. Ramirez's
    widow. The information she has provided in her letter to Senator Leahy
    is new to officials at the U.S. Embassy in Bogota, and does not appear
    to have been conveyed to them by Colombian human rights NGO's.
        The U.S. Embassy has contacted NGO's for further information, and
    has learned that one Carlos Ramirez reportedly was detained by army
    troops on March 20 in the community of Santo Domingo (Valle de
    Cimitarra region, southern Bolivar department), during the army's
    ``Operacion Bolivar.'' It seems likely, though the Embassy cannot
    confirm it without further information, that this is the same Mr.
    Ramirez.
        It remains unclear whether a formal investigation is proceeding on
    this case, and we continue to seek more information both from the
    Colombian authorities and from Colombian NGO's.

        Senator Leahy. I see things like the Los Angeles Times
    correspondent who visited the sites of paramilitary massacres
    along the Naya River over the Easter weekend this year. This is
    what he wrote:

        Paramilitaries butchered 18-year-old Gladys Appia, first
    slicing off her head and hands with a chain saw. Next they
    killed six people in a restaurant just down the trail. They
    shot some and stabbed others. They hacked one man to death and
    then burned him.
        So they traveled, members of Colombia's largest ultra-right
    paramilitary group, the United Self-Defense Forces of Colombia.
    Holy Week became a procession of death as the forces hiked 60
    miles from the Naya River's headquarters in the high Andes
    toward its outlet in the lowland jungles, stopping to slaughter
    at hamlets along the way.
        The Colombian people's advocate's office later reported
    that the paramilitaries murdered as many as 40 people and at
    least a thousand people fled their homes. The public advocate's
    report said: ``it is inexplicable how approximately 500
    paramilitaries could carry out an operation of this type
    without being challenged in any way, especially since the area
    these men entered is only 20 minutes from the village of Timbo,
    where a base operated by the Colombian army is located and has
    been staffed since March 30th of this year.''

        Do we have any reason to believe the army did not know what
    was going on?
        Mr. Beers. Sir, I am not specifically familiar with that
    particular incident, but we will submit for the record a
    response to that.
        [The information follows:]

        Eighteen-year-old Gladys Troches Mesa (whose name was erroneously
    reported as Apia in early reports) was one of 20 victims during a
    large-scale incursion by up to 300 AUC (United Self-Defense Forces of
    Colombia) paramilitaries who invaded the Alto Naya region April 12,
    2001. Embassy officers traveled to the Valle del Cauca department
    following the massacre and extensively interviewed survivors and
    displaced.
        According to Prosecutor General's office (``Fiscalia'')
    investigators, Ms. Troches was brutally tortured and murdered in the
    community of El Ceral (Cauca department), which is located northeast of
    Timba. Contrary to NGO and press reports, physical evidence indicates
    no chainsaw was used to kill any of the 19 victims whose bodies have
    been recovered, but several witnesses reported being threatened with
    one. Ms. Troches' wounds, as did those of some of the other victims,
    indicated that she was killed with a machete. The 18 other victims
    whose bodies have been recovered were murdered, some with machetes and
    some with guns, in and around the communities of El Playon, Patio
    Bonito, El Crucero and El Placer, as paramilitaries swung in a loop
    northeast of Timba before leaving the area. The body of the 12th
    victim, reportedly a mentally ill woman who was raped and killed, has
    not been recovered due to guerrilla presence in the area.
        The Army says that it has no base in Timba, although there were
    soldiers from the army's Pichincha battalion stationed in Timba at the
    time of the massacre. Witnesses also told the Prosecutor General that
    they saw soldiers in the community of Jamundi, north of Timba and not
    far from the massacre sites. Army troops also are stationed at La
    Selvajena base, to protect an electric plant south of Timba.
        It remains unclear what security forces knew, and when. Both the
    Attorney General's office (which has an investigative function) and the
    Prosecutor General's office are investigating the possibility of
    military omission in this case. Meanwhile, 74 paramilitaries captured
    by joint marine-navy operations following the massacre remain under
    arrest and under investigation. While most of the paramilitaries are
    former professional soldiers, no active service members have been
    implicated in these murders.
        Although NGO's and indigenous groups reported that as many as 100
    victims were killed, only 20 formal complaints have been filed.
    Colombian authorities have told Embassy officials that they do not
    expect more. Prosecutors attribute the high estimate to the general
    confusion following the massacre.

        Senator Leahy. I realize, Mr. Secretary, that some of these
    questions, there is no way that you could have the answers and
    that they will have to be submitted for the record. But I tell
    you, as a parent and an American, obviously I want to see the
    ravages caused by drug addiction stopped in our country, but I
    worry when we put our imprimatur on operations through our
    foreign aid assistance. We are also putting our imprimatur on
    terrible human rights violations.
        In some ways, more and more we have--not you, sir, but more
    and more we have people who seem to think that the solutions to
    our home problems are somewhere else. Aside from whether that
    is an arrogant or misguided policy, it is one that does not
    work.
        It is interesting, the drug war has become in many ways
    like some of the real excesses of the cold war. In the cold war
    we--and I mean both Democratic and Republican administrations--
    would support some of the worst dictators around the world if
    they would say they were anti-communist and would support us
    against the Soviet Union, which was fast crumbling from within
    anyway. So we propped up dictators and we did terrible things,
    both overtly and covertly, and we have been paying for years in
    parts of the world with the instability and the lack of
    democracy.
        The United States' image, a justly deserved image of a
    justice system, one of the finest in the world, a country where
    we have more opportunities than anywhere in the world, has been
    tarnished.
        As for the drug problem, I would hope, whether it is
    Colombia or anywhere else, that we do not end up doing the same
    thing, where our money, military expertise, intelligence,
    weaponry, and everything else create a situation of human
    rights violations in other parts of the world, saying that we
    are doing this to protect our children on the school grounds of
    America.
        We have got to go to the school grounds of America to try
    to talk people out of wanting to use drugs, and maybe that
    would enable us to stand for the things that are best about our
    justice system. I am not suggesting that I have an automatic
    answer. But there are concerns. They are not concerns just of
    this Senator, but concerns of members on both sides of the
    aisle, as you have heard from the questions today.
        I am so proud of our country, but I am not proud of our
    country when our aid ends up directly or indirectly supporting
    people who are evil. I am not in any way ignoring the terrible
    dangers that FARC has presented, as this report shows and as a
    lot of the press reports have shown and a lot of the work from
    your own Department have shown.
        Frankly, I think we have created a monster in our own
    country and we seem to want to get rid of that monster by
    supporting a different kind of monster in other parts of the
    world.
        Thank you both, gentlemen. The record will stay open for
    further questions for both these witnesses. I appreciate you
    coming.
        We will take a 3-minute break before we go to the next
    panel.
        Mr. Beers. Thank you, sir.
                            NONDEPARTMENTAL WITNESS

    STATEMENT OF JOSE MIGEL VIVANCO, EXECUTIVE DIRECTOR,
                AMERICANS DIVISION, HUMAN RIGHTS WATCH
        Senator Leahy. Mr. Vivanco, I appreciate you being here. As
    I said to the other witnesses, we had to move things around
    yesterday, and I appreciate you making it possible to be here
    today. As it turned out, had we tried to do this hearing
    yesterday we never would have been able to without
    interruptions.
        You have been able to hear all the testimony today, but
    please go ahead and give us your statement. Your full
    statement, of course, will be in the record, but go ahead and
    say whatever you would like. Then I am going to ask you some
    questions, some based on questions that have already been
    asked, but also feel free to add in any way to it.
        Again, like the earlier witnesses, you will have a
    transcript of your testimony and theirs, and you can always
    feel free to add any thing further to that.
        So go ahead, sir.
        Mr. Vivanco. Thank you very much, Senator Leahy. Thank you
    for inviting me to convey to the subcommittee our concerns
    about the human rights situation in Colombia and the
    implications of the U.S. security assistance sent to Colombia
    to fight drugs.
        I know the subcommittee is most interested in an exchange,
    so my remarks will be brief. I would like to submit for the
    record my written testimony. I also submit for the record a
    recent letter we addressed to the leader of the main Colombian
    rebel group about their violations of international
    humanitarian law.
        Human Rights Watch believes that it is important for this
    committee to continue to support human rights in Colombia by
    including strong and workable human rights conditions in the
    legislation under consideration. Conditions create an effective
    mechanism to promote positive change for human rights in
    Colombia.
        Second, we urge this subcommittee to include increased
    funds for the Colombian institutions that have a proven record
    of success against human rights violators in Colombia,
    including guerrilla members, prime among them the office of the
    attorney general, the internal affairs agency, and the public
    advocate. The AID proposal from the administration displays a
    greater emphasis on funding civilian initiatives, which we
    welcome, but much more is needed and specifically for these
    critical offices.
        We also urge this subcommittee to press Colombia's leaders
    for real progress on stopping attacks against human rights
    defenders, human rights monitors, and ensuring accountability
    for past murders. Even as Colombian authorities continue to
    provide bulletproof glass for the offices of threatened human
    rights groups and bulletproof vests and bodyguards for human
    rights defenders who receive death threats, these brave
    individuals continue to be murdered by experienced killers who
    continue to count on impunity for their crimes.
        The human rights situation, Mr. Chairman, in Colombia has
    deteriorated dramatically since Public Law 106-246 was signed
    last year. This deterioration is the result of at least three
    factors: the Colombian government's continuing failure to
    address continuing collaboration between its forces and abusive
    paramilitary groups; continuing impunity for military officers
    implicated in gross human rights violations; and international
    humanitarian law violations committed by guerrillas,
    principally the Revolutionary Armed Forces of Colombia, the
    FARC.
        According to the Colombian National Police, the number of
    massacres they recorded in the year 2000 increased by 22
    percent over the previous year, most the work of
    paramilitaries, who continue to enjoy at the very least the
    tolerance the acquiescence of the Colombian armed forces. In
    the first 6 months of this year, the police report yet another
    increase, from 84 massacres registered in the first 6 months of
    2000 to 98 massacres registered in the first 6 months of 2001,
    with a total of 568 victims.
        There is a growing sense the violence will only continue to
    worsen in the second half of 2001. Instead of bringing hope and
    expectations for the future, the millennium has brought terror
    and an increasing sense of hopelessness to many Colombians.
        Senator Leahy, I would like to, if I may, to make a couple
    of comments regarding the testimony of Mr. Beers, specifically
    on the issue of cooperation from the Colombian government in
    their duty to prosecute paramilitary groups. I think it is
    important to acknowledge that there has been some action
    against paramilitary groups. We have seen some progress. But it
    is important also to underscore that most of this progress is
    the result of the work of the attorney general's office,
    specifically the human rights unit of the attorney general's
    office. They deserve most of the credit.
        As a matter of fact, we continue receiving information,
    reliable information from the highest levels from different
    offices in Colombia, from different governmental offices, that
    they argue that the main obstacle for prosecution of key
    paramilitary members as well as active paramilitary groups
    across the country is the army, specifically the reluctance of
    the army to cooperate in providing security for the execution
    of arrest warrants, outstanding arrest warrants against members
    of paramilitary organizations.
        At this point, according to our information, more than 300
    arrest warrants for suspected paramilitaries across the
    country, have been unable to be executed because of the refusal
    of the military to provide needed security for the members of
    the attorney general's office to go into these areas that are
    controlled by paramilitary organizations.
        My last comment, Mr. Chairman----
        Senator Leahy. On that one, it would not be an
    overstatement to say that if they went in without that
    protection it would be basically a suicide mission?
        Mr. Vivanco. It would be extremely difficult. It is almost
    impossible for them to operate in certain areas of the country
    without the support of the military.
        Senator Leahy. Go ahead.
        Mr. Vivanco. The second point that I would like to make,
    Mr. Chairman, is that, according to our information, the
    attorney general's office remains severely underfunded. To
    date, the human rights unit has not received any funds,
    according to the latest information that we received that was
    yesterday at the highest level from the attorney general's
    office, they have not received any funds through Plan Colombia
    for operational expenses that are critical, funds for
    prosecutors to travel, to investigate cases, to protect
    witnesses and prosecutors, and to purchase critical equipment,
    vehicles that are necessary for them to carry out their
    mission.

