[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

                        U.S. GOVERNMENT PRINTING OFFICE
70-754                          WASHINGTON : 2002
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001














                    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

                              ----------                              
                                                                   Page

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

                                   - 