                               prepared statement

        As I noted in my written testimony, Mr. Chairman, so far,
    according to the information provided by Colombian officials,
    government human rights investigators have received less than
    $66,000 from USAID in the year 2000 and the first 3 months of
    the year 2001, most for travel expenses to the United States
    for a course on the U.S. justice system, which is very
    valuable, it is very important; however, given the nature of
    the emergency and the crisis in Colombia, we believe that it is
    absolutely critical to allow the human rights unit of the
    fiscale, the attorney general's office, to have the necessary
    funding to be able to carry out their mission.
        [The statement follows:]

                   Prepared Statement of Jose Miguel Vivanco
        Chairman Leahy, Senator McConnell, Members of the Subcommittee:
    Thank you for inviting me to convey to the Subcommittee our concerns
    about the human rights situation in Colombia and the implications of
    U.S. security assistance sent to Colombia to fight drugs. I know the
    Subcommittee is most interested in an exchange, so my remarks will be
    brief. I would like to submit, for the record, my written testimony. I
    also submit for the record a recent letter we addressed to the leader
    of the main Colombian rebel group about their violations of
    international humanitarian law.
        Human Rights Watch believes that it is important for this
    Subcommittee to continue to support human rights in Colombia by
    including strong and workable human rights conditions in the
    legislation under consideration. Conditions create an effective and
    measurable mechanism to promote positive change for human rights in
    Colombia.
        Secondly, we urge this Subcommittee to include increased funds for
    the Colombian institutions that have a proven record of success against
    human rights violators in Colombia, prime among them the office of the
    Attorney General (Fiscalia), the Internal Affairs agency
    (Procuraduria), and the Public Advocate (Defensoria). The aid proposal
    from the Administration displays a greater emphasis on funding civilian
    initiatives, which we welcome, but much more is needed and specifically
    for these critical offices.
        For example, in 2000 and the first three months of 2001--a period
    of fifteen months--the Attorney General's Human Rights Unit and
    advisers from the Internal Affairs agency received U.S. $65,763 from
    the U.S. Agency for International Development. Half was spent on flying
    prosecutors to the United States to learn about the American judicial
    system, a pursuit that does not address the desperate need for
    vehicles, travel funds, and other resources to investigate and
    prosecute a rising number of human rights violations. This works out to
    less than the amount of U.S. military assistance spent in Colombia in
    only two hours of a single day.
        Finally, we urge this Subcommittee to press Colombia's leaders for
    real progress on stopping attacks against human rights defenders and
    ensuring accountability for past murders. Even as Colombian authorities
    continue to provide bullet-proof glass for the offices of threatened
    human rights groups and bullet-proof vests and body guards for human
    rights defenders who receive death threats, these brave individuals
    continue to be murdered by experienced killers who continue to count on
    impunity for their crimes.
        Cases involving the murder of human rights defenders--among them
    the 1996 killing of Josue Giraldo Cardona; the 1997 killings of Mario
    Calderon, Elsa Alvarado, and Carlos Alvarado; the 1998 killings of
    Jesus Valle Jaramillo and Eduardo Umana Mendoza; the 1999 killing of
    Julio Gonzalez and Everardo de Jesus Puerta; the 2000 killing of Jaime
    Garzon and Elizabeth Canas, just to name a few-languish, in the best of
    cases with only the gunmen arrested and not the people who planned and
    paid for the killings.
                                    overview
        The human rights situation in Colombia has deteriorated markedly
    since Public Law 106-246 was signed last year. This deterioration is
    the result of at least three factors: the Colombian government's
    continuing failure to address continuing collaboration between its
    forces and abusive paramilitaries; continuing impunity for military
    officers implicated in gross violations; and international humanitarian
    law violations committed by rebels, principally the Revolutionary Armed
    Forces of Colombia-People's Army (Fuerzas Armadas Revolucionarias de
    Colombia-Ejercito del Pueblo, FARC-EP).
        According to the Colombian National Police, the number of massacres
    they recorded in 2000 increased by 22 percent over the previous year,
    most the work of paramilitaries who continue to enjoy, at the very
    least, the tolerance of the Colombian Armed Forces. In the first six
    months of this year, the police report yet another increase, from 84
    massacres registered in the first six months of 2000 to 98 massacres
    registered in the first six months of 2001, with a total of 568
    victims.
        Human rights defenders, trade unionists, journalists, and community
    leaders continue to lead the lists of people killed because of their
    work. Only on July 1, for example, did authorities discover the body of
    Alma Rosa Jaramillo Lafourie near the city of Barrancabermeja,
    Santander, long the home of a vibrant and broad-based human rights
    movement. Several days earlier, this human rights defender had been
    kidnaped by paramilitaries, who have been engaged in a deadly campaign
    against rights workers in the region. Jaramillo was a valued colleague
    of Father Francisco de Roux, a Jesuit priest who runs the Middle
    Magdalena Development and Peace Program. Some of you have met with
    Father De Roux, and are aware of his valuable and dangerous work in
    defense of local communities in the region.
        Last year, an estimated 319,000 people were forced to flee their
    homes, the highest number of displaced persons recorded in a single
    year in the last five years. Thousands of Colombians are leaving the
    country, and there is a growing sense that violence will only continue
    to worsen in the latter half of 2001. Instead of bringing hope and
    expectation for the future, the millenium has brought terror and a
    spiraling sense of hopelessness to many Colombians.
                           military-paramilitary ties
        Human Rights Watch continues to document abundant, detailed, and
    compelling evidence that certain Colombian army brigades and police
    detachments promote, work with, support, and tolerate paramilitary
    groups, treating them as a force allied to and compatible with their
    own. At their most brazen, these relationships involve active
    coordination during military operations between government and
    paramilitary units; communication via radios, cellular telephones, and
    beepers; the sharing of intelligence, including the names of suspected
    guerrilla collaborators; the sharing of fighters, including active-duty
    soldiers serving in paramilitary units and paramilitary commanders
    lodging on military bases; the sharing of vehicles, including army
    trucks used to transport paramilitary fighters; and the coordination of
    army roadblocks, which routinely let heavily-armed paramilitary
    fighters pass.
        In particular, officers at the brigade and battalion level and in
    some police detachments routinely flout, ignore, or circumvent orders
    from above to break ties to paramilitaries. In violation of the law and
    the directives of their superiors, these officers continue close and
    regular relationships with the groups responsible for most human rights
    violations in Colombia.
                                rebel violations
        In our July 10 letter to the FARC-EP, we document cases involving
    the killings and cruel and inhuman treatment of captured combatants,
    abductions of civilians, hostage-taking, the use of child soldiers,
    grossly unfair trials, and forced displacement of civilians. Further,
    FARC-EP forces continue to use prohibited weapons, including gas
    cylinder bombs that wreak indiscriminate havoc and cause appalling
    injuries, and to attack medical workers and facilities in blatant
    disregard of international law and the most basic standards of respect
    for human life.
        In the area ceded to rebels by the Colombian government for talks,
    the FARC-EP has established a pattern of abducting civilians suspected
    of supporting paramilitary groups, many of whom are later killed.
    Unlike abductions carried out for financial reasons, these abductions
    are often kept hidden. The FARC-EP generally does not disclose the
    victims' fate or even acknowledge custody. Relatives of those who are
    seized by the FARC-EP in these circumstances frequently are unable to
    obtain any information from the FARC-EP about the fate or whereabouts
    of their loved ones, causing enormous suffering. The victims of these
    abductions have no protection under the law, let alone legal remedy
    against false accusations and abuse, nor can their relatives invoke
    legal remedies on their behalf.
        We detail other violations committed by guerrillas in our letter,
    part of our continuing effort to hold all sides in this conflict
    accountable for their abuses.
                            the colombian government
        Some government officials--the Attorney General, the members of his
    Human Rights Unit, investigators in the Attorney General's Technical
    Investigation Unit (Cuerpo Tecnico de Investigaciones, CTI), the
    People's Advocate, and the Colombian National Police (CNP) leadership--
    have taken important action against paramilitaries. They have
    investigated their abuses, arrested paramilitary leaders, seized their
    weapons, and prevented some massacres.
        It was largely due to the Attorney General's efforts, for instance,
    that Colombian law enforcement for the first time successfully impaired
    the paramilitaries' financial network. In May, a combined team of
    Attorney General prosecutors and CTI agents carried out an operation in
    the city of Monteria that gathered evidence to be used to arrest and
    prosecute the people who finance paramilitary groups. For their
    security, this team was protected by an elite Colombian Army unit
    brought from Bogota. This is a critical and positive development that
    demonstrates that paramilitary groups are vulnerable and can be brought
    to justice.
        Unfortunately, this operation remains an anomaly. To date, the good
    work of the Attorney General's office has been consistently and
    effectively undermined, canceled out, or in some cases wholly reversed
    by actions promoted by the military-paramilitary alliance and inaction
    by the Pastrana Administration.
        Despite its statements to the contrary, the Pastrana Administration
    has not moved aggressively to acknowledge military-paramilitary
    collaboration and take effective action to ensure respect for human
    rights. To date, efforts to break these ties have been ineffective or,
    in some cases, wholly absent. Even as President Pastrana publicly
    deplores successive atrocities, each seemingly more gruesome than the
    last, high-ranking officers fail to take the obvious, critical steps
    necessary to prevent future killings by suspending suspect security
    force members suspected of abuses, delivering their cases to civilian
    judicial authorities for investigation, and pursuing and arresting
    paramilitaries
        Eyewitnesses, municipal officials, and even the government's own
    investigators routinely delivered to the security forces detailed and
    current information about the exact location of paramilitary bases;
    license plates, colors and types of paramilitary vehicles; cellular
    telephone and beeper numbers used by paramilitaries; and the names of
    paramilitaries. Yet despite dozens of ``early warnings'' of planned
    atrocities, paramilitaries advanced, killed, mutilated, burned,
    destroyed, stole, and threatened with virtual impunity, often under the
    very noses of security force officers sworn to uphold public order.
        Just as routinely, the security forces, in particular the military,
    have not moved against paramilitaries or have engaged in actions that
    produced only delays and allowed paramilitaries to continue their
    activities with impunity. Again and again, troops arrived at the sites
    of serious abuses committed by paramilitaries only to count bodies,
    photograph damages, and make familiar excuses for their failure to
    protect civilians and capture the paramilitaries responsible for
    abuses. Meanwhile, hundreds of arrest warrants against paramilitary
    leaders issued by the Attorney General's office remain unenforced
    because the military chooses not to execute them.
        According to the CTI, investigators attached to the Attorney
    General's office, they had over 300 arrest warrants against alleged
    paramilitary members pending in January 2001. Among them were at least
    twenty-two separate warrants against Carlos Castano for massacres,
    killings, and the kidnaping of human rights defenders and a Colombian
    senator. Government investigators from four separate institutions
    consulted by Human Rights Watch agreed that the main obstacle to
    arrests was the Colombian military. The military, according to these
    investigators, refused to send troops to make arrests or else leaks
    arrest plans to paramilitaries, frustrating operations.
        For its part, the military claimed that it has arrested
    paramilitaries. But civilian government investigators have insisted to
    Human Rights Watch that most of those counted as detained in military
    tallies were merely low-ranking fighters, not leaders and key
    organizers. The Attorney General's office, some times acting in
    coordination with the CTI and CNP, has a significantly better record of
    arresting paramilitary leaders.
        Far from strengthening key government institutions that investigate
    human rights cases, the Pastrana Administration has significantly
    weakened them by cutting their budgets, failing to adequately protect
    prosecutors and investigators, and failing to provide adequate funds to
    protect threatened witnesses.
        According to the Attorney General, decreases have been so extreme
    that they threaten key teams, like the Human Rights Unit, with
    paralysis. This was made dramatically clear to Human Rights Watch
    during a visit to the Human Rights Unit prosecutors in January 2001.
    During the interview, one prosecutor was frantically calling various
    officials to get a seat on an interior ministry helicopter for a
    colleague to investigate massacres in the department of Valle. Such
    incidents, he said, were commonplace.
                                  u.s. policy
        Human Rights Watch firmly believes that the United States has an
    important role to play in Colombia and can help to support human
    rights. There have been some positive developments in Washington and
    from the U.S. Embassy in Bogota. The chapter on Colombia in the annual
    country reports on human rights issued by the State Department
    continues to reflect an accurate, albeit grim picture of the worsening
    human rights situation. As importantly, U.S. Ambassador Anne Patterson
    has begun a long-overdue policy of speaking out on the human rights
    situation, and expressing concern over specific cases. Her timely,
    personal interventions in recent cases have been a critical factor in
    spurring the Colombian authorities to act to address the paramilitary
    advance.
        Nevertheless, it remains clear that much more needs to be done.
    U.S. law prohibits military aid from going to security force units
    engaged in abusive behavior until effective steps are taken to bring
    perpetrators to justice. Last year, the U.S. Congress wisely included
    human rights conditions specific to Colombia in Public Law 106-246.
    These were conditions that we strongly supported, and this Subcommittee
    in particular merits recognition for ensuring that they were made part
    of the law.
        However, on August 22, 2000, President Bill Clinton signed a waiver
    that lifted these conditions, allowing security assistance to be
    provided to the Colombian military even as the State Department
    reported that these forces continued to work with paramilitary groups.
    With one signature, the White House sent a direct message to Colombia's
    military leaders that overshadowed any other related to human rights.
        Judged by the Colombian military's behavior in the field--not by
    rhetoric or public relations pamphlets--its leaders understood this
    message clearly. Even as Colombia's high command has agreed to scrub a
    few units for human rights problems, the rest of the military appears
    to have a virtual carte blanche for continued, active coordination with
    the paramilitary groups responsible for most human rights violations in
    Colombia.
        Human Rights Watch remains convinced that the most important way
    that the United States can contribute to improving human rights
    protections in Colombia is to enforce strict and workable conditions on
    all military aid. These conditions should not include a waiver.
    Enforcement of the conditions contained in Public Law 106-246 would
    have contributed greatly to improving human rights protection, in my
    opinion.
        [Clerk's Note.--The Human Rights Watch letter to Manuel Maruland,
    FARC-EP, Commander in Chief, Violations of International Humanitarian
    Law, Colombia, July 9, 2001, can be found on the website: http://
    www.hrw.org]

        Senator Leahy. We provided last year $4 million for the
    protection of human rights workers, $10 million for the
    security of witnesses and judges in human rights cases, $25
    million to establish human rights units within the attorney
    general's office, $7 million to strengthen human rights
    institutions. Apparently very little of this money has gotten
    anywhere; is that what you are saying?
        Mr. Vivanco. That is right.
        Senator Leahy. Your written testimony spoke about what a
    tiny fraction of the military assistance that is. I mean, the
    amount of money we spend in a couple of hours on the military
    could provide a great deal for the human rights workers.
        Incidentally, I asked earlier about the 388 soldiers who
    were dismissed. We have been unable to find out what they were
    dismissed for, what happened to them, and whether any of them
    came back into the military or the paramilitary. Do you or your
    organization have any idea who these 388 soldiers were, whether
    any of them were ever prosecuted for any human rights
    violations?
        Mr. Vivanco. No, sir, we have no information whatsoever. We
    tried really hard to obtain information about the nature of the
    crimes that these individuals allegedly committed, their names,
    ranks, and so far we have been unable to establish anything for
    the record with regard to those ones who allegedly have been
    dismissed or suspended from active duty because they are
    involved allegedly in human rights violations.
        Senator Leahy. Do you have any response to the public
    advocate's report on the Naya River massacre? Apparently the
    public advocate made a report on the Naya River massacre. Have
    you seen that report?
        Mr. Vivanco. No, no, sir.
        Senator Leahy. Can you tell me about the letter you sent to
    the FARC leadership that was released publicly yesterday? Would
    you just summarize the key points of that letter, just so we
    could have it for the record?
        Mr. Vivanco. Senator Leahy, our organization has been
    monitoring human rights conditions in Colombia for several
    years, close to 15 years. Part of our mission is to also
    monitor the activities of irregular armed groups all over the
    world, including obviously in Colombia. We have produced
    several books and specific reports on violations committed by
    paramilitaries in Colombia, paramilitaries with close links
    with the government as well as guerrillas.
        Since guerrilla leaders every few months publicly stated
    that they are interested in peace negotiations, they are
    interested in respect for international humanitarian law, we
    decided to confront their leadership and specifically the
    maximum leader of the guerrillas in Colombia, Mr. Marlander,
    with the basic principles of international humanitarian law and
    with some cases and evidence that shows an appalling record of
    systematic abuses of international humanitarian law, especially
    against the civilian population, as well as combatants.
        That is why we conducted an on-site investigation. We
    visited the area that is under the control of the FARC as well
    as other areas in the country. After corroborating this
    information, we put all of this information in the form of a
    letter to Mr. Marulanda. We hope that with this kind of action
    we will be able to influence their practice.
        So far we have not received any reaction from the
    leadership of the FARC.
        Senator Leahy. Do you think you will?
        Mr. Vivanco. Everything depends on the reaction of the
    Colombian people as well as the international community. It is
    absolutely essential from our viewpoint to inform the public
    about the record of this group as well as the record of
    paramilitary groups and the state forces in Colombia. Based on
    information and based also on the actions of governments like
    the U.S. government and the European Union and some key
    governments in Latin America, especially for instance the
    Mexican government, we hope that some pressure could be
    exercised specifically with the FARC, but also with other
    groups in Colombia, that ends up improving human rights
    conditions there.
        Senator Leahy. Do you feel that the restrictions that we
    put on the money last year, some of which were waived by the
    Clinton administration, do you feel that we should keep on
    having restrictions, keep on tying our aid to improvements in
    human rights?
        Mr. Vivanco. I think if there is any hope, Senator Leahy,
    for improving human rights conditions in Colombia, that is
    clearly related to some degree of engagement with key actors in
    Colombia on the specific conditions that encourage them to
    improve their record. That is why we support human rights
    conditions, human rights conditions that could be feasible,
    workable, and within a reasonable time, and, obviously, without
    a waiver.
        Senator Leahy. I have written a number of letters about a
    case, the so-called Santo Domingo case, since December 1998.
    That is when a bomb exploded in a village that killed 17
    people, including 5 children, and wounded 24 others. It appears
    the bomb was made in the United States, that it was dropped by
    the Colombian Air Force flying a U.S.-manufactured aircraft.
    The Colombian military tried to cover up responsibility,
    including lying to the U.S. embassy.
        These are all pretty damning statements. Do you know
    whether a credible investigation has been done of this? Has
    anybody been prosecuted or punished?
        Mr. Vivanco. As far as I know, Senator Leahy, the most
    serious investigation has been conducted by the FBI in situ,
    and their conclusions corroborate our assessment that that act
    was the responsibility of the armed forces of Colombia. So far,
    the local investigation has not produced serious results.
        Senator Leahy. The Leahy law that we talked about before
    prohibits funds to units of security forces if there is
    credible evidence they have committed gross violations of human
    rights unless the government has taken effective measures to
    address those violations and bring the people responsible to
    justice.
        Do you think the Leahy law applies to the Santo Domingo
    case?
        Mr. Vivanco. I believe that it should apply to the Santo
    Domingo case.
        Senator Leahy. Now, in the past we have talked about the
    links between the armed forces and the paramilitary groups.
    Years ago I asked the State Department about this and they said
    they did not see such evidence of links, but then last year
    they told me the Colombian government was making real efforts
    to sever these links, the links that they did not think existed
    before.
        The Colombian Government tells me the same thing, that they
    are trying to sever the links between the armed forces and the
    paramilitaries groups. What is your sense of the efforts the
    army is making against the paramilitaries?
        Mr. Vivanco. According to the most recent information that
    we have as a result of investigations in Colombia, we are
    prepared to state, to argue that these relations in some areas,
    areas that are infested with paramilitary groups, still involve
    close and active coordination with military units, coordination
    and support that includes communications support via radios,
    cellular telephones, beepers, sharing intelligence between
    local military units and paramilitary organizations,
    including--by sharing intelligence, I mean including the names
    of suspected guerrilla collaborators, the sharing of fighters,
    including active duty soldiers serving in paramilitary units,
    and paramilitary commanders lodging on military bases, the
    sharing of vehicles, including army trucks used to transport
    paramilitary fighters, and the coordination of army road
    blocks, which routinely let heavily armed paramilitary fighters
    pass.
        So in some areas of the country this relationship is still
    very close and also the evidence shows that there is active
    support. In other words, those ties, that relationship, has not
    been breaked and it is still very key for the activities of
    paramilitary organizations.
        Senator Leahy. I wish you were wrong, but unfortunately
    every bit of information I have says the same thing.
        Now, I understand a new security law passed the Colombian
    congress and I guess President Pastrana has not signed it, but
    he probably will. Do you know whether the Colombian attorney
    general supports this security law and what effect it is going
    to have on the ability of civilian authorities to investigate
    human rights violations?
        Mr. Vivanco. This law is a very controversial piece of
    legislation in Colombia. Fortunately, it has not been signed
    yet by President Pastrana. I am not sure about the position of
    the current attorney general. President Pastrana just nominated
    a new attorney general of Colombia, so I do not know about his
    views on the current legislation.
        But in our experience all over the region, Senator Leahy,
    when a civilian government allows for activities of security
    forces without the necessary constraints and supervision and
    oversight by the judicial authorities, specifically prosecutors
    and judges, that kind of legislational prescription is the best
    recipe for abuses. In a country like Colombia, where impunity
    is the rule, where everybody acknowledges that strengthening
    the judiciary and judicial control over the police as well as
    the military is key to move forward the country and to
    strengthening democracy and the rule of law, we do not believe
    that this legislation will help to increase respect for human
    rights in Colombia.
        Senator Leahy. Well, in the New York Times yesterday in an
    editorial, which I am sure you have seen, it took much the same
    position. In fact, they are saying hopefully that President
    Pastrana would not sign the bill. They complete the editorial
    by saying: ``Congress and President Bush should make it easier
    for Mr. Pastrana to kill the bill by promising to cut military
    aid if he signs it.''
        I tend to agree, and I will put that New York Times article
    in the record at this point.
        [The information follows:]

                    [From the New York Times, July 10, 2001]

                         Legalizing Abuses in Colombia
        The human rights record of Colombia's army has improved somewhat in
    recent years. In part this is because its abuses have been privatized--
    paramilitary groups with close links to many members of the armed
    forces are now committing the bulk of the murders of civilians. But a
    new law that has passed Colombia's Congress and awaits the signature of
    President Andres Pastrana would give the military dangerous new powers
    over civilians and lessen the possibility that officers would be held
    accountable for abusing them.
        Mr. Pastrana seems likely to sign the law this week. That would be
    a grave mistake that would jeopardize American Congressional support
    for Washington's extensive aid to Colombia's military.
        Colombian officials and indeed much of the nation endorse expanded
    powers for the military because guerrilla abuses are increasing.
    Yesterday Human Rights Watch accused the nation's biggest guerrilla
    group, the Revolutionary Armed Forces of Colombia, or FARC, of serious
    abuses, including executions of civilians, hostage-taking, the killing
    of medical workers and the use of child soldiers. Last year, according
    to Colombian human rights groups, the FARC killed nearly 500 civilians.
    Most were people the FARC accused of helping the army or
    paramilitaries.
        The horrific abuses by the FARC and other guerrillas are driving
    Colombians--especially those whose income puts them at risk of
    kidnapping--to endorse draconian responses, such as the new security
    law. This reaction is misguided. While more moderate than a previous
    version, the bill still contains undemocratic and potentially abusive
    reforms. It would make authorities such as mayors and governors
    subordinate to military commanders. The bill would also give the
    military the ability in many cases to authorize raids, arrest civilians
    and in some cases carry out investigations. The law is inconsistent
    with the Colombian Constitution, which bars the military justice system
    from investigating civilians.
        The new bill would also contribute to the impunity of the armed
    forces, by placing a two-month time limit on the ability of civilian
    authorities to open investigations of crimes committed in the course of
    military operations. Another part of the security law says that when
    people are arrested in the act of committing crimes, the military need
    only inform judges of their capture, instead of bringing them before
    the courts. There is no possible case to be made that either change
    would help the military win the war. Allowing officers to wait to
    produce detainees is an invitation to mistreat prisoners. The right to
    appear before a judge is partly designed to discourage abuses.
        Congress and the Clinton administration approved a large hike in
    military aid to Colombia last year at least in part because the
    administration promised that the aid would go to a reformed Colombian
    military. Now that the money is flowing, Colombia's army has apparently
    decided that it can get away with shaking off oversight. President
    Pastrana evidently feels he needs to placate the military, another
    indication of the worrisome power of the armed forces. The House
    Appropriations Committee will meet this week to budget money for
    Colombia. Congress and President Bush should make it easier for Mr.
    Pastrana to kill the bill by promising to cut military aid if he signs
    it.

        Senator Leahy. Mr. Vivanco, I appreciate you coming here
    and I appreciate your rearranging your schedule so you could. I
    am looking forward to reading more thoroughly your report on
    the FARC. Thank you very, very much.

                             CONCLUSION OF HEARINGS

        That concludes our hearings. The subcommittee will stand in
    recess subject to the call of the Chair.
        [Whereupon, at 12:32 p.m., Wednesday, July 11, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2002

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses. The statements and
    letters of those submitting written testimony are as follows:]
                   Prepared Statement of Columbia University
        Mr. Chairman, thank you for this opportunity to submit a written
    statement for the Outside Witness Hearing Record. This statement
    provides two recommendations that will assist AID in achieving its
    missions and goals in Africa. Specifically, the recommendations are:
      --Provide $975,000 for the continued funding of the two site IRI
            climate forecasting efforts (Africa); and
      --Provide $2 million the Center for Health and Food Security,
            designed and manned by the IRI in cooperation with country
            teams across Africa.
                                   background
        Columbia University's International Research Institute for Climate
    Prediction (IRI) is the primary U.S. agent in experimental climate
    modeling and long range (seasonal to interannual) forecasting. The IRI,
    funded and established through a partnership between Columbia
    University and the National Oceanic and Atmospheric Administration
    (NOAA) of the Department of Commerce, provides support for the Drought
    Monitoring Centre in Nairobi, Kenya. The fiscal year 2001
    Appropriations Act provided continued funding for this effort and
    encouraged AID to establish a second site (in South Africa) with the
    IRI. The IRI is currently working on the logistics associated with the
    establishment of a second site in Africa. The estimated costs
    associated with this effort total $975,000 annually.
        Establishment of a Center for Health and Food Security is proposed
    at $2 million to focus on disease and famine issues caused by the
    effect of climate forcing agents across Africa. This two-year effort is
    designed to demonstrate the effectiveness of long range forecasting and
    the measures that can be taken to minimize or avoid disease, plague,
    famine and drought associated with climate forcing agents such as El
    Nino and La Nina events.
        The El Nino events in 1983, 1988 and 1997 have demonstrated that
    while there was some probability of abnormal atmospheric interaction,
    the certainty to take dramatic and forceful actions at the national and
    regional levels was lacking. The IRI has now achieved a level of
    accuracy in future climate driven events to the extent that forecasting
    and predictive capability can be utilized by private and public
    decision makers to avoid the high probabilities of below/above average
    temperature and precipitation by region. This long-range information
    can be converted to practical and practicable actions that can mitigate
    the extreme effects and damage caused by climate forcing agents around
    the world. The most vulnerable continent to these effects is Africa.
                                   iri goals
        The IRI is an institution that seeks to link scientific research
    with real world applications. The IRI provides public and private
    decision makers with the advanced tools of climate forecasting as means
    of planning and preparing for extreme variations in precipitation and
    temperature probabilities due to climate forcing agents. With IRI
    assistance, AID's efforts in developing countries will be strengthened
    beyond current capacity. As third world countries mature toward
    economic stability, emerging national leaders will have familiarity
    with the value of climate forecasting and thus will incorporate these
    instruments into improved mechanisms for national planning.
        Thank you again for this opportunity to submit this recommendation
    for AID funding.
                                     ______

                Prepared Statement of the Joslin Diabetes Center

        Mr. Chairman, thank you for this opportunity to present a project
    proposal for implementation in Egypt that addresses a growing problem
    in third world and developing countries: diabetes. This statement
    outlines an identified health problem and a mechanism of resolving the
    downstream complications that will inevitably follow in the known
    history of this disease.
        Specifically, this recommendation proposes the following:
        1. To reduce morbidity and mortality associated with diabetes and
    its complications in suburban Dakahlia and its surrounding governates.
    To be the core center for conducting research aimed at prevention of
    both type 1 and type 2 diabetes within the Egyptian population.
        2. To establish a state-of-the-art comprehensive diabetes unit
    within Mansoura University Hospitals Complex to serve as a regional and
    national resource for diabetes care, education and research.
        3. To use this unit as a working unit model for collaboration
    between U.S. and health care organizations in the Middle East that
    serves the educational and developmental needs using currently
    available technology and communication platforms. Such working unit
    model will serve as the core for future expansion and harmonious
    ``regionalization'' of the joint program.
        The fiscal year 2002 AID cost associated with this initiative
    totals $2.9 million. Local and regional contributions from sources in
    Egypt, including Mansoura University, total approximately $10 million.
    The basic goal is to transfer medical technology and protocol to meet a
    major health care crisis.
    The Problem: The Burden of Diabetes in Egypt
        Diabetes has become a major, emerging clinical and public health
    problem and one of the leading causes of permanent disability and death
    in Egypt. It is currently the major risk factor for cardiovascular
    disease, and the leading cause of lower extremity amputation,
    blindness, and endstage renal failure. Because of the chronic nature of
    diabetes and the far-reaching complications associated with it, the
    costs to society are enormous.
        The combined prevalence of diagnosed and undiagnosed diabetes in
    the Egyptian population >20 years of age was estimated to be 9.3
    percent of the 67 million Egyptians, which is far higher than its
    prevalence in the developed countries and most of developing countries.
    The main reasons for high prevalence rate of diabetes in Egypt are the
    increased risk factors for diabetes: inheritance, obesity, bad
    nutritional guidance and sedentary life style.
        The microvascular and neuropathic complications of diabetes area
    major clinical and public health problem in Egypt. In a recent study
    conducted by University of Michigan Medical Center, Ann Arbor, 42
    percent of the Egyptian diabetic patients had retinopathy (which can
    lead to blindness), 21 percent had evidence of kidney damage, and 22
    percent severe nerve damage. The onset of retinopathy was estimated to
    occur 2.6 years prior to clinical diagnosis of diabetes.
    Relation between diabetes and endemic diseases in Egypt
        One of the major growing endemic problems in Egypt is the infection
    with hepatitis C, which affects approximately 20 percent of the adult
    population. In a recent study conducted by H. Dabbous Department of
    Tropical Medicine, Ain Shams University, Cairo, the HCV seropositive
    patients were three times more likely to suffer from diabetes mellitus
    than those who were HCV.
        According to a recent epidemiological study conducted last year by
    Department of Medical Statistics and Clinical Epidemiology, Medical
    Research Institute, Alexandria University, Egypt, of diabetic patients:
    38 percent did not have their retinas examined, 29 percent did not
    receive a neurological examination, and 24 percent did not have their
    feet inspected. Only 8 percent did self-examination of blood glucose
    and 26 percent checked glucose in urine by themselves. Furthermore,
    only 4 percent had their HbAlc checked in 12 months. All these
    practices are far behind the standard level of diabetes care. Diabetes
    care in suburban areas is further behind that in urban areas.
    Active Role of USAID in supporting the Health Care System in Egypt
        During the late 1970s and early 1980s, USAID assistance to the
    Government of Egypt resulted in greatly expanded access to health
    services. Substantial investments were made in training health
    personnel, upgrading the physical infrastructure, and improving the
    service delivery system. Some of these programs brought great benefits
    to the country. For example, the Egypt child survival program has been
    a phenomenal success in improving the health of young children,
    preventing more than 80,000 child deaths every year. USAID, along with
    the Government of Egypt, non-governmental organizations and the private
    sector, is working to cut mortality rates further, expand and target
    maternal/child health services, and improve their sustainability. This
    is being done through a range of mechanisms including policy reforms,
    the promotion of quality assurance, decentralization, better resource
    allocation, and increased participation by the private sector and local
    communities.
        USAID health investments are also combating endemic and emerging
    diseases. One of those is the Hepatitis C virus, which causes severe
    liver damage, liver cancer, and increased risk of maternal mortality.
    USAID is responding to the urgent need for applied research to
    determine how to stop the spread of this deadly virus.
    Mansoura University and Mansoura University Hospitals
        The Faculty of Medicine was founded in 1962 as a branch of Cairo
    University. A presidential decree declared the establishment of East
    Delta University in 1972. The name was changed to University of
    Mansoura in 1973. The University campus covers approximately 300 acres.
    Mansoura University harbors the largest Medical Complex in Egypt, which
    includes 7 specialized centers plus the University Hospital.
        The Diabetes and Endocrine Section at Mansoura University Hospital
    was founded in the late 1960s. It includes 10 senior specialists in the
    field of endocrinology and diabetes. The unit, which has become an
    integrated clinical, education and research entity, conducted hundreds
    of scientific research projects among the Egyptian diabetic population
    and some important epidemiological studies. The unit is also a member
    of the Egyptian Diabetes Association, Egyptian Society of Diabetes,
    Endocrinology and Metabolism, and the International Diabetes
    Federation.
    Joslin Diabetes Center--Boston
        Joslin Diabetes Center, an affiliate of Harvard Medical School
    headquartered in Boston's Harvard-Longwood Medical Area, is a national
    and international leader in diabetes treatment and research. Joslin has
    locations throughout the Boston metropolitan area and offers affiliated
    programs throughout the United States. Joslin is currently integrating
    its advanced telemedicine platform for comprehensive diabetes
    management into the DOD, VA and Indian Health Service Health Care
    systems.
        Joslin's tradition of excellence in diabetes is reflected in the
    high level of satisfaction patients express in the care and education
    they receive. Nearly 90 percent of new patients to the Center
    consistently rate their experience as ``very positive.'' Moreover,
    Joslin trainees chair several prestigious diabetes programs worldwide.
        Joslin was established more than 100 years ago by Elliott P.
    Joslin, M.D. Dr. Joslin was a diabetes specialist for over 60 years,
    beginning in an era 25 years before the discovery of lifesaving
    insulin. Dr. Joslin and his colleagues were the first to use insulin in
    New England following its discovery.
    Project Outline
        The project will have two phases:
      --The first phase is to establish a well-equipped diabetes unit at
            the recently constructed Internal Medicine Center at Mansoura
            University. This unit will serve as a working model for 3 years
            for future co-operation and partnership between Joslin Diabetes
            Center and Mansoura University.
      --After 3 years and upon success of this working model, we expect to
            proceed with the second phase of establishing a diabetes center
            with the aim of serving the high load of diabetes population in
            Mansoura vicinities. This expanded center will continue with
            the technical and scientific partnership with Joslin Diabetes
            Center.
        I. With the current advance in electronic communication, medical
    informatics and telemedicine, major centers can now work in harmony
    with remote units and reach a larger target population at significantly
    lower cost. Over the last few years, University of Mansoura invested
    heavily in building a communication and networking infrastructure that
    serves the university and its affiliated hospitals. All the university
    units are currently linked through high-speed fiber optic cables to the
    computer and Internet center in the university.
        The Diabetes Unit will benefit from this infrastructure by building
    a telemedicine and electronic records system that will be fully
    integrated with Joslin Diabetes Center. The advantages of this
    electronic communication link are:
        1. Implement an electronic medical record system which has the
    following advantages: (a) Modernize the level of service at the
    Mansoura unit. (b) Allows auditing of the quality of diabetes care.
    Where Joslin Diabetes Center can monitor the services at Mansoura unit
    in order to give much better input in improving the use of the
    available resources. This will ultimately help in improving the quality
    of diabetes care in Mansoura to the international standard. (c) These
    records may serve as baseline data for epidemiological and research
    studies and improved patient services.
        2. The Telemedicine unit will provide better communication with
    Joslin specialists and staff and would enable: (a) Remote case studies,
    journal clubs and consultations; (b) Seminars and electronic meetings;
    and (c) Transmitting lectures and presentation held at Joslin Diabetes
    Center.
        3. It will reduce travel costs between the two units and eliminate
    the unneeded interruption in the health care activities of both
    parties.
        II. Joslin Diabetes Center will help Mansoura Diabetes Unit to
    establish and maintain a standard of diabetes care following the
    American Diabetes Association's recommendations and guidelines.
        III. Joslin Diabetes Center will assist Mansoura Diabetes Unit in
    starting strong programs, especially those related to:
      --Diabetes Care
      --Diabetes Education
      --Diabetes Research--with focus on issues important to Egypt
      --Diabetes Prevention
      --Diabetes Complications--management and prevention
      --Behavioral Medicine
        Joslin has a known international lead in those important fields.
    Egypt is deficient in these fields.
    Year 1
        Create Model Demonstration Unit (MDU) that can utilize the
    strategic educational and training program set by Joslin Diabetes
    Center. Prepare the task force at Mansoura unit to meet the joint
    collaboration goals. Start the telemedicine infrastructure and put it
    in demonstration mode.
    Year 2
        Use the MDU to educate local physicians, nurses and other health
    professionals. Use the MDU to develop educational material and
    applicable methods and test their input and audit their outcomes and
    analyze their effects in improving the health care delivered to
    diabetic patients in regional suburban areas. Finalize the telemedicine
    working platform to be able to utilize the training and educational
    goals.
    Year 3
        Introduce and distribute the educational materials and programs
    developed jointly by Joslin and Mansoura unit for diabetic patients in
    Mansoura and its vicinities. Implement epidemiological and health care
    services that fit the specific needs of the diabetic population in
    Egypt. Translate these services into economic benefits through better
    allocation of resources invested in diabetes care. Analyze the MDU for
    expansion of the collaborative project beyond the region.
    Significance and summary
        This project will be a model of International Collaboration in the
    twenty-first century. As the joint work progresses, we expect to
    capitalize on innovations such as Internet 2, hand held broadband
    receivers, etc. to foster an ever closer team work between dedicated
    professionals in Egypt and the United States. This project will bring
    improved care and comfort to untold numbers of patients by educating
    and helping caregivers and medical educators.
        Thank you for this opportunity to submit this statement for the
    Outside Witness Hearing Record.
                                     ______

     Prepared Statement of the Robert F. Wagner Graduate School of Public
                          Service, New York University

     the potential of technology to help meet the challenges of democratic
                            public service education
        The American experiment in democratic decision-making began long
    ago and in simpler times, but it has many lessons to offer nations and
    peoples around the world. After the Allies' victory in World War II,
    the United States faced an enormous challenge of rebuilding in Europe
    and Asia. Now, having defended its democratic system and won the Cold
    War, the United States faces a new challenge of encouraging the
    development of democratic political systems and market economies around
    the world. The struggle for democracy and economic freedom will require
    new weapons, but success in this battle may depend as much on American
    ingenuity and technological superiority as did our previous victories.
        Through its direct aid programs, its university partnership
    programs, its Fulbright and other scholar exchange programs, the Edmund
    Muskie and Ron Brown Fellows programs, and through various foreign
    visitor programs, our government is making a strategic investment in
    developing democratic, market-oriented leadership around the world.
    Indirectly, America's investment in it own higher education system has
    also paid international dividends: American universities are the most
    popular destination of students who study abroad. (More international
    students enroll at NYU than any other American university.) During
    their stay and time of study in the U.S., these international students
    are exposed to American institutions, American values, and American
    freedom.
    meeting the challenge: nyu and the robert f. wagner graduate school of
                                 public service
        I represent the Robert F. Wagner Graduate School of Public Service
    at New York University. The Wagner School--named after a great Senator
    from the State of New York, and his son, the three-term mayor of New
    York--is the largest school of public service in the United States,
    including students from more than 40 countries. In the past decade,
    Wagner faculty and programs have provided professional education to
    officials throughout the Newly Independent States, Africa, Latin
    America, and Asia. We have current partnerships with universities in
    France, England, Spain, Belgium, Ukraine, Mexico, Chile, Argentina,
    Mozambique and South Korea. We have welcomed their students into our
    classrooms, sent ours to theirs, and our faculty has taught courses on
    their campuses. The Wagner School has been a leading participant in the
    U.S. funded fellowships and educational exchange, hosted Fulbright
    scholars, and is now carrying out two Department of State funded
    programs in Ukraine and Mozambique. Wagner faculty are also providing
    technical assistance to the World Bank and other international
    organizations in Cambodia, Indonesia, Columbia, Uganda, South Africa
    and Mozambique.
        Wagner students receive very practical training. At the end of
    their master's degree program, they spend two semesters working in
    teams under faculty-supervision working for real world clients doing
    ``capstone'' projects in public policy, management, finance or urban
    planning. In the past three year more than 60 students have
    participated in international capstone projects for international
    organizations based in the United States such as Save the Children,
    UMCOR, Trickle Up, as well as a number of U.N. agencies. For example,
    this year five Wagner students are evaluating a humanitarian assistance
    project in Mozambique in cooperation with six students from our partner
    university in Mozambique. They coordinated their plans using email and
    interactive televideo conference meetings, and spent three weeks in
    January working in combined teams doing field work in Gaza, a province
    of Mozambique, which was an area most affected by last year's
    devastating floods.
        International NGOs, many based in the United States, have become
    major players in responding to humanitarian crises around the world and
    in civil society capacity building. The service delivery parts of the
    United Nations system, such as UNICEF and the Department of
    Peacekeeping Operations, have been given new and more complex
    assignments. At the same time, funders are demanding greater evidence
    of successful performance and imposing more rigorous standards of
    accountability. These developments have greatly increased the need for
    managerial competence in international public service organizations.
        The Wagner School has been deeply involved in nonprofit management
    capacity building in the NIS and in developing countries. The Wagner
    School is now creating a partnership between the first university-based
    nonprofit management programs in Spain (at ESADE) and in Argentina (at
    University of San Andres) to serve civil society capacity building in
    Latin America. Given the scale of the distances involve and of the
    challenge, this partnership's potential is heavily dependent on
    developing, and using extensively, distance learning technologies.
        In January 2000, The Wagner School inaugurated a new master's
    degree for managers of international public service organizations and
    is creating a new sub-field of public management education--
    international public service management. The first two classes of 36
    students represent 24 countries. An emerging partnership between the
    Wagner School and the international programs at the Evans School at the
    University of Washington in Seattle also supports this new program. Our
    partner program at Korea University, the Graduate School of
    International Studies, has admitted five students to a dual masters
    degree program: first an MA in international affairs, then our MS in
    management next year. We are also exploring the possibility of offering
    a related and technologically linked version of this MS program in
    Geneva, Switzerland.
                            needs exceeding capacity
        Even as the largest school of public service, the Wagner School can
    enroll only a small fraction of the international students who want to
    pursue the fields of study offered. For many students from less
    economically developed parts of the world, the combined cost of tuition
    and books and travel to and residency in New York, constitute an
    impossibly high barrier to access. This barrier looms especially large
    for women from less developed regions of the world.
        Distance learning technologies have been used to expand the reach
    of our programs in our partnerships with universities around the world.
    Building on our experience using interactive televideo conferencing in
    courses with Europe, Latin America, and Asia, we are now introducing
    this technology in our work with Mozambique. By reducing the time and
    financial costs of faculty and student travel in educational
    partnerships, we believe modern technologies will enable the Wagner
    School to dramatically widen and deepen its reach to build capacity for
    democratic public service in the nations of the world. We are
    increasingly working with our university partners in other nations
    using distance learning technologies to provide a meeting place for
    technical assistance and exchange between officials in specialized
    fields. For example, two weeks ago the Wagner School hosted a two hour
    meeting between solid waste management officials in Rio De Janeiro and
    officials and experts in New York and Paris using an interactive
    televideo conference. We believe that if we were properly equipped the
    Wagner School could multiply many times over the reach and
    effectiveness of its public service policy and management education
    efforts around the world.
    The International Center for Democratic Public Service
        To bring together all of the outstanding programs and resources we
    have to offer, Wagner is seeking to develop an International Center for
    Democratic Public Service. This Center will focus the vast resources
    found in the Wagner School, NYU and New York City on developing and
    supporting policy leadership and management solutions worldwide. In
    addition to offering a range of courses and degree programs, the
    International Center for Democratic Public Service will serve as a
    forum for American and international leaders to discuss major policy
    objectives, and at which public service professionals can gather to
    share ideas and best practices before a global audience. It will create
    a global network of students, scholars, and practitioners who want to
    better understand how to improve public service delivery throughout the
    world in the 21st Century.
        As part of its strategic plan, the Robert F. Wagner Graduate School
    of Public Service intends to move its faculty and programs from their
    dispersed locations around Washington Square into one new integrated
    facility. A crucial component of this effort--and one needed to extend
    Wagner programs to a global economy--is the inclusion of the full range
    of distance learning technologies that would make the School's new home
    a state-of-the-art global professional education center. This is an
    area in which we will be seeking government support to help leverage
    funding from private foundations, corporations and individuals
    concerned with the delivery of public services worldwide.
        Properly equipped classrooms and computer laboratories can
    facilitate a wide range of projects involving faculty, students and
    practitioners located in multiple sites simultaneously, and
    technologically advanced lecture halls can accommodate unlimited
    attendance spanning great distances. These are all well-developed
    technologies, but their initial cost is expensive. However, the cost-
    effectiveness of these means of professional education make them the
    best hope for providing democratic public service capacity building on
    the scale necessary to transform the societies aspiring to join the
    United States in the great democratic experiment.
                                     ______

                 Prepared Statement of the University of Miami

        Mr. Chairman and Members of the Subcommittee: Thank you for
    allowing me to submit testimony concerning an important new initiative
    at the University of Miami and its Institute for Cuban and Cuban-
    American Studies.
        The Castro era may be coming to an end in Cuba, if for no other
    reason than geriatric reality. Fidel Castro and his brother Raul are in
    their 70s with deteriorating health.
        The passing of the Castro brothers may ensue in a period of slow
    and peaceful transition or may lead to fast and violent change. In
    either case, United States policy makers must be ready to deal with
    these and other scenarios that may develop in United States-Cuban
    relations. A migration crisis, protracted violence, the emergence of
    anti or pro-U.S. factions within the transition leadership, all will
    require careful responses from the United States.
        If a pro-U.S. democratic transition regime emerges, the United
    States tasks may be to provide immediate humanitarian relief and to
    link humanitarian aid to democracy building. The United States may be
    called upon to assist in rebuilding civil society and beginning the
    task of economic reconstruction.
        The transition completed and a new government installed through
    free, internationally supervised elections, the United States would
    work with other democratic countries to help rebuild Cuba's
    legislative, judicial, media, and educational institutions as well as
    to encourage the growth of independent political parties and implement
    military reforms.
        A violent post-Castro transition or a civil war in Cuba may require
    the United States to deal with migration issues, an activated Cuban-
    American population, threats to the United States naval base at
    Guantanamo, pressures for United States involvement, and, possibly,
    even the eventual use of American military forces.
        It is clear that given the proximity of Cuba to the United States;
    the role of the Cuban-American community; and our own vital interest in
    Latin America and the Caribbean region changes in Cuba will have
    significant impact on the United States. The United States should be
    prepared to deal with these changes and to respond quickly to problems
    and opportunities that may arise in the island.
        One of the clear lessons from changes in Eastern Europe and the
    Soviet Union is that we were unprepared to deal with transitions in
    that region of the world. Unexpecting the depth of change, we were
    caught by surprise. Not knowing clearly what role we should play, we
    looked confused and indecisive.
        The time to start preparing for Cuba's transition is now. We can
    best advance our long term goals, in the meantime, by maintaining the
    present policy; by waiting patiently for a regime in the island that is
    willing to provide meaningful and irreversible changes and then
    offering that regime aid, trade, tourism and investments, as a carrot
    to accelerate change in the island; by assisting nascent independent
    institutions in Cuba; by studying and learning from other transitions
    to democracy and by encouraging the Cuban-American community to build
    consensus around transitional issues.
        The University of Miami seeks support to prepare United States
    government officials for the inevitable transition that will take place
    in Cuba. The Cuba Transition Project at the University of Miami is
    designed to provide policy makers, analysts and others with accurate
    information, incisive analysis and practical policy recommendations.
        The Cuba Transition Project will be developed over a three-year
    period. Clearly, if transition were to take place in Cuba at a fast
    pace the products of the Cuba Transition Project will be accelerated to
    meet United States government and Cuba's changing needs. On the other
    hand if transition is slow the studies and policy recommendations will
    be completed within the time scheduled and these will remain as the
    basis for continuous studies and monitoring of the Cuba scene.
    Regardless of the speed of transition, the studies and the resources
    developed will be of invaluable assistance to United States policy
    makers dealing with Cuba.
        During the first stage of the project (fiscal year 2002) the
    following objectives will be accomplished.
      --Establishment of a Research Center which will include offices for
            researchers; facilities for holding briefings and seminars;
            website; database.
      --Organize Research Programs. Four initial research units are
            planned: (1) socio-economic conditions; (2) statistical
            database; (3) political system and decision-making; (4)
            critical issues and emergency needs.
      --Organize Task Forces. Priority topics to include: Legal reform,
            macro-economic issues, agriculture, the future of sugar and
            tourism, international trade, immigration, multi-lateral
            financial institutions, privatization, telecommunications,
            basic education, United States-Cuba relations, justice and rule
            of law, education, the environment, institutional reform,
            micro- and small business development, transportation,
            regulation, utilities and infrastructure, health and nutrition,
            AIDS, aging and social security, employment, labor markets, and
            social welfare policy, foreign investment, crime and corruption
            and the transformation of the value system generated by 40
            years of communist rule.
      --Organize Study Groups. Priority topics to include: civil-military
            issues; governability and state reform; civil society
            development; race, ethnicity and cultural pluralism; political
            culture and value transformation.
        Once transition in earnest takes place in Cuba, and United States
    policy permits, we will emphasize a professional development and
    education component. This part of the Cuban Transition Project will be
    dedicated to direct assistance and advisement to Cuban professionals
    and potential policy makers. The objectives of this unit will be
    achieved through seminars, support groups, professional and academic
    exchange, and direct consulting. A special facility will be established
    at the University of Miami to provide distance learning capabilities
    able to train large numbers of Cubans in a variety of subjects. As
    needed, group seminars will be offered in Cuba and Miami and Cubans
    will be brought to the University of Miami campus for specialized
    training. A satellite facility will be established in Cuba as soon as
    politically and legally possible.
        The University of Miami is uniquely qualified to assist the United
    States government with transitional issues in Cuba. The University is
    located in a multi-lingual city and community, 90 miles away from Cuba.
    The University has one of the largest bilingual faculties of Research I
    university in the nation. Its academic orientation has been, since its
    founding, toward Latin America and the Caribbean. Its schools of Law,
    Business, Medicine, and Communications will be key components in
    preparing and training future leaders in a democratic Cuba. The
    University has the finest and most extensive collection of Library
    materials on Cuba. The Cuban Heritage collection at the Richter Library
    is considered the best and most comprehensive collection worldwide.
        The University of Miami has had a program of Cuban Studies since
    1964. The Institute for Cuban and Cuban American Studies directed by
    Professor Jaime Suchlicki coordinates Cuba related activities of the
    University, including the Emilio Bacardi Moreau Chair in Cuban Studies;
    the John J. Koubek Memorial Center and other components related to Cuba
    and Cuban-American Studies. The Institute offers courses on Cuban
    history, culture, and international relations, produces publications
    and sponsors original research and studies. The Institute houses Cuba
    On-Line, the most comprehensive current and historical database on Cuba
    and is in the process of becoming the Secretariat of the Association
    for the Study of the Cuban Economy (ASCE), the most prestigious non-
    partisan group of academics and researchers studying Cuba and its
    economy.
        For fiscal year 2002, the University of Miami Institute for Cuban
    and Cuban-American Studies seeks $3.5 million through the United States
    Agency for International Development to establish and develop this
    important new initiative, the Cuban Transition Project. Our human and
    physical capabilities as well as our commitment to help the U.S.
    government develop policy-relevant advice and programs to deal with
    Cuba's transition, makes the University and its Institute for Cuban and
    Cuban-American Studies unique to carry out this delicate and important
    task.
        Mr. Chairman, we know that this will be a difficult year as you and
    Members of the Subcommittee seek to establish funding priorities in
    your bill. My colleagues and I at the University of Miami and the
    Institute for Cuban and Cuban-American Studies hope that it will be
    possible for you to support implementation and development of our new
    and vital initiative, the Cuban Transition Project.
        Thank you.
                                     ______

                 Prepared Statement of Florida State University

        Mr. Chairman, I would like to thank you and the Members of the
    Subcommittee for the opportunity to present testimony before this
    Committee. I would like to take a moment to briefly acquaint you with
    Florida State University (FSU).
        Located in Tallahassee, Florida's capitol, FSU is a comprehensive
    Research I university with a rapidly growing research base. The
    University serves as a center for advanced graduate and professional
    studies, exemplary research and top quality undergraduate programs.
    Faculty members at FSU maintain a strong commitment to quality in
    teaching, to performance of research and creative activities and have a
    strong commitment to public service. Among the faculty are numerous
    recipients of national and international honors, including Nobel
    laureates, Pulitzer Prize winners as well as several members of the
    National Academy of Sciences. Our scientists and engineers do excellent
    research, have strong interdisciplinary interests, and often work
    closely with industrial partners in the commercialization of the
    results of their research. Having been designated as a Carnegie
    Research I University several years ago, Florida State University
    currently is approaching $125 million per year in research awards.
        FSU will soon initiate a new medical school, the first in the U.S.
    in over two decades. Our emphasis will be on training students to
    become primary care physicians, with a particular focus on geriatric
    medicine--consistent with the demographics of our state.
        Florida State attracts students from every county in Florida, every
    state in the nation, and more than 100 foreign countries. The
    University is committed to high admission standards that ensure quality
    in its student body, which currently includes some 192 National Merit
    and National Achievement scholars, as well as students with superior
    creative talent. We consistently rank in the top 25 among U.S. colleges
    and universities in attracting National Merit Scholars to our campus.
        At Florida State University, we are very proud of our successes as
    well as our emerging reputation as one of the nation's top public
    universities.
        Mr. Chairman, let me tell you about a project we are pursuing this
    year through the Agency for International Development. Florida State
    University has proposed to design, develop, and deliver a high quality
    program of instruction in basic legal principles for students and
    professionals in Central and Eastern Europe, the Newly Independent
    States of the Former Soviet Union and other emerging democracies with
    the cooperation of the College of Law of England and Wales and the Open
    University of Great Britain.
        The program builds upon an existing collaboration between FSU and
    the European leaders in distance education with a long history of
    excellence in instructional design and educational methodology and
    enlists the collaboration of the schools to create innovative
    applications of educational technology. It adapts existing course
    materials for use in the target countries and utilizes networks that
    have been established by other organizations committed to reform of
    legal institutions in the former Communist countries.
        Through existing educational institutions in the countries where
    the courses will be completed, programs will be delivered by
    established professional and academic networks and non-governmental
    organizations. The institutions involved have established partnerships
    and have used important developments in instructional technology and
    materials-based, supported distance learning that have an immediate and
    broad impact on legal education in developing countries.
        Last year, $900,000 was appropriated to begin this effort. In
    fiscal year 2002, we are seeking language in support of second year
    funding at the $1.1 million level through the U.S. Agency for
    International Development.
        Mr. Chairman this is an excellent project that will yield great
    rewards for our nation as well as the nations directly involved with
    this training and is just one of the many ways that Florida State
    University is making important contributions to solving some key
    problems and concerns our world faces today. Your support would be
    appreciated, and, again, thank you for an opportunity to present these
    views for your consideration.
                                     ______

                   Prepared Statement of Rotary International

        Chairman McConnell, Senator Leahy, members of the Subcommittee,
    thank you for this opportunity to present written testimony on behalf
    of Rotary International in support of the polio eradication activities
    of the U.S. Agency for International Development (USAID). The effort to
    eradicate polio has been likened to a race--a race to reach the last
    child. As in any race, discipline, commitment, and endurance are
    indispensable elements of success. This race requires the discipline to
    remain focused on the task at hand. We cannot allow ourselves to become
    complacent as we approach the finish line. Though we sense victory is
    near, a single misstep could jeopardize all we have accomplished. This
    race requires the commitment to make the sacrifices necessary to
    achieve success. The major partners in the global polio eradication
    effort have joined with national governments around the world in an
    unprecedented demonstration of commitment to this historic public
    health goal. As the initiative runs its course, total victory can only
    be guaranteed through continued and unwavering commitment to the goal
    of a polio-free world. This race requires the endurance necessary to
    maintain our current activities. We cannot allow the great distance we
    have traveled to diminish our resolve. Though we may be weary from a
    race that has now lasted years, our adversary is weakening. The victory
    over polio is closer than ever!
        I would like to take this opportunity to thank you Chairman
    McConnell, Senator Leahy, and members of the Subcommittee for your
    tremendous commitment to this effort. Without your support of USAID's
    polio eradication activities, the battle against polio would be
    impossible. We appreciate the long-term investment you have made
    through USAID to strengthen the basic health care infrastructure of
    many polio-endemic countries. This solid infrastructure has provided
    the foundation on which the polio eradication program has succeeded.
    Additional support of the polio eradication program further strengthens
    this infrastructure because it gives confidence to the health care
    workers, provides dramatic assistance to families who no longer suffer
    the ravages of polio, and provides hope that other diseases can also be
    eliminated.
        The global eradication strategy is working. In 1985, when Rotary
    began its PolioPlus Program, 125 nations around the world were polio-
    endemic. At the end of 2000, only 20 countries remained polio-endemic.
    The Western Hemisphere has now been polio-free since 1991, and the
    Western Pacific region was certified polio-free in October of 2000.
    Europe will be the next block of countries to be certified polio-free
    with the rest of the world anticipated to be certified polio-free not
    later than 2005. Today polio is confined only to Sub-Saharan Africa,
    parts of the Middle East, and South Asia (Exhibit A).
        Thanks to the polio eradication efforts over the last decade, more
    than three million children who might have been polio victims are
    walking and playing normally. Tens of thousands of public health
    workers have been trained to investigate cases of acute flaccid
    paralysis and manage immunization programs. Cold chain, transport and
    communications systems for immunization have been strengthened. A
    network of 148 polio laboratories has been established.
        Significant challenges lie before us. Continued political
    commitment is essential in polio endemic countries, to support the
    acceleration of eradication activities, and in donor countries, so that
    the necessary human and financial resources are made available to
    polio-endemic countries. Access to children is needed, particularly in
    countries affected by conflict. Truces must be negotiated if National
    Immunization Days (NIDS) are to proceed in these countries. Polio-free
    countries must maintain high levels of routine polio immunization and
    surveillance. The continued leadership of the United States is critical
    if we are to overcome these challenges.
        Rotary International is a global association of more than 29,000
    Rotary clubs, with a membership of over 1.1 million business and
    professional leaders in 163 countries. In the United States today there
    are some 7,500 Rotary clubs with over 380,000 members. All of our clubs
    work to promote humanitarian service, high ethical standards in all
    vocations, and international understanding.
        In the United States, Rotary has formed the USA Coalition for the
    Eradication of Polio, a group of committed child health advocates that
    includes Rotary, the March of Dimes Birth Defects Foundation, the
    American Academy of Pediatrics, the Task Force for Child Survival and
    Development, and the U.S. Committee for UNICEF. These organizations
    join us in expressing our gratitude to you for your staunch support of
    the international program to eradicate polio. This investment has
    helped to make the United States the leader among donor nations in the
    drive to eradicate this crippling disease. We remain on target for
    certification of eradication in 2005.
                        fiscal year 2002 budget request
        For fiscal year 2002, we are requesting that your Subcommittee
    specify $30 million for global polio eradication in USAID's budget.
    These funds will support USAID's delivery of vaccine and the
    development of the infrastructure necessary to maintain its Polio
    Eradication Initiative. This would represent a funding increase of $2.5
    million from the fiscal year 2001 level, and a $5 million increase from
    the previous four years. This funding level will provide much-needed
    stability to the program and ensure that the U.S. remains a leader in
    the global polio eradication effort. In addition, we are seeking report
    language similar to that included in the fiscal year 2001 Committee
    report, specifying that this funding is meant to be in addition to the
    resources for the regular immunization program of USAID, and is
    intended to supplement other related activities. It is important to
    meet this level of funding due to the increased costs of the
    accelerated eradication program, and to respond to the urgent needs of
    countries affected by conflict. These funds will be applied to the most
    challenging countries, such as Angola, India, Nigeria, Bangladesh and
    Democratic Republic of the Congo.
      eradicating polio will save the united states at least $230 million
                                    annually
        In 1998 the Chairman of the House Committee on International
    Relations commissioned the General Accounting Office to investigate the
    soundness of WHO cost estimates for the eradication or elimination of
    seven infectious diseases. The United States was a major force behind
    the successful eradication of the smallpox virus, and the GAO concluded
    that the eradication of smallpox has saved the United States some $17
    billion to date. Even greater benefits will result from the eradication
    of polio.
        Although polio-free since 1979, the United States currently spends
    at least $230 million annually to protect its newborns against the
    threat of importation of the poliovirus, in addition to its investment
    in international polio eradication. Globally, over $1.5 billion U.S.
    dollars are spent annually to immunize children against polio. This
    figure does not even include the cost of treatment and rehabilitation
    of polio victims, nor the immeasurable toll in human suffering which
    polio exacts from its victims and their families. Once polio is
    eradicated and immunization against it can be discontinued, tremendous
    resources will be unfettered to focus on other health priorities.
               progress in the global program to eradicate polio
        Thanks to your leadership in appropriating funds, the international
    effort to eradicate polio has made tremendous progress.
      --Since the global initiative began in 1988, more than 3 million
            children in the developing world, who otherwise would have
            become paralyzed with polio, are walking because they have been
            immunized.
      --The number of polio cases has fallen from an estimated 350,000 in
            1988 to approximately 3,500 reported cases in 2000 (Exhibit B).
            More than 180 countries are polio-free, including 4 of the 5
            most populous countries in the world (China, U.S., Indonesia
            and Brazil).
      --Almost 2 billion children worldwide have been immunized during NIDs
            in the last 5 years, including 150 million in a single day in
            India.
      --Approximately 3,500 confirmed polio cases were reported to WHO for
            2000. As a result of routine polio immunisation, NIDs and
            house-to-house mopping-up activities, there has been a 99
            percent decline in reported polio cases since 1988.
      --Of the three types of wild poliovirus, Type 2 has not been seen
            since October of 1999, and appears to have been eradicated.
      --All polio-endemic countries in the world have conducted NIDs. The
            achievement of successful NIDs and implementation of APF
            surveillance in Somalia and Sudan shows that polio eradication
            strategies can be implemented even in countries affected by
            civil unrest.
           the role of the u.s. agency for international development
        In April of 1996, with the support of the 104th Congress and in
    response to the strong urging of your Subcommittee, USAID launched its
    own Polio Eradication Initiative to coordinate agency-wide efforts to
    help eradicate polio. Over the subsequent four years, despite decreases
    in the overall Child Survival budget, Congress directed that $25
    million be allocated to USAID's international polio eradication
    efforts. In fiscal year 2001, Congress increased this allocation to
    $27.5 million. Some of USAID's achievements in the past, and their
    planned Polio Eradication Initiative activities in 2001, include:
      --USAID was one of the driving forces behind the eradication of polio
            in Latin America and the Caribbean. Since the certification of
            polio eradication in the Americas in 1994, USAID has turned its
            attention to the polio endemic countries of Africa and Asia,
            and to finding ways to use American expertise to enhance
            immunization services globally. A major breakthrough was the
            development of the heat-sensitive vaccine vial monitor, which
            is saving an estimated $10 million annually by reducing vaccine
            wastage. USAID developed the monitor in conjunction with a
            private U.S. firm at the request of WHO and UNICEF. The monitor
            is now used on every vial of oral polio vaccine used worldwide.
      --Through technical assistance projects and financial support to
            international organizations, USAID supports national and sub-
            national immunization days (NIDs and SNIDs), mop-up campaigns,
            surveillance, the laboratory network, and the training and
            social mobilization that make these programs succeed.
      --USAID joined forces with Voice of America (VOA) in 1997 to take
            advantage of their radio broadcasting network to raise
            awareness of polio eradication and to expand community-level
            participation. To date more than 900 broadcasts supporting
            eradication have been heard in 22 countries, reaching scores of
            listeners in remote areas. These broadcasts include radio
            dramas and contests of various kinds, all in local languages.
            In 1998, WORLDNET TV received funds to add TV broadcasts to
            further spread the message about polio eradication and the
            importance of routine immunization.
      --USAID is supporting Surveillance Medical Officer positions in
            Bangladesh, India, and Nepal; and the officers already in place
            have had a significant and rapid impact. The quality of
            laboratory sample collection and testing has also markedly
            improved.
      --USAID is supporting NIDs, surveillance, labs, social mobilization,
            microplanning, training, monitoring and evaluation in Africa
            and India, and surveillance and labs in Latin America.
                      other benefits of polio eradication
        Increased political and financial support for childhood
    immunization has many documented long-term benefits. Polio eradication
    is helping countries to develop public health and disease surveillance
    systems useful in the control of other vaccine-preventable infectious
    diseases. Already, much of Latin America is free of measles, due in
    part to improvements in the public health infrastructure implemented
    during the war on polio. The disease surveillance system--the network
    of laboratories and trained personnel built up during the Polio
    Eradication Initiative--is now being used to track measles, Chagas,
    neonatal tetanus, and other deadly infectious diseases. NIDs have been
    used as an opportunity to give children essential vitamin A, as well as
    polio vaccine. The campaign to eliminate polio from communities has led
    to increased publiawareness of the benefits of immunization, creating a
    ``culture of immunization'' and resulting in increased usage of primary
    health care and higher immunization rates for other vaccines. It has
    improved public health communications and taught nations important
    lessons about vaccine storage and distribution, and the logistics of
    organizing nation-wide health programs. Additionally, the unprecedented
    cooperation between the public and private sectors serves as a model
    for other public health initiatives. Polio eradication is the most
    cost-effective public health investment, as its benefits accrue
    forever. The world will begin to ``break even'' on its investment in
    polio eradication only two years after the virus has been vanquished.
            resources needed to finish the job of polio eradication
        The World Health Organization estimates that $1 billion is needed
    from donors for the period 2001-2005 to help polio-endemic countries
    carry out the polio eradication strategy. Of this total approximately
    $550 million has been committed, leaving a funding gap of approximately
    $450 million. In the Americas, some 80 percent of the cost of polio
    eradication efforts were borne by the national governments themselves.
    However, as the battle against polio is taken to the poorest, least-
    developed nations on earth, and those in the midst of civil conflict,
    many of the remaining polio-endemic nations can contribute only a small
    percentage of the needed funds. In some countries, up to 100 percent of
    the NID and other polio eradication costs must be met by external donor
    sources. We are asking that the United States continue to take the
    leadership role in meeting this funding gap.
        The United States' commitment to polio eradication has stimulated
    other countries to increase their support (Exhibit C). Belgium, Canada,
    Germany, and Italy are among those countries that have followed
    America's lead and made special grants for the global Polio Eradication
    Initiative. Japan has also expanded its support to polio eradication
    efforts in Africa. Germany has made major grants that will help India
    eradicate polio. In 1999 the United Kingdom announced two grants
    totaling U.S. $94.6 million for polio eradication efforts in India and
    Africa. In the last year, the Netherlands has committed nearly $50
    million for global polio eradication. The Dutch Government pledged $8.4
    million for surveillance in India, Pakistan and the Democratic Republic
    of the Congo, followed by a year-end allocation of $40 million for
    surveillance in 2000.
        By the time polio has been eradicated, Rotary International expects
    to have expended approximately $500 million on the effort--the largest
    private contribution to a public health initiative ever. Of this, $402
    million has already been allocated for polio vaccine, operational
    costs, laboratory surveillance, cold chain, training and social
    mobilization in 122 countries. More importantly, we have mobilized tens
    of thousands of Rotarians to work together with their national
    ministries of health, UNICEF and WHO, and with health providers at the
    grassroots level in thousands of communities.
        Your discipline, commitment and endurance have brought us to the
    brink of victory in the great race against this ancient scourge. Polio
    cripples and kills. It deprives our children of the capacity to run,
    walk and play. Other great health crises loom on the horizon. The work
    you have done and that which we ask you to continue will ensure that
    today's children possess the strength and vitality to run the race on
    behalf of future generations.
        Thank you for this opportunity to present written testimony.

                                     ______

      Prepared Statement of the American Society of Tropical Medicine and
                                    Hygiene

        The American Society of Tropical Medicine and Hygiene (ASTMH)
    appreciates the opportunity to submit testimony to present our views on
    fiscal year 2002 funding priorities to the Subcommittee.
        The ASTMH is a professional society of 3,500 researchers and
    practitioners dedicated to the prevention and treatment of infectious
    and tropical diseases. The collective experience of our members is in
    the areas of basic science, medicine, vector control, epidemiology, and
    public health.
        The Society thanks the members of this Subcommittee for their
    previous commitment and support for the programs administered by the
    U.S. Agency for International Development (USAID) targeted to combating
    the global burden of tropical and infectious disease. Your support for
    these important programs has resulted in tremendous progress in
    combating disease. World health experts estimate that USAID's child
    survival programs--which include critical activities in developing
    nation's to prevent and treat infectious diseases, such as vector
    control strategies, improving the capacity of the public health
    infrastructure through training programs and technical assistance,
    providing immunizations, oral rehydration therapy, vitamin A
    supplementation, and HIV/AIDS prevention and treatment activities--have
    helped drop infant mortality rates in the developing world to their
    lowest levels ever, and since 1985, have saved over 25 million
    children's lives.
        Despite this progress, every member of the Subcommittee would
    agree, that the global burden of tropical and infectious diseases
    remains staggering and poses a tremendous threat to global health.
    According to the World Health Organization (WHO), infectious diseases
    account for more than 13 million deaths a year (25 percent of all
    deaths worldwide in 1999). Twenty well-known diseases--including
    tuberculosis (TB), malaria, and cholera--have reemerged or spread
    geographically since 1973, often in more virulent and drug-resistant
    forms. At least 30 previously unknown disease agents have been
    identified in this period--including HIV, Ebola, and hepatitis C--for
    which little or no therapy is available. Infectious diseases represent
    not only a humanitarian concern, but also a bona fide threat to the
    national security of the United States. Our borders remain porous to
    infectious and tropical diseases, including most recently the West Nile
    Virus, which was recently found right here in Washington, DC. Other
    diseases still largely confined to the tropics, like malaria, pose a
    major threat to American travelers and especially to our military.
        Last year the CIA's National Intelligence Council issued a hard-
    hitting report entitled ``The Global Infectious Disease Threat and Its
    Implications for the United States.'' The report concluded that
    infectious diseases are likely to account for more military hospital
    admissions than battlefield injuries. The report also assessed the
    global threat of infectious disease, stating ``New and reemerging
    infectious diseases will pose a rising global health threat and will
    endanger U.S. citizens at home and abroad, threaten U.S. armed forces
    deployed overseas, and exacerbate social and political instability in
    key countries and regions in which the United States has significant
    interests.''
        The USAID programs targeted to the prevention, treatment, and
    control of tropical and infectious diseases are now more important than
    ever to the nation's foreign policy objectives and U.S. strategic
    interests.
                     usaid child survival and disease fund
        The Society thanks this Committee for placing a high priority on
    USAID's Child Survival and Disease Programs which have long been at the
    forefront of international efforts to alleviate morbidity and mortality
    among the world's most vulnerable populations--children under five
    years of age.
        The Society urges you to continue your efforts in the fiscal year
    2002 budget, by strongly supporting these activities. The Society
    applauds the Committee's support for USAID to establish coordinated
    centers of excellence of malaria research, focusing on tropical and
    subtropical regions in fiscal year 2001. We seek additional funds for
    this effort and stand ready to work with the Committee to facilitate
    these and other malaria prevention and control activities.
        ASTMH believes substantial increases for these important activities
    are a cost-effective, sound investment towards improving global health
    and protecting the health and well-being of Americans at home and
    abroad, given the enormous human and economic costs we face as a nation
    with the spread of emerging and re-emerging infectious diseases and the
    burden of disease on developing countries. We urge the Subcommittee to
    provide the highest possible funding level for the USAID Child Survival
    and Disease Fund programs to help achieve this goal.
        The ASTMH also thanks the Committee for its support in the current
    fiscal year for programs and initiatives to encourage research and
    development on vaccines and drugs to combat malaria, tuberculosis, HIV/
    AIDS and other infectious diseases causing enormous suffering and many
    millions of deaths annually. Your support has helped to ensure that
    these products are accessible to populations in developing countries
    most impacted by these diseases. Your efforts are critical to enhancing
    partnerships with federal agencies, industry, non-profit organizations,
    the World Bank, and other international organizations to combat the
    scourge of infectious diseases.
        Your support for the International AIDS Vaccine Initiative and the
    International AIDS Trust Fund administered by the World Bank will help
    advance the clinical research progress towards developing a successful
    HIV/AIDS vaccine and deliver proven therapies to the countless number
    of impoverished people suffering with the HIV virus that currently have
    no hope of receiving effective treatments.
        The Society requests your continued support for contributions to
    international organizations such as the Global Alliance for Vaccines
    and Immunizations (GAVI) for the purchase and distribution of vaccines
    and drugs in developing countries. We also urge your continued support
    for activities that will improve the public health infrastructure in
    developing countries in order to expand immunizations, prevent and
    treat infectious diseases, and build effective delivery systems for
    basic health services.
        We know you understand the need for greater resources to be
    directed to tropical and infectious disease programs, and we understand
    that you face many difficult decisions as you develop the funding
    priorities that will be reflected in your fiscal year 2002 bill.
        In the 21st century we find ourselves with many opportunities to
    expand our efforts at controlling and preventing tropical and
    infectious diseases. Control of global infectious disease threats is
    not just a development issue, it is also a national security issue for
    the United States and a health concern for every American. Investments
    in global infectious disease programs are clearly a win-win for the
    country--by helping others we are also launching the best defense to
    protect the health of our nation.
        The American Society of Tropical Medicine and Hygiene appreciates
    the opportunity to present its views. Thank you for your consideration
    of these requests.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

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    American Society of Tropical Medicine and Hygiene, prepared
      statement......................................................   180

    Beers, Rand, Assistant Secretary of State, Bureau of
      International Narcotics and Law Enforcement Affairs, Department
      of State.......................................................   117
        Prepared statement...........................................   125
        Summary statement............................................   122
    Bennett, Hon. Robert F., U.S. Senator from Utah, opening
      statement......................................................    81

    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado:
        Opening statements..........................................76, 121
        Prepared statement...........................................   125
        Questions submitted by......................................42, 112
    Columbia University, prepared statement..........................   167

    Deal, Michael, Acting Senior Deputy Assistant Administrator,
      Bureau for Latin America and the Caribbean, U.S. Agency for
      International Development......................................   130
        Prepared statement...........................................   132
    Durbin, Hon. Richard J., U.S. Senator from Illinois, question
      submitted by...................................................    42

    Florida State University, prepared statement.....................   174

    Harkin, Hon. Tom, U.S. Senator from Iowa, prepared statement.....    97

    Johnson, Tim, U.S. Senator from South Dakota:
        Opening statement............................................    83
        Prepared statement...........................................    84
        Questions submitted by.......................................   109
    Joslin Diabetes Center, prepared statement.......................   168

    Landrieu, Hon. Mary L., U.S. Senator from Louisiana, opening
      statement......................................................    79
    Leahy, Hon. Patrick J., U.S. Senator from Vermont:
        Opening statements.......................................3, 49, 117
        Prepared statements......................................4, 51, 119
        Questions submitted by......................................35, 102

    McConnell, Hon. Mitch, U.S. Senator from Kentucky:
        Opening statements.......................................1, 47, 120
        Prepared statements.......................................... 2, 48
        Questions submitted by.......................................    98
    Mikulski, Hon. Barbara A., U.S. Senator from Maryland:
        Opening statement............................................    73
        Prepared statement...........................................    75

    Natsios, Andrew, Administrator, Agency for International
      Development....................................................     1
        Prepared statement...........................................     8
        Summary statement............................................     5

    Powell, Hon. Colin, Secretary of State, Office of the Secretary,
      Department of State............................................    47
        Prepared statement...........................................    56
        Summary statement............................................    51

    Robert F. Wagner Graduate School of Public Service, New York
      University, prepared statement.................................   171
    Rotary International, prepared statement.........................   175

    Specter, Hon. Arlen, U.S. Senator from Pennsylvania:
        Opening statement............................................   149
        Question submitted by........................................   109
    Stevens, Hon. Ted, U.S. Senator from Alaska, opening statement...    68

    University of Miami, prepared statement..........................   173

    Vivanco, Jose Migel, executive director, Americans Division,
      Human Rights Watch.............................................   157
        Prepared statement...........................................   159

                                 SUBJECT INDEX

                                  ----------

                      AGENCY FOR INTERNATIONAL DEVELOPMENT

    Additional committee questions...................................    35
    Alternative development..........................................   134
    Anticipated results..............................................   151
    Belarus..........................................................    45
    Biodiversity.....................................................    38
    Blind children...................................................    40
    Budget request summary...........................................    12
    Child survival and disease account...............................    13
    Clean energy technology..........................................    37
    Coca cultivation to other areas, movement of.....................   151
    Colombian Government.............................................   161
        Contributions................................................   145
    Conflict prevention..............................................    39
        And developmental relief pillar..............................    11
    Development:
        Assistance...................................................    13
        Credit.......................................................    17
    Disaster assistance..............................................    41
    East Timor.......................................................    41
    Economic growth and agriculture..................................    10
    ESF funds........................................................    17
    Family planning..................................................    37
    Foreign assistance and foreign policy............................     9
    Global:
        Development alliance.........................................39, 42
        Health.......................................................    10
    Globalization and conflict prevention............................     9
    Infectious diseases..............................................    37
    Inspector General................................................    18
    Internally displaced persons.....................................   140
        Expenditures.................................................   140
    International:
        Crime........................................................    45
        Disaster assistance..........................................    17
        Support for Colombia.........................................   144
    Legalizing abuses in Colombia....................................   166
    Management challenges............................................    12
    Microbicides.....................................................    36
    Military-paramilitary ties.......................................   160
    Operating expenses...............................................    18
    Organization for Security and Cooperation in Europe (OSCE)
      region, corruption in the......................................    43
    Procurement, personnel, information management systems...........    39
    Rebel violations.................................................   160
    Regional requests................................................    14
    Social and economic development..................................   134
    Spray operations, the cost of....................................   151
    Strengthening democracy..........................................   133
    Transition initiatives...........................................    17
    Tuberculosis.....................................................    42
    U.S. policy......................................................   162
    Universiy directives.............................................    40
    USAID:
        Fiscal year 2002 budget, summary of..........................    19
        Fourth pillar: The Global Development Alliance...............    11
        Program pillars..............................................     9

                              DEPARTMENT OF STATE

    Aerial spraying..................................................   127
    ATPA renewal.....................................................   130
    Equipment deliveries, status of..................................   126
    Human rights progress............................................   128
    INL'S proposed Andean Counterdrug Initiative (ACI)...............   129
    Spending on Plan Colombia, status of.............................   126

                            Office of the Secretary

    Additional committee questions...................................    97
    Armenia..........................................................    86
    Belarus: U.S. Policy and Russia..................................   115
    Congressional commission.........................................   109
    Economic growth and agriculture..................................    85
    Global Development alliance pillar...............................    57
    Israel...........................................................    86
    Pakistan.........................................................    85
    PRC regional efforts.............................................    98
    Program pillars..................................................    58
    Promoting peaceful change........................................    98
    Rule of law funding..............................................   109
    U.S. Agency for International Development........................    57

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